Tata Steel Shares: After a stock split, should you purchase, sell, or hold?

Stock market experts predict that Tata Steel’s share price will soon reach levels of 115 per share.

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Due to the company’s board of directors setting the record date for the Tata Steel share split on August 1, 2022, trading in Tata Steel shares will begin on Friday. The 10:1 stock split for Tata Steel has been announced by the Tata Group organisation. Before going ex-split, Tata Steel’s share price today opened positively and eventually reached an intraday high of $100.35 per share on the NSE, posting a Thursday morning advance of around 4%.

Stock market experts predict that Tata Steel will continue to gain from increased demand brought on by the domestic market’s recovery in the auto industry, but much will depend on the rise in steel prices in the European markets. Commodity stocks may face pressure as a result of pressure on their margins if the price of steel fails to increase in European goods.

Sumeet Bagadia, Executive Director at Choice Broking, advised positional investors to maintain their buy on dips strategy with respect to Tata Steel shares, stating that “Stock market investors can maintain their buy on dips strategy in this steel stock for approximately 25% to 40% upside in next 3 to 5 months.”

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The Choice Broking analyst continued by stating that while positional investors can purchase the counter and carry on adding on dips while keeping stop loss at levels of 85 each, traders can take positions in it while maintaining stop loss at 90 for a target price of 115. Within the next three months, Tata Steel stock could increase to 125 per share.

Speaking on Tata Steel share price outlook, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “Despite steep decline in steel prices in the European and other international markets, Tata Steel has managed to deliver better Q1 numbers. This is because of the improving sentiment in the auto sector. It is expected to fuel demand for the company in domestic markets in next 2 to 3 years. However, its margins may have to face pressure in upcoming quarters if the steel prices doesn’t rebound in European and other markets like China and the US.”

Tata Steel stock split

The board of directors of the company approved a stock split in order to increase the liquidity of Tata Steel’s shares, citing that “The Board considered the proposal for sub-division of 1 equity share of the Company having face value of 10/- each into 10 (Ten) equity shares having face value of Re 1/- each.” The firm board continued by saying that by making the decision, it would be able to increase the number of shareholders and lower the price of the shares.