Shares of several Tata Group companies, including Tata Motors, Tata Chemicals, Rallis India, Tata Power, Nelco, and Tata Investment Corporation, surged up to 15 percent on March 7 as the buzz around Tata Sons’ expected IPO grew louder.
The expected listing of Tata Sons is likely to unlock value and lead to the simplification of the complicated group holding structure, enabling some of the listed holding companies to liquidate their stakes in the parent conglomerate.
Tata Sons, the principal investment holding company and promoter of Tata Companies, was classified by the Reserve Bank of India as an ‘upper-layer’ non-banking financial company (NBFC) in 2023. According to RBI guidelines, such an entity must list within three years of being notified, meaning Tata Sons is supposed to be listed on exchanges by September 2025.
The IPO is much awaited as it is expected to be the biggest IPO, not just for the Tatas but in the history of the Indian stock market.
Tata Motors shares accelerated 2 percent as India’s largest commercial vehicle manufacturer announced that it will increase the price of its commercial vehicles by up to 2 percent from April 1, 2024. The hike in prices is to offset the residual impact of past input costs. While the price increase will vary across models and variants, it will be applicable across the entire range of commercial vehicles.
Tata Chemicals shares zoomed around 14 percent to hit a 52-week high of Rs 1,349 on the NSE, extending gains to the sixth consecutive session. This comes as Spark Capital in a report stated that the only realistic way to get exposure to the potential value unlocking of Tata Sons stake is through Tata Chemicals where the ownership of Tata Sons potentially amounts to Rs 19,850 crore or 80 percent of the company’s market capitalisation.
Shares of Tata Investment Corp were locked in the upper circuit for the sixth straight day, rallying 5 percent to Rs 9,756.85, which was also its new high on the NSE. The stock has zoomed 74 percent in just the past month. In the last one year, it has rallied over 380 percent, massively outperforming the benchmark Nifty 50 which has risen 26 percent in this period.
Tata Consumer Products and Tata Steel jumped up to 4 percent to hit their respective record highs in intra-day trade. Other group stocks, including Tata Elxsi, Tata Steel, Trent, Voltas, Tata Motors, and Tata Consultancy Services also gained 1 to 4 percent.
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