Tata Group stocks gain up to 15% today: Here's why
Today, Tata Group stocks, including Tata Motors, Tata Chemicals, Rallis India, Tata Power, Nelco, and Tata Investment Corporation, experienced a surge of up to 15%. The surge is attributed to growing anticipation surrounding Tata Sons's potential IPO. The listing is expected to simplify the complex group holding structure and unlock value, allowing some listed holding companies to liquidate their stakes in the parent conglomerate.
Tata Sons classified as upper-layer NBFC with RBI
In 2023, the Reserve Bank of India (RBI) classified Tata Sons, the primary investment holding company and promoter of Tata companies, as an 'upper-layer' non-banking financial company (NBFC). As per RBI guidelines, such entities must list within three years of notification, meaning Tata Sons should be listed on the exchanges by September 2025. This IPO is highly anticipated as it could possibly be the largest in the history of the Indian stock market.
Price hike for commercial vehicles drive Tata Motors's stock
Meanwhile, another factor that led to the spike in stocks of Tata Motors is the upcoming price hike of its commercial vehicles. The shares rose over 2% after India's largest commercial vehicle manufacturer announced a price increase of up to 2% starting April 1, 2024. The stock closed at Rs. 1,038. The price hike aims to offset the residual impact of past input costs and will vary across models and variants. This applies to the entire range of commercial vehicles.
Report highlights potential value unlocking
Tata Chemicals shares soared nearly 14%, reaching a 52-week high of Rs. 1,349 on the NSE and extending gains for the sixth consecutive session. Spark Capital's report suggests that the most realistic way to gain exposure to the potential value unlocking of Tata Sons's stake is through Tata Chemicals. This is because Tata Sons's ownership in Tata Chemicals could amount to Rs. 19,850 crore or 80% of the company's market capitalization.
Surge in Tata Consumer Products, Tata Investments, Rallis India
Rallis India, a subsidiary of Tata Group, witnessed its stocks rise to Rs. 287 which is 12.84% higher than yesterday. Meanwhile, Tata Investments stocks closed at Rs. 9,756.85 witnessing a rise of 5%. It has surged 74% in a month. Also, stocks of Tata Consumer Products closed trading at Rs. 1,265 which is 3% higher than yesterday.
