During Monday’s intraday trading, Tata Group equities saw a decrease, allegedly as a result of signals suggesting Tata Sons is unlikely to join the main market anytime soon. In addition to Tata Motors, Tata Investment Corporation, Tata Consumer Products, Tata Power, Indian Hotels, and Tata Chemicals, all saw their share prices fall by 10%.
Retail investors’ attitude was buoyed by the enthusiasm last week over Tata Sons’ possible initial public offering (IPO). As a result, the equities of companies that held shares in Tata Sons, including Tata Motors, Tata Chemicals, Tata Power, and Indian Hotels, saw significant increases that yielded returns ranging from 10% to 40%.
According to reports, Tata Sons is thinking about reorganising its financial sheet. This might entail doing things like paying off debt or moving Tata Capital holdings to a different organisation. According to The Economic Times, Tata Sons may be able to bypass listing requirements by taking such actions and deregister as an upper-layer NBFC and core investment company (CIC).
Tata Sons’ potential valuation was estimated last week by Mumbai-based investment banking firm Spark Capital PWM at ₹11 lakh crore, with an estimated ₹55,000 crore for the company’s IPO. Since Tata Sons may own as much as 80% of the company’s market capitalization, the business identified Tata Chemicals as the main way to access the potential value unlocking of Tata Sons’ investment.
“The values have been lowered due to the commodity nature of soda ash and the possible headwinds that the industry may experience from declining realisations. In addition, we observe that, should the street value Tata Sons at ₹10–11 lakh crore, the listed Tata Chemicals business has an intrinsic valuation of about 5-7 times FY25 PE, which may increase if the investment is redeemed during or after the first public offering.” This information was provided by Spark Capital.
On March 4, Tata Motors adopted a strategy plan to demerge its passenger and commercial vehicle operations into two distinct listed corporations, which is a major development. The purpose of this action is to increase the company’s ability to more effectively grasp growth opportunities.
The conglomerate’s overall market capitalization reached a peak of ₹30 lakh crore as a result of the concurrent bull market trend in Tata Group equities during the last year. The substantial increases in the stocks of Indian Hotels, Tata Consultancy Services, Tata Motors, and Tata Power were the main drivers of this rise.
