Tata Group stocks on a roll, rally up to 20%; here's why

Shares of Tata Motors DVR were locked at the 20 per cent upper circuit, while Tata Motors too surged nearly 20 per cent in intra-day trade on the BSE today

Shares of Tata group companies were on a roll on Wednesday with Tata Motors, Tata Motors DVR (Differential Voting Rights), Tata Power, Tata Chemicals and Tata Investment Corporation rallying between 10 per cent and 20 per cent on the BSE on back of heavy volumes, after Tata Motors said it will raise Rs 7,500 crore ($1 billion) for its passenger electric vehicle business from TPG Rise Climate at a valuation of up to $9.1 billion.

Tata Motors (TML) and TPG Rise Climate have entered into a binding agreement whereby TPG Rise Climate along with its co-investor ADQ, shall invest in a subsidiary of Tata Motors that will be newly incorporated, Tata Motors said in a statement.

Shares of Tata Motors DVR were locked at 20 per cent upper circuit at Rs 237.20, while Tata Motors too surged nearly 20 per cent to Rs 502 on the BSE in intra-day trade. The combined market capitalisation of Tata Motors and Tata Motors DVR jumped by Rs 27,270 crore today. Meanwhile, total market capitalisation of Tata group listed companies on the BSE rose by around Rs 65,000 crore.

Analysts see the Tata Motors-TPG deal unlocking value for the former's electric vehicle business, with Tata Motors emerging as a  "formidable player in the EV space. READ MORE

"India and Jaguar Land Rover (JLR) are on the cusp of strong demand and product cycle tailwinds. This should facilitate balance sheet improvement--key driver of our Braveheart call. The TPG deal provides additional comfort on capabilities of Tata Motors India electric vehicle (EV) capabilities. This will be applicable to other old-line OEMs too. As collateral damage will the questions on traditional ICEPV business. This is already reflected in the valuation of global old-line OEMs", analyst at Edelweiss Securities said with ‘buy’ rating on the stock and target price of Rs 539 per share.

Tata Power partnered with Tata Motors, Morris Garages India Limited and JLR for developing EV charging infrastructure for their customers and dealers, including those for e-buses used by multiple state transport utilities.

Among the other Tata group stocks, Tata Investment Corporation soared 18 per cent to Rs 1,719.85, followed by Tata Power (13 per cent at Rs 220.40) and Tata Chemicals (12 per cent at Rs 1,088).

Nelco, Tata Coffee, Rallis India, Tata Communications, Trent, Tata Consumer Products, Titan Company, Tata Metaliks, Tata Steel, Timken and Indian Hotels were up in the range of 3 per cent to 5 per cent on the BSE. In comparison, the S&P BSE Sensex was up 0.54 per cent at 60,612 points at 10:59 am.

COMPANY	LATEST	PREV CLOSE	GAIN(%)
Tata Motors-DVR	237.30	197.75	20.00
Tata Motors	498.00	420.80	18.35
Tata Inv.Corpn.	1689.95	1462.60	15.54
Tata Power Co.	222.70	195.80	13.74
Tata Chemicals	1090.30	970.35	12.36
Tinplate Co.	337.25	319.80	5.46
NELCO	853.90	813.25	5.00
Tata Tele. Mah.	50.40	48.00	5.00
Tata Comm	1463.10	1393.90	4.96
Trent	1185.25	1133.70	4.55
Tata Coffee	238.20	227.90	4.52
Rallis India	318.20	304.70	4.43
Tata Consumer	845.15	816.40	3.52
Tata Steel Long	973.65	941.65	3.40
Tata Metaliks	1102.45	1066.25	3.40
Titan Company	2578.00	2494.35	3.35
Tata Steel BSL	89.65	87.00	3.05
Tata Steel	1363.40	1329.00	2.59
Indian Hotels Co	219.40	213.90	2.57
Tata Elxsi	6168.75	6073.10	1.57