Tata Motors' market capitalisation crosses Rs 4 trillion for the first time

Auto major Tata Motors’ market capitalisation (mcap) on Thursday crossed the Rs 4-trillion mark for the first time. Shares of the Tata group firm rallied 6.2 per cent to end at Rs 1,091 following an upgrade by Nomura. At the last close, the company was valued at Rs 3.63 trillion. Meanwhile, Tata Motors’ A-ordinary shares also rose 6.5 per cent to end at Rs 747 apiece. All the A-shares, which have differential voting rights, are worth Rs 37,990 crore.

Nomura raised the price target for Tata Motors’ from Rs 1,141 to Rs 1,294 with a ‘buy’ rating. The brokerage said luxury unit Jaguar Land Rover’s (JLR’s) execution can lead to significant upsides for the stock. This coupled with the proposed demerger will unlock value for the commercial vehicle business, Nomura added, which re-rated the stock to 11 times its Enterprise value-to-Ebitda from 10 times.

Tata Motors is currently the second-most valuable company in the salt-to-software Tata group after Tata Consultancy Services.

Shares of Tata Motors have rallied 38 per cent so far this year. Earlier this year, Tata Motors had announced that it will form two separate companies, with one housing the commercial vehicles business and the other passenger vehicles businesses, including JLR.

The company in May also obtained shareholders’ nod on the scheme of arrangement pertaining to conversion of A-shares into ordinary shares. The scheme, first announced in July 2023, involves issuance of seven ordinary shares of Tata Motors for every 10 A-ordinary shares held.

The move is aimed at simplifying and consolidating the company’s capital structure and paving the way for the demerger.