Tata Investment extends rally on huge volumes; stock up 41% in two days

Shares of Tata Investment Corporation (TICL) hit a new high at Rs 4,575, as they surged 17 per cent on the BSE in Monday’s intra-day trade on the back of heavy volumes in an otherwise subdued market. In past two trading days, the stock of Tata group Investment Company has zoomed 41 per cent. In comparison, the S&P BSE Sensex was down 0.20 per cent at 65,662 at 02:14 PM.

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The average trading volumes at the counter jumped over 10-fold today. A combined 4.35 million equity shares representing 8.6 per cent of total equity of TICL changed hands on the NSE and BSE.
 
The BSE today said the Exchange has sought clarification from Tata Investment Corporation on November 20, 2023, with reference to movement in volume. The reply is awaited.

TCIL and its subsidiary, a non-banking financial company (NBFC) registered with the Reserve Bank of India under the category of Investment Company, is primarily engaged in the business of investment in listed and unlisted equity shares, debt instruments and mutual funds etc. of companies in a wide range of Industries.

As at September 30, 2023, Tata Sons Private Limited, along with other promoter shareholders, held 73.4 per cent stake in TICL.

According to the company’s management, India remains a bright spot and remains optimistic that Indian equity indices may record double-digit returns in FY24. The company’s portfolio is a mix of listed Tata and diversified Non-Tata equities, unlisted equities, and fixed income securities.

CRISIL Ratings believes TICL will maintain its healthy capital position and comfortable earnings profile over the medium term, supported by its diversified investment portfolio.

Prudent investment strategies have enabled TICL to build and maintain its robust and diversified investment portfolio. The management philosophy has remained unchanged. The company continues to invest in fundamentally strong, highly liquid, dividend-yielding stocks. Healthy returns realised from the portfolio have supported the earnings profile.

As on June 30, 2023, equity investments (including InVITs / REITs), on a standalone basis, accounted for around 79 per cent of the investment portfolio in terms of book value, followed by 11 per cent investments in bonds/debentures and G-Sec, and the remaining 10 per cent in mutual funds and venture capital funds, the rating agency said in its rationale.

However, susceptibility to volatility inherent in the capital markets is relatively high. Adverse movements in the equity market can, therefore, substantially reduce the value of the company’s investment portfolio, and hence, remain a key rating sensitivity factor, CRISIL said.