Shares of Tata Group Companies rallied on Wednesday with Tata Motors, Tata Motors DVR, Tata Power, Tata Chemicals and Tata Investment Corporation among companies that saw their share prices rise in the range of 10 to 20 per cent. Titan, Tata Steel and Tinplate were also among the stocks that contributed to the ongoing rally.
The surge in the shares of Tata Group Companies come hot on the heels of the acquisition of Air India by Tata Group company Talace Pvt Ltd and the announcement made Tata Motors of raising Rs 7,500 crore for its passenger electric vehicle business from TPG Rise Climate at a valuation of up to $9.1 billion.
Tata Motors had recently entered into a binding agreement with TPG Rise Climate whereby TPG Rise Climate and its co-investor ADQ, will invest in a subsidiary of Tata Motors that will be newly incorporated. As per reports, the first tranche of capital infusion will be finished by March 22, 2022, and the entire funds will be infused by the end of 2022.
On the back of this new deal, the stock price of Tata Motors rose to 20 per cent to hit a new 52-week high of Rs 506.75 on BSE on Wednesday. It has soared about 42 per cent in the last 5 days. From closing at Rs 357.65 on October 7, the stock has gained Rs 149.10 in a matter of 5 trading sessions. In traded volume terms, 89.05 lakh shares were traded at the BSE and over 19.79 crore shares at the NSE during the day.
The market capitalisation of the firm has risen to Rs 1,67,658.94 crores on BSE. It has gained more than 276.5 per cent in the last 12 months and rallied a staggering 175 per cent since the beginning of this year.
Besides the news of capital infusion, the stock’s impressive rally could also be attributed to the company’s strong volumes and a marked improvement in its balance sheet. The company expects to increase the sale of its product further as the economic recovery continues post slowdown.
The debt of the organisation has been reduced by Rs 14 billion QoQ to Rs 40.9 billion, due to better profitability and improving working capital. Reportedly, its India business cash profits continue to be higher than CAPEX. New launches, a strong pipeline of products and improved sales have underpinned the stock rally witnessed in the last few trading sessions.
Tata Motors DVR, which usually apes Tata Motors stock, also grew by 20 per cent on Wednesday to close at Rs 237.30. Soon after the stock soared by 20 per cent, the upper circuit was triggered, a mechanism enabled by SEBI to prevent operators from driving share prices.
Since stock prices are mostly sentiment-driven, they fluctuate due to positive and negative news, a circuit filter is set up to ensure that there is no extreme price movement and investors are protected from any unwanted surprises. The filters also help limit price variation to a certain extent by stock operators.
The upper circuit limit is the highest price a stock can reach on a particular day. When this limit is touched, there will be only buyers and no sellers. Likewise, the lowest price that a stock can hit is the lower circuit limit and when a stock hits this limit, there will be only sellers and no buyers.
20% rally of Tata Motors triggers a meme fest on social media
As the stocks of Tata Motors soared by 20 per cent, social media websites were replete with memes as investors expressed their euphoria with hilarious posts.
One SM user shared the popular meme of Akshay Kumar from his movie Phir Hera Pheri where he asks Rajpal Yadav if he has brought money.
https://twitter.com/ahuja_13/status/1448143365527138307?ref_src=twsrc%5EtfwAnother Twitter user said “#TataMotors shareholders be like” and shared a clip from the popular cartoon Looney Tunes where the animated character Bugs Bunny is seen arranging dollar bills.
https://twitter.com/Strangekidney/status/1448136075298230280?ref_src=twsrc%5EtfwYet another Twitter user shared a screengrab from a Nawazuddin Siddique movie where the actor pompously says, “Chand pe hai apun(I am on the moon)”.
https://twitter.com/AshaVaadi/status/1448133774512844800?ref_src=twsrc%5EtfwTata Group Companies register impressive gains on the stock market
Tata Power has 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. On Wednesday, the stock saw a 15 per cent upward movement as it closed off the day at Rs 225.80. In the last 5 trading sessions, the stocks of the company had risen by 26 per cent.
Tata Chemicals was hovering around 970-990 levels for the last few days. But the news of capital infusion into Tata Motors for its EV product line-up spurred the growth of shares of Tata Chemicals as well. After closing at Rs 973 on October 12, the stock witnessed a gap-up opening at Rs 1028.70 on Wednesday, indicating a strong demand among investors to park their money in this Tata Group Company. Shortly later, the share saw a rise of almost Rs 100 to close at Rs 1,150, clocking a growth of 15.17 per cent.
Shares of Titan Company Limited have also shown strong growth after the Tata Group company reported a robust recovery in demand in the July-September quarter. The shares of Titan on Wednesday closed at Rs 2,540, 1.8 per cent higher than its opening price. The stock has seen a sudden surge in prices recently, with the last 5 trading sessions registering a growth of Rs 205.45 or 8.80 per cent.
Among other Tata Group stocks, Tata Investment Corporation shot up by 14 per cent to Rs 1,719.85, Tinplate by 4.72 per cent, NELCO by 5 per cent.
Tata Coffee, Rallis India, Tata Communications, Trent, Tata Consumer Products, Tata Metaliks, Tata Steel, Timken and Indian Hotels were up in the range of 3 per cent to 5 per cent on the BSE. All this led to a boost in the group’s market capitalisation figure, which rose by ₹70,000 crores on October 13.