Shares of Tata Motors crossed Rs 700 for the first time on Wednesday, closing at Rs 712.15 (up 2.09%) on the BSE and Rs 711.50 (up 2.01%) on the NSE, in anticipation of a stellar debut by subsidiary Tata Technologies, which had witnessed a near-70x subscription to its initial public offering (IPO) in the previous week.
Reports on Wednesday suggested Tata Technologies could list at a premium of 70-80%. Ahead of its keenly-awaited listing, the company’s shares were said to be trading at a premium of Rs 375 in the unlisted market. The upper price band for the IPO was set at Rs 500.
Master Capital Services in a report suggested investors invest in the stock. “Tata is known as an investor-friendly group and enjoys special preference amongst investors.”
Based on the current GMP trends and the likely demand for the shares even post-listing, it won’t be a surprise if the stock doubles over the IPO price on the first day itself. Listing gains aside, analysts are quite bullish on the company even from a long-term perspective.
In intra-day trade, Tata Motors hit a 52-week high of Rs 714.4 on the BSE. The encouraging response to Tata Technologies’ IPO drove buying interest in the stock. Tata Motors commands a market capitalisation of close to Rs 2.4 trillion, with a price/earnings of 53.7 and price/book ratio of 10.2.Tata Motors said in a filing to the exchanges on Wednesday that the firm had been informed by its subsidiary on Tuesday regarding the approval for allotment of 60,850,278 equity shares tovarious investors who had successfully subscribed to the public offering.
Of these, 46,275,000 equity shares were offered for sale by the company, 9,716,853 shares were offered by Alpha TC Holdings, and 4,858,425 shares by Tata Capital Growth Fund I, the filing said.“Autos are in a sweet spot now. The firm has been a beneficiary of the CV cycle, higher capex, and global momentum in JLR.
TaMo is on a fresh breakout. We expect a bumper opening of Tata Tech, as the IPO had been priced attractively, and the IPO has left something on the table especially for retail investors,” said Sanjiv Bhasin of IIFL Securities.
The filing mentioned that of these, 46,275,000 equity shares were offered for sale by the company, 9,716,853 shares were offered for sale by Alpha TC Holdings, and 4,858,425 shares were offered by Tata Capital Growth Fund I.
Tata Technologies public issue is the first IPO listing from the Tata Group after over 19 years. The company had fixed the price band at Rs 475-500 per equity share for its Rs 3,042 crore IPO. Later, Tata Motors announced that the offer price, including the anchor investor offer price, had been set at Rs 500 per equity share.
