Tata group shares rally on hopes of listing

Tata group shares rally on hopes of listing
Minority shareholders in the company’s various businesses will be watching as an IPO could affect Tata’s ability to shift capital between its cash-rich established businesses and newer, less profitable ventures.

MUMBAI: With the possibility of Tata Sons’ listing gaining traction, stocks of several Tata companies that hold shares of the group’s holding company rallied on Thursday. Tata Chemicals jumped 6.5%, Tata Investments 5.5%, Tata Motors PV 4.5% and Tata Steel rose 2.8% while the broader market mostly closed flat.Tata Sons’ likely listing also lifted the stock price of Afcons Infrastructure, a company that belongs to Shapoorji Pallonji Group, which holds a little over 18% in Tata Sons. Some other SP group companies also saw their stock prices gain on Thursday.Latest shareholding data shows that seven listed Tata companies together hold 11.9% in Tata Sons, and a potential IPO could unlock value for them. Among Tata group companies, Tata Chemicals holds 2.5% of Tata Sons’ equity. If Tata Sons commands a valuation of Rs 10 lakh crore, that stake would be worth Rs 25,000 crore. In comparison, at Thursday’s close, Tata Chemicals’ market capitalisation was Rs 19,853 crore, NSE data showed. Among the other Tata group companies, Tata Motors Passenger Vehicles and Tata Steel each hold 3.1% in the parent company. Tata Steel closed 2.8% on BSE. Tata Investment Corporation, which holds 0.01% in Tata Sons, closed 5.5% up.Several of the Tata group companies that hold stakes in Tata Sons have seen strong buying interest since RBI said late last week that Tata Sons should list.Among the Shapoorji Pallonji Group companies, while Afcons Infra gained 3.3%, Gokak Textiles closed 9.2% up on BSE. For the debt-laden Shapoorji Pallonji Group, an IPO could offer a route to cut its roughly Rs 55,000 crore debt and relieve liquidity pressure that has dogged it for years.

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