Tata Motors gains as company plans to sell stake in Tata Technologies via IPO

Shares of Tata Motors were in focus today as the company plans to sell its stake in Tata Technologies Limited via the IPO route. The stock opened at Rs 419.95 apiece on NSE, jumping more than 1 per cent from previous close of Rs 414.15. It was also among the top Nifty50 gainers. 

Brokerage firm Macquarie is bullish on Tata Motors and has maintained an ‘Outperform’ rating. It has recommended buying for a price target of Rs 493, implying an upside of more than 20 per cent.

On Monday, Tata Motors informed the exchanges about its plan to partially divest its equity shares held in Tata Technologies, through Initial Public Offering. 

The issue will come subject to market conditions, applicable approvals, regulatory clearances (including observations from the Securities and Exchange Board of India), the company said in its filing to the exchanges. The company will make further announcements of all material developments relating to IPO, as and when required, as per SEBI regulations and other applicable laws, it further said. 

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Market expert Sanjiv Bhasin said that the move augurs well for this stock and will help the company reduce its debts and bring valuation comfort in the stock. He recommends a buy in Tata Motors for a price target of Rs 446 and stop loss of Rs 402. 

The stock has corrected from highs of Rs 528 which the stock hit in January this year.  

This stock has underperformed Nifty50 by over 20 per cent and given negative returns of 15.4 per cent versus Nifty which has returned 5.7 per cent to investors.  

Momentum indicator RSI is around 41 according to data from Trendlyne. A number below 30 indicates oversold while a number above 70 shows that the stock is in overbought category.      

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)