Tata Chemicals and Rallis India rally in trade; here is why

Tata Chemicals share price: Shares of Tata Chemicals clocked an all-time high of Rs 1,349 apiece in Thursday's trade (March 7), thereby continuing its winning streak for the sixth straight session. Rallis India, in which Tata Chemicals holds a nearly 55 per cent stake, also jumped over 12 per cent in the afternoon trade. 

The stock rose on the back of news related to Tata Sons' initial public offering (IPO) which may be valued at Rs 8 lakh crore to Rs 11 lakh crore, as per Zee Business Research. 

At close, shares of Tata Chemicals traded 11.57 per cent, or Rs 136.35, higher at Rs 1,314.9 apiece on the BSE. The market capitalisation at about the same time stood at Rs 33,497.9 crore. 

The Reserve Bank of India (RBI) classified Tata Sons as an upper-layer NBFC last year, which makes it mandatory for the company to list itself on the exchanges by September '25.

Why is Tata Sons' IPO beneficial for Tata Chemicals?

Tata Chemicals will get a possible benefit of value unlocking from Tata Sons' IPO as the company holds a three per cent stake in Tata Sons, which is worth around Rs 19,850 crore.

A report by Midas Equities said the only realistic way to get exposure to the potential value unlocking of Tata Sons' stake is via Tata Chemicals, wherein the ownership of Tata Sons potentially amounts to 80 per cent of the company’s market capitalisation. 

It should be noted that four companies—Tata Motors, Tata Chemicals, Tata Power, and Indian Hotels—within the Tata Group hold ownership in Tata Sons.

Tata Chemicals share price: Past performance 

In a year, shares of Tata Chemicals have gained over 30 per cent as against Nifty50's rise of over 25 per cent. 

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