Tata Motors likely to consider spinoff of battery business Agratas; stock hovers around 52-week high

Tata Motors share price: Shares of Tata Motors rose as much as 3 per cent in Friday's trade (February 16) and hovered near their 52-week high on the BSE at Rs 949.6 apiece. The stock rose for the third session in a row. The stock drew buyers' attention after reports said that Tata Group was considering a demerger of its battery business.

At around 9:54 a.m., shares of Tata Motors traded 2.53 per cent, or Rs 23.3, higher at Rs 943.5 apiece. Meanwhile, its market capitalisation stood at Rs 3,13,382.63 crore at around the same time.

According to reports, Tata Group is considering a potential spinoff of its battery business as the conglomerate expands its foray into the country’s renewable energy and electric vehicle sectors.

It further said Tata is in the early stages of discussions about eventually breaking out Agratas Energy Storage Solutions Pvt. as an independent unit. Such a structure would allow the battery business to raise funds and go public in Mumbai at a later stage. 

A listing may value Agratas at $5 billion to $10 billion, depending on its growth and market sentiment.

Additionally, Tata Motors is also exploring similar spinoff plans for its electric vehicle (EV) business, as some of the existing investors may want to exit. The EV operation may go public as a separate company at a later stage, as per the report.

Considerations are preliminary, and Tata may decide against proceeding with the spinoffs, the report read. 

It should be noted that Agratas designs and makes batteries for the automobile and energy sectors, with factories in India and the UK. Tata Motors and its unit Jaguar Land Rover Automotive are Agratas' anchor customers. 

Tata Motors share price: Past performance 

In a year, shares of Tata Motors have gained over 113 per cent against the Nifty50's rise of over 22 per cent.

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