Tata Motors shares zoom to fresh peak; what is driving the Tata group stock?

Tata Motors shares scaled a record high on Monday, rising for the fifth session in a row, after the Tata group company signed a share purchase pact to offload 9.9 per cent in its initial public offer (IPO)-bound subsidiary Tata Technologies for about Rs 1,613.7 crore. The Tata Motors stock gained by as much as Rs 10.8, or 1.6 per cent, to Rs 677.9 apiece on BSE. 

At the end of the session, however, the stock was down 0.2 per cent at Rs 666.1 apiece on the brouse, having traded in high volumes. As many as 13.5 lakh shares changed hands for the day as against a daily average of 5.8 lakh in the past two weeks, according to exchange data. 

Out of the 9.9 per cent stake, 9.0 per cent will be acquired by private equity fund TPG Rise Climate, the lead investor for the transaction, for Rs 1,467 crore, and the remaining 0.9 per cent to Ratan Tata Foundation for Rs 146.7 crore, at an equity valuation of Rs 16,300 crore, according to a regulatory filing post-market hours on Friday.

The auto major said the transaction will be completed by October 27, 2023, and furthers its de-leveraging agenda.

Tata Technologies has domain expertise in the automotive industry and leverages this expertise to serve clients in adjacent industries, such as aerospace, transportation and construction heavy machinery. The company's deep manufacturing domain knowledge and globally distributed service delivery capability helps it deliver value-added services to its clients, Tata Motors said. 

TPG Rise Climate is the dedicated climate investing arm of TPG’s $18 billion global impact investing platform. The fund focuses on five climate sub-sectors: energy transition, green mobility, sustainable fuels, sustainable molecules, and carbon solutions.

Tata Motors said TPG Rise Climate, which earlier invested $1 billion in Tata Passenger Electric Mobility, is a strategic partner in the auto maker's "journey to create a market-shaping electric passenger mobility business in India". 

Meanwhile, Tata Motors shares have been on a rising spree in the recent past. Last week, the stock registered a record high after the auto maker's subsidiary, Jaguar Land Rover (JLR) India, posted a record performance in the first half of the current financial year. JLR's total sales nearly doubled to 2,356 units in the six months to September 30 from 1,194 units in the corresponding period a year ago.

Tata Technologies filed papers in March to float an initial share sale. Tata Technologies, a provider of engineering and product development digital services, serves industries such as auto and aerospace.

The Tata Motors arm's consolidated net profit rose 23 per cent on a year-on-year basis to Rs 407 crore for the nine months ended December 31. Its revenue increased 15.5 per cent to Rs 3,012 crore.

With inputs from agencies

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