Tata Investment soars 15% pre-Tata Tech IPO, up 35% in 2 days

On November 20, Tata Investment Corporation surged on the second consecutive day. In the previous trading session, Tata Investment had increased by up to 20%. This upward momentum came just before the Tata Technologies IPO, set to open for public subscription on November 22. The announcement of the IPO has generated a positive outlook for the company, playing a pivotal role in the increase in its share price, and on Monday Shares of Tata Investment Corporation rallied over 15%, reaching a new 52-week high.

Analysts express optimism about Tata Investment Corporation, anticipating potential opportunities for value unlocking through the upcoming Tata Technologies IPO. As a subsidiary of Tata Motors, Tata Technologies, and being a promoter group entity of the automotive major, Tata Investment Corporation is poised to reap benefits from this development. The IPO, representing the first public offering from the Tata Group in almost two decades, has generated positive sentiment and is a key driver behind the surge in Tata Investment Corporation's share price.

Tata Technologies IPO Details

Tata Technologies, a subsidiary of Tata Motors, is a pure-play manufacturing-focused Engineering Research & Development (ER&D) company, primarily concentrated on the automotive industry. The IPO aims to raise ₹3,042.51 crore through an offer for sale (OFS) of 6.09 crore equity shares. Tata Motors, the promoter, is set to divest 4.62 crore equity shares with a total value of ₹2,313.75 crore in the Offer for Sale (OFS). Simultaneously, Alpha TC Holdings Pte Ltd plans to sell 97.17 lakh shares and Tata Capital Growth Fund I will offload 48.58 lakh shares.

Financial Highlights & Stock Performance

For the fiscal second quarter, Tata Investment Corporation reported a net profit of ₹113.24 crore, reflecting a 31.38% YoY increase. Revenue for the same period stood at ₹123 crore, showing a 16% YoY growth. As of September 2023, the promoters hold 73.38% of the company's stock.

As of 11:30 am, Tata Investment shares were trading 11% higher at ₹4,353.55 on the National Stock Exchange (NSE). The stock has risen by 43% in the past month and 105% over the last six months. Share price of Tata Investment has surged over 104% in 2023, marking its best annual performance since 2009. And the stock has risen over 425% in the last five years.

Tata Investment Corporation, a non-banking financial company (NBFC), holds stakes in various Tata Group companies, including Tata Consultancy Services (TCS), Tata Steel, Tata Consumer Products, Tata Chemicals, Tata Elxsi, and Trent.

Stock is currently trading in uncharted territory, and for prospective investors considering fresh investment, caution is advised. The Relative Strength Index (RSI) is currently at 87, indicating that the stock is in the overbought zone. Recent breakout occurred around the ₹3500 mark, and within just two days post-breakout, the stock surged to ₹4595. Because of high RSI and rapid price movement.

Final Words

The surge in Tata Investment Corporation shares is driven by the optimism surrounding the Tata Technologies IPO. With the IPO opening on November 22, market observers are closely watching the developments, anticipating further impact on Tata Investment Corporation's valuation. The stock's impressive performance in 2023 adds to the overall positive sentiment, making it a noteworthy player in the current financial landscape.