Upcoming Tata Technologies IPO Propels Little-Known Tata Stock To All-Time High
Tata Investment Corp. owns 0.33% stake in Tata Motors—the promoter of Tata Technologies and biggest selling shareholder in the IPO
The first initial public offering from the house of Tata in nearly two decades has propelled a little-known Tata Group stock to all-time highs.
On Monday, shares of Tata Investment Corp. surged as much as 17.65% to an intraday high of Rs 4,598.70 apiece, before giving up some of the gains to settle at an all-time high of Rs 4,501.75 apiece—up 15.17% from its previous close. The stock’s trading volume was 27 times its 30-day average, Bloomberg data showed.
On Friday, the stock was locked in an upper circuit of 20%.
The outperformance and surge in trading volume can be attributed to the Nov. 22-24 Tata Technologies IPO—a first for Tata Group since the listing of Tata Consultancy Services Ltd. in August 2004. Tata Investment Corp., a non-banking financial company of sorts, invests primarily in Tata stocks. A new investment avenue from the salt-to-software conglomerate in nearly 20 years clearly has investors enthused.
Additionally, the public shareholding of Tata Investment Corp. is tiny at 1.34 crore shares, equivalent to 26.61% of the stake, according to the company’s shareholding pattern as of Sept. 30. Promoter Tata Sons Pvt. and related entities hold 3.71 crore shares—equivalent to a 73.38% stake.
To be sure, Tata Investment Corp. owns a 0.33% stake in Tata Motors—the promoter of Tata Technologies and the biggest selling shareholder in the IPO. The pure offer-for-sale of 6.08 crore shares at Rs 475–500 apiece will see the automaker offload as much as 11.41% of its stake in the ER&D company. All the proceeds will go to the selling shareholders.