Tata Chemicals shares up nearly 35% in 1 week; On Thursday, Tata Chemicals’ stock is rising for the sixth straight day. During the six-day rise, the stock has increased by almost 40%. On Thursday, shares had increased by an additional 7%.
The Tata Group’s parent firm, Tata Sons, may go public within the next 18 months, according to a March 4 Spark Capital note, which sparked the most recent surge. This is as a result of the company’s classification as an upper layer NBFC by the Reserve Bank of India.
An upper-layer NBFC must list within three years following notification in accordance with the RBI rule. Tata Sons must list by September 2025 as it was classed in September 2022.
Why are Tata Chemicals’ shares rising in response to a possible Tata Sons listing?
Tata Chemicals shares up nearly 35% in 1 week; Tata Sons is owned by four Tata Group companies:
- Tata Motors,
- Tata Chemicals,
- Tata Power,
- Indian Hotels,
according to the Spark Capital note that was published earlier this week. However, Tata Chemicals is the only practical means to learn about this possible chance to unlock wealth.
Tata Chemicals shares up nearly 35% in 1 week; Why is it the case?
As per Spark Capital, Tata Sons owns around 80% of the total market capitalization of Tata Chemicals, whereas the remaining three firms have shareholding ranging from 16% to 21%.
In the first two months of 2024, Tata Chemicals’ shares underperformed, falling 7% and 9%, respectively. Spark Capital blames this underperformance to the commodity nature of soda ash and industry-wide challenges brought on by decreased realisations.
But if the street places Tata Sons’ valuation between ₹10 lakh crore and ₹11 lakh crore, Tata Chemicals’ intrinsic value ought to increase if the investment is sold off during or after the IPO.