Notwithstanding Dalal Street’s negative emotions, Tata Motors shares rose on Friday as a result of Tata Technology filing paperwork with market regulator Tata Technologies Sebi filing. Tata Motors wants to sell 8,11,33,706 Tata Technology shares bought for $7.40 per share in this public offering. As a result, Tata Motors is likely to benefit significantly from the Tata Technologies IPO, and the market has become extremely optimistic on Tata Motors shares.
Avinash Gorakshkar, Head of Research at Profitmart Securities, commented on the impact of Tata Technologies’ IPO on Tata Motors shares “Tata Technologies is an IT firm, and Tata Motors owns a stake in this IT company, which has filed for an IPO with SEBI. Because Tata is associated with the Tata Technologies public offering, investors are anticipated to respond positively. Tata Motors would benefit from the Tata Technology IPO since they purchased Tata Technologies shares for $7.40 per share (as stated in the Draft Red Herring paper or DRHP).”
Gorakshkar stated that Tata Technologies has yet to set an IPO pricing, but it is certain that the IPO price would be at least 4-5 times the amount at which Tata Motors purchased a share in Tata Technology. According to Avinash Gorakshkar, Tata Motors is projected to gain greatly from Tata Technologies’ IPO.
Regarding how Tata Technologies IPO will impact Tata Motors share price in near term, Anuj Gupta, Vice President — Research at IIFL Securities said, “With Tata Technologies IPO, Tata Motors subsidiary IPO is going to register profit and consequently cash flow in Tata Motors would go up following Tata Technologies share listing. Tata Motors’ Q3FY23 earnings exceeded market expectations by a wide margin, putting the company’s stock on the rise. Because it has a large exposure to JLR sales in the Chinese market, this increase is projected to continue. As a result of the positive business outlook, Tata Motors is likely to enhance its balance sheet in the coming quarter, and Tata Technologies’ IPO will serve as frosting on the cake in the near future.
The IPO price of Tata Technology
Regarding the predicted IPO pricing of Tata Technologies, “The listing of Tata Technologies, a subsidiary of Tata Motors, might unleash wealth for shareholders,” said Gaurav Dua, Head – Capital Market Strategies at Sharekhan by BNP Paribas. Though the price is yet unknown, the street anticipates the business listing at an M-Cap of roughly Rs18000 crore. As a result, it might add 35 to 40 cents per share to Tata Motors’ SoTP valuation.”
Share price forecast for Tata Motors
Anuj Gupta of IIFL Securities predicts a significant rise in Tata Motors shares “Tata Motors’ share price has solid support at 420 per share levels, and those who own this company may hold it with a stop loss below 420 per share levels. Investors interested in purchasing Tata Motors shares should do so at current levels with a short to medium term aim of 490 to 500 per share and a strict stop loss below 420.”
