Tata Chemicals share price surges over 4%; Here's why
Tata Chemicals' share price surged over 4% as the Tata Group signed an MoU with the Gujarat government to build a giga factory with a 20 GW capacity.
PremiumTata Chemicals share price surged over 4% on Monday's session following the announcement that the Tata Group signed an memorandum of understanding (MoU) with the Gujarat government to build a giga factory with a 20 Gigawatt (GW) capacity at a cost of ₹13,000 crore, and that the company would restructure its US operations to reduce the number of intermediary entities. Tata Chemicals shares opened at ₹981 apiece on BSE.
According to Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities, the stock is in action is on the news of the lithium-ion battery deal where Tata Chemicals is creating a platform for electro-chemistry solutions to create its own electric vehicle supply chain.
Technically, the analyst sees a strong resistance near 1,035-1,040 levels, any close above 1,040 on weekly close the stock command above 1,100 levels. Stop loss should be below 979.
On June 2, the Gujarat Government and the Tata Group-backed subsidiary Agratas Energy Storage Solution signed a MoU. According to Vijay Nehra, a representative of the Gujarat state government, "The plant will go a long way towards contributing to the development of the EV ecosystem in Gujarat and India."
The project will be located on the Sanand region in northern Gujarat plan. The plant's initial manufacturing capacity in the first phase will be 20 GW.
Tata Group to set up ₹13,000 crore lithium-ion battery giga factory in Gujarat
According to Vinit Bolinjkar, Head of Research, Ventura Securities Ltd, Tata Chemicals is entering the lithium battery space to provide backward integration to Tata Motor’s EV space in both domestic and JLR segments. The company’s first lithium-ion battery is expected to be launched in 2024.
Furthermore, through its subsidiary Rallis India, Tata Chemicals also has a presence in agrochemicals, along with its recent entry into speciality chemicals. This could give it an edge to the company over its peers.
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