Tata Investment stock surges 20% to hit upper-circuit; What’s driving the rally?

Shares of Tata Investment Corporation Ltd experienced a significant rise on Tuesday, surging by 20 per cent to reach its upper circuit limit of ₹7,406.15. The stock eventually closed 19.45 per cent higher at ₹7,372.30. With this increase, it has achieved a 73.13 per cent gain on a year-to-date (YTD) basis.

The recent stock rally comes after a four-month stretch of lackluster performance. From March to July, the stock fell by almost 13 percent, following a surge of over 100 percent in January and February 2024.

Tata Sons currently owns more than 68.5 per cent of Tata Investment Corp, while other Tata Group companies such as Tata Power, Tata Chemicals, Tata Steel, Tata Consumer Products, and Trent hold stakes between 0.5% and 1.6 per cent.

Recently, the BSE and NSE have placed Tata Investment Corp's securities under the long-term ASM (Additional Surveillance Measure) framework. This framework, used by exchanges both short-term and long-term, serves to alert investors to increased volatility in share prices.

Tata Investment stakes in Tata Group companies

Notably, Tata Investment Corp also has stakes in several Tata Group companies. Its largest holding is in Tata Chemicals, with a 5.97 per cent stake, followed by Tata Consumer Products at 4.65 per cent and Trent at 4.28 per cent. It also has smaller stakes, ranging from 0.03 per cent to 3 per cent, in other Tata Group companies including Voltas, Titan Company, Tata Elxsi, Indian Hotels, Oriental Hotels, Tata Steel, Tata Motors, Tata Power, and TCS.

According to The Economic Times report, Tata Sons has voluntarily returned its registration certificate to the RBI following the repayment of more than ₹20,000 crore in debt. This action enables Tata Sons to stay unlisted, circumventing the RBI's listing requirements.

The repayment has decreased its liabilities to ₹363 crore in non-convertible debentures and preference shares. Moreover, Tata Sons has deposited ₹405 crore with SBI and has issued an undertaking to the RBI as part of this process.