Tata Technologies IPO effect: Tata Motors share price jumps 25% in two months. Experts see more upside | Mint
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Business News/ Markets / Stock Markets/  Tata Technologies IPO effect: Tata Motors share price jumps 25% in two months. Experts see more upside
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Tata Technologies IPO effect: Tata Motors share price jumps 25% in two months. Experts see more upside

Tata Motors shares have been in uptrend ever since Tata Technologies Ltd submitted its DRHP at SEBI on 9th March 2023 for the IPO launch

Tata Motors share price has risen from ₹410 to ₹512 apiece levels in last two months. (Reuters)Premium
Tata Motors share price has risen from 410 to 512 apiece levels in last two months. (Reuters)

Tata Technologies IPO DRHP (Draft Red Herring Prospectus) was filed on 9th March 2023 to sell up to 9.571 crore Tata Technologies shares. The Initial Public Offering (IPO) of Tata Technologies Ltd is an offer for sale by its existing shareholders, including Tata Motors, Alpha TC Holdings Pte and Tata Capital Growth Fund-I. 

Tata Motors currently holds 74.69 per cent stake in the company, while Alpha TC Holdings Pte and Tata Capital Growth Fund-I have a 7.26 per cent and 3.63 per cent stake, respectively. So, after the Tata group subsidiary filed DRHP at SEBI, Tata Motors shares have been in uptrend and in last two months, Tata Motors share price has risen to the tune of 25 per cent as this Rekha Jhunjhunwala portfolio stock has risen from around 410 to 510 apiece levels in this time.

According to stock market experts, Tata Technologies IPO is completely OFS in nature, which means net proceeds of the public issue will go directly into the corpus of the entities offloading its shareholding in the company. As Tata Motors is offloading its shareholding in the company, market is expecting that Tata Motors financial would improve and hence better quarterly numbers can be expected from the auto major in upcoming quarters. Hence, the expect that bull run in Tata Motors shares would continue and hence any dip in the stock should be seen as buying opportunity by positional investors.

Why you should buy Tata Motors shares?

Speaking on why Tata Motors shares are in bull trend, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "Tata Motors Ltd would be a direct beneficiary of Tata Technologies IPO as the auto company is offloading its stake in Tata Technologies that it acquired at 7.40 apiece (as mentioned in the DRHP). As Tata Technologies IPO is completely OFS in nature, net proceeds of the public issue would go to the corpus of Tata Motors instead of Tata Technologies. Hence, the IPO is expected to boost the balance sheet of Tata Motors instead of Tata Technologies. Therefore, market is expecting improvement in the financial of Tata Motors and better quarterly numbers in upcoming quarters."

The Profitmart Securities expert said that those who want to apply for the Tata Technologies IPO, they have a chance to multiply their return from the public offer by buying Tata Motors shares. He said that every dip in Tata Motors share price till Tata Technologies IPO subscription opening date would be a good buy on dips opportunity for a positional investor.

Tata Motors share price target

On outlook for Tata Motors shares, Mudit Goel, Senior Technical Analyst at SMC Global Securities said, "Tata Motors share price is looking strong on chart pattern and the stock may go up to 525 apiece levels in near term. So, those who hold this Rekha Jhunjhunwala portfolio stock are advised to remain invested in the stock for 525 target maintaining trailing stop loss at 495 apiece levels. Once the stock sustains above 525, it may soon go up to 545 apiece levels. So, those Tata Motors shareholders who want to hold the stock for 545 apiece level target, they are advised to upgrade their trailing stop loss to 505 once the stock closes above 525 levels."

Rekha Jhunjhunwala shareholding

According to Tata Motors shareholding pattern for January to March 2023 quarter, Rekha Jhunjhunwala holds 5,22,56,000 Tata Motors shares, which is 1.57 per cent of the total paid up capital of the company.

Tata Technologies IPO details

Tata Technologies has filed DRHP with the SEBI for its IPO on 9th March 2023. It plans to sell up to 9.571 crore shares, representing approximately 23.6 per cent of its paid-up share capital through offer for sell. The IPO is an offer for sale by its existing shareholders, including Tata Motors, Alpha TC Holdings Pte and Tata Capital Growth Fund-I. Tata Motors currently holds a 74.69 per cent stake in the company, while Alpha TC Holdings Pte and Tata Capital Growth Fund-I have a 7.26 per cent and 3.63 per cent stake, respectively.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
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Published: 09 May 2023, 01:05 PM IST
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