Tata Chemicals, Tata Power, Tata Consumer, Tata Motors share prices up by 2% to 12%

According to reports, Tata Sons was classified as an upper-layer NBFC last year, mandating its listing on exchanges within 1.5 years. The potential listing of Tata Sons could significantly benefit Tata Chemicals and three other companies: Tata Motors, Tata Power, and Indian Hotels.

What is driving the rally in Tata Chemicals?

The sudden and sharp rally in Tata Chemicals can be attributed to its 2.5% stake in Tata Sons. Reports suggest that Tata Sons could achieve a market valuation of ₹ 11 lakh crore, valuing Tata Chemicals' 2.5% holding at approximately ₹19,850 crore, which is close to 60% of its current market capitalization of ₹33,520 crore. This rally comes in the wake of a 12% correction in Soda Ash prices over the last month and a 40% decline from its peak in October 2021.

Other Tata Group stocks like Tata Motors, Tata Power, and Indian Hotels could also witness significant value appreciation following the listing of Tata Sons, as they also hold stakes ranging from 1% to 3% in the company. The holding value of these companies in Tata sons is in the range of 16% to 20% of their current market capitalization.

Tata Chemicals reported a subdued quarterly performance in Q3FY24. The revenue for the quarter was lower by 10% YoY to ₹3,730 crore. On the operational front, the EBITDA dropped by 41% YoY to ₹542 crore and margins contracted substantially from 22% in Q3FY23 to 14% in Q3FY24. The net profit for the company also halved to ₹194 crore in Q3FY23 vs ₹425 crore in previous year same quarter.

Following these developments, Tata Chemicals' share price has increased 44% in last 6 trading sessions, including today's 11% gain. While Tata Power's share have also moved up by 8% on Thursday. Similarly, share price of Tata Motors and Tata Consumers closed 2% & 3.6% higher for the day.