Tata Motors share price: After a special price-discovery session, the shares started at Rs 400 each as the firm adapted to the demerger of its commercial vehicle division.
On October 14, Tata Motors’ stock increased by almost 4% as it reacted to the demerger of its commercial vehicle division.
The stock, which now represents its passenger car business, opened at Rs 400 each after a special price-discovery session. As of 11.10 am, it had increased to Rs 415.80 apiece.
The demerger of Tata Motors:
In order to determine which stockholders are qualified to acquire shares in its demerged commercial vehicle division, the corporation set October 14 as the record date earlier this month. This implies that the demerger plan will be available to investors who owned Tata Motors stock on the record date.
For each share of Tata Motors that these stockholders possess, they will get one share in the demerged company. In November, TML Commercial Vehicles Ltd.’s (TMLCV) shares are probably going to start trading on the BSE and NSE.
As of October 1, the demerger is already in effect. Today was the day of the stock adjustment.
Regarding the demerger of Tata Motors:
To increase company focus and take advantage of future development prospects, the board of Tata Motors authorized the demerger of its passenger and commercial vehicle businesses into two distinct listed corporations in August of last year.
Tata Motors Passenger Vehicles (TMPVL) will be the new name for the passenger vehicle arm after the demerger, while Tata Motors (TML) will be the new name for the commercial vehicles company in November.
As a result of the 1:1 demerger, Tata Motors Commercial Vehicles (TMLCV) and Tata Motors Passenger Vehicles (TMPV) will become two distinct companies.
What do analysts think about Tata Motors’ demerger?
Nomura
According to CNBC-TV18, Nomura values the passenger car business at Rs 367 per share and the commercial vehicles entity at Rs 365 per share. According to the brokerage’s analysis, the PV industry’s momentum has accelerated since the GST changes due to the influx of pent-up and festive demand.
“With a spike in reservations for small and mini SUVs, such as the Punch and Nexon, the premiumization trend is still visible,” the company said.
Goldman Sachs:
According to CNBC-TV18, Goldman Sachs stated that the company’s stake in Tata Technologies is worth Rs 26 per share. “We currently value the consolidated Tata Motors business at Rs 700 per share, which is made up of Rs 236 for JLR, Rs 436 per share for the India business, which comprises of Rs 130 for the Passenger Vehicles and Rs 306 for Commercial Vehicles,” the report said.
The purpose of the special trading session is to determine the fair value of the Tata Motors Commercial Vehicles company.
Nuvama
In the next 30 to 45 days, Nuvama anticipates the Tata Group company’s CV business to become live. The brokerage has valued the passenger vehicle business at Rs 410 per share, which will be divided as follows: Rs 33 for the investment in Tata Technologies, Rs 176 for the India PV business, Rs 188 for JLR, and Rs 16 for the JLR China JV, according to CNBC-TV18. It also said that this value accounts for a holding company discount of 20%.