Tata Motors rises to hits 52-week high on Rs 13,000 crore capex plans

Shares of Tata Motors climbed to a 52-week  high  in early trade on June 5, buoyed by the Tata Group’s plans to invest Rs 13,000 crore to set-up a lithium-ion manufacturing facility in Gujarat.

At 09.58 am, shares of Tata Motors were trading at Rs 539.80, with gains of around 1 percent on the National Stock Exchange. The stock also touched a 52-week high of Rs 542.50 within the first hour of trade on June 5.

The Tata Group, through its subsidiary, Agratas Energy Storage Solution, has signed a Memorandum of Understanding (MoU) with the Government of Gujarat for its capital expenditure plans in the state.  The move will significantly support the development of the electric-vehicle (EV) industry in India.

According to an official announcement by the Gujarat government, the project is set to commence with an initial investment of Rs 13,000 crores (equivalent to USD 1.8 billion) during its first phase. This endeavour aims to establish a factory with a substantial capacity of 20 gigawatts (GW), furthering the government’s push towards  achieving 100 percent EV adoption and reduction in carbon emissions by 50 percent by 2030.

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Global research and broking firm Morgan Stanley sees Tata Group’s entry into the battery cells segment as a positive for Tata Motors. The firm believes this move will provide a stable, secure and cost-effective supply chain for Tata Motors which will be critical for the company in maintaining its dominance in the Indian EV space.

Currently, Tata Motors holds the largest market share within the EV passenger car segment. With just two models, namely the Nexon EV and Tigor EV, Tata Motors commands an 86 percent market share in the EV sector.

Meanwhile, Tata Motors also expects to see some moderation in growth within the passenger vehicle segment to 5-7 percent in FY24. At such a time, the company’s efforts to sustain long-term growth through their focus on sustainable products from the EV and CNG segments was cheered by the Street.

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