Tata Motors races to new 52-week high ahead of Tata Technologies listing

The Tata Motors Ltd share hit a new 52-week high of Rs 702.80 on November 29, anticipating a strong listing for its arm, Tata Technologies.

According to analysts, Tata Technologies, which would be the first listing from the Tata group since TCS in 2004, could see a strong listing gain of over 75 percent, considering the overwhelming subscription demand and investor-friendly pricing.

At 1.05 pm, Tata Motors shares were trading half a percent higher at Rs 701.25 on the National Stock Exchange (NSE). The stock has risen 77 percent against benchmark Nifty’s 10 percent gain during this time.

Tata Technologies shares were commanding handsome grey market premium (GMP) of Rs 389-399, suggesting a likely listing at Rs 889-899 over the issue price of Rs 500.

The grey market is an unofficial platform where shares get traded well before the allotment in the IPO and till the listing day.​ Investors usually track the grey market to get an idea of the listing price.

“There is a high possibility that Tata Technologies can be a doubler-candidate post listing,” said Prashanth Tapse, Senior VP Research at Mehta Equities.

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Shares of Tata Motors were also in focus ahead of the November auto sales data. Nomura India estimates Tata Motors PV sales for the month to come in at 44,000, down 4 percent on-year.

“Tata Nexon’s facelift in particular has received a strong response, as per our dealer survey. It became the no.1 SUV across all segments in Sep-23 and Oct-23 as expected by us and may retain the position in November also,” the international brokerage said.

In the fast lane

Tata Motors is displaying a bullish short-term outlook, having recently broken free from a sideways trend that persisted since July this year.

The stock has resumed its overall uptrend and the 11 percent rise in the last month marked the end of the sideways consolidation, analysts said.

Tata Motors can move to Rs 790-800 over the next four to six weeks. The stock has to fall below Rs 670 to come under pressure, they added.

The financial outlook for Tata Motors is optimistic, as analysts anticipate strong growth for the company’s luxury car unit Jaguar Land Rover (JLR).

After the successful closure of the Tata Technologies IPO, analysts revised JLR’s expected EBIT margins from 6 percent to 8 percent.

Also Read | Why experts expect Tata Technologies to be a blockbuster listing on Nov 30?

There are expectations that the company will sustain a free cash flow (FCF) exceeding 2 billion pounds, while managing to keep net debt below 1 billion pounds.

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