Tata Investment Corporation (NSE: TATAINVEST) shares are up 35% in the last couple of trading sessions. This is not just some blip either, this is on very heavy trade. So heavy that the exchange asked Tata why this was happening and got the answer “Well, we don’t know”. Or rather, and more accurately, we have no unknown information which would explain this, all the relevant information is already out there in the market.
It’s important to grasp that second meaning of this release to the exchange: “In connection with your letter NSE/CM/Surveillance/13575 dated November 17, 2023, we would like to inform you that to the best of the information available with Management; we do not have any information/announcements to share with the Stock Exchanges under Regulation 30 of the SEBI (Listing Obligations & Disclosure Requirements) which have a bearing on the price/volume behaviour of our scrip traded.” That isn’t “We don’t know”, that’s “We don’t know anything that everyone else doesn’t already know”.
As to the business line we all know that: “Tata Investment Corporation Limited is a non-banking financial company involved in investing in long-term investments.” Which doesn’t really tell us all that much but there we are, that’s their own description of themselves.
It’s this which needs explaining:
Tata Investment Corporation share price from Google Finance
The answer is the upcoming IPO from within the Tata Group: “The strong upward move in the share price came on account of Tata Technologies Ltd's initial public offer (IPO), which is scheduled to open on November 22. Tata Tech is a subsidiary of Tata Motors. And, Tata Investment Corp is a promoter group entity in Tata Motors. The IPO would be the first by the Tata Group in nearly two decades.” In more detail: “The IPO is priced between ₹475 and ₹500 per share, potentially valuing Tata Technologies at over ₹20,283 crore. Tata Motors (NYSE:TTM) shareholders have been allocated a tenth of the IPO shares, with a minimum investment threshold set at ₹14,250 for thirty shares at the lower price band. The offer for sale (OFS) aims to raise ₹3,042.51 crore, allowing existing shareholders to sell their stakes.”
As we understand it the Tata Investment stake is held, indirectly, through Tata Motors. Which does mean that we think this current share price movement is overdoing it. For Tata Motors isn’t moving with that IPO, but Tata Investment is. That is, we think we’re seeing rather too much hope value being built into TATAINVEST shares here.