Tata Motors makes debut as third-largest PV OEM at $17 bn valuation
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Tata Capital's ₹15,512 crore IPO was subscribed 1.95x
Tata Motors makes debut as third-largest PV OEM at $17 bn valuation
Tata Motors has emerged as the third-largest passenger vehicle OEM in India, debuting on the stock market with a valuation of ₹1.51 lakh crore. Despite initial fluctuations in stock price, the company remains a significant player, with its PV business including Jaguar Land Rover. The demerger will see the commercial vehicle division form a new entity, TML Commercial Vehicles Limited.
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Tata Motors’ stock fluctuated post-listing, and its commercial vehicle division will be restructured into TML Commercial Vehicles Limited. JLR is dealing with production issues from a cyber incident, affecting its market performance.
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Tata Capital's ₹15,512 crore IPO was subscribed 1.95x
Tata Motors, which now represents the passenger vehicle business of the salt-to-electronics conglomerate, made its debut on the Street at a valuation of ₹1.53 lakh crore ($17 billion), making it the seventh largest automobile company with Maruti Suzuki sitting pretty at ₹5.09 lakh crore. In terms of pure PV makers, Tata Motors is now the third-largest after Maruti, and Hyundai Motor.
After listing at ₹400, the stock was down to ₹392 as of 10.18 AM, before climbing back at ₹416.90 at 10.51 AM. The domestic PV business, besides other investments, also comprises Jaguar Land Rover (JLR), stakes in Tata Sons (unlisted), Tata Steel and Tata Technologies. As per the demerger scheme, the commercial vehicle division will be housed under a new entity named, TML Commercial Vehicles Limited (TMLCV). On a 1:1 basis, Tata Motors shareholders will also receive the one share of the new CV entity.
A day before the split, that is Monday, Oct 13, the stock had closed at ₹600, down 42% from its all-time high.
Incidentally, a report by foreign brokerage Nomura has equally apportioned Tata Motors’ post-demerger valuation between its PV and CV businesses. The brokerage’s target prices of ₹367 per share for the PV entity is nearly 8% lower than the market price as of 10.27 AM and ₹365 per share for the CV entity.
According to Chirag Jain of Emkay, the PV entity may hike prices in January 26 on commodity pricing pressure, though it aims to preserve profitability via operating leverage and richer product mix.
Meanwhile, domestic brokerage firm, Motilal Oswal, has expressed concerns over the cyber incident at JLR that has disrupted production for Sep’25, even as the company has has lined up funding lines to ensure that sufficient working capital is available at all times. “While JLR has now indicated a phased production start, it is likely to take some time for production to return to normalcy. Nonetheless, JLR is facing several headwinds, which include: 1) tariff-led slowdown for exports to the US; 2) demand weakness in key regions like Europe and China; and 3) rising VME, warranty and emission costs,” states the report.
