The parent company of the Tata Group acquired a tranche of 2.61 crore shares at around Rs 255.8 apiece, as per disclosures made to exchanges
In a bid to increase promoter holding in its automotive arm, Tata Sons purchased shares of Tata Motors in bulk from the open market. This is the third such transaction in the last 14 months.
The parent company of the Tata Group acquired a tranche of 2.61 crore shares at around Rs 255.8 apiece, as per disclosures made to exchanges. Previously, Tata Sons had bought shares amounting to Rs 670 crore on August 13 and August 20, respectively.These transactions have raised Tata Sons’ holding in the auto manufacturer to 33.40 percent from 25.22 percent in 2015. The parent company of the salt-to-software Tata group has been gradually raising its stake in Tata Motors since 2015 by snapping up shares from the open market and participating in rights issues.
The move to strengthen promoter holding in group companies is not restricted to Tata Motors. The parent company has also acquired a higher stake in subsidiary Tata Steel.
Investor sentiment has also picked up. The purchase of shares by promoters is viewed as a positive move by investors, which in turn provides a fillip to stock prices.
Shares of the automaker are trading at its lowest level in six years. Its valuation has fallen 40 percent since the beginning of the year. Tata Motors also has the dubious distinction of being the worst performer on the BSE Auto index.According to Bloomberg data, the average 12-month target price of the stock is Rs 361 per share. Analysts tracking the stock are a divided lot. Of the 42 polled by Bloomberg, 29 had a Buy rating.
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