The company on Tuesday announced that private equity firm TPG will be investing close to $1 billion in its electric vehicle subsidiary at a valuation of $9.1 billion. The announcement sparked a slew of rating and price target upgrades from Dalal Street and triggered an instant rerating in the stock.
While a more than 20 per cent move in one day is bound to raise questions over sustainability but analysts believe that best is yet to come.
If Tata Motors is riding the electric vehicle wave, then Tata Chemicals is sitting right next to it. The Tata Group company has its own ambitions of becoming an EV car battery manufacturer and is looking to invest in the same.
Shares of the company surged nearly 15 per cent as investors view Tata Motors’ acceleration in the EV space to have benefits for Tata Chemical as it looks to become part of the EV supply chain.
Sona BLW Precision
As the acceleration to an EV-based future gathers steam, Blackstone-backed Sona BLW Precision Forgings cannot be far behind in the conversation.
The recently listed company is already a supplier of automobile parts to leading electric vehicle manufacturers abroad and as our own EV industry breaks ground, investors expect the company to be a leading beneficiary. This optimism was reflected in the stock’s action today, as it closed 14 per cent higher.
Maruti Suzuki gets FOMO
While Tata Motors’ investors were jubilant over the company’s move towards electric vehicles, spare a thought for investors of Maruti Suzuki. The stock sank 2.6 per cent and was the worst performer among Nifty50 stocks as its investors drowned in the fear of missing out.
Maruti Suzuki has said that it will invest in EVs when the business is viable and does not require it to run losses. The country’s biggest passenger vehicle maker’s conservatism is already looking like a misstep as its rivals steal a march.
M&M hitchhikes Tata Motors’ ride
Well if any and every company that has anything to do with electric vehicles is getting investors’ attention then Mahindra & Mahindra deserves to be in that conversation. The rerating sparked by Tata Motors’ move for the space is beneficial for M&M, which has also invested considerably in preparing itself for an EV-based future.
Shares of the company ended over 5 per cent higher on the perception that its own electric mobility business deserves the valuations that Tata Motors’ is getting.