Tata Chemicals stock slides over 7%; Tata Steel, Motors & TCS also dip

Shares of Tata Chemicals Ltd. fell over 7.13 per cent in Wednesday’s intraday trade at Rs 1040.70 after the stock came out of the F&O ban. 

The stock had been under the ban for most of the March F&O series. It had reached a 52-week high of Rs 1,349 on March 07 after Spark Capital speculated on the potential listing of Tata Sons by September 2025 to comply with RBI's upper layer NBFC norms.

According to the RBI norms, an upper layer NBFC needs to list within three years of being notified. The central bank notified Tata Sons in September 2022.

 

Spark Capital's March 4 report highlighted Tata Chemicals as the primary vehicle for capitalising on the speculated value unlock opportunity, given its 3 per cent stake in Tata Sons. 

However, the likelihood of Tata Sons' listing remains uncertain, with the group exploring alternatives such as debt reduction and divesting entities like Tata Capital.

In a bid to alleviate group debt, Tata Sons sold a 0.6 per cent stake in Tata Consultancy Services for nearly Rs 9,000 crore. With Tata Chemicals out of the F&O ban, new positions can now be initiated.

Kotak Institutional Equities, in its March 12 report, reiterated a "sell" rating on Tata Chemicals with a price target of Rs 780, foreseeing a decline in EPS by approximately two-thirds between financial years 2023 - 2025 due to declining soda ash margins.

Apart from Tata Chemicals, shares of other Tata Group companies were also trading in red. Tata Motors dipped for a third consecutive trading session on Wednesday, the company’s shares were trading 1.93 per cent lower at Rs 939.10 a piece. 

Tata Steel too was down 1.85 per cent at Rs 145.90 per share. The group’s IT services arm TCS stock was down 0.21 per cent at Rs 3,969.10.