Tata Grp shares slip up to 12% amid report of Tata Sons trying to avoid IPO

Shares of Tata Group companies were down up to 12 per cent on profit booking on the BSE in Monday's intraday trade on reports that Tata Sons is looking at ways to avoid going public next year. CLICK HERE FOR FULL REPORT

Tata Chemicals, Tata Investment Corporation, Tata Consumer Products, and Tata Power Company were down between 3 per cent and 12 per cent. Indian Hotels Company, Tata Teleservices (Maharashtra) (TTML), Tata Communications, Tata Motors, and Tata Steel, meanwhile, were down in the range of 1 per cent to 2 per cent. In comparison, the S&P BSE Sensex was down 0.02 per cent at 74,105 at 09:27 am.

 

However, Trent rallied 5 per cent to hit a record high of Rs 4,162.40, while Tata Consultancy Services (TCS) was up 1 per cent on the BSE.

Last week, Tata Group stocks had surged up to 40 per cent on reports that the group may go for a mega initial public offer (IPO) before September 2025 in the wake of Reserve Bank of India (RBI) guidelines for non-banking finance companies.

While four group companies -Tata Motors, Tata Chemicals, Tata Power and Indian Hotels - hold ownership in Tata Sons to the tune of 1-3 per cent, Tata Chemicals could be the biggest beneficiary as the ownership of Tata Sons in this firm is around 80 per cent of the company's market capitalisation, PTI had reported quoting Spark Capital.

Today, the shares of Tata Chemicals (TCL) dipped 12 per cent to Rs 1,183.45 on the BSE in the intraday trade. The stock had hit a record high of Rs 1,349.70 on Thursday (March 7), zooming 40 per cent in the last week.

However, on March 1, Fitch Ratings revised the outlook on TCL's long-term foreign-currency Issuer default rating (IDR) to 'Stable' from 'Positive' and affirmed the rating at 'BB+'.

The demand environment for soda ash in domestic markets as well as international markets was challenging during the past quarter. This was especially so in the container glass and flat glass sectors in Europe & Americas, which led to a pressure on volumes and price.

In the short term, the current demand–supply situation is likely to persist but should improve and stabilise over the long term driven by growth sectors based on sustainability trends, the management said.

Fitch Ratings expect TCL's Ebitda (earnings before interest, taxes, depreciation, and amortisation) net leverage to average 2.2x over FY25-FY27 and be commensurate for its rating, driving the 'Stable' Outlook, despite the near-term industry pressures.

Demand in Europe, particularly the glass segment, has been weaker than expected in FY24 so far, prompting Turkish soda ash exports to pivot to Asia. It has resulted in an industry oversupply, pressuring TCL's Ebitda margins. Fitch Ratings expects persistent oversupply to weaken TCL's profits and credit metrics in FY25, before a gradual recovery from FY26.