Tata Motors (NYSE:TTM)’ stock experienced a significant rise at the Bombay Stock Exchange (BSE) today, propelled by the overwhelming response to the initial public offering (IPO) of Tata Technologies. The automotive giant’s shares peaked at ₹699.45 before closing slightly lower at ₹698, marking a 3.61% increase for the day. The surge followed the news of Tata Technologies’ IPO drawing bids worth ₹1.57 lakh crore (INR100 crore = approx. USD12 million), which resulted in an oversubscription by 69.43 times.
The company’s financial outlook appears promising, with analysts predicting robust growth for Tata Motors’ luxury car unit, Jaguar Land Rover (JLR). Following the successful IPO, which closed on Friday, analysts have revised JLR’s expected EBIT margins upward from six percent to around eight percent. They also forecast that the company will maintain a free cash flow (FCF) above GBP2 billion while keeping net debt below GBP1 billion.
This optimistic projection is further bolstered by anticipated improvements in the EBITDA margins of Tata Motors Commercial Vehicles (TML-CV) division. The company’s strategic initiatives and new product launches are expected to enhance the performance of Tata Motors Passenger Vehicles (TML-PV), particularly in the electric vehicle (EV) segment. Cost reductions in battery production and new contracts are set to advance EV margins, contributing to the positive sentiment.
