Why do Tata Investment Share Price, rally so much in just two or three sessions? In this blog we’ll highlight some key factors for such huge rise in the share price.
Why the Tata Investment Share price is rising ?
Tata group stocks have been performing exceptionally well in recent years, with the stock of the companies in the group going up on almost all alternate trading sessions. One such stock that has been performing exceptionally well is that of Tata Investment Corporation. The stock of the Tata Group NBFC has gained more than 100% year-to-date in 2023, making it the best performing stock in the year since 2009, when the stock had gained more than 120%. In fact, the stock has delivered positive returns in 7 out of the last 8 years. Tata Investment Share Price surged 7% in early trading today (Nov. 21, 2023), hitting a new high of Rs 4.735.
About Tata Investment Share Price
Tata Investment Corporation (TICL) is a publicly listed investment company in India, having its registered office in Mumbai. Established in 1937 by the Tata Group, it is one of the oldest listed investment companies in the country. Throughout its history, TICL has evolved from a financing business to an investment company, operating as a portfolio manager. Currently, TICL operates as a Non- Deposit Taking Non-Banking Finance Company (NBFC), with a focus on investing in equity and related securities for the purpose of creating long-term value.
Here are some possible reasons for the increase in share price:
1. Strong Financials
In the first quarter of June 2023, the company saw a huge jump in its revenue, which increased by 52.9%, reaching Rs 1.7 billion. It also saw a huge increase in its net profit, which increased by 63.2%, to Rs 1.5 billion, thanks to higher sales.
Tata Investment Corporation did really well in the first quarter of FY23, with a net profit of Rs. 2.8 billion, which was up 9% compared to the same period last year. The company’s net profit margin also saw a huge jump, rising from ₹ 2.5 billion to ₹ 6.8 billion.
Tata Investment has been doing really well for the past three years, with a CAGR of 20.5%, income growth, and net profit. As an investment company, they make a lot of money, which is why their profit margins are so high – their PAT margin for FY23 was 91%.
Tata Investment stock is also debt-free. The company’s management has kept a zero-debt-to-cap ratio for a very long time. The company mainly finances its securities purchases through internal accrual and provisions. Tata Investment’s strong financial strength and track record have been the driving forces behind its share price growth.
2. Tata Technologies IPO
The rally that started in November 2023 was triggered by the launch of the company’s most-awaited initial public offering (IPO). Investors are optimistic about unlocking value once shares of the company are listed on the stock exchanges. The company is a subsidiary of the auto major, Tata Motors, and Tata Investment Corporation (TIC) is one of the promoter group entities of the company. The market regulator had earlier this year proposed a separate delisting procedure for holding companies.
3. Progressive Dividend
Tata Investment Corporation has significant shareholdings in important Tata group companies like Tata Sons, TCS, and Tata Motors among others. One of the main reasons behind Tata Investment’s strong fundamentals is that it regularly receives dividends from its investments. These dividends are one of the main sources of revenue for the company and in the last fiscal year alone, the company received dividends amounting to more than 1.7 billion rupees. Tata Investment Corporation receives a steady flow of dividends from its investments, which provides income stability to the company. It ensures that the company’s financial health is not adversely affected by market volatility.
How Tata Investment have Performed
Tata Investment has seen a significant increase in its share price over the past five days, with a rise of more than 30% in the past five days and over 43% in the past month. For the year 2023, the company’s shares have seen a significant increase of more than 100%. The company’s share price reached a 52-week high at ₹ 4,735 on November 21, 2023, and a 52-week low at ₹ 1,730 on March 31, 2023.
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