RBI keeps Tata Sons NBFC status, Tata-Chemicals +20% Tata-Investment-Corporation +10%
Big day for Tata Group fans: Tata stocks shot up after the Reserve Bank of India (RBI) decided to keep Tata Sons' NBFC status, opening the door for a possible stock market debut.
Tata Chemicals saw a huge 20% jump, and Tata Investment Corporation wasn't far behind with a 10% rise.
Manish Bhandari: Tata valuations could rise
While shares of Tata Motors Passenger Vehicles, Indian Hotels, and Tata Power had an early boost before settling down, experts say companies like Tata Chemicals and Tata Steel (which own small stakes in Tata Sons) could see their valuations get a nice lift if the listing happens.
As Manish Bhandari, chief executive officer and portfolio manager at Vallum Capital, puts it, "It will set a valuation benchmark as an embedded value in each company, as currently the investment is on book value. But there is no reason to think that group companies will sell shares in the open market and realize value," though don't expect instant cash windfalls; group companies probably won't sell their shares right away.