Tata Sons plans IPO launch to raise ₹55,000 crore

Shares of six Tata Group companies surged to all-time highs on Thursday following reports suggesting that Tata Sons, the conglomerate's holding company, is contemplating an initial public offering (IPO) to raise ₹55,000 crore.

Tata Steel, Tata Chemicals, Tata Power, Tata Investment Corp, Tata Consumer, and Tata Comm all experienced notable spikes in their share prices, with Tata Steel reaching ₹159, Tata Chemicals at ₹1,349, Tata Power at ₹433.30, Tata Investment Corp at ₹9,756.85, Tata Consumer at ₹1,269.60, and Tata Comm at ₹2,038.40.

This surge in share prices contributed to a robust performance across the Tata Group, with ten of its companies closing over 5% higher. Consequently, the group's market capitalization increased by 3.3% to ₹31.9 trillion from ₹30.89 trillion. For comparison, the Adani and Ambani groups currently hold market capitalizations of ₹16.26 trillion and ₹22.13 trillion, respectively.

Market analysts attribute this positive sentiment to the potential IPO, which has garnered significant investor interest, particularly among companies holding substantial stakes in Tata Sons. Vidit Shah, an analyst at Spark PWM, estimates the value of Tata Sons' stakes in various listed companies, such as Tata Chemicals, Tata Power, Tata Motors, and Indian Hotels. These stakes are believed to hold substantial value, with Tata Chemicals alone estimated to be worth ₹19,850 crore.

Shah's analysis suggests that Tata Chemicals' intrinsic valuation could significantly increase post-IPO, especially if Tata Sons achieves a valuation of ₹10-11 trillion. Furthermore, he notes the potential for higher valuations of Tata Sons' unlisted investments, particularly in emerging sectors like semiconductors and EV batteries.

Overall, the reports of a potential Tata Sons IPO have spurred optimism among investors, leading to a surge in Tata Group stock prices and a positive outlook for the conglomerate's future prospects.