The share price of this prominent automobile company increased by 2.4 percent following the board’s approval of merging its subsidiary within its group entity.
With a market capitalization of Rs 3,31,216 crores, at 1:05 p.m., the shares of Tata Motors company moved up by 1.95 percent, trading at Rs 921.80 a piece on Wednesday’s afternoon session, compared to its previous closing price of Rs. 904.15 per share to today’s high of Rs 926.35 per share.
The changes in the share prices were observed after the Board of Directors of Tata Motors Limited (TML), Tata Capital Limited (TCL), and Tata Motors Finance Ltd (TMFL) approved a merger of TMFL with TCL through an National Company Law Tribunal (NCLT) scheme of arrangement
With this merger TCL will gain new customers in the fast-growing CV/PV financing segments and it also aims to serve innovative products and digital offerings to clients, while providing various growth opportunities to its own employees, according to the company’s filings.
As consideration for the merger, TCL will issue its equity shares to the shareholders of TMFL resulting in TML effectively holding a 4.7 percentage of stakes in the merged entity.The scheme of arrangement will take around 9-12 months to complete, according to the company’s filings.
The board has also approved the incorporation of a wholly-owned subsidiary named TML Commercial Vehicles to house its commercial vehicles business.
Taking a look into the financials of Tata motors The revenue from operations increased by 8.5 percent from Rs. 110,577 crores in Q3FY24 to Rs. 119,986 crores in Q4FY24. On a year-on-year basis, it increased by 26.5 percent from Rs. 345,967 crores in FY22-23 to Rs 437,928 crores in FY23-24.
The net profits of the company also witnessed a tremendous increament by 145.3 percent from Rs. 7,145 crores in Q3FY24 to Rs. 17,529 crores in Q4FY24. On a year-on-year basis, it increased by 1082.4 percent from Rs. 2,690 crores in FY22-23 to Rs 31,807 crores in FY23-24.
Analyzing the financials of the merging entity TMFL , As on March 31, 2024, the revenue from operations stood at Rs 3,996 crores and the net worth of the company was recorded at Rs 4,797 crores.
Tata motors witnessed the best ever financial performance in FY24 with the highest numbers ever for the metrics such as revenue from operations recored at Rs 437.9K crores, EBITDA at Rs 62.8K crores, PBT at ₹ 28.9K crores, and the highest ever dividend payout stood at Rs 2,310 crores.
The shares of this company generated an overall return of 68.15 percent over the past one year and 29.56 percent over the past 6 months.
As of March 2024, its shareholding pattern stood at 46.36 percent for promoters, 18.36 percent for the public, 16.08 percent for domestic institutional investors, and 19.20 percent for foreign institutional investors.
Incorporated in 1945, Tata Motors Ltd. (TaMo) is the largest commercial vehicle manufacturer and one of the top three passenger vehicle manufacturers in India. It is part of the salt-to-software conglomerate of the Tata Group which holds a 46.4 percent promoter stake in the company.
Written By Zahal
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