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RBI Decision Sparks Tata Chemicals Stock Rally
16 Sep
Summary
- Tata Chemicals stock jumped 14% from its intra-day low.
- RBI rejected Tata Sons' application to surrender NBFC license.
- Tata Chemicals holds a 2.5% stake in Tata Sons, valued potentially at ₹10,000-15,000 crore.
Tata Chemicals' stock price saw a notable increase of 14% from its intra-day low, reaching ₹788.50 on Wednesday. This rally is attributed to the Reserve Bank of India's recent rejection of Tata Sons' application to surrender its core investment company registration.
This RBI decision may compel Tata Sons, the holding company of the Tata Group, to undergo a public listing. Tata Chemicals holds approximately 2.5% of Tata Sons, a stake that ICICI Securities estimates could be worth between ₹10,000 and ₹15,000 crore.
Despite short-term positive sentiment, ICICI Securities anticipates a prolonged legal battle. Meanwhile, Tata Chemicals is navigating a challenging near-term environment for its international operations due to oversupply and higher costs in the soda ash market. The company is focused on its domestic business and long-term diversification into specialty segments and batteries.
