Tata Investment hits record high, soars 29% in two weeks

Shares of Tata Investment Corporation hit a record high of Rs 2,072.15 on the BSE as the stock rallied 6 per cent in Tuesday’s intra-day trade. In the past two weeks, the stock of the Tata Group company has zoomed 29 per cent. In the last one month, it has surged 39 per cent, as compared to 1.8 per cent rise in the S&P BSE Sensex.

Tata Investment Corporation is a non-banking financial company (NBFC) promoted by Tata Sons. The company is registered with the Reserve Bank of India under the category of Investment Company. It is engaged in the business of investment in listed and unlisted equity shares debt instruments of companies in a wide range of Industries and in mutual funds.

The major sources of income for the company consists of dividend income and profit on sale of investments. The company together with Tata Sons is a promoter of the Tata Mutual Fund. The company is also the principal shareholder of Tata Securities Ltd a company engaged in the distribution of mutual funds and other investment-related securities.

For April-June quarter (Q1FY23), Tata Investments had reported a standalone profit after tax (PAT) of Rs 89.74 crore, against Rs 53.89 crore in Q1FY22. It had posted PAT of Rs 20.23 crore in previous quarter (Q4FY22). The healthy growth in earnings was on back of higher dividend income of Rs 74.19 crore ni Q1FY23, as against Rs 41.26 crore in Q1FY22 and Rs 17.55 crore in Q4FY22.

Tata Investment recorded an appreciation of 38 per cent in its NAV in FY22 and realized gains of Rs 430.61 crore on equity investments (post-tax) taking advantage of the buoyant markets. Going forward the performance will be dependent on how global factors, the economy and corporate earnings shape up over the second half of the year, the company said.

Tata Investment said the company aims to remain invested in leaders in sectors, which they believe have potential to remain value accretive over the medium and long term. The company further said it continues to invest for the long term while availing opportunities to realize gains to augment the operating income for dividend distribution.

The company invests in Tata and Non-Tata companies, both listed and unlisted, though investments in Tata companies constitute a larger portion and may be considered for a longer term and are strategic in nature. The company endeavours to evaluate opportunities and invest considering the macro economic conditions both globally and domestically, Tata Investment said in its FY22 annual report.

“The company will continue to look for opportunities to invest in companies which have consistent growth prospects with high quality earnings. In new age companies where valuations are a concern and whose earnings will fructify at a later stage in their development, the Company has made a small allocation of capital,” the company said.

It further said the Company will continue to allocate its capital between listed equity, fixed income and unlisted equity. Management will evaluate and select investments based on high quality governance, long term sustainability and strength of the investee company’s balance sheets.