Tata Investment shares fall 9% in October after a sizzling 53% September rally. Has the frenzy run its course? – News Air Insight

Tata Investment Corporation Ltd (TICL) shares are losing steam this month after a blistering run-up in September. The stock fell as much as 4.5% on Tuesday to Rs 9,500 on the BSE, extending its October decline to nearly 9%, as investors booked profits following a two-week, 35% surge last month ahead of the Tata Capital IPO and a stock split announcement.

TICL shares soared 52.7% in September, with most of the rally packed into just two sessions: September 23, when the company announced a 10-for-1 stock split, and September 30, after Tata Capital unveiled its IPO details. The sharp rise left the counter vulnerable to short-term corrections as traders locked in gains.

The stock split is expected to improve liquidity and attract more retail investors, but it does not alter the company’s fundamentals. As a holding company, TICL’s valuation is better assessed in relation to the performance and growth prospects of its investee firms, rather than traditional price-to-earnings multiples, given its earnings volatility from realised gains.

Tata Investment, which holds around 80 million shares in Tata Capital, equivalent to a 2.1% stake, has drawn investor attention as Tata Capital’s Rs 15,512-crore IPO hit the market this week. The offering opened for subscription on Monday, October 6, and was 39% subscribed by the end of Day 1.

IPO buzz and unlocking value

Investors are betting the Tata Capital listing could unlock value for TICL and boost its standing within the listed financial services ecosystem. “Given current market sentiment, Tata Capital’s management has wisely priced the IPO a bit below the industry average, providing good room for a healthy listing gain,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities.

The Tata Capital IPO has a price band of Rs 310–326 per share and will close on Wednesday. The issue comprises a fresh issue of Rs 6,846 crore and an offer for sale worth Rs 8,666 crore by promoter Tata Sons, which currently holds a 95.6% stake. Anchor investors, including LIC, HDFC Mutual Fund, Morgan Stanley, and Norway’s sovereign wealth fund, have already committed Rs 4,642 crore.However, the grey market premium remains modest, hovering at Rs 12–13 above the issue price, signalling a limited 3.7% implied upside.

Split and sentiment

TICL’s 1:10 stock split, reducing the face value of each share from Rs 10 to Rs 1, has further fueled retail interest. The company has fixed October 14 as the record date.

Tata Investment remains a debt-free holding company with a long-term investment approach. Its revenues are primarily derived from dividends, interest, and capital gains from a portfolio that spans both Tata and non-Tata firms. The stock has delivered a 65% compounded annual return over the last three fiscal years, underscoring strong investor faith in its structure and exposure to the broader Tata Group ecosystem.

Also read | LG Electronics IPO GMP hints at double-digit returns. Should you subscribe?

While the Tata Capital IPO has lifted sentiment, market experts caution that TICL’s value should be judged by its investments, not short-term trading momentum. As the IPO proceeds and the stock split takes effect, investor focus is likely to shift back to the company’s fundamentals and long-term growth potential.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)