Tata Investment shares jump 29% in 2 weeks

Shares of Tata Investment Corporation rose 6% in intraday trading on Tuesday to hit a new high of Rs 2,072.15 on BSE. Shares of the Tata Group company have soared 29% in the past two weeks. It was up 39% over the past month, compared to the 1.8% increase in the S&P BSE Sensex.

Tata Sons is the sponsor of Tata Investment Corporation, an NBFC (non-banking financial institution). The company is listed as an investment company with the Reserve Bank of India. Its activity includes investment in mutual funds, public and unlisted stocks and debt securities of companies in various sectors.

Dividend income and profits from the sale of investments are the main sources of income for the company. The company is a promoter of the Tata Mutual Fund along with Tata Sons. The company also owns a majority stake in Tata Securities Ltd, a company that distributes mutual funds and other investment-related securities.

Tata Investments recorded an autonomous profit after tax (PAT) of Rs89.74 crore for the April-June quarter (Q1FY23), up from Rs53.89 crore in Q1FY22. In the previous quarter, it had reported a PAT of Rs20.23 crore (Q4FY22). Higher dividend income of Rs 74.19 crore in Q1FY23 compared to Rs 41.26 crore in Q1FY22 and Rs 17.55 crore in Q4FY22 was the main driver behind the significant profit improvement.

Tata Investment took advantage of strong markets to generate profits of Rs 430.61 crore on equity investments (after tax), resulting in a 38% increase in net asset value in FY22 The company said future success will depend on how the economy, corporate earnings and global issues unfold in the second half.

Although investments in Tata companies represent a larger share of the Company’s portfolio and can be viewed over a longer time horizon and be more strategic in nature, the Company also invests in non-Tata, public and unlisted companies. According to Tata Investment’s FY22 annual report, the company strives to review investment opportunities and take into account domestic and international macroeconomic conditions.

“The company will continue to seek opportunities to invest in companies with stable growth prospects and high quality earnings. The company has allocated a small amount of money to new era companies with problematic valuations and whose revenues would materialize at a later stage of their growth, the company said.

In addition, it was stated that the company will continue to divide its capital between listed stocks, fixed income securities and unlisted stocks. Based on excellent governance, long-term viability and the strength of the issuing company’s balance sheets, management will evaluate and select investments.

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