Tata Chemicals Plunges 8% After F&O Ban Lifts

20 Mar 2024 , 01:01 PM

Following the stock’s removal from the F&O embargo on Wednesday, shares of Tata Chemicals Ltd. dropped by more than 8%.

For the majority of the March F&O series, the Tata Group stock was prohibited from trading.

Following a note from Spark Capital regarding Tata Sons’ possible IPO by September 2025 to comply with the Reserve Bank of India’s upper-layer NBFC norms, shares had already surged more than 40% earlier this month.

According to the regulations, an upper-layer NBFC must list after three years of notification. The RBI notified Tata Sons in September of 2022.

Given that it has a 3% interest in Tata Sons, Spark Capital stated in a note dated March 4 that using Tata Chemicals to take advantage of this value-unlocking opportunity is the most practical course of action.

Over the weekend, sources informed CNBC-TV18 that the group is exploring several options, including reducing debt and spinning out companies like Tata Capital, and that an IPO of Tata Sons seems improbable.

Tata Sons on Tuesday sold a 0.6% share in Tata Consultancy Services (TCS) for about ₹9,000 crore, possibly as a step towards reducing corporate debt.

It is not possible to build new holdings in the stock during the F&O ban; however, this is possible once the stock has exited the embargo.

Tata Chemicals’ shares are currently trading 8% lower at ₹1,032. The majority of the gains earned by the stock during its most recent surge have been relinquished.

For feedback and suggestions, write to us at [e-mail]