Tata Motors gears up 5 % post block deals

Shares of India’s largest commercial vehicle maker, Tata Motors surged as much as 5 per cent in early morning trade after promoter entity Tata Sons bought about 5 crore shares worth Rs 2400 crore at a 10 per cent premium to its last closing price.

According to reports Morgan Stanley was mandated to purchase the stocks in a block deal which represented close to 1.73 per cent of the Tata Motor’s total equity capital.

Around 5 crore equity shares were exchanged through three multiple block deals on the NSE at a price range of Rs 474.85-486.25 a piece.

The share purchase at this juncture can be seen as a ploy to remove erstwhile chairman, Cyrus Mistry from holding any position in the group company by shoring up the Tata Sons holding in the automobile major. For quarter ending September 30, promoter and promoter group including Tata Sons held 33 per cent stake in Tata Motors.

This move by the Tata Sons also holds significance as the promoter group may look at investing similarly in other Tata Group companies come up as a priority over the much-dragged board room battle.

Independent analysts seem to have questioned the motive behind such a move as the money could have been more judiciously invested into more valuable ventures or business.

Scrips of Tata Motors were trading at Rs 469.50 up 3 per cent on NSE.