- Share price of
Tata Investment Corporation is surging because of its dividend income, interest and profit on sale of investments. - The company aims to invest in sector leaders that have potential to remain value accretive over the medium and long term.
- Besides other stocks, the company has invested huge corpus in all Tata company stocks.
Tata Investment Corporation is a non-banking financial company (NBFC) involved in making long-term investments. Shares of the company are surging because it is witnessing a boost in its income through dividend, interest and profit on sale of investments. It is registered with the RBI under the category of investment company.
The company invests in a diversified portfolio of listed and unlisted equity shares, debt instruments, mutual funds including Tata companies. Its primary sources of income consist of dividend, interest and gains on sale of long term investments.
“Tata Investment Corporation has shown a massive rally on its robust revenue from the higher dividend income, interest and profit on sale of investments. The company has well exploited the opportunities to invest in companies which have consistent growth prospects with high quality earnings. Its business strategy to invest for the long term to realize gains to augment the operating income for dividend distribution has boosted the investors’ confidence in the company,” said Dr Ravi Singh, vice president and head of Research at Share India.
The Tata firm reported about 66% growth in consolidated net profit at ₹89 crore, driven by higher dividend income.
Catch up rally in holding companies that typically trade at discount
Shares of holding companies like Bajaj Holdings and Investment, Aditya Birla Capital, L&T Finance Holdings have been doing well recently.
Analysts say this is because investors are being cautious amid volatile market situations and investing in well known group companies that offer attractive holding company discounts.
“All the group companies of
Analysts say that whenever there is a heightened activity in the market, these holding companies tend to move higher because they are available at discounted price. “Shares of other group holding companies have also seen catch up rallies,” said Baithini.
Tata Investment Corporation aims to invest in sector leaders
In the future, Tata Investment Corporation aims to invest in sector leaders that have potential to remain value accretive over the medium and long term. “Management will evaluate and select investments based on high quality governance, long term sustainability and strength of the investee company’s balance sheets,” the company said in its FY22 annual report.
Besides other stocks, the company has invested huge corpus in all Tata company stocks. So basically, with an exposure to Tata Investment Corporation’s stock, one can have exposure to many other Tata Group companies and other unlisted companies as well. The market capitalisation of the company stood at ₹13,984 crore as of September 2022.
It’s also looking to invest in new age companies. “Your 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 in its annual report.
Here is the sector-wise investment distribution
$TATAINVEST.NSE Completely Bullish on this stock as BIG ELEPHANT BARS WITH Volume are clearly visibile but as investors and Traders we need to get a better price to enter into the Stock to make the best use of it. So, any price near 2400 will be a GOOD BUY!
— (@Tradingmonks) September 21, 2022]]>SEE ALSO: