Tata Sons raises stake in Tata Motors, shells out Rs 2430 cr

Tata Sons has informed the exchange that it has hiked its stake in Tata Motors. It has spent Rs 2,430 crore to buy the 5 crore shares for a 1.7 percent stake at Rs 483 per share.On Monday, CNBC-TV18 had reported that promoters had likely bought the shares in a block deal. Morgan Stanley was the book runner for this deal.

Market expert, Prakash Diwan of prakashdiwan.in  says it looks like a strategic intent of the holding company to acquire something that they believe would vulnerable to any kind of disruption to the shareholding pattern.

So, overall it is positive for Tata Motors because it shows that promoter group is confident of the fortunes of the company even in these troubled times, says Dwian. However, investors need not read too much into this as it is an internal book-keeping exercise by the promoter group to bolster its holding.

Going forward Diwan believes the stock will start aligning to its sales numbers and if they are weak, then the stock could undergo a correction. So, though it may not be negative for the stock at the current juncture, this move may not necessarily support it for long.