Tata Motors Stocks Rise Further 

Tata Motors Stocks Rise Further
Tata Motors Stocks Rise Further 

Hi Guys, Ideas for profit all eyes on Tata motors. in a bit to capture the significant opportunity that electric vehicles offer Tata motors has signed a pact with tpg rights for equity funding of one billion dollars that's almost 7,500 crore rupees for a stake of 11 to 15 percent in a separate entity an eevee company that will be created to focus only on electric vehicles.

This transaction assigns a post-money valuation of 9.1 billion dollars that's almost 68 250 crores to Tata motors eevee business which is 45 of the current market capitalization of the listed entity that is Tata motors the ev industry has been registering a growth of one and a half to 2x every year between fy17 and fy21 and it's expected to post a 2.5 to 2.7 times growth of fy 21 volumes in f by 22.

TAILWINDS FOR DOMESTIC EV SECTOR

1. Favourable government policies

2. Rise in cost of ownership of ICE vehicles

3. Increase in fuel cost

4. Aspirational product launches


And now the industry is gearing up for an exponential growth there are myriad reasons which can potentially lead to huge growth in the ev space favorable government policies when the government has started giving monetary incentives rise in the total cost of ownership of traditional ice vehicles due to change in emission norms and increase in fuel cost and aspirational launches by oems are some of the factors that will fuel ev demand.


Tata Motors Stocks Rise Further
Tata Motors Stocks Rise Further 


Currently Tata motors is an undisputed leader in manufacturing and selling EVs in india and has three products in its portfolio now on the back of product performance Tata motors has been able to capture more than 70 percent of domestic EV market share. If you look back the company sold 4 200 or evs in fy 21 and in fy 22 it has already sold 3 341 units till now.

Tata motors evs have reached 60 cities and have 150 touch points that's driving the growth for the company to create a wider adoption tata motors provides captive charges to customers and it's also offering various ways to customers to test as well as own EVs.

TAMO'S EV AMBITIONS

1. Launch 10 new EVs

2. Catalyse charging infra

3. Invest in drive trains, products & platforms


In terms of future plans Tata motors aims to launch 10 new electric vehicles catalyze charging infrastructure and invest proactively in drive trains products as well as platforms. Now talking about the deal under the transaction the company has proposed to create two subsidiaries one for traditional passenger vehicles where the listed entity Tata motors will hold a hundred percent stake and the other one for electric vehicles where tarmac will hold 85 to 89 stake and the remaining 11 to 15 percent like i said will be held by tpg rice.


Tata Motors Stocks Rise Further
Tata Motors Stocks Rise Further 


Now TPG rice climate is a seven billion dollar fund with a focus on investing in companies that enable carbon reduction in a quantifiable way TPG rise has made a commitment to invest one billion dollars of which 50% will be paid by march 22 for setting up of the eevee company and the remaining will come by q3 fy22 the deal values Tata motors eevee company business at 9.1 billion dollars close to 68 250 crores which is 45 of the current market gap of Tata motors.

The EV company will use all the existing investments in technologies brands manufacturing capacities and even the sales network of the pv company which will keep the ev company asset like it however will pay a fee to the pv business for using its facilities additionally the ev company will create and build its own future intellectual property.

To succeed in EVs Tara motors needs to make an investment to the tune of 16 000 crores over the next 5 years in products platforms drive trains dedicated EV manufacturing charging infrastructure and advanced technologies therefore this deal plays an important role in accelerating the progress in this area so from an investor standpoint what should you do now despite a 25 rise in the stock price in the last 5 trading days our sotp valuation suggests another 28 upside hence.

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