Domestic investor LIC crosses 5% holding in this Tata Motors; Jefferies recommends Buy – check target

Insurance behemoth Life Insurance Corporation (LIC) of India’s shareholding in Tata Group auto company – Tata Motors Ltd has crossed 5 per cent as the state-owned insurer raised stakes in the auto major over the past ten months, investing Rs 11.39 crore in the auto company.

LIC, which is also seen as a domestic institutional investor (DII), said its shareholding in Tata Motors Ltd has increased from 16,59,48,741 to 16,61,98,741 equity shares increasing its shareholding from 4.997 per cent to 5.004 per cent of the paid-up capital of the company, the insurer said in a regulatory filing on Tuesday.

"Holding in the company has crossed 5 per cent on October 31, 2022," LIC said. The acquisition of shares was done during the period from December 3, 2021, to October 31, 2022, at an average cost of Rs 455.69.

As per regulatory norms, listed companies are required to inform stock exchanges when their shareholding in a company crosses 5 per cent.

Besides LIC, celebrity investor Rakesh Jhunjhunwala also held over a 1 per cent stake, which comprises 3,67,50,000 equity shares in Tata Group auto company. Rakesh Jhunjhunwala, who was called as the Big Bull of Indian stock markets, passed away in August this year.

Tata Motors is scheduled to report its second-quarter earnings for the financial year 2022-23 (Q2FY23) on November 09, 2022. The counter in the last one year has slipped over 13 per cent, while it is down over 15 per cent year-to-date, while it has gained almost 6 per cent in a month.

Tata Motors has a market capitalisation of Rs 1.38 lakh crore and its shares ended over 2 per cent higher to Rs 421.50 per share on the BSE. While shares of LIC closed at Rs 605.30 apiece on BSE, up by 0.22 per cent from the previous close.

Global brokerage firm Jefferies said, “Notwithstanding the near-term macro challenges for JLR (Jaguar Land Rover), we continue to like Tata given a strong cyclical recovery in Indian trucks and PVs, an improved franchise in Indian PVs, and a strong EV focus.”

The brokerage retains a Buy stance with a target price of Rs 540 apiece, which implies an upside of 28 per cent on the long-term basis and added that “India business forms around 70 per cent its price target.”