Shares of a mid-cap company from the Tata group notched 4 percent gains after India’s largest domestic institutional investor said that it has increased its share in the company by approximately 2 percent. The company’s shares reached an intraday high of ₹ 1077.00 apiece, against their closing price of ₹ 1035.75 apiece on Monday.
According to an exchange filing, the Life Insurance Corporation of India (LIC) has increased its shareholding in Tata Chemicals to 2,33,78,890 shares or a 9.177 percent stake. It held 1,81,45,978 shares or a 7.123 percent stake earlier.
The increase in stake happened as a result of LIC’s investment function. The shares were bought during the period from June 27, 2023, to August 24, 2023, through open market transactions as per the filing. They were bought at an average price of ₹ 999.35 apiece.
Tata Chemicals is a Tata Group company that was incorporated in 1939. It manufactures and exports basic and specialty chemicals.
The company’s share price has remained flat over the last month. It lost nearly 8 percent until August 16, 2023, but gained an equal amount to trade at the current level. It has gained 13.57 percent on a year-to-date basis.
With a market capitalization of ₹ 26,387 crores, Tata Chemicals is a mid-cap company. It has a low return on equity of 11.81 percent and an ideal debt-to-equity ratio of 0.32. Its shares were trading at a price-to-earnings ratio (P/E) of 11.68, which is lower than the industry P/E of 32.92, indicating that the stock might be undervalued as compared to its peers.
The company’s promoters hold a 37.98 percent stake in it followed by retail investors with 27.65 percent, foreign institutions with 14.47 percent, domestic institutions with 11.37 percent and mutual funds with 8.53 percent.
Written by Simran Bafna
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