Tata Chemicals, Tata Investment shares jump; check near-term targets, outlook

Shares of select Tata Group companies, including Tata Chemicals Ltd and Tata Investment Corporation Ltd, witnessed a sharp upmove in Tuesday's trade following the Reserve Bank of India (RBI) rejecting Tata Sons' application to surrender its registration as a core investment company (CIC).

Tata Chemicals shares zoomed 20 per cent to hit their upper price band of Rs 734.50, while Tata Investment Corporation climbed 15.24 per cent to touch a day's high of Rs 750.30. Tata Motors Passenger Vehicles Ltd (TMPV) and Tata Steel Ltd also traded in positive territory at the time of writing.

The gains came amid expectations that some Tata Group companies could benefit from a potential listing of Tata Sons, the group's holding company. The RBI's decision has brought the issue of Tata Sons' mandatory listing back into focus.

Ravi Singh, Chief Research Officer at Master Capital Services, said, "RBI's rejection of Tata Sons' request to surrender its CIC registration has brought its mandatory public listing back into focus. A potential Tata Sons IPO could unlock significant value and improve transparency, while also allowing shareholders such as Shapoorji Pallonji to monetise their stake. The development has already triggered strong buying across Tata stocks, including TCS, Tata Motors, Tata Steel, Titan and Tata Chemicals."

Tata Chemicals outlook

For Tata Chemicals, Singh sees resistance at Rs 745 in the near term and advised investors to consider exiting on any further bounce.

According to AR Ramachandran, Sebi-registered research analyst at Tips2trades, "Tata Chemicals is bullish but overbought on daily charts, with next resistance at Rs 747. Investors should keep booking profits as a daily close below the support of Rs 704 may trigger a fall towards Rs 643 in the near term."

Tata Investment outlook

On Tata Investment, Singh said the stock has the potential to hit an upside target of Rs 780 in the short term. He suggested a 'buy-on-dips' approach at Rs 680-690, with a stop loss of Rs 650.

Ramachandran also described Tata Investment as bullish but overbought on daily charts. "Next resistance is at 735. Investors should keep booking profits, as a daily close below the support of Rs 700 could lead to a downward target of Rs 643 in the near term."