Investors are unhappy with the Tata Motors stock and Tata Motors management is also aware about this fact.
And an aggressive bid for Jaguar and Land Rover will make markets further unhappy, but here is something that could get investors smiling.
Tata Motors is considering IPO for its ancillary subsidiaries-HV Transmissions and HV Axles. The company may also consider a strategic stake sale in ancillary units before IPO.
Tata Motors is planning to de-merge its ancillary subsidiaries by this fiscal-end, moreover it is also eyeing international alliances and external customers for its two divisions.
HV Transmissions is Tata Motors'' Gear Box Division and HV Axles is its Heavy Axle Division, Analysts see some rich valuations in these ancillary units.
HVAL and HVTL revenues are seen in range the range of Rs 200-250 crore and market capitalization for these ancillary units were seen at Rs 2,000 crore each.
Tata Motors stock has given a negative return of 20 per cent in the last one year while the Sensex posted a positive return of 30 per cent.
Analysts see value-unlocking proposal as a positive move by Tata Motors, however they are a bit worried about the fact that auto ancillaries companies are not doing too well on Dalal Street.
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