TATA MOTORS DENIES JLR LISTING PLANS, SHARES UP 3.2%

Shares of Tata Motors Ltd, India’s largest auto firm by value, closed at ₹467.15, up 3.28% on Tuesday after the company denied a Bloomberg news report of listing its UK subsidiary Jaguar Land Rover Automotive Plc. A Tata Motors spokesperson said, “It untrue. We don’t have any plans of listing JLR.”

Late on Monday night, Bloomberg reported Tata Motors is considering an initial public offering of JLR citing people with knowledge of the matter. It said it has held preliminary internal discussions over the past few months about the potential listing. It is weighing London and New York as possible listing venues for Jaguar Land Rover, it said.

Equity analysts tracking the company said rumours of JLR listing has been doing the rounds for many years and there’s no truth to it. The business is generating enough cash to support future expansion. Moreover, it has been raising funds by issuing bonds from time to time and also has unutilised credit lines from the banks, should the need arise.

JLR which Tata Motors acquired from Ford Motor Co in July 2008 for $2.3 billion has been the cash-cow for the Tata group flagship. It accounts for over 80% of revenue and 100% profits for the consolidated entity.

A potential listing can help the company to reduce debt out of proceeds of JLR listing if it were to happen, but it will be at the cost of dilution of promoter’s equity, said Bharat Gianani, analyst at Sharekhan. “JLR does no really need to be listed separately unless they have a very big capex to be met and Tata Motors cannot infuse the same, which doesn’t seem to be the case currently.”