1:2 Split Soon: Ahead Of Splitting, Tata Group's 79-Year-Old Auto Company Makes Big Announcement; Buy Or Sell?

Tata Group-backed 79-year-old automobile giant, Tata Motors share is in focus on Wednesday after the company announced that it opened its fifth Registered Vehicle Scrapping Facility (RVSF) near Delhi, marking a significant stride in its commitment to advancing sustainable mobility. This announcement also comes ahead of its demerger of businesses in the ratio of 1:2. Tata Motors' share price has sharply corrected, creating a buy-on-dips-like scenario.

Called as 'Re.Wi.Re - Recycle with Respect,' the new cutting-edge facility deploys environmentally friendly processes and can safely disassemble 18,000 end-of-life vehicles annually.

The RVSF is developed in partnership with Johar Motors and is adept at responsibly scrapping passenger and commercial vehicles of all brands.

In a statement, it said, this significant milestone follows the resounding success of Tata Motors' four preceding RVSFs in Jaipur, Bhubaneshwar, Surat and Chandigarh, reiterating the company's commitment to advancing sustainable initiatives.

Girish Wagh, Executive Director, Tata Motors, said "Tata Motors has been at the forefront of driving innovation and sustainability to shape the future of mobility. The launch of our fifth scrapping facility marks a significant step forward in making sustainable practices and responsible vehicle disposal more accessible."

Wagh added, "Creating value from scrap aligns with our vision of building a circular economy. It also contributes to the Government's efforts to promote sustainable automotive practices. This state-of-the-art facility will set new benchmarks in disposing of vehicles responsibly and pave the way towards a cleaner, more sustainable future for all."

Re.Wi.Re. is a cutting-edge facility, purpose-built for dismantling end-of-life passenger and commercial vehicles across all brands, with a focus on employing environmentally friendly practices. The fully digitalized facility is equipped with dedicated cell-type and line-type dismantling for commercial vehicles and passenger vehicles, respectively, and all its operations are seamless and paperless. Additionally, there are dedicated stations for the safe dismantling of various components, including tyres, batteries, fuel, oils, liquids, and gases.

Every vehicle undergoes a meticulous documentation and dismantling process specifically designed to meet the requirements of passenger and commercial vehicles. By doing so, the dismantling process ensures maximum attention to detail, guaranteeing the safe disposal of all components as per the vehicle scrappage policy. Ultimately, the Re.Wi.Re. facility embodies a ground-breaking leap towards fostering sustainable practices within the automotive industry.

Tata Motors Share Price:

At the time of writing, Tata Motors' share price traded at Rs 934.75 apiece on BSE, down by 2.4% with a market cap of Rs 3,10,740.64 crore. Tata Group stocks were broadly in red after Tata Sons offloaded over 2 crore equity shares in the Group's largest company TCS.

Tata Motors' stock price has touched 52-week high and low of Rs 1,065.60 apiece and Rs 400.40 apiece respectively.

Despite its latest fall, Tata Motors' share is still a multi-bagger as it is trading higher by 133.5% from its 1-year lows.

Motilal Oswal has kept a neutral stance with a target price of Rs 1,000 on Tata Motors. While Sharekhan and KR Choksey have kept much higher target prices of Rs 1,188 and Rs 1,178 on Tata Motors ahead.

Tata Motors Stock Split:

Tata Motors received approval to be demerged into two separate listed companies housing A) the Commercial Vehicles business and its related investments in one entity and B) the Passenger Vehicles businesses including PV, EV, JLR and its related investments in another entity. Tata Motors will be split into two, hence a ratio of 1:2.

As per the filing, the demerger is a logical progression of the subsidiarisation of PV and EV businesses done earlier in 2022 and shall further empower the respective businesses to pursue their respective strategies to deliver higher growths with greater agility while reinforcing accountability.

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