Why did Tata Motors shares jump up 13%?
Tata Motors shares have risen by more than 250% since its March lows, thus more than tripling investor wealth. Today, shares of Tata Motors rocketed up by almost 13% to end the day at ₹223.2.
Reason for the surge
There were rumors that US electric vehicle manufacturer, Tesla, looking to enter India may partner with Tata Motors to manufacture and sell its vehicles in India. Several insiders claim that due diligence has already been conducted, and Tesla has found Tata Motors’ facilities to be the best suited to manufacture its electric vehicles.
Last week, the price of Tata Motors’ shares were pushed up by better than anticipated domestic and Jaguar Land-Rover (JLR) sales. In December 2020, the company recorded a sales growth of 21%, having sold 53,430 units, as compared to December 2019.
Share Price Action
Shares of Tata Motors opened at ₹199.9, before falling to an intraday low of ₹199.65. In the latter half of the day it surged to hit a high of ₹225.4 before ending the day marginally lower at ₹223.2. on NSE. On BSE the Tata Motors share had surged by 11.11% to end the day at ₹220.1. Heavy volumes were witnessed in the share today, and 14.02% of the shares were taken for delivery.
Tesla has been trying to enter India for a few years now, but has been unsuccessful till now. The Union Minister for Road Transport and Highways, Nitin Gadkari had confirmed last month that Tesla would be entering India in 2021.
Tesla shares are seeing massive success in the USA markets. They were inducted into the S&P 500 late last year. Last week Tesla’s CEO, Elon Musk, also had taken up the mantle of the richest person in the world when the Tesla shares hit an all time high of $800.