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Markets unfazed, stock rises

Nano, that once was perceived to drive the Tata Motors stock, failed to have any negative impact on the company’s share price.

autos Updated: Aug 22, 2008 21:55 IST
Sandeep Singh

Nano, that once was perceived to drive the Tata Motors stock, failed to have any negative impact on the company’s share price as Ratan Tata announced that he will not come to Singur if he is unwanted and give up the Rs 1,500 crore investment already made.

In fact, as shares of the company rose 1.8 per cent post-announcement, experts feel that if Tata withdraws from Singur, the project will be delayed by merely six to eight months. A fact that the market had already factored in.

“Nano has no impact on the bottom line of Tata Motors in the near-term and so it does not hold a lot of significance on the share prices,” said a senior official with a fund house.

“The Singur happenings have been getting discounted over the past,” said Sanjeev Gopalakrishnan, head of research, Justtrade.in.

Market men are optimistic that even if Singur fails the company may roll out the product as per schedule from either its Pantnagar or Pune plants. “The scale-up of the facility however may take 6-8 months,” said, Supriya Khedkar, senior analyst with ICICIdirect.

For a group that lives and dies by the bottomline, a delay like this can be taken in stride. “Being a low margin product, no one is expecting a lot of profit from Nano immediately,” Khedkar said. “The market is also cautious on the performance front of Nano.”