Tata Investment Corp shares crash 90% in just one day! Is that true?

Synopsis

Shares of Tata Investment Corporation fell sharply on October 21, hitting a low of Rs 1,015 on the NSE, following a 1:10 stock split. The apparent drop is purely optical, as the company’s market capitalisation and investor holdings remain unchanged. Post-split, the stock opened around Rs 1,056, making shares more affordable and improving liquidity.

Shares of Tata Investment Corporation fell sharply on Tuesday, October 21, slipping as much as 90% to the day’s low of Rs 1,015 on the NSE. At first glance, the drop might seem alarming — but it is purely optical, as the stock traded ex-split following its 1:10 stock split.

The company had announced a sub-division of each equity share of face value Rs 10 into 10 shares of face value Re 1 each, with October 14 set as the record date. Investors holding the stock by the end of trading on Monday qualified for the split.

The stock, which had closed at Rs 9,949 – up 7.04% in the previous session – opened lower on Tuesday in line with the adjustment and was seen trading around Rs 1,056 in early deals. While the price appears to have tumbled, the company’s market capitalisation and investor holdings remain unchanged.

The split increases the number of outstanding shares, making them more affordable and improving liquidity – a move often aimed at attracting more retail investors.

Investor enthusiasm around the stock has been further fueled by the looming deadline for Tata Sons — the holding company of India’s largest conglomerate — to become a publicly listed entity. Under RBI norms, upper-layer NBFCs must list within three years of notification, with September 30 marking the end of that period. While Tata Sons sought to sidestep the mandate by applying for NBFC registration in 2024, the central bank’s last communication in January 2025 suggested the deadline remains in force.

A listing could unlock significant value for Tata Investment and strengthen its balance sheet, even though the company holds just 0.1% in Tata Sons. It also owns 2.1% of Tata Capital, which was listed on the bourses on October 13.

Q1 Performance Snapshot

Last month, the company reported an 11.6% year-on-year (YoY) rise in its consolidated profit after tax (PAT), which stood at Rs 146.30 crore, up from Rs 131.07 crore in the year-ago period. Meanwhile, its revenue from operations rose to Rs 145.46 crore, from Rs 142.46 crore in Q1FY25, marking a 2.1% YoY increase.

On a standalone basis, the company’s net profit surged 23.5% YoY to Rs 139.22 crore, compared with Rs 112.76 crore in the same quarter last year, while revenue from operations grew 21% YoY.

Around 9:20 am, shares of the company, following the adjustment, gained over 7% to trade at the day’s high of Rs 1,069 per share on the NSE.

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