Why TVS Shares Hit All-Time High Today

TVS share price soared up over 3% on Monday to hit a new all-time high of ₹1,384.80.

What Happened: The surge in the stock comes as the company announced buying an additional 25% stake in its subsidiary Swiss E-Mobility Group. SEMG is a fully integrated e-bike platform with its core business consisting of the purchase and resale of its own branded e-bikes, third-party branded e-bikes and spare parts through retail and online stores in Switzerland and Germany.

The automobile giant currently holds a 75% stake in the company which it acquired in January 2022. With this additional acquisition, SEMG will become a wholly-owned subsidiary of the two-wheeler major. The company would be acquiring the share at a price of CHF 517.36 ( around ₹47,180). The deal would cost the company around ₹180 crore.

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The announcement comes on the heels of the company’s board granting approval for a share subscription agreement involving TVS Credit Services and PI Opportunities Fund-I Scheme-II. As part of this agreement, PI will inject Rs 480 crore into TVS Motor Company’s subsidiary, TVS Credit Services. Upon the successful completion of the transaction, PI will possess approximately 9.72% of TVS Credit on a fully diluted basis.

Reacting to the development, global research firm Macquarie maintained its ‘outperform’ rating on the stock with a price target of ₹1,418. The firm noted that the fund raise in the credit subsidiary was at a marginal premium. The analyst added that the investment could cap the capital requirement for TVS Credit which is a positive for TVS’s balance sheet.

Price Action: TVS share price was up 0.79% to trade at ₹1,346.50 in the early hours of trading on Monday.

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