Axis Capital Forecasts Tata Power Gain From Tata Sons Listing

Axis Capital identifies the potential public listing of Tata Sons as a significant value-unlocking trigger for Tata Power. The brokerage maintains an "Add" rating for Tata Power with a target price of ₹415, based on the company's 1.65% stake in Tata Sons.

Axis Capital estimates that a Tata Sons listing at a ₹10 trillion valuation could value Tata Power's stake at approximately ₹16,500 crore. After applying a 30% holding company discount, this would potentially add ₹35 per share to Tata Power's sum-of-the-parts valuation.

This outlook follows reports that the Reserve Bank of India rejected an application from Tata Sons to surrender its core investment company registration. This decision ensures Tata Sons remains categorized as an upper layer non-banking financial company, a status that Axis Capital suggests brings the entity closer to a possible public listing.