The Tata Motors stock rose nearly 4 percent on Tuesday whereas Tata Motors DVR was up nearly 9 percent at a time when the market sentiment seems supportive of companies grabbing the electric vehicles (EV) opportunity in India.

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Earlier this month ICICI Direct maintained a ‘buy’ rating on Tata Motors’ stock on continued deleveraging focus and EV proactiveness. The brokerage pointed to continued EV alertness as a key trigger to invest in the automaker’s stock.

Tata Motors is the passenger vehicle market leader with Nexon and plans to introduce 10 models by 2025. It also looks to launch the Jaguar all-electric by 2025, six BEVs in Land Rover over the next five years.

The upward movement in the Tata Motors shares comes alongside TVS Motor's stock, which was trading more than 11 percent higher on BSE following reports of the two-wheeler evaluating the possibility of a fundraising exercise in its EV business.

Earlier in October, Tata Motors had also announced an infusion of over $2 billion in its EV business over the next five years. This was after the automaker announced it has raised funds from private equity firm TPG.

Rishabh Jain, the programme lead at Council on Energy, Environment and Water-Centre for Energy Finance, had then said the growth trajectory for Tata Motors is looking healthy in the EV segment.

At 1:25 pm, Tata Motors shares were trading 2.63 percent higher at Rs 514.65 apiece on BSE and they were up 2.66 percent at Rs 514.75 apiece on NSE. The Tata Motors DVR stock was at Rs 286 apiece, up 6.34 percent, on BSE whereas it was trading 6.17 percent higher at Rs 285.70 on NSE.

Edelweiss Alternative Research highlighted that the spread between DVR and ordinary shares has narrowed down to 44.5 percent vs its recommended levels of 52 percent. “The spread trade is in our favour by 7.5 percent and in the course of next few months, we expect the spread to narrow down till 35 percent, which was the usual levels before 2017 end when the business was doing phenomenally well,” it said.

The brokerage added that with the bullish momentum continuing in Tata Motors, it expects DVR to O/P simultaneously and thus one should look to ride the story by betting on DVR vs ordinary shares.

Earlier in the day, Tata Motors announced that it has signed a retail finance MoU with the Bank of India (BOI) to offer finance options to its passenger vehicle customers. As part of the tie-up, BOI will provide loans to Tata Motors’ customers at an interest rate starting from 6.85 percent. This scheme will offer a maximum of 90 percent financing on the total cost of the vehicle, which includes ex-showroom pricing, insurance and registration. Customers can also avail of an EMI option starting with Rs. 1502 per lakh on a 7-year repayment period.

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(Edited by : Dipti Sharma)