TVS Holdings, erstwhile Sundaram Clayton Ltd SCL, is an auto components manufacturer, based in Chennai and part of the TVS Group. It makes aluminium and magnesium castings for the automotive industry. SCL was the flagship company of the TVS Group before being overtaken by its subsidiary—TVS Motor Company.

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The stock fell nearly 1,000 points in trade Thursday as against yesterday's closing price. This is because the stock is trading ex its die-casting manufacturing business, which is named Sundaram-Clayton DCD. The die-casting manufacturing business has been demerged from the company.

In March, the company traded ex its redeemable preference shares and gave 116 non-convertible redeemable preference share (NCRPS) of Rs 10 each fully paid. This equals to Rs 1160 per share, that is for every one share held of Sundaram-Clayton.

How to value TVS holding?

The company is trading at a 70 percent discount in comparison to the value of its holding in TVS Motors. It has more than 50 percent stake in TVS Motors. The market capitalisation stands at Rs 10,217 crore.

So, if an investor bought one stock nearly a year ago for roughly around Rs 4,600 per share. Today, one share of the company is about Rs 5,000 but an investor also has the preference shares, which amounts to around Rs 1,160. In addition, the investor will also get one share of the die-casting business, which effectively has adjusted for around Rs 1,000.

Thus, an investor has actually made a whopping 50 percent.

Meanwhile, the market failed to hold on to opening gains and ended near the day's low in a volatile session on Thursday, with the Sensex falling 180.96 points, or 0.28 percent, to 65,252.34 and the Nifty ending at 19,386.70, down 57.30 points or 0.29 percent.

The market opened strong on positive global cues and extended the gains in the initial hours but then slipped on widespread selling in the second half to end near the day's low.

The Sensex shed 661 points from the day's high of 65,913.77 and the Nifty50 197.75 points from the high of 19,584.45.

Top Nifty losers included Reliance Industries, Grasim Industries, ONGC, Power Grid Corp and JSW Steel, while gainers were BPCL, Asian Paints, IndusInd Bank, Infosys and Britannia Industries.

First Published:Aug 24, 2023 6:58 PM IST