By IANS,
Mumbai : Ahead of the launch of the world’s cheapest car Nano, the Tata Motors scrip shot up over eight percent in Monday morning trade.
The commercial roll-out of the small car will take place around 4.30 p.m. in Mumbai at a ceremony in the Taj Mahal Palace & Tower, a hotel partially destroyed by terrorist attacks last November.
The Tata Motors stock, which opened higher at Rs.168.75, soon went up eight percent to touch an intra-day high of Rs.173.85.
Around 11 a.m., the scrip had settled down at Rs.168.60, still trading about 4.8 percent higher than its previous close.
Showcasing the Nano prototype last year, Tata Motors had announced that it would cost Rs.100,000 ($2,000) at the factory gate – cheaper than any other car on the road now.
The four-door, five-seat car has a 33-bhp engine at the rear and is targeted at the Indian middle class population that aspires to trade its two-wheelers for the Nano.
Analysts were however sceptical about Nano providing the much needed succour to a debt ridden Tata group as the company would have to sell about 2-3 million cars just to break even.
Tata Sons, the holding company of Tata Motors, is reeling under heavy debt after buying firms like Tetley Tea, Daewoo Commercial Vehicle, Corus Steel and Jaguar/Land Rover.
Analysts said about $2 billion of Tata’s debt is due in June, and the company will have to come up with a plan fast to stem losses.