Stocks

Shares of TVS firms rise on new ownership plan

Our Bureau Chennai | Updated on December 11, 2020

The shares of Chennai-based TVS Group are attracting attention from traders on the back of the Group’s proposed ownership restructuring plan.

The shares of most TVS group companies surged following the announcement. The main gainers included TVS Electronics, up 17.11 per cent, TVS Srichakra up 16.74 per cent, Sundaram Clayton (10.7 per cent), and Sundaram Brake (3.72 per cent). The share price of TVS Motor Company fell 2.74 per cent.

 

Venu Srinivasan, MD of TVS Motor Company, had said on Thursday the family has agreed to subscribe to the terms of a memorandum of family arrangement to align and synchronise the ownership of shares in various group companies.

AK Narayan, Founder and CEO of AK Narayan Associates, a Chennai-based independent financial distribution and consulting house, said, “Unlike some groups that are grappling with the succession plan issues, TVS has announced its plan. This is a good move as it will give clarity in terms of management to the employees and shareholders.” The move will enhance the group’s corporate governance score, too, as the management has given a clear directional sense of its future plans, said another analyst.

Besides, competition amongst family members can drive the performance of companies, Narayan added.

Though some stocks reacted positively to the news, going forward fundamentals and other details about restructuring and growth plans will set the direction for individual stocks in the group, Narayan further said.

Published on December 11, 2020

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