Hello Tata!

What a day it has been! A small step for TaMo but a giant leap for Indian electric vehicle industry. So I write today as a note to myself as to what patience, vision and bull market can do to your portfolio.

As I noted earlier, I had been holding TaMo since January 2018 and the earlier bet was only based on what it’s sales are and why should it be selling at atleast one time sales which would make it close to 600/-. That story also had a small glimmer of hope that maybe one day the EV business will take off and the whole rerating will happen and blast it will go up, just like Tesla! That story, well,died last evening at 5PM with the press release confirming raising of $1B for EV business at $9-10B valuation. Let’s see how!

All of you by now have understood that if the EV business is worth $9B, the whole company should be worth well over $40B atleast. So that makes it close to 1000/- share. This is well, just the beginning. The fun begins now!

India is on cusp of a huge electrification revolution which will be led by TaMo is old news. The real juice is the news that private equity has made TaMo EV company the latest $10B unicorn. TPG isn’t working on God’s behalf. They are here to make money. So if they’re putting in $1B now, they’re looking to cash out 4-5-10x over the next five-ten years, which will generate the returns their investors are accustomed to. And I’m not sure if all of you noticed but TaMo has promised that come the day of deliverance, TPG can cash out in whichever form it like- sell it back to TaMo, IPO or anything else they wish for. So it’s not cash burn and dump like Paytm. We’re talking real returns here. And why do I think TaMo EV company’s valuation will grow? Well, let’s look at baby Tesla!

Tesla came with it’s IPO ten years back and was valued at close to $10B while it was still selling 1-2k cars in US. Come 2019 and when people realised it wasn’t going to die, it shot up from $50B to $900B in 18 months. I’m not suggesting anything but this is how EV companies are being valued and with 1.3B population, TaMo has huge domestic market to capture.

So, my hunch is, if nothing stupid happens and things just unfold as they do in the house of Tata- quietly, we’re looking for atleast 5x our money in TaMo from here. I was earlier willing to not sell it before 2025 but now I just realised at any valuation less than $100B, I’d be leaving too much money on the table. That might be the costliest profit booking ever!

PS: If this can happen for EV in TaMo, I’m just wondering if it does happen for INX in BSE, will BSE also not be rocketing north of 5000/-. Who knows! Be patient, don’t sell unless you’re dying tomorrow and let the market takes care of you. Till then, laugh, dance and make merry. Diwali came early on Dalal Street!