The 30-share BSE Sensex jumped 349.05 points or 0.43% to settle at an all-time closing high of 82,134.61, extending its winning momentum to the eighth day in a row. File
| Photo Credit: Reuters

Equity benchmark indices Sensex and Nifty hit their all-time high levels on Thursday (August 29, 2024), driven by a rally in index majors Reliance Industries and Tata Motors.

The 30-share BSE Sensex jumped 349.05 points or 0.43% to settle at an all-time closing high of 82,134.61, extending its winning momentum to the eighth day in a row. During the day, it soared 500.27 points or 0.61 per cent to hit a lifetime intra-day peak of 82,285.83.

Rallying for the 11th straight session, the NSE Nifty surged 99.60 points or 0.40% to settle at a new closing high of 25,151.95. During the trade, the benchmark climbed 140.55 points or 0.56% to hit a fresh record intra-day peak of 25,192.90.

Among the 30 Sensex firms, Tata Motors jumped over 4%, followed by Bajaj Finserv, Bajaj Finance, HCL Technologies, ITC, Reliance Industries, Tech Mahindra, Maruti and State Bank of India.

Reliance Industries climbed nearly 2% after Mukesh Ambani, chairman and managing director of the firm, said the board of the company will meet on September 5 to consider issuing bonus shares in the ratio of 1:1.

“When Reliance grows, we reward our shareholders handsomely,” Mr. Ambani said.

Mahindra & Mahindra, Sun Pharma, JSW Steel, Kotak Mahindra Bank, Infosys and Tata Steel were among the biggest laggards.

In Asian markets, Seoul, Tokyo and Shanghai settled in the negative territory, while Hong Kong ended higher.

European markets were trading in the positive zone. The U.S. markets ended lower on Wednesday (August 28, 2024).

Foreign Institutional Investors (FIIs) offloaded equities worth ₹1,347.53 crore on Wednesday(August 28, 2024), according to exchange data.

Global oil benchmark Brent crude declined 0.60% to USD 78.27 a barrel.

Rising for the tenth straight session on Wednesday (August 28, 2024), the NSE Nifty went up by 34.60 points or 0.14% to settle at a new closing high of 25,052.35. The benchmark surged 111.85 points or 0.44% to hit a fresh intra-day all-time peak of 25,129.60.

Extending its winning run to the seventh day in a row, the BSE benchmark climbed 73.80 points or 0.09 per cent to settle at 81,785.56.

As per the scheme, the existing Passenger Vehicle business in TMPV, will be merged into TML, the existing listed entity, the company said in a regulatory filing. File

The Board of Directors of Tata Motors Ltd. (TML) on August 1 approved a Composite Scheme of Arrangement amongst TML, TML Commercial Vehicles Limited (TMLCV), Tata Motors Passenger Vehicles Limited (TMPV) and their respective shareholders for separation of the Commercial Vehicles and Passenger Vehicles businesses of the company into two entities.

As a part of the scheme, TML will demerge its Commercial Vehicle undertaking involving the Commercial Vehicle business (all the assets, liabilities and employees relating to the Commercial vehicle business) and all its related investments into TMLCV.

As per the scheme, the existing Passenger Vehicle business in TMPV, will be merged into TML, the existing listed entity, the company said in a regulatory filing.

After the scheme becomes effective, both TMLCV and TML will be renamed, resulting in two separate listed entities. These include the Commercial Vehicle business and its related investments, under the name TML, and The Passenger Vehicle business, the Electric Vehicle (TPEM) business, JLR and their related investments, under the name TMPV.

According to the scheme, shareholders of TML will receive 01 share of TMLCV of face value ₹2 fully paid up for every 01 fully paid-up share of ₹2 held in TML of the same class.

“These actions would further empower the respective business groups to pursue their differentiated strategies with greater agility while reinforcing accountability and will enhance shareholder value. The scheme will not have any adverse impact on employees, customers, creditors and other business partners,” Tata Motors said in a statement.

The scheme is subject to all the necessary shareholder, creditor and regulatory approvals which can take around 12-15 months to complete, the company said.

Tata Motors is a leading manufacturer of commercial vehicles, including trucks and buses, in India. File
| Photo Credit: P.V. Sivakumar

Tata Motors on June 19 said it will hike prices of its commercial vehicles by up to 2% from July 1, 2024 to offset the impact of rising commodity prices.

The price hike will be applicable across the entire range of commercial vehicles, and will vary as per individual model and variant, Tata Motors said in a statement.

Earlier this year, the company had announced a price hike by up to 2% from April 1, 2024 to offset the residual impact of the past input costs.

Tata Motors is a leading manufacturer of commercial vehicles, including trucks and buses, in India.

File photo: A private security guard walks outside the closed Tata Motors Nano car factory in Singur in this April 27, 2011.
| Photo Credit: Reuters

The story so far: In what could serve as an epilogue to a long-drawn tussle between Tata Motors and the West Bengal Industrial Development Corporation (WBIDC), an arbitration panel on Monday directed the latter to compensate the automobile manufacturer for “the loss of capital investments” for the suspended Nano manufacturing facility at Singur. Tata Motors was forced to exit the town in southern Bengal following protests by Trinamool Congress leader Mamata Banerjee alleging “forcible acquisition of land” and forced displacements. 

In an exchange filing on Monday, Tata Motors revealed the conclusion of the arbitration panel’s proceedings in its favour. With unanimous agreement, Tata Motors was deemed eligible to recover a sum of Rs 765.78 crore at an interest of 11% per annum from the WBIDC until actual recovery. This would be for the period beginning from September 1, 2016 — when the Supreme Court declared the acquisition of the land in central Bengal as “void and unconstitutional.” It also directed the WBIDC to pay a sum of Rs 1 crore to Tata Motors towards “cost of proceedings” (or legal charges).

Reacting to the development, TMC MP from Dum Dum (West Bengal) Sougata Roy said the tribunal’s order was neither the final verdict nor a judgment of the Supreme Court. “Legal avenues are still open for the State government,” news agency PTI quoted him as saying.

What led to the legal battle?  

In 2006, the Left government in West Bengal headed by Buddhadeb Bhattacharya allocated 1,000 acres of land to Tata Motors for manufacturing the affordably-priced hatchback Nano in Singur. This was on a lease of 99 years and processed by the WBIDC. However, alleging forcible acquisition of the land and citing concerns about people being displaced from their lands, then opposition leader Mamata Banerjee launched the Singur land movement. 

Observing the disruptions at the site, Tata Motors began contemplating a move to another site in mid-2008. This was eventually finalised in October 2008. 

In 2011, the newly-elected Trinamool Congress government got the Singur Land Rehabilitation & Development Act, 2011 passed in the legislative Assembly. This became the epicentre of a legal battle as it proposed to take possession of the land leased out to Tata Motors. It also aspired to return the land to owners who had not accepted the compensation granted to them by the previous Left-front government. The balance portion, the Act stated, was to be utilised for “public interest and benefit of the State.”  

Observing the disruptions at the site, Tata Motors began contemplating a move to another site in mid-2008. This was eventually finalised in October 2008. 

How did Tata Motors react to the Singur Act?  

The automobile manufacturer challenged the Singur Act in the Calcutta High Court in June 2011. Since then, it has argued that it has not been provided with “reasonable compensation,” with the Act also taking away their rights over the land. 

Also read: Singur imbroglio

In fact, as reported widely in the press, Tata Group Chairman Ratan Tata, during a press conference with the then Minister of Commerce and Industries Nirupam Sen in 2009, had expressed his willingness to return the land in return for adequate compensation. “We have no plans for Singur but will cooperate with the government if they have a plan that makes sense to the government and us. We do not wish to sit on the land,” the now Chairman Emeritus of Tata Sons was quoted as saying. 

How have the legal proceedings panned out?  

The Division Bench of the Calcutta High Court delivered a setback to the TMC-administered State government. In June 2012, the Court declared the Act to be “void and unconstitutional.” It also observed that the Act had not received assent from the President of India. This was a shot in the arm for the automobile company, which had made investments of Rs 1,800 crore in the project. Furthermore, as also highlighted in the press conference mentioned previously, after recoveries, ‘sunk costs’ amounted to Rs 500 crore. “All the equipment had been installed and trial production had begun. In fact, about 15 to 20 cars were ready for roll-out,” a statement in June 2011 said.

The State government, however, decided to challenge the verdict in the Supreme Court. In August 2016, the Supreme Court deemed the acquisition of the land itself (for the car manufacturing facility) from cultivators and landowners to be “illegal and void.” It directed that the land be restored to the landowners and/or cultivators within 12 weeks from the date of the judgement. 

Furthermore, it held, “The compensation which has already been paid to the landowners/cultivators shall not be recovered by the State government as they have been deprived of the occupation and enjoyment of their lands for the last ten years.” 

How did the case reach the arbitration tribunal? 

The initial lease agreement signed with the Left-front government contained a clause that should the acquisition be declared illegal, the West Bengal government would have to indemnify Tata Motors.  Other than this, it also provided for arbitration as a mechanism to resolve disputes between the two coordinating parties, that is, Tata Motors and WBIDC. This was under the provisions of the Arbitration and Reconciliation Act, 1996.

Subsequently, the automobile manufacturer’s request for compensation was declined. It was then that Tata Motors exercised its right for initiating arbitration proceedings. The tribunal consisted of two retired judges from the Calcutta High Court and was presided over by a retired judge of the Supreme Court. The proceedings commenced in May 2019. After WBIDC’s counterclaim, the tribunal initiated proceedings in October 2021, heading towards cross-examinations of the parties.