Mumbai: Tata Motors’ market capitalization crossed Rs 4 trillion for the first time on Thursday.

The company's shares surged 6.2% to close at Rs 1,091 after Nomura upgraded its rating, Business Standard reported.

Previously, the company's market cap stood at Rs 3.63 trillion.

Further, Tata Motors' A-ordinary shares, which carry differential voting rights, rose 6.5% to Rs 747 each, collectively valued at Rs 37,990 crore.

Nomura increased its price target for Tata Motors from Rs 1,141 to Rs 1,294 with a 'buy' rating, according to the report.

The brokerage highlighted that strong execution by the luxury unit Jaguar Land Rover (JLR) could significantly boost the stock's value.

Nomura also noted that the proposed demerger of Tata Motors' commercial vehicle business could further unlock value, leading them to revise the stock's valuation multiple from 10 to 11 times its Enterprise value-to-EBITDA.

Tata Motors is currently the second-most valuable company within the Tata Group, trailing only Tata Consultancy Services.

The company's shares have risen by 38% so far this year.

Earlier, Tata Motors announced plans to form two separate companies, one for the commercial vehicles business and another for the passenger vehicles business, which includes Jaguar Land Rover (JLR), the reports said.

In May, the company received shareholder approval for a scheme to convert A-ordinary shares into ordinary shares.

This scheme, initially announced in July 2023, involves issuing seven ordinary shares of Tata Motors for every ten A-ordinary shares held.