Jaguar Land Rover Ripe for IPO?

Tata Motors Ltd. would benefit from a partial spinoff of its Jaguar and Land Rover brands via an initial public offering, says Bloomberg News.

The news service cites three analysts, whose estimates of the combined value of the British boutique brands average $14 billion. The sale of a stake in JLR would garner a tidy profit for Tata, which paid $2.5 billion for the unit in 2008.

After acquiring the money-losing brands from Ford Motor Co., the Mumbai-based carmaker cut costs, expanded sales in emerging markets and pumped billions of dollars into new products. JLR boosted its global sales 29% to 314,400 vehicles in the fiscal year that ended on March 31. The unit's profits now account for most of Tata's growing income.

Some analysts contend that JLR's growth prospects are a good reason for Tata to retain 100% of the unit, Bloomberg says.

Others say a JLR IPO would attract investors who are not focused on India, thus helping Tata fund the unit's future growth. The Indian company tells Bloomberg it plans to finance JLR's growth internally. But Tata adds that it continues to consider opportunities for changes in its capital structure.