Mumbai: Shares of Tata Global Beverages rallied more than 10 percent on the bourses Tuesday as investors cheered the company's deal with US coffee giant Starbucks to set up cafes in India.
Tata Global shares ended the day at Rs 107.75, up 10.01 percent on the BSE. During the day, the stock climbed as much as 11 percent.
A similar trend was seen on the NSE, where the scrip jumped by 10.52 percent to close at Rs 108.20.
In the process, the market value of the company advanced by Rs 606 crore to Rs 6,663 crore.
"This is positive news for Tata Global Beverages. Starbucks is a successful franchise and the joint venture is a win-win for Tata Global Beverages," Ashika Stock Brokers Research Head Paras Bothra said.
Under the deal, US-based coffee chain Starbucks will set up cafes in India through an equal joint venture with Tata Global Beverages.
In a filing to the BSE, Tata Global Beverages said it has signed a joint venture agreement with Starbucks, which sets forth the vision of developing the business in India. Each party will hold 50 percent of the JV, Tata Starbucks.
Starbucks already has a deal with the Tata Coffee to source coffee for its global operations.
In a separate filing, Tata Coffee said it has also entered into separate agreements with Starbucks Coffee International, Inc (Starbucks), USA, and Tata Starbucks for supplying the beverage to outlets in India and other global markets.
Shares of Tata Coffee pared their initial gains and closed the day at Rs 857.60, down 0.91 percent from their previous close on the BSE.