Shares of Tata Motors [Get Quote], which surged over eight per cent in morning trade, shed gains to settle up three per cent on the Bombay Stock Exchange and National Stock Exchange as the company launched the world's cheapest car 'Nano'.

The scrip pared its morning gains to end up 3.2 per cent at Rs 166.05 on the Bombay Stock Exchange, after touching an intra-day high of Rs 173.85 in morning trade.

"Tata Motors shares opened on a positive note as the American Depository Receipts (ADRs) closed in the green on Friday last week. The scrip gave in to profit booking later in the day settling considerably below its intra-day high," Geojit Financial Services [Get Quote] Research head Alex Mathew said.

The scrip also touched an intra-day low of Rs 164.65 at the BSE.

However, analysts said that the launch of the Nano would not be able to provide much boost to the stock at present as the delivery of the first lot of Nano cars would begin only in July.

On the National Stock Exchange, the scrip settled up 3.26 per cent at Rs 166.15 at the end of trade.

A total of over 1.17 crore shares of Tata Motors changed hands at both the bourses today.