Tata Stocks Fall Amid Ownership Rift
Tata Group companies lost about $3.2 billion in market value as investors reacted to uncertainty over Tata Sons’ listing and leadership.
Shares of Tata Group companies fell on Friday, reversing part of the previous session’s gains, as investors reacted to growing uncertainty around Tata Sons’ proposed listing and leadership.
By noon, about ₹30,222 crore ($3.16 billion) had been wiped off the combined market value of listed Tata Group companies, according to Reuters calculations based on LSEG data.
Tata Consultancy Services fell 2.98%, while Tata Chemicals declined 9.57% and Tata Investment Corporation dropped 3.55%. Tata Motors Passenger Vehicles fell 3.15%, Tata Elxsi declined 1.16% and Tata Motors slipped 0.32%. Tata Capital, however, gained 1.12%.
The selloff followed a dispute between Tata Sons and Tata Trusts, which owns a 66% stake in the holding company. Tata Sons' board had moved towards complying with Reserve Bank of India rules that could require the company to list, while also extending Chairman N. Chandrasekaran’s term by five years.
Tata Trusts opposed both the proposed listing and Chandrasekaran’s reappointment, describing the appointment as contrary to Tata Sons’ internal rules. The disagreement has increased uncertainty around governance and succession at the group.
The Shapoorji Pallonji Group, which owns an 18.4% stake in Tata Sons, backed the potential listing. Tata Trusts also said the SP Group had proposed monetising part of its stake through a two-tranche transaction that could raise at least $2.61 billion over 18 months.
The developments come a day after major Tata stocks gained following news of Chandrasekaran’s reappointment. The latest decline has therefore reversed some of those gains.
The dispute could also have implications for capital allocation and dividend flows from Tata Sons, with Tata Trusts relying on dividends to support its philanthropic activities.