Tata Chemicals Falls 7.6% as Tata Sons Listing Question Remains Unsettled

Tata Chemicals fell sharply on Friday, giving back much of the previous session’s gains as the prospect of a Tata Sons listing became less clear. 

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The stock dropped as much as 7.6% on September 18. Tata Investment Corporation was down 3.1%, Tata Motors Passenger Vehicles lost 2% and Tata Power slipped 1.6%. 

The reversal came after Tata Trusts publicly stated that it had not agreed to take Tata Sons to the stock market. 

That clarification followed Thursday’s Tata Sons board meeting, where the holding company discussed the Reserve Bank of India’s communication and agreed to examine its options for complying with the regulatory framework. Tata Trusts subsequently stressed that those options were not limited to a listing. 

The distinction is important because expectations around a possible Tata Sons IPO had helped lift several Tata group stocks in the previous session. 

The listing question returned after the RBI rejected Tata Sons’ request to surrender its registration as a core investment company. Tata Trusts, which owns 66% of Tata Sons, has maintained its preference for preserving the group’s existing structure. 

Noel Tata, chairman of Tata Trusts, also noted that the RBI order itself does not specifically direct Tata Sons to list or prescribe a particular course of action. According to the Trusts’ statement, the Tata Sons board has yet to determine the legal implications of the RBI communication, including what steps are required and the timeline for taking them. 

Thursday’s meeting also resulted in N Chandrasekaran being reappointed as chairman of Tata Sons. Shares of several Tata companies had risen following the meeting before reversing course on Friday. 

The possibility of a Tata Sons listing has drawn particular attention to listed companies that own shares in the holding company. 

Tata Steel and Tata Motors Passenger Vehicles each hold 3.06% of Tata Sons, while Tata Chemicals owns 2.53%. Tata Power’s stake stands at 1.65%, followed by Indian Hotels at 1.11%, Tata Consumer at 0.4% and Tata Investment Corporation at 0.25%. 

For Tata Chemicals, Friday’s fall came a day after Tata group shares had rallied on expectations surrounding the holding company. With Tata Trusts now reiterating that a public listing is only one of the options being examined, the question that drove Thursday’s gains remains unresolved.