Tata Group Stocks Lose $3.2 Billion in Market Value as Tata Sons Dispute Weighs

Tata group stocks came under pressure on Friday, wiping about $3.2 billion off their combined market value as differences over Tata Sons’ leadership and a possible listing moved into the open. 

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By 10:45 am, listed Tata companies had lost ₹302.22 billion, or $3.16 billion, in market capitalisation. Their combined value stood at roughly $268.5 billion at Thursday’s close. 

The major blow came from Tata Chemicals, which declined by 8.37%. Tata Investment Corporation lost 3.67%, whereas Tata Consultancy Services declined by 2.69%. 

Tata Motors Passenger Vehicles declined by 2.77%. Tata Elxsi and Tata Motors declined by 0.82% and 0.79% respectively, whereas Tata Power lost 0.56%. 

However, there were a few exceptions to this trend, with Tata Capital gaining 0.91%, and Tata Steel gaining 0.15%. 

There was a contrast in mood the previous day, since many Tata companies had seen their stock prices rise after the reappointment of N Chandrasekaran as chairman of Tata Sons for another five years. The Tata Sons board was also taking steps in order to comply with the Reserve Bank of India regulations that would pave the way for listing of its parent company. 

After the market closed on Thursday, Tata Trusts pushed back on both issues. 

The Trusts, which owns 66% of Tata Sons, opposed the listing move and challenged Chandrasekaran’s reappointment. It described the reappointment as “illegal” under Tata Sons’ articles — a position taken by Tata Trusts rather than an independent legal finding. 

The disagreement has brought questions around governance, succession and the future ownership structure of the 158-year-old Tata group into sharper focus. 

There is also a separate proposal involving the Shapoorji Pallonji Group, Tata Sons’ second-largest shareholder. 

According to Tata Trusts, the SP Group has proposed monetising part of its 18.4% holding through a two-tranche buyout. The transaction could generate at least $2.61 billion for the group over 18 months. 

Noel Tata, chairman of Tata Trusts, outlined several possible sources of funding for such a transaction, including Tata Sons’ internal cash flows, the sale of listed shares, bringing investors into newer businesses or listing some of its companies. 

The SP Group, however, publicly backed a potential listing of Tata Sons on Friday. 

That leaves the two largest Tata Sons shareholders taking different positions on how the holding company should move forward, while Friday’s selloff showed the uncertainty spilling over into the group’s listed stocks.