Shares of India’s Tata Group companies lost about $3.2 billion in market cap on Friday, as investors reacted to heightened uncertainty over the potential listing and leadership of holding company Tata Sons Pvt. Ltd., following a public dispute.
The selloff came a day after Tata Sons’ board moved towards complying with Reserve Bank of India rules that could require the holding company to list, while extending Chairman N. Chandrasekaran’s term by five years. The moves follow a growing dispute between Tata Sons and Tata Trusts, its largest shareholder, over aspects of governance and succession planning at the storied autos-to-aviation conglomerate.
By noon on Friday, about ₹30,222 crore ($3.16 billion) had been chipped off the combined market value of listed Tata Group companies, versus about $268.5 billion at Thursday’s close, Reuters calculations based on LSEG data showed.
Shares of flagship Tata Consultancy Services Ltd. slipped 2.98%, Tata Chemicals Ltd. tumbled 9.57%, while Tata Investment Corporation Ltd. fell 3.55%. Tata Motors Passenger Vehicles Ltd. dropped 3.15%, utility Tata Power Co. Ltd. lost 0.16% and Tata Elxsi Ltd. slipped 1.16%. Shares of Tata Motors Ltd. fell 0.32% while those of Tata Capital Ltd. rose 1.12%.
Friday’s declines reversed some of Thursday’s gains in group stocks that followed news of Chandrasekaran’s reappointment.
After market hours on Thursday, Tata Trusts, which owns 66% of Tata Sons, opposed both moves on the listing and the reappointment, exposing a widening rift over the leadership and future structure of the 158-year-old group. The Tata Trusts called Chandrasekaran’s reappointment “illegal” under Tata Sons’ articles of association and opposed listing plans.
Chandrasekaran’s reappointment removed leadership uncertainty, independent analyst Ambareesh Baliga said, “But it has further displayed the huge crack within the boardroom”.
The dispute could affect capital allocation, with Tata Trusts reliant on Tata Sons’ dividends to fund its philanthropic efforts, while investment needs could pressure payouts.
Tata Trusts also said Tata Sons’ second-largest shareholder, Shapoorji Pallonji Group, had proposed monetising part of its 18.4% stake through a two-tranche buyout that would yield at least $2.61 billion over 18 months.
On Friday, SP Group backed a potential Tata Sons listing.
