Shares of Tata Group companies came under heavy selling pressure in Friday’s trade, September 18, with the combined market capitalisation of several listed group firms eroding by ₹46,600 crore.
The sell-off came as an unprecedented boardroom revolt at Tata Sons pushed the 158-year-old conglomerate into a high-stakes governance crisis, while uncertainty over the holding company’s potential listing added to investor concerns.
The sharp losses followed a dramatic turn of events at Tata Sons, the group’s holding company. The board, on Thursday, asked Chairman Natarajan Chandrasekaran to continue for another five years and approved a potential public listing of the company by a majority vote, according to a Tata Sons statement.
The developments came after the RBI refused to exempt Tata Sons from a listing requirement last week. Chandrasekaran, widely known as Chandra, agreed to extend his tenure just weeks after announcing plans to step down in February.
However, the governance uncertainty escalated shortly after the announcement. Tata Trusts, the controlling shareholder of Tata Sons, called the board’s decision to extend Chandrasekaran’s tenure “illegal” in a separate statement.
The Trusts, a group of 13 charitable organisations, had also said late Thursday that they had not agreed to a listing of Tata Sons. They added that the company’s board was required to explore all available options, further deepening uncertainty over the group’s future direction.
Separately, Tata Trusts said Shapoorji Pallonji Group, Tata Sons’ second-largest shareholder, 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.
The boardroom showdown comes at a challenging time for Tata Group, with several of its major businesses facing operational and financial headwinds. Jaguar Land Rover (JLR) is dealing with a slowing European market, while Air India continues to grapple with heavy losses following a fatal crash and geopolitical disruptions.
Meanwhile, Tata Consultancy Services (TCS), the group’s flagship technology company, is facing challenges in reigniting growth, Bloomberg reported.
TCS, Titan lead market-cap losses among Tata Group stocks
About ₹46,634 crore was erased from the combined market value of listed Tata Group companies on Friday, according to LiveMint calculations based on exchange data.
Tata Consultancy Services (TCS) saw the biggest erosion in market capitalisation among the Tata Group stocks, losing around ₹29,550 crore as its share price fell 3.88% in Friday’s trade. It was followed by Tata Motors Passenger Vehicles, which shed about ₹3,804 crore in market value after the stock declined 3.40%.
Tata Steel lost around ₹2,154 crore in market capitalisation as its shares fell 1%, while Tata Chemicals saw a sharp decline of 11%, wiping out approximately ₹1,942 crore from its market value. Tata Consumer Products lost around ₹1,725 crore, with the stock falling 1.75%, while Tata Technologies declined 4.78%, eroding nearly ₹1,402 crore in market capitalisation.
Tata Investment Corporation saw its market value decline by around ₹838 crore as shares fell 2.36%, followed by Voltas, which lost approximately ₹779 crore after declining 2.12%.
Tata Elxsi shed around ₹692 crore in market capitalisation, with its shares falling 3.40%, while Titan Company lost approximately ₹3,748 crore despite a relatively modest 0.88% decline in its share price.
(With inputs from Bloomberg)
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