loading
loading
Tata Group stocks came under heavy pressure on Friday last week, slipping up to 10%, with investors losing over ₹52,000 crore. Tata Group stocks came under pressure on September 18 after a fresh escalation in the dispute over the leadership and future structure of Tata Sons, the unlisted holding company of the conglomerate. On Friday, Tata Chemicals declined nearly 10% in early trade, while Tata Investment Corporation fell around 4%, Tata Motors Passenger Vehicles dropped about 2.6% and Tata Power slipped roughly 1.4%. The developments have heightened concerns over governance, succession and the future structure of Tata Sons. The sell-off followed Tata Trusts’ opposition to the Tata Sons board’s decision to reappoint N Chandrasekaran as chairman for another five-year term. Tata Trusts, which owns about 66% of Tata Sons, said the resolution was a “legal nullity”, arguing that the required support from both Trust-nominated directors was not secured. Separately, the Reserve Bank of India has rejected Tata Sons’ request to surrender its registration and retain its private status, putting renewed focus on the company’s potential listing and its future structure. Noel Tata, chairman of Tata Trusts and one of its nominee directors on the Tata Sons board, was the only director to vote against Chandrasekaran’s reappointment. Tata Trusts has maintained that Chandrasekaran’s earlier decision not to seek another term, after his current tenure ends in February 2027, had been accepted and had attained finality. The dispute could now place greater importance on Tata Sons’ upcoming shareholder proceedings and the interpretation of its Articles of Association. The board meeting came shortly after the Reserve Bank of India rejected Tata Sons’ request to continue operating as a private, unlisted entity. The central bank also clarified that regulations applicable to large shadow banks, which require them to be publicly listed, would extend to Tata Sons. Following the meeting, Tata Sons announced that its board had, by majority vote, approved the reappointment of N Chandrasekaran as executive chairman for another five-year term upon completion of his current tenure. However, Tata Trusts continued to oppose the move, stating that its position remained unchanged as the majority shareholder’s considered view. The Trusts said their chairman reiterated this stance during the board meeting. According to the statement, four directors voted in favour of Chandrasekaran’s reappointment, while Noel Tata voted against the proposal. Tata Trusts further contended that the resolution was a legal nullity, citing provisions under the Articles of Association of Tata Sons. According to Sachdeva, Founder of SS WealthStreet, Tata Group stocks are likely to remain susceptible to headline-driven volatility, until greater clarity emerges on Chandrasekaran’s leadership, the Tata Sons listing question and the group’s capital-allocation priorities “A Tata Sons listing could unlock embedded value for companies holding stakes in the holding company and improve transparency around Tata Sons’ assets and liabilities. On the other hand, if substantial capital continues to be deployed into capital-intensive or relatively low-return businesses, investors may become more cautious about group-level capital efficiency and the returns generated on incremental investment. Such concerns could weigh on valuations even if the underlying businesses continue to expand,” she said. She further explained that the group should not be viewed as a single homogeneous trade. Individual Tata companies will continue to perform according to their own earnings growth, sector dynamics, balance-sheet strength, cash flows and capital-allocation discipline. Certain businesses may therefore continue to outperform on company-specific fundamentals even while the broader Tata Group remains affected by governance-related uncertainty. “Overall, the immediate market focus is likely to remain on whether the two sides can arrive at a workable resolution. Until then, the potential value unlocking from a Tata Sons listing will coexist with uncertainty surrounding leadership, governance and future capital deployment, keeping the broader Tata Group narrative and several of its listed stocks relatively volatile,” she added. From an investment perspective, Sachdeva added that the situation presents both potential value creation and valuation risk. A Tata Sons listing could unlock embedded value for companies holding stakes in the holding company and improve transparency around Tata Sons’ assets and liabilities. “On the other hand, if substantial capital continues to be deployed into capital-intensive or relatively low-return businesses, investors may become more cautious about group-level capital efficiency and the returns generated on incremental investment. Such concerns could weigh on valuations even if the underlying businesses continue to expand,” she said. Meanwhile, Anuj Gupta, SEBI Registered Research Analyst, investors should adopt a wait-and-watch approach and focus on the performance and financial numbers of individual companies rather than being swayed by the ongoing developments. The current conflict is primarily affecting unlisted entities within the Tata Group. “The public rift between the Tata Sons board and its majority owner, Tata Trusts, led by Chairman Noel Tata, centres on two key issues. The first is the 4-1 board vote to extend Executive Chairman N. Chandrasekaran’s tenure for another five years. The second is the board’s decision to move towards a public listing after the Reserve Bank of India (RBI) rejected its request for exemption from the listing requirement,” Gupta added. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions. Vaamanaa covers business and stock market news. Started in 2020, she has been producing news on digital platforms for over 4.5 years now. She writes on markets, commodities, IPOs, and industry. She has worked for news channels like Jagran New Media and Business Insider India. You can reach out to her at vaamanaa.sethi@htdigital.in. Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
document fetched 2026-09-21 02:47 · canonical https://livemint.com/market/stock-market-news/tata-stocks-crashed-on-friday-investors-lost-over-52k-crore-will-shares-bounce-back-today-amid-boardroom-battle-11789953995568.html