Tata Group Stocks: Tata Chemicals, TCS Erase Rs 40,000 Crore After Tata Trusts Opposes Tata Sons Listing

Tata Group stocks reversed sharply on Friday, September 18, a day after rallying on expectations of a possible Tata Sons listing, after Tata Trusts said it had not agreed to the proposal.

Tata Chemicals bore the brunt of the selloff, plunging more than 10% in its steepest single-day decline since March 2024. The fall erased the stock's 6.5% gain from Thursday, when Tata Sons said its board would consider a public listing of the holding company and approved a five-year extension for Chairman N Chandrasekaran. Tata Chemicals holds a 2.53% stake in Tata Sons.

The selling spread to other listed companies with stakes in Tata Sons. Tata Investment Corporation fell as much as 5.1% before paring losses, while Tata Motors Passenger Vehicles declined 3.2%.

Tata Consultancy Services (TCS), the Tata Group's largest listed company by market value, also fell around 3%, wiping out close to Rs 27,000 crore in market capitalisation. The combined decline across Tata Group companies resulted in an erosion of nearly Rs 40,000 crore in market value. The group's listed companies have a combined market capitalisation of around Rs 24 lakh crore.

Tata Trusts Opposes Tata Sons Listing

The selloff followed a statement issued by Tata Trusts after market hours on Thursday. The charitable trusts, which collectively hold around 66% of Tata Sons, said they had not agreed to a listing of the holding company.

Tata Trusts said the existing ownership structure had served the group for more than a century and argued that a listing could alter the character of Tata Sons. It also said the Tata Sons board should examine all available options.

Noel Tata, chairman of Tata Trusts, said the group's ownership structure had stood the test of time and warned that a listing could affect the principle on which the structure was built.

Shapoorji Pallonji Group Seeks Tata Sons Listing

The Tata Trusts' position differs from that of the Shapoorji Pallonji Group, which owns an 18.4% stake in Tata Sons.

The group has been seeking to monetise part of its holding to help reduce debt. Shapoorji Pallonji Mistry has previously described a public listing of Tata Sons as a way to increase transparency and public accountability.

Shares of Afcons Infrastructure, which is owned by the Shapoorji Pallonji Group, also declined around 3% on Friday amid the broader market reaction.

The debate over Tata Sons' listing comes after the Reserve Bank of India declined to exempt the company from the requirement to list after classifying it as an upper-layer non-bank financial company.

The RBI's classification has kept the listing issue in focus, even as Tata Sons' major shareholders have differing views on whether the holding company should go public.

For Tata Group companies that hold stakes in Tata Sons, the outcome could have implications for how those investments are valued and reflected in their market valuations. The next step will depend on Tata Sons' response to the RBI's regulatory position and the discussions among its shareholders.

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