Tata Group stocks came under heavy selling pressure on September 18 as investors reacted to the growing disagreement between Tata Sons and Tata Trusts over the proposed listing of the holding company. 

The sell-off erased around Rs 40,000 crore in market value from listed Tata Group companies during the session, with Tata Chemicals, TCS and Tata Motors Passenger Vehicles among the stocks facing pressure.

Tata Sons’ board had on September 17 approved the proposed listing of the holding company while also clearing N Chandrasekaran’s reappointment as executive chairman for another five-year term. 

The decisions came after the Reserve Bank of India rejected Tata Sons’ request to surrender its core investment company registration, increasing the regulatory pressure for the company to comply with listing requirements.

However, Tata Trusts, which controls around 66% of Tata Sons, opposed the listing decision. The Trusts said they had not agreed to a public listing and that the board should examine all available options before deciding on the next course of action. The Trusts had earlier maintained that Tata Sons should remain unlisted.

The disagreement also extends to the leadership of Tata Sons. Tata Trusts chairman Noel Tata opposed Chandrasekaran’s reappointment and described the board’s decision as legally invalid. Tata Sons, meanwhile, has treated the reappointment as approved by the board. The dispute could now lead to further discussions and potential legal challenges.

The market reaction was visible across several Tata counters. Tata Chemicals fell more than 8% intraday, while TCS and Tata Tech declined around 2-4%. Tata Motors Passenger Vehicles also declined, while other group companies including Tata Investment Corporation and Tata Steel remained under pressure.

Another issue being discussed is the stake held by the Shapoorji Pallonji Group, which owns about 18.4% of Tata Sons. The group has backed a potential Tata Sons listing and has proposed monetising part of its holding to raise at least Rs 25,000 crore.

Ready to invest like a pro? Tradz by EquityPandit app equips you with 100+ Free tools and knowledge you need to succeed. Download the Tradz by EquityPandit app and gain access to daily stock lists and insightful market analysis and much more!