Tata Group stocks fall: Tata Chemicals, Tata Motors PV, TCS, among others tumble up to 8%; here is what happened

Tata Group stocks such as TCS, Tata Motors Passenger Vehicles and Tata Chemicals declined on Friday, September 18, following developments at Tata Sons after its board meeting on Thursday.

In a key development, the Tata Sons board voted to reappoint N Chandrasekaran as executive chairman for another five-year term, with Tata Trusts Chairman Noel Tata voting against the resolution. The board approved the reappointment by a 4-1 vote, with Chandrasekaran abstaining.

The development comes against the backdrop of the RBI’s rejection of Tata Sons’ request to surrender its core investment company registration, keeping the possibility of a listing of the holding company in focus. Tata Sons has said it will seek guidance from the RBI, Tata Trusts and other stakeholders on the regulatory requirements.

Tata Sons is a holding company for several listed and unlisted Tata Group companies, which is majority-owned by Tata Trusts.

Earlier while announcing his stepping-down move, N Chandrasekaran did not name the person who opposed the proposal of his re-appointment; reports have suggested key differences between the veteran and Noel Tata, who is the Chairman of Tata Trusts and a board member of Tata Sons.

“The Trusts’ position remains unchanged, as a considered judgement of a majority shareholder. This position was reiterated in today’s board meeting by the Chairman, Tata Trusts,” according to the official statement from Tata Trusts on Sept 17.

Stocks like Tata Chemicals, TCS, Tata Investment Corp., Tata Technologies, and Tata Motors PV were leading the pack of top laggards during the morning market hours on September 18.

Tata Group stocks today

Tata Trusts calls re-appointment ‘illegal’

After Tata Sons’ board meeting on September 17, Tata Trusts reiterated their position on N Chandrasekaran’s re-appointment, with Chairman Noel Tata’s vote against the motion, as the entity advised Tata Sons to initiate the process for setting up a Selection Committee for appointing a successor.

“The Tata Trusts maintain that the Resolution to re-appoint Mr N. Chandrasekaran as Chairman, Tata Sons, is illegal,” said Tata Trusts in its statement.

The divide in Tata Sons’ board comes amid reports of key differences between Chandrasekaran and Noel Tata, who took charge as the Chairman of Tata Trusts in 2024 after Ratan Tata’s demise.

While Noel Tata is looking to keep Tata Sons unlisted, explore options for Shapoorji Pallonji Group’s exit and a five-year strategic roadmap for the Group, N Chandrasekaran reportedly did not agree, causing disagreements which also involved questions of board representation.

Originally, the Dorabji Tata Trust and Ratan Tata Trust resolved and recommended the extension of N Chandra’s tenure for an upcoming period of five years.

Earlier this week, the Tata Group stocks were under buying interest of investors as the Reserve Bank of India rejected Tata Sons’ application to de-register as a non-banking financial company (NBFC).

This move somewhat revived the potential for the flagship Tata Group holding entity’s listing on the Indian stock market.

However, Tata Trusts Chairman Noel Tata on September 17 asked Tata Sons to explore options other than listing to preserve the more than a century-old structure of Tata Sons and the Tata Group.

SP Group’s ₹25,000 crore liquidity proposal

At the board meeting on Thursday, Noel Tata also tabled a proposal received from the Shapoorji Pallonji Group (SP Group) to monetise a portion of the Tata Sons shareholding held by Sterling Investments Corp. and Cyrus Investments.

As per the proposal, the SP Group seeks a stake sale of a number of Tata Sons shares held by Sterling Investments Corp. and Cyrus Investments at a minimum valuation yield of ₹25,000 crore.

The proposal further mentioned that the share buyout would be carried out in two tranches over 18 months, as Tata Sons will initiate a selective capital reduction process through the NCLT.

“Noel N. Tata suggested that various avenues could be used for the purpose of raising the funds required for this purpose, including from internal cashflows; sale of listed shares; bringing in an investor into some of the newer businesses and listing, upon an offer for sale, of some of the businesses,” as per the statement.

Tata Trusts Chairman, Noel Tata, also requested Tata Sons board members to take the necessary steps for initiating the NCLT process and authorise the operating team of Tata Sons and the Tata Trusts to continue discussions with the SP Group, the bankers, and report back to the Board.