TCS, Tata Motors PV, Tata Chemicals: Tata Group shares surge up to 20%; here is why the stocks are surging

Shares of the Tata Group companies such as Tata Consultancy Services (TCS), Tata Motors Passenger Vehicle, Indian Hotels Company, Tata Power, Tata Consumer Products, Tata Steel and Voltas among others surged in trade on Tuesday, September 15.

TCS was top gainer in the NIFTY50 index and among the Tata Group stocks. The stock rose as much as 5.5% to an intraday high of ₹2,322. Tata Motors PV advanced 5%, Tata Power gained 1.5%, Tata Power advanced 1.45%, Indian Hotels Company gained 1.2%, Tata Consumer Products climbed 1.2%, Voltas gained 0.95%, Tata Steel advanced 0.3%, Tata Chemicals rose 20% and Trent gained 0.15%, data from the stock exchanges showed.

These shares came under buying interest on expectations of value unlocking after the Reserve Bank of India (RBI) rejected Tata Sons' application to ‌de-register as a non-banking finance company (NBFC), reviving prospects of a stock market listing for the holding firm.

Tata Sons listing

A public listing would mark a fundamental change for the holding company of one of India's oldest and largest business groups. Tata Sons owns significant stakes in listed and unlisted Tata companies spanning information technology, automobiles, steel, consumer products, aviation, hospitality and financial services, the PTI report added.

The move could also bring far greater scrutiny of Tata Sons' finances, capital allocation and investments. A listed holding company would face regular disclosure requirements and greater pressure from public shareholders for clarity on the value of its investments and returns on capital, the report noted.

The roots of the current issue trace back to October 2021, when the RBI introduced a scale-based regulatory framework for NBFCs, sorting lenders into base, middle, upper and top layers with progressively stricter oversight.

In September 2022, the central bank placed Tata Sons - alongside firms including Bajaj Finance and Shriram Finance in the Upper Layer category, a classification that carries a hard three-year deadline to list on the stock exchanges, originally due to expire on September 30, 2025.

Tata Sons pushed back. It repaid more than ₹21,000 crore of debt in 2024, becoming debt-free, and filed to surrender its Core Investment Company registration altogether - a move that, if approved, would have let it exit the NBFC framework entirely and remain privately held. The RBI left the application pending through 2025, even as it kept including Tata Sons on successive Upper Layer lists, each time noting the listing did not affect the outcome of the deregistration review.

Tata Sons is the apex holding company for one of India's oldest and largest conglomerates, with stakes spanning IT services, automobiles, steel, consumer goods, aviation, hospitality and financial services.

The regulatory outcome coincides with an unresolved internal struggle over the company's future. Tata Trusts, chaired by Noel Tata and holding more than 65% of Tata Sons, has resisted a listing. People familiar with the matter say Noel Tata communicated concerns to the RBI in June that a public listing could disrupt the holding company's long-term structure and philanthropic mission.

The Shapoorji Pallonji Group, which owns roughly 18% of Tata Sons, has argued the opposite for years - that a listing would let shareholders finally realize value from their stake, a dispute that has occasionally spilled into public legal wrangling between the two sides.

Which Tata companies own stake in Tata Sons

Seven Tata Group companies own 11.6% stake in Tata Sons with Tata Chemicals owning 2.53% stake in the company worth ₹25,300 crore which is significantly higher than its market capitalisation of ₹18,722 crore.

Tata Steel, Tata Motors PV, Indian Hotels, Tata Consumer Products, Tata Investment Corporation and Tata Power also own stakes in Tata Sons.

Tata Steel owns 3.06%, Tata Motors PV has a 3.06% stake, Indian Hotels owns 1.11%, Tata Power owns 1.65%, Tata Consumer Products and Tata Investment Corporation own 0.43% and 0.25% each respectively.

As of 9:38 am, Tata Group stocks were outperforming the NIFTY50 index as the measure of Tata Group stocks on the NSE – NIFTY TATA 25 CAP index advanced 1.4% compared with 0.12% gain in the NIFTY50 index.