Shares of Tata group companies that hold minority stakes in the group’s holding company, Tata Sons, declined on Tuesday after Tata Trusts proposed measures to avoid a listing of Tata Sons, weighing on investor sentiment.

On Monday, Tata Trusts announced a restructuring proposal for Tata Sons (TSPL) involving the merger of Tata Electronics Systems Solutions Private Limited (TESS) and Tata Consulting Engineers (TCE) with TSPL. Following the merger, the reorganised entity would reportedly no longer qualify as a Non-Banking Financial Company (NBFC) or a Core Investment Company (CIC) and, therefore, would not be required to pursue a public listing as mandated by the Reserve Bank of India.

Tata Chemicals led the decline, with its share price falling as much as 5% intraday before paring some losses. The stock closed 4.20% lower at Rs 614.70 on the BSE. Similarly, shares of Tata Investment Corporation declined 3.5% intraday, Tata Motors Passenger Vehicles fell 3.4%, and Tata Power declined 2.2%.

Shares of Shapoorji Pallonji group companies, including Afcons Infrastructure and Sterling and Wilson Renewable Energy, also came under pressure, declining 2.61% and 1.64% intraday, respectively.

Meanwhile, the benchmark Sensex and Nifty extended their declines for the second consecutive session on Tuesday. The Sensex fell 242.65 points, or 0.33%, to 72,529.07, while the Nifty declined 64.05 points, or 0.28%, to 22,716.20.

Tuesday was also the monthly expiry day for Nifty futures and options contracts. The Nifty index declined 6.50% during the September series, marking its worst performance since March.

Foreign portfolio investors sold shares worth Rs 9,980.22 crore and domestic institutional investors purchased shares worth Rs 6,952.71 crore respectively, as per provisional data by the exchanges.

“Markets remained under selling pressure on the monthly expiry day, extending the ongoing corrective trend. After a weak opening, the benchmark indices remained under pressure through most of the session and traded near their lowest levels in nearly six months before recovering marginally from the lows,” said Ajit Mishra, SVP – Research, Religare Broking.

Global concerns continued to weigh on sentiment, with crude oil prices remaining elevated, the US 10-year Treasury yield staying firm and the rupee weakening further amid continued foreign fund outflows. However, oversold conditions and expiry-related activity triggered some recovery from the day’s lows, limiting the overall decline, Mishra added.

On the sectoral front, selling remained broad-based, with realty, IT and auto among the key losers, while metal and pharma stocks ended in positive territory. The broader market also witnessed selling pressure, with both the BSE Midcap and BSE Smallcap indices declining around 1% each.

Investors’ wealth eroded by Rs 1.86 lakh crore, taking the total market capitalisation of BSE-listed companies to Rs 472.50 lakh crore.