Shares of Tata group companies declined by up to 11% on Friday after Tata Trusts, the majority shareholder in Tata Sons, said it had not agreed to the proposed listing of the group’s holding company.
Tata Trusts, which holds a 66% stake in Tata Sons, said in a statement after market hours on Thursday that it had not agreed to the listing of Tata Sons.
“The Board agreed that all available options, not just listing, should be thoroughly explored and assessed on an immediate basis, with the findings and recommendations presented to the Board,” Tata Trusts said.
“What makes the Tata operating structure unique is that it is premised on trust and its majority shareholder is a charity. A listing will destroy its character and strike at the heart of this principle,” said Noel Tata, Chairman, Tata Trusts.
Of the 26 listed Tata group companies, seven ended higher, while the remaining companies closed in the red. Tata Chemicals was the top loser, with its shares falling 11.14% to Rs 693.50. Tata Technologies (down 4.65%), TCS (down 4.33%) and Tata Motors Passenger Vehicles (down 3.40%) were among the other major losers.
The group lost Rs 51,413 crore, or 2%, in market capitalisation on Friday, with its combined market cap declining to Rs 25.28 lakh crore. TCS was the biggest contributor to the decline, with its market capitalisation falling by Rs 34,372 crore to Rs 7.60 lakh crore. Titan Company, Tata Steel, Tata Motors Passenger Vehicles and Tata Chemicals were among the other major market-cap losers.
On Thursday, shares of Tata group companies had rallied by as much as 14% after reports that the Tata Sons board had approved plans to list the holding company, potentially paving the way for one of India’s biggest-ever initial public offerings.
Expectations of value unlocking from a Tata Sons listing had put the spotlight particularly on listed Tata group companies that hold stakes in Tata Sons.