Tata Group stocks fell sharply on Friday, September 18, as Tata Sons faced fresh ownership and governance uncertainty. Tata Chemicals led losses near 9:40 am, while TCS, Tata Power and Tata Motors also declined sharply.
The selloff followed an SP Group proposal to monetize part of its Tata Sons stake.
The proposal targets at least Rs. 25,000 crore through two transactions over 18 months. Investors reacted across Indian markets as the proposal revived questions around Tata Sons' ownership structure.
Tata Chemicals dropped as much as 7.8%, while Tata Investment Corporation declined nearly 3.9% during early trading. TCS fell 3%, while Tata Motors Passenger Vehicles slipped 2.6% and Tata Power declined 1.4%. Tata Steel remained almost flat, while Tata Capital gained around 1.1% during early market hours.
The SP Group wants liquidity from its Tata Sons holding without immediately forcing a public listing. The proposed transaction involves shares held through Sterling Investments Corporation and Cyrus Investments. Tata Sons could pursue selective capital reduction through the National Company Law Tribunal under the proposal.
The proposal arrives alongside a separate dispute over Tata Sons' future leadership and listing plans. Tata Sons' board approved N Chandrasekaran's five-year reappointment as executive chairman on Thursday. The board also moved toward exploring a public listing for the holding company.
Tata Trusts opposed both developments and challenged Chandrasekaran's reappointment through its latest statement. Tata Trusts said, “The Trusts’ position remains unchanged, as a considered judgement of a majority shareholder.” The Trusts also said the board should examine alternatives instead of focusing only on listing.
The Reserve Bank of India rejected Tata Sons' request to surrender its Core Investment Company registration. The decision keeps Tata Sons within the Upper Layer NBFC framework and maintains regulatory pressure.
The ownership structure makes these developments important for several listed Tata companies. Tata Chemicals, Tata Motors and Tata Investment hold stakes in Tata Sons, linking their valuations indirectly. Tata Chemicals holds around 2.5% in Tata Sons, according to ICICI Securities estimates.
Friday's selling therefore reflects uncertainty around Tata Sons rather than fresh operational weakness across individual businesses. Thursday's rally had followed the leadership decision and renewed expectations around a potential Tata Sons listing. Friday's reversal shows investors are reassessing those expectations alongside the new SP Group proposal.
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