Tata Group Stocks Fall As Tata Sons Listing, Chandrasekaran Reappointment Dispute Deepens

Tata Group stocks remained in negative territory on Monday as investors tracked the ongoing uncertainty surrounding Tata Sons’ listing plans and the continuation of N Chandrasekaran as chairman of the group holding company.

Shares of Tata Motors Passenger Vehicles fell more than 1% in early trade, while Tata Power declined around 2.3%. Tata Chemicals, Tata Investment Corporation and Tata Technologies also witnessed losses, dropping 0.6%, 2.1% and 1.6%, respectively.

Tata Sons board decision sparks investor concerns

The decline in Tata Group stocks comes amid rising tensions over Chandrasekaran’s reappointment as chairman of Tata Sons. The company’s board approved his continuation through a 4-1 vote, with Noel Tata, chairman of Tata Trusts, being the only member to oppose the decision.

Tata Sons holds significant stakes in several listed and unlisted Tata Group companies, while Tata Trusts collectively owns around 66% of Tata Sons.

Chandrasekaran had earlier informed the Tata Sons board in August that he would not seek another term. His decision followed reported differences over the future of some loss-making businesses and concerns regarding a possible listing of Tata Sons.

RBI decision brings listing debate back

The situation changed after the Reserve Bank of India rejected Tata Sons’ application to surrender its registration as a non-banking financial company. Under RBI rules applicable to upper-layer NBFCs, Tata Sons may now need to comply with listing requirements.

Chandrasekaran’s reappointment has been viewed by some as an indication that Tata Sons may move ahead with a public listing. Tata Sons board members Noel Tata and Venu Srinivasan represent Tata Trusts, with Srinivasan supporting the listing.

However, Tata Trusts has challenged the validity of the board decision, arguing that the resolution did not meet the requirements under Tata Sons’ Articles of Association.

The Trusts maintain that approval from a majority of Trust-nominated directors was necessary. Since Noel Tata opposed the resolution while Srinivasan supported it, Tata Trusts argues that the required condition was not fulfilled.

The disagreement has added uncertainty around Tata Sons’ future leadership and potential market listing plans.