Tata Group stocks decline; Tata Chemicals drops over 4 pc

New Delhi, Sep 29 (PTI) Most Tata Group stocks ended lower on Tuesday after Tata Trusts proposed merging two operating companies with the group’s holding company in a restructuring aimed at allowing Tata Sons to shed its regulatory classification as a non-banking financial company and a core investment company, potentially removing the need for a stock-market listing. ​ Tata Chemicals emerged as the major loser among the Tata Group stocks, with its shares declining 4.20 per cent.

Among other firms of the conglomerate, Tata Investment Corporation dropped 3.10 per cent, Titan 2.72 per cent, Tata Teleservices 2.63 per cent, TCS 1.72 per cent, Tata Power 1.10 per cent, Tata Elxsi 1.53 per cent and Tata Motors Passenger Vehicles 0.72 per cent on the BSE.

The proposal, announced on Monday, involves merging Tata Electronics Systems Solutions Pvt Ltd (TESS) and Tata Consulting Engineers (TCE) with Tata Sons. The Trusts have asked the Tata Sons board to consider the plan and seek a prior no-objection certificate from the Reserve Bank of India.

The proposed structure would turn Tata Sons back into an operating company alongside its role as the Tata Group’s holding company, with operating businesses and revenues sitting directly within the parent. The Trusts said this would ensure that the reorganised entity does not meet the regulatory criteria for either an NBFC or a core investment company.

“The Tata Trusts today, as majority shareholders with a 66 per cent stake in Tata Sons Private Limited (TSPL), outlined a strategic reorganisation plan for the company which, when given effect to, would ensure that the reorganised entity would neither be a non-banking financial company (NBFC) nor a core investment company (CIC),” the Trusts said in a statement.

The restructuring comes amid a widening disagreement between Tata Trusts and the Tata Sons board over the future ownership and governance of the holding company. At the heart of the dispute is whether Tata Sons should remain an unlisted private company or comply with the RBI framework that could require it to list.

The Trusts, chaired by Noel Tata since October 2024, have consistently opposed a listing.

The listing question became more pressing after the RBI classified Tata Sons as an upper-layer NBFC in 2022, a designation that carries a listing requirement. Tata Sons subsequently sought to exit the regulatory framework, but the RBI rejected its request in September, leaving the company facing the listing issue.

The Tata Sons board has since backed steps toward compliance, while the Trusts have pushed for alternatives that would allow the company to remain private. PTI SUM SHM