Tata group stocks surge up to 20%: Here's why

• Tata group stocks surge after RBI rejects Tata Sons' appeal
• RBI's decision may force the holding company to list on exchanges
• Listing would give investors direct access to the group's core value

Kolkata: Major Tata group company stocks such as software bellwether TCS (Tata Consultancy Services), Titan, Tata Steel and tata Motors witnessed a surge

in prices as the market opened for trading this morning. The stocks rallied up to 20% and analysts point out that the buying interest was seen after the Reserve Bank of India rejected the appeal of Tata Sons to voluntarily surrender its certificate of registration. In other words, this plea of Tata Sons to surrender its certificate was the last desperate attempt by the Tata group to avoid listing of Tata Sons, the holding company of one of India’s largest industrial empires.

Tata group firm shares surge

At 10:05 AM, Tata Motors shares were trading at Rs 314.90, up 4.58%, TCS shares were trading at Rs 2,293.10, up 4.19%. Even TOMCO shares were up 5.88%. At one point, Tata Chemicals shares were up 20%. Tata Consumer Products shares werealso up by 0.87%. Indian Hotels Company shares were up by 1.67%. Tata Technologies shares were up 2%. tata Steel shares were up 0.53%.

What the RBI action implies

RBI first classified Tata Sons as an Upper Layer NBFC in September-October 2022. The rules state that a firm has to get listed in the stock exchanges within three years of such a categorisation. The implication is clear: Tata Sons might now have to get listed in the stock exchanges, something which the Tatas desperately want to avoid. 

Implications of Tata Sons listing

If Tata Sons gets listed, it can have huge implication for common investors. It would give them direct access to the group’s core holding company. It would unlock hidden value in listed Tata companies that hold cross-holdings.

Tata Sons profits

Despite being saddled by a few loss-making ventures, such as Air India, Tata Sons it has reported a profit of Rs 31,961 crore in FY26. The closely-held holding company of the Tata empire has declared a dividend of Rs 1,10,717 per share. However, it must be remembered that the very high dividend is on account of a limited number of shares. If it goes for an IPO, the number of shares will rise far higher.