Tata Group stocks tumbled up to 7% on Wednesday, September 16, as investors likely booked profits following the previous session’s sharp rally on renewed expectations of a potential Tata Sons initial public offering (IPO).
Tata Investment Corporation fell as much as 7% to an intraday low of Rs 666, compared with its previous close of Rs 718.35.
Tata Chemicals also faced selling pressure, declining nearly 6% to an intraday low of Rs 691.90. However, the stock staged a sharp recovery and traded 1.12% higher at Rs 743.15. It moved between Rs 691.90 and Rs 788 during Wednesday’s session.
Among other Tata Group stocks, Tata Motors fell as much as 2.52% to Rs 416.40. Tata Steel declined up to 1.81% to Rs 180.33 before erasing its losses.
Tata Consultancy Services traded 1.19% lower at Rs 2,224.20; however, Trent bucked the trend, rising 1.57% to Rs 2,772.80.
The profit booking followed Tuesday’s rally of up to 20% in Tata Group stocks after the Reserve Bank of India rejected Tata Sons’ request to voluntarily surrender its Certificate of Registration.
RBI decision revives Tata Sons IPO focus
The RBI on September 11 rejected Tata Sons’ request to surrender its Certificate of Registration and directed it to comply with NBFC-Upper Layer rules. The decision has renewed expectations of a potential Tata Sons listing.
The central bank advised Tata Sons to take the necessary steps to comply with the guidelines applicable to non-banking financial companies classified in the upper layer.
The decision brought the possibility of a Tata Sons IPO back into focus, although the company has not formally announced a listing plan or timeline.
Chandrasekaran’s resignation
Tata Sons’ nomination committee is expected to ask Chairman N Chandrasekaran to reconsider his decision to step down in February 2027, potentially putting it at odds with Tata Trusts. The matter may be discussed at the September 17 board meeting.
Tata Sons IPO valuation
Tata Sons could be valued at Rs 9-12.5 lakh crore in a potential IPO, according to investment bankers and valuation experts cited by ET. This would represent a sizeable discount to its estimated underlying portfolio value of Rs 15-16 lakh crore.
The portfolio comprises around Rs 12 lakh crore in listed holdings and Rs 4 lakh crore in unlisted assets. The IPO valuation would depend on holding-company discounts of 41-45% on listed investments and about 15% on unlisted assets, along with an additional 10-15% discount to fair value.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
