Summary of this article
Tata Group shares decline amid growing boardroom leadership disputes.
Tata Trusts challenges the reappointment of Chairman N Chandrasekaran.
RBI rejects deregistration, mandating Tata Sons for public listing.
Tata Group shares extended losses in early trade on September 21. Shares of Tata Chemicals slipped 3.55 per cent in the early hours of the session to trade at Rs 668.6 apiece on the NSE.
Tata Consultancy Services (TCS) shares fell 1.41 per cent to trade at Rs 2075.3 apiece, shares of Tata Investment Corporation fell 2.37 per cent to trade at Rs 685.65 apiece, and shares of Tata Motors Passenger Vehicles declined 1.51 per cent to trade at Rs 299.1 apiece.
Shares of other major Tata group companies, such as Tata Power, Tata Steel, Titan Company and Trent, also traded in the red as they fell between 0.34 per cent and 2.29 per cent. The declines seen in early trade are expected to have left retail and institutional investors concerned about the stability of the group’s businesses.
Why Are Tata Stocks Declining
The key reason behind the decline seen across major Tata Group stocks is the ongoing boardroom dispute between Tata Sons and Tata Trusts. The dispute has increased uncertainty regarding the future leadership of the conglomerate and the potential public listing of its parent company, Tata Sons.
Earlier on August 6, the Reserve Bank of India issued a press release detailing the official list of Non-Banking Financial Companies (NBFCs) in the Upper Layer (UL) for the year 2026 to 2027. Tata Sons was included as a Core Investment Company. However, a crucial footnote in the release stated that the inclusion of Tata Sons in the list of NBFC-UL is without prejudice to the outcome of its application for deregistration, which is under examination.
Shortly after this publication, on August 12, Chairman N Chandrasekaran offered his resignation and stated he would not seek another term once his current tenure ends in February 2027. Later on September 11, the RBI reportedly issued a private communication rejecting the pending deregistration application and reminded Tata Sons that it must list on the stock exchanges to comply with the central bank’s NBFC-UL regulations.
Following the regulatory nudge, the Tata Sons board convened on September 17. During this meeting, the board reversed course and voted to reappoint Chandrasekaran for a fresh five-year term.
The resolution was supported by four directors according to a report by the Economic Times. However, on Friday, September 18, Tata Trusts Chairman Noel Tata publicly challenged the board's decision. Tata Trusts declared the reappointment illegal and legally void. Noel Tata also presented a proposal from the Shapoorji Pallonji Group seeking to monetise part of their massive holding.
This escalation panicked the markets on September 18 as the market began to factor in the imminent uncertainty regarding the leadership of Tata Sons. Consequently, major group Tata stocks continued to decline on September 21 as investors fear the feud between Tata Trusts and Tata Sons is now destined for a prolonged legal battle in the courtroom.
At the time of writing, TCS shares traded at Rs 2128.40 apiece, trading higher by 0.93 per cent on the NSE. Shares of Titan Company also traded higher by 0.85 per cent. However, other Tata Group stocks such as Trent, Tata Power, Tata Chemicals and Tata Steel continued to trade in the red, down between 0.34 per cent and 2.29 per cent.
