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Cyrus Mistry ouster pulls down Tata group stocks by up to 3%

Shares of Tata Steel fell by 2.51 percent, Tata Power lost 1.5 percent, Tata Consultancy Services slipped 1.20 percent and Tata Motors went down by 1.07 percent on BSE.


Cyrus Mistry ouster pulls down Tata group stocks by up to 3%

New Delhi: Following the ouster of Cyrus Mistry as the chairman of India's largest conglomerate and replacement by his predecessor Ratan Tata as the interim chief, shares of Tata Group on Tuesday ended up to 3 percent lower, with key firms losing nearly Rs 10,700 crore collectively in market capitalisation.

Shares of Tata Steel fell by 2.51 percent, Tata Power lost 1.5 percent, Tata Consultancy Services slipped 1.20 percent and Tata Motors went down by 1.07 percent on BSE.

The market valuation of TCS declined by Rs 5,753.3 crore to Rs 4,72,636.70 crore, while Tata Motors lost Rs 2,432.01 crore to Rs 1,58,990.99 crore.

The valuation of Tata Steel dropped by Rs 1,039 crore to Rs 40,354 crore and Tata Power saw an erosion of Rs 337.38 crore to Rs 22,272.62 crore.

Shares of Tata Sponge Iron dropped by 3.04 percent, Tata Coffee declined by 2.63 percent, Tata Global Beverages (2.47 percent) and Tata Communications (2.26 percent).

Tata Chemicals fell by 2.09 percent and Tata Elxsi shed 1.40 percent.

Together all these firms lost Rs 10,688.51 crore in market capitalisation.

During the morning trading session these stocks had lost up to 4.2 percent.

"What would provide reassurance to the market is the fact that Ratan Tata is back in saddle as the interim Chairman as also the tight deadline of four months given to the selection committee by the Board of Tata Sons. After the initial wobble the group's shares should stabilize in my view," said Ajay Bodke, CEO & Chief Portfolio Manager PMS, Prabhudas Lilladher.

In a sudden and dramatic turn of events, Cyrus Mistry was yesterday sacked as Chairman of India's largest conglomerate Tata Group and replaced by his predecessor Ratan Tata in the interim, a development that can trigger a confrontation between the single-largest shareholder and the company's founding family.

Mistry's family firm Shapoorji Pallonji Group has 18.4 percent in Tata Sons.

In the surprise development, the board of Tata Sons, where 66 percent shares are held by philanthropic trusts endowed by members of the Tata family, ousted Chairman Mistry, saying it was acting "for the long-term interest" of the firm.

The board named a five-member search committee, which includes Tata, to choose a successor within four months.

Tata Group currently commands a listed market capitalisation of over USD 125 billion (close to Rs 8.5 lakh crore), with the software giant TCS alone commanding a market value of Rs 4,72,636.70 crore.

In the stock market, the BSE benchmark Sensex too fell by 87.66 points to end at 28,091.42.

"The market languished in a negative zone due to unfavorable winds from earnings and ambiguity over Tata Group issue," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services Ltd.

From Zee News

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