Tata Group stocks tumble up to 8% as Tata Sons dispute rattles investors

Tata Group shares tumbled sharply on Friday, with Tata Chemicals falling more than 8% while Tata Consultancy Services, Tata Motors Passenger Vehicles and other group companies also declined after investors reacted to a rift over the leadership and future structure.

Tata Chemicals was down 8.37%, TCS fell 2.69% and Tata Motors Passenger Vehicles lost 2.77% by mid-morning, LSEG data cited by Reuters showed. Tata Investment Corporation was also down, and the total market value of listed Tata Group companies fell by some $3.2 billion.

The selling came after the board of Tata Sons decided on Thursday to extend N. Chandrasekaran’s term as executive chairman by five years and begin steps towards complying with Reserve Bank of India rules that could require the holding company to list.

Both moves were opposed by Tata Trusts, which controls 66% of Tata Sons. It said Chandrasekaran’s reappointment was “illegal” as per Tata Sons’ articles and it had not agreed to a listing.

The developments negated gains made by several Tata stocks on Thursday following the board decisions. The dispute has added to uncertainty over Tata Sons’ leadership, ownership structure and possible listing.