Stocks of listed Tata group companies on Tuesday fell by up to 3.16 per cent on the stock exchanges after Cyrus Mistry was removed as chairman of Tata Sons and replaced by his predecessor Ratan Tata as the interim Chairman.
The market capitalisation — or the market value of listed shares — of top listed Tata companies lost close to Rs 10,877 crore on Tuesday. There are 29 publicly-listed Tata enterprises with a combined market capitalisation of about $116 billion (around Rs 775,000 crore) as on March 31, 2016.
WATCH VIDEO: Cyrus Mistry’s Career Timeline
Tata Steel shares fell by 2.51 per cent, Tata Power lost 1.50 per cent, Tata Consultancy Services slipped 1.20 per cent and Tata Motors went down by 1.07 per cent on the BSE. The biggest fall was in Indian Hotels which declined by 3.16 per cent.
Tata Sponge Iron dropped by 3.04 per cent, Tata Coffee declined by 2.63 per cent, Tata Global Beverages 2.47 per cent and Tata Communications 2.26 per cent. Tata Chemicals fell by 2.09 per cent and Tata Elxsi shed 1.40 per cent. The market valuation of TCS declined by Rs 5,753 crore to Rs 472,636 crore, while Tata Motors lost Rs 2,432 crore to Rs 158,991 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 crore to Rs 22,272 crore.
“Tata group shares declined because the exit of Cyrus was unexpected. We don’t expect the group shares to dive. With Ratan Tata coming back as Interim Chairman, there will be stability. The market has faith in Mr Tata,” said Pawan Dharnidharka, a BSE broker. “The market is expecting a capable person to be selected as the next Chairman,” he said.
The 30-share S&P BSE Sensex closed down 87.66 points to 28,091.42 on Tuesday as Tata group stocks pulled down the index amid mixed Asian cues. Investors were also cautious ahead of October’s expiry in the derivatives segment on Thursday. “The fall in Tata shares also affected the overall sentiment,” Dharnidharka said.
The rupee maintained its edge against the dollar for the second day and appreciated by a modest 3 paise to close at 66.82.