Tata Group firms' stocks tumble up to 6 pc after Chandrasekaran rules out another term; TCS, TMPV top laggards
Mumbai, Aug 12
Tata Group-backed companies' stocks witnessed heavy selling pressure on Wednesday, plunging up to 5.95 per cent and losing about Rs 46,000 crore in market value after N. Chandrasekaran said he would not offer himself for reappointment as chairman of Tata Sons when his current term expires in February 2027.
Shares of several Tata Group-backed companies witnessed selling pressure as the chairman's decision raised uncertainty over succession at India's largest conglomerate.
Tata Consultancy Services shares declined as much as 5.95 per cent to hit an intraday low of Rs 2,300.10 on the NSE, while Tata Motors Passenger Vehicles shares fell about 4 per cent
Similarly, Tata Steel shares also fell by more than 2 per cent to Rs 183.60.
Moreover, the sell-off by investors also weighed on other group companies.
Shares of Tata Elxsi, Tata Communications, Tata Technologies, Tata Power and Trent also traded up to 2 per cent per cent.
The sell-off followed Chandrasekaran's announcement that he would not seek another term as chairman of Tata Sons, ending months of uncertainty over his future at the group holding company.
In a statement, Chandrasekaran said his current tenure as chairman will end on Feb 2027.
He said the Sir Dorabji Tata Trust and Sir Ratan Tata Trust had unanimously recommended extending his term by another five years and that the recommendation had also been recorded by the Tata Sons Nomination and Remuneration Committee and the board.
However, he said the proposal was not carried forward because one board member did not support it.
"I chose to defer the matter then because I felt strongly that such an important decision should not proceed without unanimous support," Chandrasekaran said.
"It has been 6 months since that Board meeting, and no resolution has been reached till date."
Chandrasekaran said he had now decided not to offer himself for reappointment when his present term ends, citing the need for leadership clarity as Tata Sons executes several strategic projects.
Chandrasekaran -- who became chairman of Tata Sons in 2017 after leading Tata Consultancy Services -- has overseen major investments and acquisitions across the group.
— IANS
Reader Comments
Market overreacting as usual. This is just a short-term panic. Tata Group has survived for over 150 years with strong institutional systems. Leadership transitions are part of business. Give it a week and the stocks will stabilize. But yes, transparency from Tata Sons would have been better.
Rs 46,000 crore wiped out in a single day! That's a huge amount. But honestly, Chandrasekaran handled this gracefully. He could have fought for his position, but he chose to step aside for the sake of clarity. Shows he's a true Tata man - putting the group first. The board member who blocked him should come forward and explain their reasoning. 🤷♂️
As someone who has been following Tata Group for years, this is disappointing. Chandrasekaran brought discipline and digital transformation to the group. His stewardship of TCS was phenomenal. However, I feel like the group needs a younger leader who understands new-age business challenges. Maybe this is an opportunity in disguise for fresh leadership? 🤷♀️
The uncertainty is what's hurting. Investors hate ambiguity. Whether it's Tata or any other company, clarity on leadership is crucial for market confidence. Chandrasekaran stepping down early was probably the responsible thing to do, but Tata Sons needs to expedite the succession plan and reassure the market.
The Tata brand is bigger than any individual. Our desi conglomerate has navigated much tougher storms. Chandrasekaran leaving is a loss, no doubt. But the group will find someone strong. Just look at their track record - Ratan
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