Why Tata stocks fell up to 7% today
What's the story
Tata Group stocks witnessed a major fall today, with losses of as much as 7%. The decline comes after a major rally on Tuesday, which was fueled by renewed hopes of a possible IPO for Tata Sons. Tata Investment Corporation's share price plummeted by as much as 7% to an intraday low of ₹666. Meanwhile, Tata Chemicals' stock also came under pressure, falling nearly 6% to an intraday low of ₹691.90.
Market impact
Other group stocks also decline
Other Tata Group stocks weren't spared either. Tata Motors' share price fell by as much as 2.52% to ₹416.40, while Tata Steel's stock declined up to 1.81% to ₹180.33 before recovering its losses later in the day.
Even Tata Consultancy Services (TCS) traded lower at ₹2,224.20, down by 1.19%.
However, Trent bucked the trend and rose by 1.57% to ₹2,772.80 during the market session today.
Regulatory influence
RBI rejects Tata Sons' voluntary surrender request
The Reserve Bank of India (RBI) recently rejected Tata Sons' request to voluntarily surrender its Certificate of Registration, directing it to comply with NBFC-Upper Layer rules.
This decision has reignited speculation about a possible IPO for Tata Sons, even though the company has not officially confirmed any plans or timelines for such a move.
Valuation insights
Potential IPO could be valued at ₹9-12.5 lakh crore
Investment bankers and valuation experts estimate that a potential IPO for Tata Sons could value the company between ₹9-12.5 lakh crore.
This would be a significant discount to its estimated underlying portfolio value of ₹15-16 lakh crore.
The portfolio includes roughly ₹12 lakh crore in listed holdings and ₹4 lakh crore in unlisted assets, with holding-company discounts of 41-45% on listed investments and about 15% on unlisted assets.