Several Tata Group companies experienced a decline in their stock prices, dropping by as much as 10% on March 11. Previously, there was speculation about an imminent IPO, which had initially boosted stock values, with some Tata stocks rising up to 36%.
As a core investment company (CIC) under the Reserve Bank of India (RBI), and being classified in the ‘upper layer’ of Non-Banking Financial Companies (NBFCs), Tata Sons faces a regulatory requirement to list on the stock exchange by September 2025. This mandate came into effect with the RBI’s notification in September 2023. However, recent developments indicate that Tata Sons may be exploring alternative methods to comply with these RBI regulations, leading to uncertainty among investors.
The ripple effect of this uncertainty was evident across various Tata Group companies. Tata Investment Corporation’s shares hit a 5% lower circuit, while Tata Technologies and Tata Consumer Products saw around a 3% decline each. Shares of Tata Teleservices, Tata Steel, and Tata Power Company also fell, alongside marginal decreases in Indian Hotels Company and Tata Motors stocks. This market reaction comes despite earlier expectations of Tata Sons’ IPO potentially being the largest ever, surpassing the Life Insurance Corporation of India’s Rs 21,000 crore offering, with estimated valuations around Rs 7-8 lakh crore.
