Tata Motors PV, Tata Investment, Tata Chemicals shares fall after Tata Trusts' latest proposal; key details

Shares of Tata Group companies including Tata Chemicals Ltd, Tata Motors Passenger Vehicles Ltd and Tata Power Company Ltd fell in Tuesday's trade after the majority shareholder Tata Trusts proposed merging Tata Sons with two of its unlisted units, in a bid to avoiding a listing mandated by the Reserve Bank of India.

The fresh proposal seeks merging of Tata Electronics Systems Solutions Pvt  and Tata Consulting Engineers into the parent, converting Tata Sons into a holding-operating company, allowing it to bypass regulations mandating the listing, Noel Tata-led Tata Trusts said in a statement.

"The Tata Trusts believe that the proposed reorganization and action plan for compliance would be in the best interests of the Tata Group as well as its stakeholders, in addition to being a regulatory permissible and compliant form of reorganization of a CIC. The Tata Trusts have, accordingly, written to the TSPL Board to consider and approve the proposal, and to take necessary steps, including applying to the RBI for the necessary ‘no-objection certificate’ as required for the proposed merger and reorganisation of TSPL," Tata Trust said.

Following the development, Tata Motors Passenger Vehicles Ltd declined 2.60 per cent to Rs 275.65. Tata Investment Corporation Ltd fell 2.01 per cent to Rs 631.85. Tata Chemicals Ltd slipped 1.61 per cent to open at Rs 631.30. Tata Power dropped 0.76 per cent to Rs 359.25. Tata Steel and Indian Hotels edged up to 1 per cent lower.

Tata Trusts owned 66 per cent stake in Tata Sons Private Limited (TSPL). Tata Sons is registered as a core investment company (CIC) and was classified as an upper-layer non-banking financial company (UL-NBFC) in September 2022 under the scale-based regulatory framework of the RBI. This framework required mandatory listing of the company.

As per Bloomberg, Tata Chemicals has 2.53 per cent stake in Tata Sons. Tata Investment Corp Ltd  held 0.08 per cent stake. Tata Steel (3.06 per cent), Tata Motors Passenger Vehicles Ltd (3.06 per cent), Tata Power Company Ltd (1.65 per cent), Indian Hotels (1.11 per cent) and TCPL (0.43 per cent) also held stakes in the company. In total, seven listed Tata group companies held 11.94 per cent stake in Tata Sons.

Tata Trusts said it will, along with TSPL, engage with the RBI on all aspects of the proposed reorganisation. It said the proposed amalgamation and consequential steps are in line with regulatory compliance requirements and the unanimous resolutions passed by the Boards of Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025 wherein it was agreed that all endeavours should be made to ensure that the status of TSPL as an unlisted private company should continue.

"It also has the advantage of preserving the more than 100-year-old distinctive and unique organisational structure of the Group, which has always focussed on long term strategic initiatives geared towards nation building and the welfare of the disadvantaged and the excluded," Tata Trusts said.