Tata group stocks fall on Mistry's ouster; Tata Steel down 3%

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Moneycontrol Bureau

Shares of Tata Group stocks were under selling pressure Tuesday reacting to Cyrus Mistry's ouster as Chairman. In a sudden move, Tata Sons board replaced Mistry by Ratan Tata to run the USD 100 billion salt-to-software conglomerate.In November 2011 Mistry was appointed Deputy Chairman of Tata Sons, whose board he had entered in 2006. He was made chairman on the basis of his representation from Shapoorji Palonji, the largest shareholder in Tata Sons.

Stating that the change of leadership at Tata Group was unexpected, Sanjay Mookim of Bank of America Merrill Lynch says that increased uncertainty at the top could affect stock prices of listed companies in the near term and  may indicate that the board wishes a change in group strategy.

Combined market valuation of all listed companies of Tata Group have almost doubled under four years of Mistry's leadership.

Currently, Tata Group has a listed market capitalisation of around Rs 8.5 lakh crore. Software giant TCS has a market value of nearly Rs 4.8 lakh crore. When Ratan Tata took over the charge way back in 1991, the total market cap of the group was less than Rs 8,000 crore.