Some knee-jerk reaction to the new is expected, but no damage over long-term is expected, said Ramesh Damani, member of BSE & NSE adding that â€œthough it will expose dirty linen of Tata Group to public eye.â€
In probably what is India’s biggest boardroom battle, Tata Sons on Monday sacked chairman Cyrus Mistry and replaced him with Ratan Tata as the interim head for a period of four months.
Some volatility is expected to come into the stock in near-term, but over the long term, it is positive for the company, believes Ajay Srivastava of Dimensions Consulting.
“Positive for the stock in long-term as the man (Ratan Tata) is looking at expanding business and not contracting it,” he told CNBC-TV18.
Some knee-jerk reactions to the news are expected, but no damage over long-term is expected, echoed Ramesh Damani, member of BSE & NSE adding that “though it will expose dirty linen of Tata Group to the public eye.”
The important question is who will ultimately succeed Mistry, Damani added.
Subsidiaries like Tata Motors and TCS are likely to benefit from the change, but Tata Steel or Docomo could bear some brunt of the news.
Cyrus Mistry will be contesting his removal in courts. Experts believe that if removal has been done as per the Articles of Association of the company, then no court can interfere.
Suhas Tuljapurkar, Managing Partner of Legasis, said that Pallonji Group doens't have the case to ask for a pro-rata share in other businesses of the company.
Shareholders need not worry about the prospects of the company.
Sandeep Parekh said the company is not likely to sell off their 18 percent stake in the company. Pallonji can fight the issue, but won’t sell the stake, he said.
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First Published on Oct 25, 2016 08:35 am