Icon times
Why Tata Group Shares are Going UP Today?

Tata Mistry Case and How it impacts Tata Group Valuation? (Whats ahead?)

Published on 26 March 2021 Views 0 Comments 0

The stocks of Tata Group were mounting up on Friday 26th March, 2020. Tata Chemicals were up by 1.89%, Tata Power went up by 5.17%, Tata Elxsi by 1.60%, Tata Steel by 5.89% on NSE. What was the reason behind this gain in Tata Group Stocks, read this blog to know the reason?

Introduction:

Stocks of Tata Group soared on Friday on account of the decision of the Supreme Court against the NCLAT order in the Tata-Mistry Case. The decision was announced by the bench of Chief Justice SA Bobde and Justice AS Bopanna and V Ramasubramanian.

A glimpse of the Tata-Mistry Case:

  • In 2012, Mr. Cyrus Mistri was handed over the position of Chairman in Tata Sons.
  • Cyrus Mistri sat over this position of Chairman till 2016.
  • In the same year, he was expelled from the Chairmanship by the Board members of Tata Sons.
  • Furthermore, he felt humiliated with his removal from the Chairman of the group in this manner and he filed a case against the Tata Group in National Company Law Tribunal (NCLT) on the grounds of irregularities in the Article of Association and severe issues in Corporate Governance.
  • In the hearing of December 2019, NCLAT announced the verdict in the favor of Cyrus Mistri and directed the Tata Group to reinstate Cyrus Pallonji Mistry to the position of Chairman in Tata Sons & Director of Tata Group for his remaining working tenure.
  • Then, Tata Group moves to Supreme Court against this decision, where the Honorable Supreme Court put stay on the decision of NCLAT in January 2020.
  • Finally, Supreme Court gave a verdict in favor of Tata Group and against the NCLAT by stating “all questions of law are in favor of Tata Group”.
  • With this decision, Tata Group needs no longer to continue with the earlier announced verdict of NCLAT.

Matter of Valuations of Tata Group-Pallonji Group:

  • Shapoor Pallonji Group holds a minority stake of 18% in Tata Group, also Tata Group holds a certain stake in Pallonji Group as well.
  • The process of separation of this group might be carried in fast-forward manner post this verdict of the Honorable Supreme Court.
  • One of the suggestions made to carry on the settlement for the separation was to swap their stake valuations, to which Tata Group did not agree upon.
  • On this topic, Supreme Court has directed Tata Sons & Pallonji Group to take the legal route. Hence, this battle can move forward a bit more.
  • Also, Supreme Court leaves the concern of the Valuation of Tata sons open.  In the verdict of NCLAT in 2019, Tata Group was told to list the Tata Sons in the stock market.

What’s Ahead for Tata Group?

  • The decision of the Supreme Court on the issue of Chairmanship is certainly good news for the Tata Group.
  • Mr. N. Chandrasekaran is the current chairman of the Tata Group.
  • A notable front on which Mr. N. Chandra proves to be a right choice for the position of Chairman of the Group is:

i) He efficiently led TCS- The most profitable firm of Tata Group.

ii) HE is stressing a lot about making profit centers for the Tata Group.

iii) Under the chairmanship of N. Chandrasekaran, businesses of Tata Group like Tata Motors, Tata Steel, Tata Consumer Products, Tata Elxsi, Tata Technologies have revived and are performing well.

iv) Also, the most talked-about matter of developing synergies between Tata Motors, Tata Chemicals, Tata Power, and TCS and building of an ecosystem is also taking place under the control of the current chairman.

  • Tata Group is also concentrating a lot on the Retail Sector as well. They are implementing numerous Strategies in this sector especially in Tata Consumer Products, Tata Digital & Tata Cliq.
  • With time, Group has also shifted its focus towards Digital. In addition to this point, we can also look after the acquisition of Big Basket, an e-Grocery platform by the Group.

Conclusion:

As per the current scenario, Tata Group seems to be working efficiently and effectively for future growth. The group is working very whole-heartedly to make the businesses profitable and implementing strategies in the correct place.

For a longer horizon, this news seems to be of much value for the Tata Group. And Looking at the efforts of management and the strategies of business, one should keep the Stocks of Tata Group on their radar.

Attachments
File Name
private article suscription area icon

You like to know more. We like that!

Please subscribe Model Portfolio Plan to get access of all premium model portfolio articles Only at Rs 7499/Year.

Please login to view this free article.

This blog is available only for logged in users, please register and get access to view this article.

LATEST UPDATE

premium Premium
free Free
Read More

REPORTS


Chat on WhatsApp
Caret UP Arrow
InvestYadnya Support
Typically replies in minutes
InvestYadnya Support
Hi there
Welcome to InvestYadnya.
We are available to assist you on WhatsApp.
Please click on the button below to chat with us.
(10 AM to 7 PM IST)
16:10
Chat with InvestYadnya