Tata separation from Shapoorji Pallonji

Shapoorji Pallonji (SP Group)  holding 18.37% stake in Tata Sons, while Tatas holding 81.6% stake, have estimated valuation of this stake at Rs. 1.75 lakh crore, while submitting a separation plan to Supreme Court. Infact, discharge of this was sought with pro rata split of listed assets, where Tata Sons currently owns stake. Major portion of this to get discharged by 18.37% stake of 72.02% stake held by Tat Sons in TCS, value of which comes to Rs. 1.35 lakh crore.

However, problem will be seen with stake in companies like Tata Steel, Tata Motors, Tata Chem, Tata Consumer and Voltas, to be given to SP Group, where they will not be interested in retaining any of this stake as financial investor. Even Titan, where Tata Sons is holding 20.84% stake, while if it gives an effective 3.83% stake of Titan to SP Group, valued at Rs. 4,000 crores may see selling, as SP Group requires a liquidity of about Rs. 20,000 cores, which can get mobilised from these stakes.

Hence, this will be an alarm bell for the investors in all these companies, as share price may drift lower sharply and swiftly, on selling to be seen by SP Group, if this arrangement goes through. Gullible retail investors will get crushed in fight of 2 Bull Promoters. Pity on them.