The Hindu Business Line

Fund houses make the most of correction in Tata group stocks

Hike holdings in TCS, Tata Motors, Tata Power, others


Domestic mutual fund houses seem to have made the most of the correction in Tata Group stocks following the ouster of Cyrus Mistry — they have accumulate­d shares across group companies in November, according to data from fund houses.

Heavy buying in Tata Motors

Mutual funds’ holdings in crown jewels TCS, Tata Motors, Tata Power and Tata Steel has risen during the month, according to a report by research house Morningsta­r. However, details of other listed companies such as Indian Hotels, Titan, Tata Global Beverages and Tata Teleservic­es Maharashtr­a are not available.

Tata Motors, the maker of JLR cars, anticipati­ng a spurt in demand for its latest hatchback Tiago, saw the most buying with over 13.81 million shares being bought, which is a rise of 11.33 per cent over the previous month, it said.

This is followed by Tata Power, where investors added 8.36 per cent to their existing holdings and Tata Steel where 8.17 per cent new buying was done.

Sell-off after Mistry’s ouster

Barring Tata Power, all the scrips saw an increase in the number of fund houses holding the stock at the end of November, with Tata Motors emerging as the favourite with 310 fund houses, followed by TCS at 226. In a surprise move, Mistry was ousted as chairman of Tata Sons on October 24, without being given detailed reasons.

This led to unease among investors, and a sell-off in group company stocks, which led to erosion of value.

The Tatas have begun the lengthy process of dismissing Mistry as chairman and director on the boards of publicly-held group companies and have already succeeded in TCS, Tata Teleservic­es and Tata Industries, where they had absolute majority.

Institutio­nal investors are expected to play an important role in similar voting at group companies Tata Power, IHCL and Tata Motors, where Tatas hold as little as 28 per cent. Among the 100-odd group companies, the Tatas have called for EGMs in the largest six — TCS, Tata Motors and Tata Steel, among others between December 13 and 26.

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