It has been a very rough last month of Tata group of companies. Since surprise exit of Cyrus Mistry and his surprising revelations, the group has lost around 15% of their market capitalization. In numbers, the group has lost around Rs. 1.16 lakh crore.
This huge decline in Tata companies’ market cap has affected all types of investors. It is estimated that around Rs. 11,000 crore of the money has been wiped out from retail investor’s wealth since the Mistry fiasco.
The group companies had the combined market cap of around Rs. 8.7 lakh crore. Now the value left is Rs 7.5 lakh crore. TCS, Tata Motors, Titan and Tata Steel have seen maximum value erosion due this event.
Analysts are suggesting avoiding the fresh buying the group stocks considering the uncertainty due to the internal dispute. Leadership issues also require clarity. The corporate governance related allegations have been very harsh for the reputed name of the group.
In last one month. TCS has lost around 11%, Tata Steel has lost around 8%, Tata Motor has lost about 16%, whereas Sensex has fallen by 7.5% in last month. Experts, however, believe that the investors may start picking up some of the stocks may see dead cat bounce due to oversold positioning.
However a few analysts expect that demonetization is impacting the stocks. Tata Steel, Tata Chemical and Titan are most impacted by demonetization, while TCS, Tata Global Beverages and Tata Power may be the least impacted.
Experts believe that stocks might remain volatile in the short term but for a long term perspective this is the right to invest in these companies. The fund managers are also using the opportunity to buy individual stocks depending on valuations and business outlook.
Analysts expect turn around in Tata Motors stock as its Jaguar and Land Rover business is expected to remain intact. Its domestic business is expected to pick up as the seventh pay commission money kicks in.