The markets rebounded smartly and stocks of some the larger companies belonging to the Tata group rose on Thursday, a day after Cyrus Mistry, younger son of Shapoorji Pallonji Mistry, was chosen to succeed Ratan Tata, chairman Tata Sons, as head of the $75 billion Tata conglomerate.
While the benchmark Sensex saluted the appointment with a gain of 158 points to close at 15,858.49, putting on one%, shares of Tata Motors outperformed, rising 2.8% as did the Tata Consultancy Services stock which added 2.5%. The Voltas stock was among the biggest gainers climbing 3.8% while Tata Steel was up 0.7%. The Tata Group?s market capitalisation was $1.4 bn on Thursday led by TCS to hit $75 billion.
?The move to appoint Mistry, who is young, has been running a business and is a familiar with the Tata Group is a good one,? said a senior fund manager. Mistry is expected to uphold the Tata tradition of being ethical and transparent group in terms of financial reporting and corporate governance.
Mistry, 43, who joined the board of Tata Sons in 1996 was appointed the firm?s deputy chairman. He was a member of the search committee set up to hunt for a successor to Ratan Tata but recused himself from deliberations involving his own appointment. Mistry has been running the family construction business.
Among the other Tata Group stocks that were up Tata Coffee gained 2% while Indian Hotels put on 0.8%.
In terms of market capitalisation, bulk of the addition came from TCS which itself added $ 1 bn (R5,244 crore) of market capitalisation while Tata Motors and Tata Steel added R1,475 crore and R235 crore respectively. The net profits of 30 Tata Group listed companies increased by 20% during the financial year 2010-11 to R19,856 crore.
As a group, the Tata Group is currently the most valuable industrial group in the country. Earlier this year, the combined market capitalisation of the Tata companies had in fact overtaken the combined market wealth of the two Ambani groups.