Tata Sons Chairman Cyrus Mistry was unceremoniously ousted recently at a board meeting | The move has triggered a Rs 55,000-crore sell-off in the Tata Group companies' shares.
Amidst rising worries about the plunging value of Tata Group companies after Cyrus Mistry was shown the door earlier in the week, interim chairman Ratan Tata today met V K Sharma, the acting chairman of LIC which is one of the major investors in Tata companies.
While Bombay House sources confirmed the meeting between Tata and Sharma, they refused to share what transpired between the two.
Tata Group officials also met other leading domestic fund houses to allay fears about the investors worries following the dramatic developments in the nation's largest corporate group.
Life Insurance Corporation (LIC) has an exposure of over Rs 37,500 crore to different Tata Group companies whose market cap eroded by over 5% since the dramatic development on Monday when Mistry was summarily sacked and Tata took over.
While LIC owns 3.2% in TCS, which is the most profitable Tata firm, it owns 1.9% in Tata Steel which is the most troubled group company now due to the lingering troubles in its British operations.
In Tata Power, LIC owns 13.1% stake, 5.2% in Tata Motors, 8.8% in Indian Hotels and 9.8% in Tata Global Beverages.
Meanwhile, a section of the media reported that Tatas are planning to get the Mistry family that owns 18.5% in the Tata Sons, out of the group by getting some sovereign wealth funds to buyout the single largest non-Tata family investor in the group holding company.
When asked whether this was a point of discussion between Tata and LIC, the sources refused to comment.
Meanwhile, Tata Steel had a half-a-day long meeting with investors and analysts at the Bombay House on Thursday. Though the company spokesman confirmed the meeting, he feigned ignorance about the discussion topic.
It is rumoured that one of the reasons for the summary sacking of Mistry was his bid to sell the troubled Tata Steel UK, whose networth has completely eroded since the past few years.
The Tatas bought the then Corus steel for a hefty $12.8 billion (nearly Rs 1,280 crore) at the peak of the commodity price cycle and got its fingers burnt after the macroeconomic crisis in Britain and Europe engulfed the sector.
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