Tata Group stocks took further beating during morning trades on Thursday after the boardroom battle between Ratan Tata and Cyrus Mistry turned into a corporate governance issue as well.
On BSE, shares of Indian Hotels lost nearly 8 per cent or Rs.9.55 to trade at Rs.111.85. Similarly, Tata Motors was down over two per cent or Rs.10.85 to trade at Rs.518.65.
In an email addressed to the directors of Tata Sons, ousted chairman Mr. Mistry said that losses caused by what he called ‘legacy hotspots’ in the Tata group could result in a write-down of Rs.1.18 lakh crore, over time.
He referred to losses in Indian Hotels Company Ltd, Tata Motors PV, Tata Steel Europe, Tata Power Mundra and Tata Teleservices as having reached alarming proportions.
According to him, “The capital deployed in these companies has risen to Rs.1.96 lakh crore due to operational losses, interest and capex. This figure is close to the networth of the group which is at Rs.1.74 lakh crore.” He said, “A realistic assessment of the fair value of these businesses could potentially result in a write down over time of about Rs.1.18 lakh crore.”
Shares of Tata Steel were also down 1.53 per cent and were trading at Rs.392.75.
The Sensex, during the morning session was down only a marginal 0.28 per cent or 77 points to trade at 27,760.
