FPIs have pared stakes across several Tata companies with the sharpest reduction seen in premium growth-oriented businesses that had witnessed strong valuation rerating during the post-pandemic rally.
FPI holding in Trent fell from 26.6 per cent in September 2024 to 15.6 per cent in March 2026. Tejas Networks saw foreign ownership decline from 9.6 per cent to 5.3 per cent during the same period, while Tata Consumer Products saw FPI holding fall from 24.4 per cent to 20.8 per cent.
Sharp reduction
The sharp reduction in foreign ownership coincided with steep market-cap erosion across several Tata companies. Tata Motors Passenger Vehicles saw its market cap decline nearly 70 per cent since September 2024, while Tejas Networks lost more than 66 per cent of its value. Tata Teleservices Maharashtra, Trent, Tata Technologies and Tata Elxsi also witnessed market-cap erosion of around 50 per cent or more during the period.
Among the top Nifty 50 companies by market cap, FPI holding in Reliance Industries declined from 20.8 per cent in September 2024 to 18.3 per cent in March 2026, and market cap declined around 8.8 per cent to ₹18.9 lakh crore, according to Prime Database data. HDFC Bank saw foreign ownership fall from 41.5 per cent to 38.1 per cent and market cap fell by 15 per cent, which was largely triggered after the recent resignation of its Chairman raising governance concerns. In contrast, benchmark heavyweights such as ICICI Bank and Bharti Airtel saw relatively stable foreign ownership and materially lower market-cap correction during the period.
“Long-term investors such as pension funds do look at succession planning and governance metrics, while there are other momentum funds that do not look at governance at all,” said Shriram Subramanian, founder and MD of InGovern Research Services.
Opposite approach
Retail investors, however, appear to have taken the opposite approach in several Tata companies. Retail shareholding in Tejas Networks rose sharply during the period, while Tata Technologies, Tata Motors Passenger Vehicles, TRF and Nelco also witnessed increased retail participation despite continued FPI selling.
The Tata group stocks have been under a long consolidation phase, with the current turbulence with Tata Sons’ listing and governance concerns weighing on investor sentiment, said Kranthi Bathini, equity strategist at Wealthmills Securities. “The governance issues are surprising at the board level but the operating companies are expected to remain fundamentally strong over the medium to long term,” he said.
Published on May 19, 2026