Foreign Portfolio Investors (FPIs) have significantly reduced their stakes in several Tata companies, with the most prominent declines occurring among premium growth-oriented businesses that experienced substantial valuation increases during the post-pandemic recovery.
FPI holdings in Trent plummeted from 26.6 percent in September 2024 to 15.6 percent by March 2026. Similarly, Tata Consumer Products saw its FPI ownership decrease from 24.4 percent to 20.8 percent, while Tata Consultancy Services recorded a decline of three percentage points to 9.7 percent. The FPI shareholding in Tata Motors’ Passenger Vehicles segment fell from 20.5 percent to 17.3 percent, and Indian Hotels’ FPI ownership decreased from 27.4 percent to 23.2 percent.
The decline in foreign ownership coincides with significant market capitalization losses across various Tata enterprises. Notably, Tata Motors’ Passenger Vehicles segment experienced nearly a 70 percent drop in market cap since September 2024. Tejas Networks lost over 66 percent of its value, and other Tata entities such as Tata Teleservices Maharashtra, Trent, Tata Technologies, and Tata Elxsi also faced market cap reductions averaging 50 percent or more during the same timeframe.
Among leading Nifty 50 firms, FPI holding in Reliance Industries fell from 20.8 percent in September 2024 to 18.3 percent in March 2026, coupled with a market cap decrease of approximately 8.8 percent to ₹18.9 lakh crore, as per Prime Database data. HDFC Bank witnessed a drop in foreign ownership from 41.5 percent to 38.1 percent, alongside a 15 percent fall in market cap, largely attributed to governance concerns following the recent resignation of its Chairman. In contrast, major firms like ICICI Bank and Bharti Airtel maintained relatively stable FPI ownership and experienced minimal market cap corrections during this period.
“Long-term investors, such as pension funds, consider succession planning and governance metrics, while other momentum-focused funds may overlook governance issues,” stated Shriram Subramanian, founder and managing director of InGovern Research Services.
Conversely, retail investors appear to have adopted an opposing strategy, increasing their shareholdings in several Tata companies amid FPI sell-offs. Retail participation in Tejas Networks surged, while Tata Technologies, Tata Motors Passenger Vehicles, TRF, and Nelco also saw heightened retail engagement despite continued foreign investor withdrawals.
The Tata group’s stocks are currently experiencing a prolonged consolidation phase, exacerbated by ongoing turbulence related to Tata Sons’ listing and governance concerns, which have dampened investor sentiment, according to Kranthi Bathini, equity strategist at Wealthmills Securities. “The governance issues are surprising at the board level, but the operational companies are expected to remain fundamentally strong over the medium to long term,” he remarked.
Published on May 19, 2026.
