Mumbai: The nine years of Tata Group under N. Chandrasekaran’s leadership not only saw aggressive capital allocation and forays into different kinds of businesses, it also saw the investor base of the group’s listed companies undergo a significant shift.
According to a Mint analysis of Ace Equity data between March 2017 and June 2026, domestic mutual funds increased their holdings in core IT and telecom, foreign portfolio investors (FPIs) rotated into consumer businesses, and retail investors heavily backed turnaround stories.
Among the companies where mutual funds substantially increased their holdings, median returns were around 130% during the period, with some of the group’s biggest institutional favourites emerging as its strongest stock-market performers. But the relationship was not uniform: some companies that attracted greater retail ownership delivered more modest returns.
All returns mentioned in the story are adjusted for stock splits, bonus issues, demergers and other corporate actions.
Fund favour
A defining feature of Chandrasekaran’s tenure has been the growing presence of domestic mutual funds in several Tata companies. Backed by sustained systematic investment plan (SIP) inflows from Indian households, mutual funds have increased their holdings in a number of the group’s flagship companies.
In Tata Consultancy Services (TCS), mutual fund ownership rose from 0.94% in March 2017 to 5.68% as of 30 June 2026. The stock has delivered 90% returns during Chandra’s tenure as Tata Sons chairman, compared to the benchmark Nifty IT’s 193%.
Mutual funds displayed even stronger accumulation in Tata Communications, where their combined holding increased by more than 12 percentage points, from 3.8% to 16.3%. The company has since transformed from a traditional telecom operator into a provider of enterprise connectivity, cloud and digital infrastructure.
“Domestic mutual funds have used nine years of SIP-driven inflows to build permanent, low-turnover positions in Tata’s highest-quality franchises — TCS and Tata Communications for their cash generation and moat, and Trent and Titan for compounding consumption stories,” said Tanvi Kanchan, associate director at Anand Rathi Shares & Stock Brokers Limited.
Mutual funds also increased their holding in Tata Motors Passenger Vehicles from 4.82% in 2017 to nearly 10% by June 2026, as the automaker pursued an electric-vehicle strategy and reduced leverage. However, the stock declined 25% over the period, compared to Nifty Auto’s gain of 201%. To be sure, in FY17, Tata Motors Passenger Vehicles existed in the form of Tata Motors Limited, which had both passenger and commercial vehicle businesses.
Trent and Titan Company were among the other favourites, with mutual fund holdings rising by more than 500 basis points (bps), or five percentage points, each. Trent gained 1,691% during the period, while Titan rose 1,017%.
“Domestic fund ownership of the market roughly doubled over Chandrasekaran’s tenure on SIP flows, so some rise everywhere was inevitable, but both these businesses (Trent and Titan) genuinely transformed over the period. Zudio scaled into a category of its own, while Tanishq took share from unorganised jewellery,” said Vedant Gupte, co-founder and CEO of investment platform Trackk.
The accumulation was not uniform across the group. Mutual funds cut their holdings in Oriental Hotels and Tata Chemicals by nearly 800 bps each.
Kanchan of Anand Rathi added that high mutual fund ownership provides these companies with stable, long-term capital rather than speculative trading volume. Moreover, having large, institutional investors permanently anchored to their shareholding structure acts as a major corporate governance vote of confidence, she said.
Overseas shift
FPIs moved in a different direction. Foreign ownership of TCS declined from 16.9% in March 2017 to 9.1% by June 2026. In Tata Motors Passenger Vehicles, it fell from 23.2% to 17.1% over the same period. FPIs also reduced their holdings in Tata Power and Trent by 17 and 12 percentage points, respectively.
“This should not be interpreted as a loss of confidence in the Tata group. It reflects the growth of SIP-funded domestic capital, index participation and global investors’ sectoral reallocation,” said Manish Bhandari, CEO and portfolio manager at Vallum Capital.
At the same time, foreign investors increased their exposure to businesses more closely linked to India’s domestic consumption and travel economy.
FPI ownership of Tata Consumer Products increased by nearly five percentage points to 20.1%, while their holding in Indian Hotels Company Ltd (IHCL) rose from 15.1% to 21.7%.
The shift reflects a preference for India-facing consumer and hospitality businesses, where growth is driven by premiumisation, formalisation and domestic travel, rather than exposure to US technology spending or global automotive cycles, Bhandari said.
Retail conviction
The most striking shift, however, may be among individual investors.
Retail shareholders—defined in the shareholding data as individuals with nominal share capital of up to ₹1 lakh—have increased their exposure to several Tata companies even as institutional investors have reduced theirs.
Tata Chemicals is one example. As mutual funds and FPIs reduced their holdings, retail ownership increased from 18.1% in March 2017 to 22.7% by June 2026. Yet the stock delivered only a 16% gain over the period.
Tata Motors Passenger Vehicles saw an even sharper increase in retail ownership, of about 12 percentage points to 18.1%, alongside higher mutual fund ownership. Retail holdings in crop-care company Rallis India also rose by nearly 700 basis points to 17.8%.
However, two stocks that delivered strong gains over Chandra’s tenure saw retail shareholders cut their holdings by nearly 300 bps and 400 bps, respectively. Tata Elxsi and Nelco gave returns of 398% and 1,116% over the same period.
The divergent ownership trends suggest that rising retail participation should not automatically be read as a vote of confidence.
“This is retail doing what retail typically does at the tail end of a re-rating — buying recognisable, familiar names often after institutional flows have already captured the bulk of the move,” said Kanchan of Anand Rathi Shares. “It’s a classic institutional-exit, retail-entry pattern, and worth a note of caution rather than celebration when both MFs and FPIs are trimming a stock at the same time retail ownership triples.”
Gupte of Trackk also sounded a note of caution: “Retail ownership rising while both institutional cohorts exit is less a vote of confidence than a shift in who holds the risk.”
He pointed to Tata Motors as a genuine retail story, although the demerger complicates long-term comparisons. Tata Chemicals, he said, was a sharper example, with retail interest often driven by expectations around a Tata Sons listing even as institutions focused on weak soda ash fundamentals.
“The broader rise in domestic ownership is healthy, but the concern is concentration in specific story-driven stocks rather than the trend itself,” Gupte said.