Mutual fund managers supportive of Tata Camp

Currently, mutual funds' investment in Tata shares accounts for a 1.4% of the sector's overall assets of Rs 16 lakh crore

Mutual fund managers, who have investments worth Rs 22,000 crore in the Tata group of companies, seem more supportive of Ratan Tata in the big feud with Cyrus Mistry.
 
Battles among promoters in big corporate groups are not new, they said, and hoped this one would see a thaw.
 
“Several of the allegations in the leaked letter of Mistry do not hold ground. I would call them illogical to an extent. The kind of write-offs being talked about might not be true. Further, I believe the Tatas will ensure the feud does not percolate down to the group company level, affecting business in general,” said the chief investment officer (CIO) of a fund house.
 
According to another senior CIO, “There will not be much impact on the share prices. As fund managers, we do not have any locus standi on the issue, as it is not a company-specific issue. And, it is less likely that it will turn messier. Anybody raising questions on Ratan Tata’s integrity stands to lose credibility.”
 
Fund managers said the group was professionally managed. “The good point is they are not only bothered about ROI (return on interest) or ROCE (return on capital) but traditionally they have a social responsibility to the country. Any alteration to this model might not be good for the group and Cyrus’ removal could prove to be a part of a corrective course of action,” said a chief executive officer.
 
They also said it was too early to take a call on investments in Tata stocks. “We expect more details to surface. Taking a strategic investment call by hearing only one party’s story is not wise at the current stage. Ratan Tata must have done his sound research and analysis before ambushing Cyrus,’ says another CIO.
 
In case, the situation gets messier and companies are affected, we would not delay taking a directional call on our investments, they say.
 
Currently, MFs’ investment in Tata group shares are a mere 1.4 per cent of the sector’s overall assets of Rs 16 lakh crore. However, of the equity assets of Rs 5.05 lakh crore, Tata shares account for 4.3 per cent.
 
Tata Motors account for the largest, Rs 6,046 crore of equity assets. Followed by Tata Consultancy Services at Rs 4,776 crore, Tata Motors DVR (Rs 4,346 crore), Tata Steel (Rs 3,425 crore) and Tata Chemicals (Rs 1,968 crore).