New Delhi, Sept. 18 -- Shares of India's Tata Group companies lost about $3.2 billion in market cap on Friday, as investors reacted to heightened uncertainty over the potential listing and leadership of holding company Tata Sons Pvt. Ltd., following a public dispute.

The selloff came a day after Tata Sons' board moved towards complying with Reserve Bank of India rules that could require the holding company to list, while extending Chairman N. Chandrasekaran's term by five years. The moves follow a growing dispute between Tata Sons and Tata Trusts, its largest shareholder, over aspects of governance and succession planning at the storied autos-to-aviation conglomerate.

By noon on Friday, about Rs.30,222 crore ($3.16 billion) had been chi...