With time running out for Tata Sons to meet the mandatory public listing deadline, the Reserve Bank of India (RBI) is yet to decide on the conglomerate’s application to surrender its status as a core investment company (CIC).
This move, initiated in March, was aimed at exempting Tata Sons from listing obligations under the RBI’s regulatory framework.
Deadline approaches for Core Investment Companies
In 2022, the RBI set September 2025 as the deadline for core investment companies to go public, a rule that would require Tata Sons, classified as an “upper layer” non-banking financial company (NBFC), to adhere to stricter governance norms as part of the Scale-Based Regulation (SBR) framework.
Also Read Stocks To Watch: Tata Motors, Asian Paints, OLA Electric, Wipro, LIC, Divi’s Laboratories, Aarti Industries, Hindustan Aeronautics Maharashtra Elections 2024: Kharge releases MVA manifesto; promises Rs 3 lakh annual aid, job stipend, and much more Over-regulation pitfalls Tata Steel Share Price Today Highlights, 07 Nov, 2024: Tata Steel ends 1.6% lower
Also ReadNSE revises norms for stocks listed on other exchanges
The SBR framework demands enhanced transparency for systemically important NBFCs, positioning Tata Sons under higher scrutiny. However, Tata Sons, expressing its opposition to a public listing, applied to voluntarily relinquish its CIC status eight months ago.
Shapoorji Pallonji Group pushing for IPO
While Tata Sons resists the idea of going public, the Shapoorji Pallonji Group, holding an 18% stake, remains vocal about public listing/ IPO. At Tata Sons’ recent annual general meeting, the Shapoorji Pallonji Group highlighted that listing could unlock substantial value, enhance corporate governance, improve liquidity, and broaden access to capital markets.
Analysts estimate that even a modest 5% stake sale could generate over Rs 55,000 crore, significantly strengthening Tata Sons’ financial standing and market presence.
Industry-Wide SBR Compliance
The SBR framework, implemented in 2022, has led other key players such as LIC Housing Finance, Bajaj Finance, and L&T Finance to adjust their structures and processes to meet compliance standards. Tata Sons’ decision to remain private, therefore, stands in contrast with peers making strides toward public market readiness.
Also ReadHSBC cuts Sensex 2025 target by 10 per cent
Adding complexity to the situation is the involvement of Venu Srinivasan,
» Read More
