Tata Sons is considering various alternatives including the possibility of an initial public offering (IPO), to prepare for mounting pressure from Shapoorji Pallonji (SP) Group, which owns an 18.4% share, for share sale. This is according to a report by The Economic Times.
Tata Sons, the holding company for Tata Group is exploring going public, selling a partial stake, or fully acquiring the minority interest, reported The Economic Times citing sources. However, none of these options are anticipated in the near term, as stakeholders at Tata Trusts do not have a unified opinion on the matter.
Tata Sons is the holding entity of the Tata Group
The SP Group is facing a demand to settle Rs 22,000 crore in debt, most likely by March. The group has indicated to Tata that the public offering of the holding company would be advantageous for all stakeholders.
“Tata Sons has to be prepared for any eventuality, even if it’s in the distant future. The financial outcomes have to be weighed in,” read the report.
Leading finance and legal specialists have collaborated to strategise the holding company for various potential situations, said the report quoting an executive.
The SP Group earlier secured loans by pledging shares of Tata Sons. Tata Trusts has contested the use of these shares as collateral for loans, referring to the Articles of Association that limit the transfer of shares since Tata Sons transitioned to a private company in 2017.
Apart from that, Tata Sons eliminated debt from its balance sheet to steer clear of being added to the central bank’s upper-layer non-banking finance company (NBFCUL) list. Being included in this list requires them to be listed by September 2025. The Reserve Bank of India (RBI) has stated that it is reviewing Tata Sons’ request for removal from the list.
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