Tata Sons IPO order backs tycoon Shapoor Mistry's long-running ask

The RBI's decision came months after reclusive billionaire Shapoor Mistry published an open letter to the regulator seeking a listing of Tata Sons to help unlock value for the group's 18.4% stake

By P R Sanjai, Saikat Das and Ruchi Bhatia

The Indian central bank’s refusal to relax listing rules for Tata Group’s holding company delivered an outcome long sought by the conglomerate’s biggest minority shareholder, though the road to going public is far from smooth.

The Reserve Bank of India’s decision came months after reclusive billionaire Shapoor Mistry, who helms the debt-laden Shapoorji Pallonji Group, published an open letter to the regulator seeking a listing of Tata Sons Pvt. to help unlock value for the group’s 18.4% stake. Valued at about $31 billion by Bloomberg Billionaires Index, nearly three-quarters of Mistry’s net worth is coming from the Tata shareholding.

Executives close to SP Group also held meetings with Indian government officials in recent months to press their case, according to people familiar with the discussions, who asked not to be named because they’re not authorized to speak publicly. The executives convinced some senior government officials of potential contagion risk if the construction giant were ever to default, the people said.

Representatives of the RBI, India’s finance ministry, Tata Sons and SP Group did not respond to a request for comment on the regulatory decision last week and what led to it.