Tata Sons Listing: Shapoorji Pallonji, Tata Group Firms in Focus

Mumbai:RBI's rejection of Tata Sons' request to deregister as a non-bank lender and direction for immediate listing would benefit certain Tata Group companies holding minority stake in Tata Sons as well as largest non-Tata Group stake holder Shapoorji Pallonji Group, by value unlocking through the listing process.

Meanwhile, forthcoming Tata Sons Board meeting on September 17 has gained lot of importance as RBI has called for immediate listing of Tata Sons.

Seven listed Tata Group companies collectively own about 11.6 per cent to 13 per cent of Tata Sons - Tata Motors(3.06 per cent), Tata Steel(3.06 per cent), Tata Chemicals(2.53 per cent), Tata Power(1.65 per cent), Indian Hotels Company (IHCL)(1.11 per cent), Tata Consumer Products(0.43 per cent) and Tata Investment Corporation(0.43 per cent).

While market is closed on Monday on account of Ganesh Chaturthi, these Tata Group companies will be in focus on Tuesday in the light of Tata Sons listing possibilities.

Shapoorji Pallonji Group holds 18.37 per cent stake in Tata Sons through Mistry family holding entities Cyrus Investments and Sterling Investment Corporation( about 9.19 per cent each), acquired primarily during the 1930s by Shapoorji Pallonji Mistry.

Listing of Tata Sons will allow Shapoorji Pallonji Group to monetise their holdings in the secondary market or through an offer for sale during the Tata Sons listing process itself.

Shapoorji Pallonji Group faces debt payment burden and has been looking to monetise Tata Sons stake for a very long time.

Afcons Infrastructure, Sterling and Wilson Renewable Energy, Forbes & Company and Gokak Textiles are listed entities of Shapoorji Pallonji Group.

Seven Tata Trusts hold remaining 66 per cent stake in Tata Sons.

As per content of RBI's letter made public, in a letter to Saurabh Agarwal, the chief financial officer, Tata Sons, RBI said, “please refer to your letter of application dated March 28, 2024 that stated that Tata Sons Pvt Ltd, would fulfil the criteria prescribed for being classified as an unregistered core investment company, and your several subsequent correspondences on the subject.”

“After considering the above and examining all the relevant factors, we advise that your request for voluntary surrender of CoR for being classified as an unregistered CIC, cannot be acceded to,” RBI said.

“As such, we advise you to take necessary actions to ensure full compliance with all guidelines/instructions, as applicable to NBFC-upper layer issued by the RBI, immediately,” the central bank said.