Tata: Tata Sons has to list by September 2025 under RBI norm

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MUMBAI: Tata Sons, holding company of the $150-billion Tata Group, will have to be ready for a stock market listing by September 2025 with the RBI classifying it as an ‘upper-layer’ NBFC, which requires greater regulatory compliance.
If Tata Sons gets listed, it will be a windfall for its shareholders, including Tata Trusts. At an estimated valuation of Rs 11 lakh crore for Tata Sons, a 5% offering would be worth Rs 55,000 crore — India’s biggest public offering.
Tata Sons, the holding company of the Tata Group may explore options to avoid the RBI’s upper-layer NBFC tag. The RBI on Thursday again released the list of 15 NBFCs (including Tata Sons) in the upper-layer category, which requires greater regulatory compliance.
Tata Sons declined to comment. An email sent to Ratan Tata, who heads Tata Trusts and is also the chairman emeritus of Tata Sons, didn’t elicit any response till the time of going to press.
According to RBI, upper-layer NBFCs have to follow a stringent disciplinary structure with mandatory listing within three years of being notified. The requirement for public listing, akin to those mandated for private banks, is to ensure diffused ownership. Size and interconnectedness are key factors that place an NBFC in the upper layer.
Tata Sons, led by chairman N Chandrasekaran, had explored the possibility of getting an exemption from the RBI, which first issued the list in September 2022. An analyst said that while Tata Sons shares will get converted into a liquid currency through the IPO, there will be a disconnect on the valuation front as investors typically apply a discount to holding companies.
Though Tata Sons has time to comply with the RBI notification, sources said the company could evaluate options, including a reorganisation so that it is excluded from the upper-layer list. The RBI requires upper-layer NBFCs to prepare a board-approved road map for implementation of its regulations within three months from the date of notification. It is unclear whether the Tata Sons board has prepared and approved such a plan.
Apart from Tata Sons, its indirect subsidiary, Tata Capital Financial Services, is also included in the list. Tata Sons is merging Tata Capital Financial Services into Tata Capital, which is making itself “listing-ready”. Tata Sons, in its FY23 report, said: “The simplified corporate structure will create a larger unified entity with a stronger capital and asset base, and shall help us move towards a listing-ready structure aligned with the RBI’s regulations.”
In December 2004, Ratan Tata, who was then chairman of Tata Sons, told The Sunday Times in Mauritius that he would like to list the holding company of the conglomerate. “It would not be very different from Berkshire Hathaway (founded by Warren Buffett),” Tata said. He added: “One option was to use funds to buy or grow another TCS-style company and use it as a springboard to float Tata Sons itself.”
In 2017, late Tata Sons chairman Cyrus Mistry said in a court affidavit that his family – the single-largest individual shareholder of the company – had objected to Tata Trusts’ 2014 plan of listing Tata Sons in London. The plan was to issue shares with differential voting rights (bonus non-voting shares) through primary and secondary listings on the LSE. Mistry said he was against the proposal as legacy hotspots were not fully resolved and that shares with differential voting rights were denounced globally as investor-unfriendly. He added that the IPO could be re-looked at a more appropriate time.



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