Tata Sons is considering various options to adhere to the Reserve Bank of India’s (RBI) mandates regarding upper-tier Non-Banking Financial Companies (NBFCs), according to a report by CNBC-TV18. According to RBI regulations, any upper-layer NBFC is mandated to list its shares within three years, with Tata Sons expected to adhere to this directive by September 2025.
However, the conglomerate’s listing appears increasingly improbable, said the report. Tata Sons is contemplating the possibility of hiving off Tata Capital and reducing its debt amount to ensure compliance, added the report.
Tata Sons Ltd may fetch a valuation of as much as ₹11 lakh crore in an initial public offering (IPO) with an issu size of ₹55,000 crore , according to Mumbai-based investment banking firm Spark Capital PWM Pvt.
The conglomerate — which owns stakes in software major Tata Consultancy Services Ltd. and Jaguar Land Rover maker Tata Motors Ltd. — was classified as an “upper-layer” non-banking financial company by the central bank in September 2022. The category, among other requirements, mandates that such firms seek a public listing within a period of three years.
Also Read: Tata Sons may fetch up to ₹8 trillion valuation in IPO, says Spark PWM
While four group companies–Tata Motors, Tata Chemicals, Tata Power and Indian Hotels hold ownership in Tata Sons to the tune of 1-3 per cent, Tata Chemicals can have the biggest play as the ownership of Tata Sons in this firm is around 80 per cent of the company’s market capitalisation.
Tata Sons is mostly owned by Dorabji Tata Trust (28 per cent) and the Ratan Tata Trust (24 per cent), the other promoter trusts own 14 per cent. The Cyrus Mistry family-run Sterling Investment Corporation and Cyrus Investments own nine per cent each.
Tata Motors and Tata Chemicals own three per cent each, Tata Power (two per cent) and Indian Hotels holds one per cent. Other entities hold seven per cent.
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Published: 09 Mar 2024, 04:00 PM IST