Daijiworld Media Network – Mumbai
Mumbai, Sep 18: The Shapoorji Pallonji (SP) Group on Friday backed the Reserve Bank of India’s (RBI) stand on Tata Sons, a day after Tata Trusts questioned whether the central bank’s order necessarily required the Tata group holding company to go public.
SP Group Chairman Shapoorji Pallonji Mistry said the RBI’s decision had brought “full clarity” to the regulatory position and described a public listing of Tata Sons as a “social and moral imperative”, saying it would strengthen transparency and accountability.
The SP Group, which holds around 18.4 per cent in Tata Sons through Sterling Investment Corporation Private Limited and Cyrus Investments Private Limited, said it was willing to work with Tata Sons to resolve the matter constructively.
The development follows a September 17 Tata Sons board meeting at which the company decided to examine a potential public listing. The decision came after the RBI rejected Tata Sons’ request to surrender its registration as a Core Investment Company.
Tata Trusts, which holds 66 per cent in Tata Sons, has questioned the interpretation and legal implications of the RBI’s communication. Tata Trusts Chairman Noel Tata said the board should consider all available options rather than treating a public issue as the only route.
In his September 17 communication to the Tata Sons board, Noel Tata said the RBI order “does not mention listing” and questioned whether it amounted to a direction to take the company public.
He said the board should obtain the relevant documents, explanations and legal advice before determining how to respond to the central bank.
The issue has gained significance as Tata Sons is the holding company of the Tata group and owns stakes in several listed Tata companies. A public listing of the parent company could potentially unlock value for shareholders of companies that hold shares in Tata Sons, including Tata Chemicals, Tata Motors and Tata Investment Corporation.
The RBI designated Tata Sons as an Upper-Layer Non-Banking Financial Company (NBFC) in 2022, bringing it under a regulatory framework that includes listing-related obligations. The central bank rejected Tata Sons’ application to surrender its registration on September 11 and directed the company to comply with the applicable regulatory framework.
Meanwhile, the Tata Sons board on September 17 reappointed N Chandrasekaran as chairman for another five-year term and agreed to proceed with consideration of a public listing.