Daijiworld Media Network – Mumbai
Mumbai, Jul 28: Tata Sons Pvt., the holding entity of India’s sprawling Tata Group, is not making any immediate moves toward a share sale, banking instead on a likely extension from the Reserve Bank of India (RBI) to delay its mandatory public listing, sources close to the matter revealed.
The company’s leadership reportedly expects official communication from the RBI granting a reprieve from the September deadline for an IPO. This follows discussions amid an ongoing regulatory review on whether entities like Tata Sons — not directly involved in public fundraising — need to go public at all.
Tata Sons had previously been classified by the RBI as a top-tier Non-Banking Financial Company (NBFC), which would have compelled it to list. In response, the conglomerate last year sought deregistration from the shadow banking framework as a Core Investment Company (CIC).
The firm holds significant stakes in major Tata entities such as Tata Consultancy Services, Tata Motors, and Tata Steel. Tata Trusts, a philanthropic body, controls a 66% share in Tata Sons, ensuring majority governance.
While an IPO could bring transparency to the group’s intricate holding structure, it would also open up the company to hostile takeovers — a scenario Tata Sons currently avoids due to the veto power held by its board.
A Tata Group representative declined to comment, and the RBI has not yet responded to media queries. However, the company’s strategic pause may hurt the Shapoorji Pallonji Group, which holds an 18.37% stake in Tata Sons and is struggling under heavy debt. An IPO was viewed as a potential opportunity for the group to exit and ease its financial burden.
To avoid being classified again as a top-tier NBFC, Tata Sons had cleared all debts from its books last year. Meanwhile, RBI Governor Sanjay Malhotra recently indicated that a flexible approach might be adopted for such institutions.
“It is dynamic,” Malhotra had stated. “Policies have to change with the times... especially for Type-I NBFCs.”
A final decision from the RBI on Tata Sons’ status is still awaited.