Tata Sons Considers Partial Stake Sale Amid Mounting IPO Pressure

Tata Sons, Tata Group’s holding company, is exploring multiple options, including a partial stake sale or a complete buyout of the minority stake and a possible public listing. However, the conglomerate’s holding company is unlikely to decide soon, as Tata Trusts, which holds 66 per cent stake in Tata Sons, has no consensus on these options, according to the Economic Times. 

“Tata Sons has to be prepared for any eventuality, even if it’s in the distant future...The financial outcomes have to be weighed in. Top finance and legal experts have applied their minds to prepare the holding company for multiple scenarios,” the Economic Times reported, citing a source. 

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Tata Sons IPO Countdown 

This comes at a time when the salt-to-steel conglomerate is facing mounting pressure to launch an initial public offering (IPO) as it has been classified as a core investment company (CIC) under upper-layer non-banking finance company (NBFC-UL). Tata Sons application to de-register it as NBFC-UL is still under the Reserve Bank of India’s consideration. However, in a recently published list of 15 companies that fall in the category of NBFC-UL, RBI included Tata Sons name as well, apart from others like Bajaj Finance and Aditya Birla Finance. If the regulator rejects its plea for de-registration, the salt-to-steel conglomerate will have to get listed by September 2025. 

“...inclusion of Tata Sons is the list of NBFC-UL is without prejudice to the outcome of its application for de-registration, which is under examination,” said the regulator. 

Amidst the regulatory nudge to get listed, political stress is also increasing for Tata Sons. Last year in December, a letter written by Lok Sabha MP Nalanda Kaushalendra Kumar to the finance ministry to intervene in the matter surfaced after a report by Daily Pioneer and Zee News. 

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Moreover, the Mistry family-led Shapoorji Pallonji Group, which is the largest public shareholder of Tata Sons, is under pressure to repay a Rs 22,000 crore loan taken by it against the 18.4 per cent Tata Sons shares by March 2025. The construction-to-real estate conglomerate has reportedly told Tata Sons that public listing will benefit all stakeholders.