Tata Sons has reportedly started discussions with the Shapoorji Pallonji (SP) Group to plan an exit and monetisation of the SP Group's stake in the company
The SP Group holds an 18.37% stake in Tata Sons, which has been pledged with lenders
N Chandrasekaran-led Tata Sons has started discussions with its minority shareholder, the Shapoorji Pallonji Group, to chart out an exit and monetisation plan for the latter’s stake in the company. The talks regarding the exit plan have been initiated between Tata Sons chairman N Chandrasekaran and SP Group chairman Shapoor Mistry, the Economic Times reported. The SP Group, which holds an 18.37% stake in the Tata Group’s holding company, has pledged its shares with lenders.
“It was done to get a sense of expectation from the SP side. It will be a long journey towards any final settlement talks between the two,” ET reported, citing sources.
The development is significant, as it is reportedly the first formal meeting between the heads of the two companies since 2016. The bond between the two conglomerates had become bitter after the removal of Cyrus Mistry as Tata Sons chairman in 2016.
Additionally, the construction-to-real estate conglomerate’s decision to pledge Tata Sons shares had further increased differences between the two giants. The SP Group owns an 18.38% stake in Tata Sons via two of its companies, including Cyrus Investments Pvt Ltd. and Sterling Investment Corporation.
The development comes just days after Noel Tata-led Tata Trusts passed a resolution confirming that Tata Sons should continue to be an unlisted private company and start discussions with the construction-to-real estate conglomerate for potential exit options.
“It was agreed at the meeting to request the chairman of Tata Sons to explore all possible avenues for ensuring that there was no change in the status of Tata Sons as it currently stood. This included a dialogue with the minority shareholders for providing an exit to them,” ET reported, citing the resolution.
This comes at a time when the salt-to-power conglomerate’s holding firm is facing intense pressure from the Reserve Bank of India to go public. Tata Sons was declared an upper-layer NBFC by the regulator in September 2022 and was given a three years’ time to go public, which is set to expire next month.
