Tata Trust, led by Noel Tata, is set to meet today to discuss various issues related to its flagship company Tata Sons. The philanthropic organisation, held by members of the founding Tata family, controls over 66% of Tata Sons.
According to the Economic Times (ET), one of the key issues on the agenda today is Tata Sons' looming public listing mandate by RBI. The company was designated an upper-layer NBFC by the RBI in September 2022. This means the holding company of Tata Group is mandated to get listed within three years of the classification or adopt an internal roadmap if merging or surrendering the licence.
Upper Layer NBFCs are considered systemically important due to their size, interconnectedness, complexity, and risk profile. This classification brings stricter regulatory oversight, enhanced governance norms, higher capital requirements, and mandatory listing (within a timeline) for such companies. In its latest annual report, the company said that it has asked RBI to remove it from the Upper Layer Core Investment Company (UL-CIC) category.
Point to note: Shapoorji Pallonji Group, one of the largest shareholders in the company, has been reportedly pushing the company to get listed.
Tata Trust's board on Monday is also expected to discuss the "future fit" roadmap laid out by Tata Sons' Chairman N Chandrasekaran. In its annual report, he highlighted last week that Tata Sons has deployed ₹5.5 lakh crore capital over the past five years. This has helped generate a revenue of ₹15.34 lakh crore in FY25, with net profit at ₹1.13 lakh crore and market capitalisation at ₹37.84 lakh crore.
Chandrasekaran, in his letter to shareholders, noted that since FY20 the company phased out strategies "that may have aged poorly with time amid changing economic conditions" and highlighted the group's shift toward a "fitness first, velocity next" approach.
As per the ET, he recently briefed the board of Tata Trusts in a closed-door meeting at Bombay House. It was one of a kind in the group's 156-year history.
Further, at least two members of the Tata Sons board are set to step down in the coming months. Former Jaguar Land Rover CEO Ralf Speth and Ajay Piramal both joined the board in 2016. Independent director Leo Puri resigned in April.
The report claims that Kotak Mahindra Bank's founder and director Uday Kotak may join the board. Bahram Vakil, cofounder of AZB & Partners, who joined the board of Tata Investment Corp in March, is also being considered for the job.
