In a major development related to the boardroom battles in the Tata Sons, both the Tata Group and the Shapoorji Pallonji Group have agreed not to opt for the Initial Public Offering (IPO) as it may harm the interests of both conglomerates.
However, the Tata Trusts Chairman, Noel Tata, has refused to bail out the SP Group. The man, who is married to the sister of the late SP Group Chairman Cyrus Mistry, has bluntly said that he would not go to bail out the biggest minority shareholders. According to the Hindu Business Line, Ratan Tata’s half-brother said, “Why should we bail out the SP Group now? Did they ask us before running up a debt of Rs 50,000 crore? And where has the money gone?”
SP Group debt
The SP Group is desperate for the Tata Sons IPO as it would list the Tata Group companies and release a massive amount of money that it might use in retiring its debt amounting to Rs 50,000 crore to Rs 60,000 crore. The SP Group wants to sell its 18.4% stake in Tata Sons, which is estimated to be worth Rs 1.5-2 lakh crore, as Tata Sons’ notional valuation is estimated to be around Rs 11 lakh crore. The Reserve Bank of India said in 2022 that Tata Sons should be listed within 3 years.
Tata Sons listing delay
The Tata Sons surrendered its NBFC certification in January this year, becoming a “closely held” entity rather than a listed one. Tata Sons has also reportedly taken steps such as significantly reducing debt and restructuring operations to meet the conditions necessary for deregistration.
According to Hindu Business Line, a trustee complained that when the issue of a potential IPO for Tata Sons came up at the company’s board, the information was not shared with the Trusts. He said, “We asked but were told that ‘we are not at liberty’ to share with you.”