Noida, Sep 18 (APAC Media): The Shapoorji Pallonji Group, the second-largest shareholder in Tata Sons, on Friday backed the holding company’s proposed public listing, saying the Reserve Bank of India’s latest decision had provided clarity on the regulatory path ahead.
Shapoorji Pallonji Group Chairman Shapoor Mistry said the listing should not be viewed as a contest between stakeholders but as an opportunity to strengthen transparency, accountability and governance at Tata Sons.
“The Reserve Bank of India has provided full clarity,” Mistry said in a statement.
Tata Sons was classified as an Upper-Layer non-banking financial company (NBFC) under the RBI’s Scale-Based Regulatory Framework. On September 11, the central bank rejected Tata Sons’ application to surrender its registration and directed the company to take the necessary steps to comply with the applicable regulatory framework.
Mistry said the regulatory framework had established a clear route for Tata Sons.
“Tata Sons had been classified as an Upper-Layer NBFC under the RBI’s Scale-Based Regulatory Framework, and the prescribed listing route followed from that regulatory architecture,” he said.
“With the RBI having rejected the application to surrender its registration and directing Tata Sons towards the necessary compliance at the earliest, the path forward is clear,” Mistry added.
The SP Group holds about 18.4 per cent in Tata Sons, making it the company’s second-largest shareholder after Tata Trusts, which collectively own about 66 per cent.
The development comes amid differences between the Tata Sons board and Tata Trusts Chairman Noel Tata over the proposed listing.
At a Tata Sons board meeting on Thursday, Noel Tata opposed the listing proposal and sought further engagement with the RBI. He argued that the regulator’s September 11 order did not necessarily make a stock-market listing the only available route for Tata Sons.
The board, however, approved steps towards complying with the RBI’s direction and moving towards a potential listing.
Mistry said the SP Group’s support for the listing was not intended to deepen differences within the Tata group.
“This landmark decision should not be viewed as a victory of one stakeholder over another. It should be viewed as an opportunity to bring people and institutions together,” he said.
“The listing of Tata Sons can become a bridge,” Mistry said, describing it as a possible link between shareholders and the Tata Trusts, private ownership and public accountability, and different generations of stewardship.
Mistry also described the proposed listing as more than a financial or regulatory issue.
“I have repeatedly said that the public listing of Tata Sons is not merely a financial or regulatory matter. It is a social and moral imperative,” he said.
According to Mistry, greater public accountability could strengthen governance while preserving the philanthropic role associated with the Tata Trusts.
“It is about strengthening transparency and public accountability in one of India’s most consequential business institutions, while preserving and advancing the extraordinary philanthropic purpose that lies at the heart of the Tata legacy,” he said.
The SP Group has been seeking ways to monetise part of its Tata Sons holdings. The group’s stake has also been used as collateral for borrowings. It completed a refinancing of about Rs 21,500 crore in July and faces repayment obligations of around Rs 3,500 crore by the end of September, according to reports.
At Thursday’s Tata Sons board meeting, Tata Trusts also placed before the board a proposal concerning monetisation of part of the SP Group’s holding. Reports said the proposal involved about Rs 25,000 crore through a partial stake sale without a listing.
The listing dispute is unfolding alongside a separate disagreement over the leadership of Tata Sons. The board has approved a fresh five-year term for N Chandrasekaran as executive chairman, a decision opposed by Noel Tata. The board vote on Chandrasekaran’s reappointment was 4:1, according to reports.
Mistry said the SP Group remained willing to work with Tata Sons and the Tata Trusts.
“I look forward to working closely and constructively with Tata Sons on this pathway,” he said, adding that his group wanted to build a “deeper, more harmonious, and supportive relationship” with the Tata institution.
“The objective is not victory for one side,” Mistry said. “The objective is a stronger Tata institution, stronger philanthropy, greater accountability, deeper partnership and ultimately greater service to India.”
The immediate focus is now on Tata Sons’ response to the RBI’s regulatory direction and discussions between the company’s board, Tata Trusts and the SP Group over its future ownership and governance structure.
–ENDS–
Disclaimer: This article is for informational purposes only and is based on publicly available information. APAC Media is not responsible for investment decisions or losses. Please conduct your own research or consult a financial adviser before investing.
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