The Tata Sons board on Thursday approved going public. This comes after the Reserve Bank of India (RBI) recently rejected Tata Sons plea to surrender its registration as an upper layer non-banking financial company (UL-NBFC) for an exemption from initial public offer (IPO). The central bank had also filed a caveat in the Bombay High Court to ensure its position is heard before Tata Sons seeks legal relief.
The Tata Sons board has now proposed heeding the RBI's directive on pursuing a listing, as per Bloomberg.
Tata Sons is registered as a core investment company (CIC) and was classified as an upper-layer non-banking financial company (UL-NBFC) in September 2022 under the scale-based regulatory framework of the RBI. This framework required mandatory listing of the company.
Tata Sons is the principal investment holding company of the Tata group. Around 66 per cent of the share capital of Tata Sons is held by public charitable trusts. The company holds core equity stakes in major group companies, including TCS, Tata Steel Ltd, Tata Motors Ltd, The Tata Power Company Ltd, Tata Chemicals Ltd, Tata Investment Corporation Ltd, Tata Teleservices Ltd and Tata Capital Ltd, among others.
Noel Tata, chairman of Tata Trusts, who together with affiliated trusts controls about 66 per cent of Tata Sons, had opposed a listing since at least February. The position was reportedly among the conditions he attached to backing N Chandrasekaran's previous term renewal, PTI reported.
Tata Sons has now asked Chairman Natarajan Chandrasekaran to stay on for five more years. As per reports, Noel voted against the reappointment, but the resolution carried on a majority vote.
Shares of Tata Chemicals and Tata Motors Passenger Vehicles Ltd jumped climbed up to 13 per cent following the development. As per Bloomberg, the directors asked Chandra, as he’s widely known, to stay on to steer the sprawling group, the people said, asking not to be identified discussing internal company matters, as per Bloomberg.