Mumbai: The Shapoorji Pallonji (SP) Group is backing a Tata Sons listing after a proposed 2.5% stake sale to monetise part of its holding was delayed, people familiar with the matter said. The SP Group, which owns about 18.37% of Tata Sons, had discussed the sale with Tata Trusts chairman Noel Tata, with a tax-efficient structure involving a bank or financial institution being explored.
The proposal stalled at Tata Sons and was formally taken to board only after the RBI’s directive brought a listing requirement into focus, the people said.
The discussions focused on a limited stake sale rather than an immediate broader monetisation and the proposal envisaged cash proceeds being paid to the SP Group over a defined period, potentially allowing Tata Sons to avoid a listing, the people said. SP Group and Tata Trusts did not comment.
The last discussion on the matter with Tata Sons involved Noel Tata suggesting that separate teams from both sides be created to examine the monetisation proposal, the people said. The monetisation plan discussed earlier was being handled by Farokh Subedar on behalf of Tata Trusts, Ankur Verma representing Tata Sons, and a representative from the SP Group, sources said.
SP Group chairman Shapoor Mistry had publicly backed the listing and said he looked forward to working constructively with Tata Sons on way forward.
The SP Group’s backing of a listing now gives the conglomerate another potential route to monetise its stake. A public listing could provide a market-based valuation for its holding and make it easier to attract an investor for part of the stake before an IPO, experts said.
“The SP Group holds just over 18% of Tata Sons and its intent has been to monetise part of this holding in some form,” said Ketan Dalal, founder of Katalyst Advisors. “With the IPO now seeming very likely, monetising through an OFS or post IPO, of course, is one possibility.” Post-listing lock-in requirements would need to be considered, he said. “Pricing issues would play an important part, both from the investor point of view and from the SP Group point of view. In any case, it is not a situation of one or the other, but it could be a combination of both routes,” Dalal said.
An earlier proposal in July involved a share swap under which SP Group would receive shares in a basket of listed Tata companies in exchange for part of its Tata Sons holding. Tata Sons chairman N Chandrasekaran had announced in early August that he would not seek reappointment when his term ended in February 2027 and did not participate in subsequent discussions.
But he reversed his exit decision and agreed to continue as executive chairman of Tata Sons for another five years after Tata Sons board approved his reappointment on September 17.
The SP Group’s Tata Sons stake is held through Sterling Investments Corp and Cyrus Investments and has been pledged against borrowings. The group completed a ₹21,500 crore refinancing in July after telling investors it planned to monetise part of its Tata Sons holding through a listing or share sale within 18 months. It faces a repayment obligation of about ₹3,500 crore by the end of September.
