SP Group invokes Jamsetji Tata, says Tata Sons IPO is a moral imperative
The SP Group stands to gain significantly from a listing of Tata Sons. The group is estimated to have a total debt of ₹55,000-60,000 crore.
The Shapoorji Pallonji Group, one of the largest shareholders of Tata Sons, on Friday called for a public listing of the company, making a rare public statement that referred to the relationship between the two storied business houses.
“The public listing of Tata Sons is not merely a financial step — it is a moral and social imperative," read the statement. It would unlock significant value for over 12 million shareholders of listed Tata companies, who are indirect shareholders of Tata Sons, it said.
The SP Group stands to gain significantly from a listing of Tata Sons. The group is estimated to have a total debt of ₹55,000-60,000 crore. In May, it raised $3.4 billion (about ₹29,000 crore) from private creditors by issuing non-convertible debentures at an eye-watering interest rate of 19.75%. A public listing could help Tata Sons sell some of its 18.37% stake in the company to repay its debts.
Friday's statement invoked the Tata Group’s founder Jamsetji Tata, saying that the listing of Tata Sons would uphold the spirit of transparency envisioned by its founding father. The statement also acknowledged the recent developments at Tata Trusts, where differences have surfaced among the trustees. On 7 October, Tata Trusts chairman Noel Tata, accompanied two trustees and Tata Sons chairman Natarajan Chandrasekaran met Union finance minister Nirmala Sitharaman and home minister Amit Shah in New Delhi.
“In light of the recent developments pertaining to the internal matters of Tata Trusts, it is both timely and necessary to reiterate our long-standing position," it read.
RBI deadline
The SP Group’s comments come after Tata Sons missed the Reserve Bank of India's 30 September deadline to get listed. The RBI had mandated the listing as part of its scale-based regulatory framework introduced in October 2022. The framework categorized non-banking financial companies (NBFC) into four layers—base layer, middle layer, upper layer, and top layer—based on size, activity, and perceived risk. Under this framework, Tata Sons was classified as an upper layer non-banking financial company (NBFC-UL) due to its significant borrowings and its heavy investments in group companies.
The Tata Group has so far resisted the push for listing. The central bank has not confirmed whether it has given the company an exemption from listing or if it will take any action against it for violating the deadline.
“We are confident that the RBI will act, as it always has, in accordance with the rule of law and the spirit of fairness," the SP Group said.
The SP Group has sold several assets in recent years to pare its debt. These include home appliance maker Eureka Forbes, the Gopalpur Port in Odisha and several real estate assets. It has also publicly listed Afcons Infrastructure Ltd.
Tata Sons and SP Group are engaged in a protracted legal battle over the pledging of the group’s stake in Tata Sons to raise debt. The company’s articles of association restrict the sale or pledging of its shares without the approval of the board of directors.
The relationships between the two groups soured a decade ago following a rift between Cyrus Mistry and Ratan Tata, that led to the former's ouster as Tata Group chairperson.
“We reaffirm that our relationship with the House of Tatas spans generations, built on mutual respect and shared heritage. We remain fully committed to playing a constructive role alongside Tata Trusts and Tata Sons, in shaping a future that upholds the legacy of both our founding families," read the SP Group statement.
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