Tata Group seeks waiver from RBI to avoid Tata Sons IPO: Report
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Synopsis
If Tata Sons reorganises debt by repaying borrowing or transferring the holding in Tata Capital to another entity, it may get deregistered as a core investment company (CIC) and upper-layer NBFC.
RBI rules mandate all 'upper layer' non-banking finance companies (NBFCs) from getting listed on stock exchanges. The IPO deadline given by RBI is September 2025.
If Tata Sons reorganises debt by repaying borrowing or transferring the holding in Tata Capital to another entity, it may get deregistered as a core investment company (CIC) and upper-layer NBFC.
Last month, the holding company Tata Sons, which is the holding company of TCS, sold 2.34 crore shares in the subsidiary in a block deal that was said to be worth around Rs 9,000 crore.
The cash could also be used to pare some of the debt of Tata Sons whose FY23 balance sheet shows borrowings of about Rs 20,270 crore. Debt reduction could also help the holding company avoid an IPO.
The market value of Tata Sons' listed investments is estimated at Rs 16 lakh crore and the book value of the unlisted investments is Rs 60,000 crore. But the market value of unlisted investments could be much higher at about Rs 1-2 lakh crore given the group's foray into semiconductors and EV batteries, according to calculations done by Spark Capital.
Stocks Recommendations
Tata Sons is majorly held by the Dorabji Tata Trust (28%) and the Ratan Tata Trust (24%). However, the group is also known to have several cross-holdings across its companies. Other shareholders include Sterling Investment, Cyrus Investments, Tata Motors, Tata Chemicals, and Tata Power.
The Tata Group is India's most valued conglomerate with the market value of all listed entities going above the Rs 30-lakh crore mark.
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