RBI okay with Tata Sons road map to avoid street
RBI) is said to be agreeable to a restructuring plan proposed by Tata Sons seeking a waiver for the mandatory listing of the group’s holding company. The Tata Group holding company has already implemented parts of the plan, including wiping off debt, said people with knowledge of matter.
The recast will result in Tata Sons not being classified as a non-bank finance company (NBFC) in the ‘upper layer’ (UL) subject to a few regulatory conditions. This, in turn, will imply that Tata Sons won’t be required to list itself on the stock exchanges. In line with the plan, Tata Sons has restructured its balance sheet to be a zero-debt company to be compliant with RBI rules, said the people cited above. Net debt was at Rs 15,200 crore on September 30, 2023, according to the latest Crisil Ratings report. It had standalone cash and cash equivalents of over Rs 2,500 crore.
An RBI circular in October 2021 directed that those companies identified as NBFC-UL should be mandatorily listed within three years. The central bank had classified Tata Sons as an ‘upper layer’ NBFC in 2022, which would have meant a listing by September 2025 if it had not undertaken this restructuring exercise, said the people cited.
Tata Group Valuation
All future funding by Tata Sons for the group businesses will be made from cash reserves, said the people cited above.
RBI and Tata Sons didn’t respond to ET’s queries. The Tata Group has a combined valuation of $400 billion with 26 listed companies. Tata Sons is mindful about its financial impact on the
