Shapoorji Pallonji Group unlikely to hold any adversarial stance at Tata Sons AGM

economictimes.indiatimes.com:

Shapoorji Pallonji (SP) group, which holds about 18% stake in Tata Sons, is unlikely to hold any adversarial position during the latter's annual general meeting (AGM) to be held on August 29. This will be the first Tata Sons AGM after the demise of Cyrus Mistry, former chairman of the Tata holding company, in a road accident last year. The SP Group's Cyrus Investments and Sterling Investment Corp holds an 18.4% stake in Tata Sons.

The stake has been pledged with banks to raise funds estimated at $3 billion to date for repaying its debt obligations and infusing funds into operating companies. Cyrus, who had unsuccessfully challenged Tata Sons legally on his removal in 2016, had later been involved in restructuring the SP Group to make it future-ready along with his elder brother and SP group chairman, Shapoor Mistry. The SP group had in the last AGM demanded a higher dividend payout from Tata Sons stating that the dividend of 2.5% for fiscal 2022 is meagre against the industry normal of over 25%.

Tata Sons announced a dividend of 1,750% for FY23 compared with 1,000% the year ago. The dividend payout involves cash flows of '707.1 crore against over '404 crore last year. Officials aware of the development said the SP group is currently focused on its own group restructuring and growth plans.

The SP group did not comment. Most of the issues between both the groups are now concluded in view of the orders passed by the courts and tribunals, hence it is unlikely that any new surprise may come up now, said Yash Dhruva of law firm MDP & Partners. «Both the groups now seem to be moving forward keeping the long-term interest of their respective stakeholders in mind,» Dhruva said.