Tata Sons goes debt-free as it seeks listing exemption
₹5 crore of borrowing remaining through non-convertible debentures (NCDs). According to disclosures filed on its website, Tata Sons had no loans from banks and other financial institutions as of 30 June, as against ₹18,809 crore or 44% of its total liabilities in the same period last year. The move towards becoming debt-free is being seen as a step towards avoiding getting listed under a Reserve Bank of India (RBI) guideline, because loans from financial institutions is one of the metrics assessed by the regulator when it looks at classifying upper-layer NBFCs such as Tata Sons.
Upper layer NBFCs like Tata Sons have to get listed by September 2025. According to an analyst who did not wish to be named, while top 10 NBFCs by asset size would automatically be tagged upper layer, it is unclear whether assets would mean loans or even investments in group companies, as in the case of Tata Sons. The Economic Times had reported on 2 August that RBI “is said to be agreeable" to a proposed recast for a waiver of Tata Sons' listing.
Under Natarajan Chandrasekaran, who was reappointed chairman for a second five-year term in February 2022, the Tata Group has considered retiring some of the debt of group companies like Tata Steel and Tata Power. At the same time, the share of dividend income of the group firms has also increased. In fact, it managed to wipe off almost all of its debt on account of the ₹42,536.2 crore it got from IT services bellwether Tata Consultancy Services Ltd.
(TCS), as per Mint's research. Of this amount, ₹33,174.2 crore came through dividends and share buybacks in FY24. Another ₹9,362 crore came in when it sold 0.65% of TCS shares earlier this year.
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