Tata Sons may explore options, including an IPO, to avoid upper-layer NBFC tag
(This story originally appeared in on Sep 16, 2023)
MUMBAI: Tata Sons, the holding company of the $150-billion Tata Group, will have to be ready for a stock market listing by September 2025 with the RBI classifying it as an ‘upper-layer’ NBFC, which requires greater regulatory compliance.
If Tata Sons gets listed, it will be a windfall for its shareholders, including Tata Trusts, headed by Ratan Tata. Tata Sons is estimated to be valued at Rs 11 lakh crore. If Tata Sons is listed through an IPO at a valuation of Rs 11 lakh crore, a 5% offering would be worth Rs 55,000 crore— India’s biggest public offering.
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Offering CollegeCourseWebsiteIndian School of BusinessISB Venture Capital and Private Equity ProgramVisitNorthwestern UniversityKellogg Marketing Leadership Development ProgramVisitIndian School of BusinessISB Chief Digital OfficerVisitIIM LucknowIIML Chief Marketing Officer ProgrammeVisitTata Sons, led by chairman N Chandrasekaran, had explored the possibility of getting an exemption from the RBI, which first issued the list in September 2022. The RBI on Thursday again released the list of 15 NBFCs in the upper-layer category.
Tata Sons declined to comment. An email sent to Ratan Tata, who is also the chairman emeritus of Tata Sons, didn’t elicit any response till the time of going to press.
According to the RBI, upper-layer NBFCs have to follow a stringent disciplinary structure with a mandatory listing within three years of being notified. The requirement for public listing, akin to those mandated for private banks, is to ensure diffused ownership. Size and interconnectedness are key factors that place an NBFC in the upper layer.
An analyst said that while
