The Shapoorji Pallonji (SP) Group on Friday threw its weight behind the proposed listing of Tata Sons, saying the Reserve Bank of India’s (RBI) decision on the holding company’s regulatory status had provided clarity on the way forward. In a significant gesture, the group also called for a “deeper, more harmonious” relationship with Tata Sons and Tata Trusts.
“The RBI has provided full clarity,” Shapoor Mistry, chairman of the SP Group, said in a statement, noting that Tata Sons had been classified as an upper-layer NBFC and the listing requirement followed from that classification. “With the RBI having rejected the application to surrender its registration and directing Tata Sons towards the necessary compliance at the earliest, the path forward is clear.”
The statement came a day after the Tata Sons board decided to pursue a stock listing and extend its chairman’s term by five years, despite opposition from Tata Trusts chairman Noel Tata — and a day after Noel Tata presented to the board the SP Group’s proposal to monetise part of its stake for up to ₹25,000 crore. Under the proposed structure, the buyout would take place in two tranches over 18 months, with Tata Sons pursuing a selective capital reduction through the National Company Law Tribunal and shares valued under income-tax fair-value norms.
The SP Group, which owns 18.4% of Tata Sons, has long favoured a listing, which could let it monetise part of its holding and ease liquidity pressures. The group carries debt estimated at ₹55,000-60,000 crore.
Mistry sought to move the debate beyond shareholder differences. “The decision should not be viewed as a victory of one stakeholder over another. It should be viewed as an opportunity to bring people and institutions together,” he said, adding that the RBI’s decision could become “far more than the conclusion of a regulatory question” and mark a milestone in Indian corporate governance.
A listing, he argued, could serve as a “bridge” between shareholders and the Trusts, private heritage and public accountability, and successive generations of stewardship. A transparent, publicly accountable Tata Sons could strengthen the wider Tata ecosystem, provide greater visibility to value, protect investors and lay the foundation for a “more robust and equitable dividend policy”. A stronger Tata Sons, he said, could also enhance the Trusts’ philanthropy: “It should be our shared ambition that, over the coming five years, the Tata Trusts become one of the largest and most consequential philanthropic corpuses in the world.”
“I look forward not merely to a resolution of the present chapter, but to forging a greater partnership, greater engagement and deeper relationships with Tata Sons and the Tata Trusts in the years ahead,” Mistry said, signalling an attempt to reset ties between two of India’s oldest business families after years of differences.
With the group expanding into semiconductors, aviation, defence, artificial intelligence and energy, Tata Sons was at the threshold of another major growth phase, Mistry said. “I would like to see Tata Sons evolve into a modern, globally respected and publicly responsible holding institution,” he said, one that combines “capital, innovation and enterprise with the conscience and trusteeship that have distinguished the Tata name”.
The bond market has taken note. The SP Group’s dollar bonds rose to a record this week as investors bet a listing may help the group unlock value from its Tata Sons stake and repay costly debt, Bloomberg reported. The $650-million, 14.5% three-year notes of Mercury Finance Co, a Mauritius-incorporated special purpose vehicle overseen by the group, gained 1.8 cents this week to a record 101.9 cents on the dollar — their best week since their July issue. Rupee bonds of group firm Eqyizen Investment, being marketed by Deutsche Bank and wealth managers, are being offered at an 18.75% yield, down from 18.95% at issue, with some distributors cutting the minimum ticket size to ₹1 crore from ₹10 crore, Bloomberg said.
At the same time, the group is in talks with lenders to delay by three to six months the repayment of ₹3,500 crore due September 30 on a zero-coupon bond issued by financing arm Porteast Investment, Bloomberg reported, citing people familiar with the matter. Proceeds from July’s financing deals, originally meant to service the bond, are being kept for other purposes. The group has held meetings with investors in Singapore, arranged by Deutsche Bank, and lenders would receive a consent fee for the extension. Porteast had raised $3.4 billion last year through three-year zero-coupon bonds at a 19.75% yield, backed by the group’s Tata Sons stake — India’s biggest private credit deal.