Mumbai: Tata Trusts Chairman Noel N Tata has placed a proposal before the Tata Sons board that could help the Shapoorji Pallonji Group unlock at least ₹25,000 crore from its Tata Sons stake without requiring the holding company to go public.
₹25,000 Crore Monetisation Plan
Under the proposal, Sterling Investments Corporation Pvt Ltd and Cyrus Investments Pvt Ltd, which hold the SP Group’s Tata Sons shares, would sell enough shares to generate proceeds of at least ₹25,000 crore.
The transaction would use a valuation determined under Rule 11UA of the Income Tax Rules, 1962. The proposed buyout would be completed in two tranches over 18 months and would require Tata Sons to begin a selective capital-reduction process before the National Company Law Tribunal.
No final agreement has been announced.
How Tata Sons Could Raise Funds
Noel Tata has asked the board to examine funding options. These include using Tata Sons’ internal cash flows, selling listed investments, bringing investors into newer businesses and possible offers for sale connected with listings of operating companies.
He also sought approval for Tata Sons’ operating team and Tata Trusts to continue discussions with the SP Group and its bankers.
Why The Proposal Matters
The SP Group owns roughly 18% of Tata Sons and has long looked for ways to monetise its holding. Since Tata Sons is privately held, selling or unlocking value from the stake has remained difficult.
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A negotiated buyout or selective capital reduction could give the SP Group liquidity while allowing Tata Sons to remain private.
IPO Question Remains
The proposal comes after the Reserve Bank of India rejected Tata Sons’ application to surrender its core investment company registration, bringing the listing issue back into focus.
The plan could provide an alternative route to an IPO, but it would need regulatory and tribunal approvals. Valuation, shareholder treatment and the legality of the capital-reduction structure are likely to face scrutiny before any transaction can proceed.
