Tata Sons listing row: Tata Trusts tables Rs 25,000 crore SP Group proposal

Tata Trusts chairman Noel Tata on Thursday tabled a proposal from the Shapoorji Pallonji Group (SP Group) to monetise a portion of its Tata Sons shareholding, potentially providing the group with at least Rs 25,000 crore in liquidity without requiring Tata Sons itself to immediately pursue a public listing.

The proposal was placed before the Tata Sons board during its meeting on Thursday, the same day the board approved N Chandrasekaran’s reappointment as chairman for another five-year term. Noel Tata voted against the resolution to reappoint Chandrasekaran.

The proposal involves the sale of a portion of the Tata Sons shares held by SP Group investment companies Sterling Investments Corporation Private Limited and Cyrus Investments Private Limited. It follows discussions between Noel Tata, Chandrasekaran and Shapoor Mistry.

The development comes at a crucial time for Tata Sons, after the Reserve Bank of India rejected its application to voluntarily surrender its certificate of registration. The decision has revived the question of a possible Tata Sons listing, although the company has not announced an IPO.

Under the SP Group proposal, enough Tata Sons shares held by Sterling Investments Corporation and Cyrus Investments would be sold to generate a minimum gross consideration of Rs 25,000 crore.

The transaction would be carried out in two tranches over an 18-month period. Tata Sons would initiate a selective capital reduction process through the National Company Law Tribunal (NCLT), while the shares would be valued according to their fair value under Rule 11UA of the Income Tax Rules.

Noel Tata suggested several ways Tata Sons could raise the funds needed for the transaction. These include using internal cash flows, selling listed shares, bringing an investor into some of the newer businesses and listing some businesses through an offer for sale.

He also asked the board to take the necessary steps to initiate the NCLT process and authorised the Tata Sons operating team and Tata Trusts to continue discussions with the SP Group and bankers and report back to the board.

Tata Trusts said the proposal is a continuation of its efforts to find a fair and equitable solution for the SP Group in respect of its Tata Sons holdings.LISTING QUESTION RETURNS AFTER RBI REJECTION

The proposal comes days after the RBI rejected Tata Sons’ application to voluntarily surrender its certificate of registration.

Tata Sons had applied in March 2024 to exit the regulatory framework applicable to upper-layer NBFCs. As part of its efforts, the company repaid borrowings and prematurely redeemed preference shares worth approximately Rs 20,000 crore, according to Noel Tata’s statement to the board.

The RBI rejected the application on September 11 and advised Tata Sons to take necessary action to ensure compliance with the regulations applicable to an upper-layer NBFC.

The decision has brought the listing question back into focus. But Tata Trusts has made clear that it has not agreed to a public listing of Tata Sons.

In its statement issued after Thursday’s board meeting, Tata Trusts said the RBI communication was discussed and the board agreed that “all available options, and not listing alone”, should be explored before deciding the appropriate course of action. A separate board meeting will be held after the assessment.WHY NOEL TATA IS OPPOSED TO A LISTING

Noel Tata's detailed statement to the Tata Sons board says the RBI communication itself does not specifically require Tata Sons to list.

He said the regulator had declined the company's request to surrender its registration and advised it to comply with the rules applicable to an upper-layer NBFC, but “does not mention listing” or prescribe a particular step. He called for legal advice and a detailed assessment of all options available to the company.

Noel Tata also pointed out that the Tata Sons board had unanimously decided in March 2024 that the company should remain unlisted. He said that decision had never been formally placed before the board for reconsideration and remained the board's standing decision.

The Tata Trusts reiterated this position on Thursday, saying its stance has remained consistent. It said the Sir Dorabji Tata Trust and Sir Ratan Tata Trust had also unanimously resolved in July 2025 that Tata Sons should remain unlisted.

Noel Tata's opposition is also linked to the ownership structure of Tata Sons. Tata Trusts and affiliated trusts hold around 66% of the company.

In his statement, Noel Tata argued that dividends from Tata Group operating companies flow through the Trusts towards charitable activities such as hospitals, universities and research.

He said a listed Tata Sons would have institutional and foreign shareholders whose legitimate interest would be financial returns. According to Noel Tata, this could make it harder for the holding company to deploy capital towards distressed group companies or long-term projects where returns may take many years.

Tata Trusts said the existing ownership structure is what has allowed Tata Sons to operate as an institution with a public purpose for more than a century. Noel Tata said in his statement that a listing would “destroy its character” and strike at the principle underlying the Tata Group's ownership structure.CHANDRASEKARAN GETS THIRD TERM, NOEL OBJECTS

The SP Group proposal was tabled on the same day that Tata Sons’ board approved Chandrasekaran’s reappointment for another five years.

All board members voted in favour of the resolution except Noel Tata, who voted against it. The decision reverses Chandrasekaran's position in August, when he told the board that he did not intend to seek another term.

His decision followed months of uncertainty over his continuation, with earlier reports pointing to differences over the listing question, capital allocation and the performance of newer Tata Group businesses.

Tata Sons had subsequently started exploring succession options in anticipation of Chandrasekaran's departure. The board's latest decision puts that process on hold.

Noel Tata's statement does not say that Chandrasekaran's reappointment itself was illegal. His objection is focused on the process around the listing question and the role of Tata Trusts in decisions that could change the structure of Tata Sons.

He said the Trusts should be involved and consulted before any structural step towards a listing, including before an adviser is appointed or any position is taken on the structure or timing.

Noel Tata also said that if he were forced to vote on a decision to list, he would have “no option but to veto” it.advertisementSP GROUP'S LIQUIDITY PROPOSAL NOW ON THE TABLEThe SP Group proposal therefore adds another possible route to the Tata Sons ownership and liquidity question.

Instead of Tata Sons immediately having to go public to create liquidity for shareholders, the proposal seeks to monetise part of the SP Group's existing stake through a selective capital reduction.

Noel Tata has proposed that Tata Sons explore multiple ways of raising the money needed for the transaction, including internal resources, sale of listed shares and bringing investors into newer businesses.

The board will now have to assess the proposal and the possible funding routes, while Tata Sons also considers its regulatory options following the RBI's decision.

Tata Trusts has said that after all available options are assessed, a separate board meeting will be convened to determine the appropriate course of action.

For now, the Rs 25,000-crore proposal provides a potential mechanism to give liquidity to the SP Group without, by itself, determining whether Tata Sons will ultimately become a publicly listed company.