What is happening with Tata Sons’ IPO? 

There has been a lot of talk about Tata Sons’ impending IPO over the past couple of years. This is mainly because the Reserve Bank of India re-classified the Tata Group holding company as an upper layer NBFC (NBFC-UL) in September 2002.  This meant the Tata Sons would have to go for an IPO within 3 years of being classified as NBFC-UL.

There have been many news reports over the past couple of years on the possibility of Tata Sons listing, and if the Reserve Bank of India has allowed it an exemption from listing. According to a news report, in an RTI response, RBI has said that Tata Sons had never applied for such an exemption. 

But news reports suggest that Tata Sons has applied to surrender its registration as an NBFC-UL entity. It was already a ‘Core Investment Company’ under RBI’s regulations. This status of the Tata Group holding company as a core investment company is what precipitated RBI’s decision to classify it as a NBFC-UL.

Unless it secures this reclassification out of a core investment company, and RBI grants this request by Tata Sons, Tata Sons will have to list by September 2025.

Which companies does Tata Sons hold shares in? 

Tata Sons holds stakes in many listed companies, including Tata Consultancy Services (TCS), Tata Motors, Tata Consumer Products, Tata Chemicals, Tata Steel, among other Tata Group companies. Some companies like Tata Chemicals and Tata Investment Corporation also hold stakes in Tata Sons. These crossholdings are what pushed their stock prices higher, as investors pondered over the benefit these companies would earn if their parent firm listed on the stock markets.

Tata Sons also holds stakes in unlisted Tata Group companies like Tata Capital, Tata Advanced Systems, Tata Digital, Air India, Vistara, among other businesses.

According to news reports, Tata Sons posted a profit before exceptional items and taxes of ₹41,116.51 crore in FY24 on revenues of ₹43,893 crore. 

Will Tata Sons really list on the exchanges? 

As the nudge towards listing on the exchanges came due to a regulatory move by the RBI, only the banking regulator can now stop Tata Sons’ public listing. A large shareholder in Shapoorji-Pallonji Group (SP Group), which holds over 18% stake in Tata Sons, according to reports, has been pushing for a listing. This would have helped the to deleverage and reduce its large debt burden.

For now, investors looking forward to Tata Sons’ listing will have to wait and watch what other moves the Tata Group holding company and RBI make. This will seemingly continue till September 2025. Unless there is another twist in the tale.