SP Group Backs Tata Sons Listing

The Shapoorji Pallonji Group (SP Group), the second-largest shareholder in Tata Sons, has backed a potential public listing of the holding company of the Tata Group. The development comes a day after the Tata Sons board said it would move towards complying with Reserve Bank of India rules that could require the company to list.

SP Group Chairman Shapoorji Pallonji Mistry said the group looks forward to working closely and constructively with Tata Sons. The group holds about 18.4% of Tata Sons, making it the second-largest shareholder after Tata Trusts.

The potential listing has become a key issue in differences between the Tata Sons board and Tata Trusts, which controls about 66% of the holding company. The trusts have opposed the listing and have been examining alternatives.

Tata Sons is the holding company and promoter of the wider Tata Group, whose businesses span technology, automobiles, steel, consumer products, aviation and financial services.

The latest development follows the RBI’s decision concerning Tata Sons’ regulatory status. Tata Sons had sought to surrender its registration as an upper-layer non-banking financial company, but the RBI rejected the application and directed the company to undertake the required compliance.

The SP Group has also sought to monetise part of its Tata Sons stake. Reuters reported that the group raised $2.25 billion in July through refinancing backed by its Tata Sons shares. Tata Trusts said the SP Group had separately proposed selling part of its stake for at least $2.61 billion.

The SP Group and Tata Group have a relationship spanning more than a century. The potential listing now remains part of a wider discussion involving Tata Sons, Tata Trusts and other shareholders over the future structure and regulatory compliance of the holding company.