Tata Sons, the holding company at the centre of the Tata Group, is preparing to begin the process that could eventually lead to its stock market listing. The move follows the Reserve Bank of India’s (RBI) decision requiring the company to comply with regulations applicable to the ‘Upper Layer’ of non-banking financial companies (NBFCs).
While reports suggest that Tata Sons could potentially be listed in February 2027, there has been no official confirmation from the company regarding the proposed IPO timeline.
The development comes despite Tata Trusts Chairman Noel Tata being opposed to the idea of Tata Sons becoming a publicly listed company. The RBI recently rejected Tata Sons’ application to surrender its registration as a Core Investment Company and directed it to follow the regulatory requirements applicable to the Upper Layer of NBFCs.
Under the applicable rules, Tata Sons would have been required to complete its listing by September 2025. Following the RBI’s latest decision, preparations for the listing process have therefore gained importance.
Merchant Bankers and IPO Preparations
Reports indicate that a Tata Sons team started working on the documentation required for a potential listing soon after the RBI’s September 11 directive.
However, there has been no confirmation yet regarding the appointment of merchant bankers, investment banks or other advisers. These appointments and other preparatory steps would need to be completed before the company can file a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI).
If the IPO proceeds, the DRHP will form an important part of the regulatory process before the shares can be offered to the public.
Board and Capital Structure Could Also Be Reviewed
The preparations for a possible listing may extend beyond the filing of IPO documents. Tata Sons could also examine its existing board structure and capital structure as part of the process.
Among the matters that could require consideration are a possible bonus issue or share split, the treatment of existing convertible preference shares and changes to the company’s authorised share capital.
The IPO documents would also be required to include financial information covering the previous three years. Details of related-party transactions would also need to be disclosed as part of the listing process.
Tata Sons Shareholding Structure
Tata Trusts currently hold the largest stake in Tata Sons and are central to the ownership structure of the Tata Group. The reported shareholding pattern is:
- Tata Trusts: 65.9%
- Shapoorji Pallonji Group: 18.4%
- Tata Group companies: 12.9%
- Seven individuals/others: 2.8%
The 65.9% stake held by Tata Trusts is divided among various trusts. Their reported holdings are:
- Sir Dorabji Tata Trust: 28%
- Sir Ratan Tata Trust: 23.6%
- JRD Tata Trust: 4%
- Tata Education Trust: 3.7%
- Tata Social Welfare Trust: 3.7%
- RD Tata Trust: 2.2%
- MK Tata Trust: 0.6%
- Sarvajanik Seva Trust: 0.1%
Another area that could receive attention during a potential IPO is the cross-holding between Tata Sons and other Tata Group companies. Investors are generally expected to examine the ownership structure and the company’s investments in other group entities closely.
The relationship between Tata Sons and various Tata Group companies, including their respective holdings, would therefore be among the details investors may look at when evaluating the proposed listing.
Disclaimer
This article is intended for informational purposes only and should not be considered investment advice. The information relates to reported developments concerning Tata Sons and a possible IPO, and the final listing plans or timelines may change. Readers should conduct their own research and consult a qualified financial adviser before making any investment decision involving shares, IPOs, mutual funds, commodities, REITs, InvITs, alternative investments or digital assets.