SP Group's Tata stake plan faces fresh uncertainty with N Chandrasekaran's exit

Mumbai: N Chandrasekaran's decision to step down as chairman of Tata Sons has thrown the future of Shapoorji Pallonji Group's stake in the holding company into fresh uncertainty, with people familiar with the matter saying the two sides are now likely to adopt a wait-and-watch approach.

SP Group and Tata Sons recently held discussions on ways to monetise part of the Mistry family's 18.37% stake in Tata Sons, including a potential share-swap involving listed Tata group companies. But differences over valuation and the structure of a transaction remained unresolved.

Also read: Inside the Tata empire as its chairman steps down

Surprising Move

The abrupt announcement of Chandrasekaran's departure has added another layer of uncertainty to those discussions, said the people cited above. The development has also surprised sections of the wider Tata group, given Chandrasekaran's nearly decade-long tenure and his central role in shaping the diversified conglomerate's strategy.

"Everyone will wait and watch now," said a person familiar with the thinking in the group. "There are too many moving parts."

Group watchers expect the Mistry family to continue pushing for a public listing of Tata Sons, which they have long regarded as a way to unlock the value of their stake and address SP Group's debt burden. The family has resisted structures that would leave Tata Sons assume additional debt to facilitate a deal.

Also read: N Chandrasekaran resigns as chairman of Tata Sons before AGM

Case for a listing

The case for a listing could gain fresh resonance as the leadership transition unfolds, particularly if the leadership change triggers further debate over the group's future direction and governance, the people said. Tata Trusts, which owns 66% of Tata Sons, is expected to play a crucial role in determining the next chairman and the broader succession process. The change could therefore delay any substantive movement on a settlement with SP Group until the new leadership structure becomes clearer. SP Group has been seeking to monetise part of its holding in Tata Sons to reduce its roughly ₹60,000 crore debt burden. It recently used the stake to back a refinancing programme that raised about ₹21,500 crore.

The financing documents require the group, within 18 months, to secure either an announcement of a Tata Sons initial public offering, or agree terms for a stake settlement involving Tata Sons, SP Group and, if applicable, a third-party buyer.

That deadline could keep pressure on both sides even as leadership transition plays out and immediate priority within Tata camp is expected to be succession and continuity.