Shapoorji Pallonji Group rethinks 18.37% Tata stake sale, valued at Rs 2.3 lakh cr

Mumbai: Shapoorji Pallonji (SP) Group is reassessing plans for an early monetisation of its stake in Tata Sons after the Reserve Bank of India directed the Tata holding company to immediately comply with listing requirements applicable to an upper layer non-banking finance company, people familiar with the matter said.

The group is likely to wait for greater clarity on the timing of a potential listing and the valuation of Tata Sons shares before deciding how much of its stake to sell and through which route, people said.

SP Group owns an estimated 18.37% of Tata Sons and has been seeking to monetise about 7% of the holding. Shapoor Mistry, chairman of the group, had sought around ₹25,000 crore from Tata Sons over the next 24 months as part of a proposal to sell a portion of the stake. An investor note circulated last month valued the stake at about ₹2.3 lakh crore on a look-through basis, rather than as an IPO valuation.


Also Read: Tata Sons may be valued up to ₹12.5 lakh cr in IPO

"An IPO completely changes the spectrum of viewing monetisation in terms of valuation. It will have to be seen through the lens of an official valuation sought by the Tata Sons board" said an official close to the matter. The official cited significant relief in the SP group following the Reserve Bank of India (RBI) directive.

Options before SP Group now include participating in a potential Tata Sons public offering or selling part of the holding separately after merchant bankers establish an official valuation for the shares, said the people cited above.

The valuation will be critical for SP Group, which is under pressure to raise cash against the stake.

Board to Discuss Issue

Any valuation set ahead of a listing could also influence the eventual post-listing value of Tata Sons and, in turn, the proceeds SP Group can realise from its remaining holding, the people said.

SP Group did not comment.

Also Read: Shapoor Mistry eyes ₹25,000 crore in two years for part of SP's Tata stake

Shapoor Mistry had discussed monetising the stake with Tata Sons chairman N Chandrasekaran and Tata Trusts chairman Noel Tata until July. Chandrasekaran announced early August that he would not seek reappointment when his term ends in February 2027 and has not participated in subsequent discussions.

The monetisation of SP Group's stake will now be tabled and discussed with the board of Tata Sons, people in the know told ET.

The RBI directive could ease some of the pressure on SP Group from lenders and vendors by providing greater visibility on a potential route to monetise its Tata Sons holding, one person familiar with the matter said. A clearer listing path could also strengthen the group's ability to refinance its debt and negotiate with creditors and suppliers.

Talks between SP Group and Tata Sons have made limited progress because of differences over the structure and valuation of a potential transaction. Tata Trusts controls Tata Sons and Noel Tata has sought to preserve the holding company's private status, the people said.

One proposal discussed by the two sides involved a share swap under which SP Group would receive shares in a basket of listed Tata companies in exchange for part of its Tata Sons holding. The latest proposal envisages cash proceeds being paid to SP Group over a defined period, potentially allowing Tata Sons to avoid a listing, they said.