In a Mumbai meeting on Thursday, Tata Sons' board agreed to set up a committee to assess compliance options with RBI's upper‑layer NBFC rules. The company, whose assets topped Rs 2.01 lakh crore, now sits far above the Rs 1 lakh crore threshold that triggers mandatory listing.
While the board remained split over reappointing N Chandrasekaran as chairman, they were unanimous on forming the committee. No resolution on an IPO was passed, and no director voted on the matter.
Tata Trusts chairman Noel Tata raised concerns about a public listing, noting the extensive corporate overhaul required. He estimated that preparing for an IPO would take at least three years, citing changes to articles of association, shareholder approvals, and financial restatements.
Experts suggest that merging with Tata Consultancy Services could help Tata Sons exit the upper‑layer NBFC framework, but may erode its valuation premium. Alternatively, splitting the group into two entities could reclassify the conglomerate and remove the IPO requirement. The RBI rejected Tata Sons' application to voluntarily surrender its certificate of registration, a move that had been pending for over two years.
The committee’s findings will be tabled at the next board meeting, where a decision on an IPO or restructuring will be made. A public issue could unlock value for minority holders such as the Shapoorji Pallonji Group, while a restructuring might safeguard the holding company’s long‑term capital needs.