Potential IPO Valued at Rs 55,000 Crore for 5% Stake
Tata Sons, the apex holding company of the Tata Group, is contemplating a listing on the stock exchanges, which could potentially become India’s largest initial public offering (IPO). This move comes in response to a classification by the Reserve Bank of India (RBI) that designates Tata Sons as an upper layer Non-Banking Financial Company (NBFC) due to its substantial size and its potential impact on India’s financial system. It’s worth noting that Tata Capital Financial Services is excluded from this list as it plans to merge with Tata Sons.
Timeline for Tata Sons Listing
In compliance with RBI regulations for upper layer NBFCs, Tata Sons is expected to go public before 2025. The RBI identified 15 NBFCs for this upper layer classification, considering their size and the associated risks to India’s lending system.
Estimated IPO Value
The IPO of Tata Sons, comprising a 5% stake, is estimated to be valued at approximately Rs 55,000 crore, potentially making it one of the largest IPOs in India. The total valuation of Tata Sons is estimated at Rs 11 lakh crore.
Majority Ownership and Philanthropic Involvement
Tata Sons is primarily owned by philanthropic trusts dedicated to various social causes, including education, health, livelihood, art, and culture.
Leadership at Tata Sons
Currently, Nataraj Chandrasekaran, often referred to as “Chandra,” serves as the CEO of Tata Sons. He is a seasoned professional within the Tata Group.
Tata Sons’ Prominent Role
Tata Sons holds the distinction of being the holding company and promoter for more than 100 operational companies with a combined revenue exceeding $100 billion.
Upcoming Tata IPOs
Apart from Tata Sons, the Tata Group is also planning an IPO for Tata Technologies, a subsidiary of Tata Motors. This move aims to create value for investors and harness the company’s capabilities for electric vehicle production. While the IPO was initially expected to launch in August-September 2023, it might take place later this year. Tata Technologies operates in regions spanning Africa, Europe, and the Asia Pacific. This IPO would mark Tata Group’s first since Tata Consultancy Services (TCS) in 2004.