The shares of Tata Chemicals and Tata Investment Corporation tumbled around 3% each after a report claimed that Tata Trusts Chairman Noel Tata has written to the Reserve Bank of India (RBI) against the potential listing of Tata Sons.
Tata Chemicals shares dropped more than 3% to close at Rs 734 apiece on the NSE, while those of Tata Investment Corporation fell nearly 3% to end the session at Rs 671.75 apiece on Monday.
Noel Tata argued that the Tata Sons IPO could alter the long-term character of the Tata Group’s holding company and disrupt the Tata Trusts’ philanthropic objectives, Moneycontrol reported, citing people familiar with the matter.
In a letter to the RBI cited by the report, Noel Tata-led Tata Trusts said that Tata Sons has historically functioned as a vehicle for deploying long-term patient capital into businesses and strategic sectors. They believe that a public listing could, however, expose the company to the compulsions of quarterly earnings, stock market pressures and demands of public shareholders. These short-term considerations, including profit maximisation, may not always go in tandem with the long-term objectives of Tata Trusts, the report further said.
The Economic Times couldn’t independently verify the report.
Notably, this comes as a rising number of Tata Trusts trustees support the listing of Tata Sons, contrary to the resolution passed by Tata Trusts less than a year ago, which aimed to retain Tata Sons as an unlisted private entity, resisting regulatory momentum toward a potential IPO.
Tata Trusts has majority control of Tata Sons with a stake of about 66%. Amid mounting pressure-including a possible regulatory mandate, demands from the SP Group, and rising internal differences-the Trusts appear to be increasingly divided. One section of trustees sees a listing as inevitable and aligned with shareholder interests, while another remains opposed, favouring an unlisted structure to preserve control and legacy considerations.
The SP Group has been actively pushing for the public listing of Tata Sons, calling it a "moral and social imperative" to ensure transparency and unlock value.
People familiar with the matter told The Economic Times that Tata Trusts chairman Noel Tata conveyed to the Tata Sons board after the meeting last week that several key issues remained unresolved, rendering any formal discussion on the reappointment of the holding company’s chairman N Chandrasekaran premature. Tata sought greater clarity from Chandrasekaran on the group’s five-year strategic roadmap, the framework for providing an exit option to the Shapoorji Pallonji Group that doesn’t involve Tata Sons going public, as well as his formal position on the long-debated matter of the listing.
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