Tata Trusts Proposes Tata Sons Reorganisation as Noel Tata Seeks Alternative to Listing

The Tata Trusts have suggested a restructuring plan for Tata Sons that can serve as an alternative to the listing of the holding company of the group on the stock exchange, according to the chairman of the group, Noel Tata. 

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

The Tata Trusts own 66% of the shares of Tata Sons, which is the holding company at the core of the Tata Group. The suggested plan entails the merger of two Tata Group firms with Tata Sons. 

The move comes as Tata Sons faces a Reserve Bank of India requirement to list its shares. Noel Tata said the Trusts hopes the central bank will engage with it on the proposal and that a solution can be found without taking Tata Sons public. 

The issue of listing is now one among many that is causing a dispute between Tata Trusts and Tata Sons. The Tata Trusts are against the reappointment of N. Chandrasekaran as chairman of Tata Sons, as well as their decision to list on the stock exchange. 

While Tata Sons manages more than 30 firms under the Tata Group umbrella, Tata Trusts have continued to be the majority shareholders in the firm. 

Noel Tata was also concerned about what would happen to the operations of Tata Sons if they decided to go public after operating for over 150 years. 

A listing would bring Tata Sons under closer scrutiny from the market and introduce additional disclosure requirements and oversight from minority shareholders. It could also affect the influence Tata Trusts has traditionally exercised over the group’s broader direction. 

Another concern raised by Noel Tata relates to the pressure that comes with being a listed company. Public companies are closely watched for their quarterly performance, and he indicated that such expectations could have an impact on the Tata Group’s philanthropic work. 

The proposed reorganisation therefore puts another option on the table as Tata Trusts looks to address the regulatory requirement while seeking to preserve the existing structure under which Tata Sons and the Trusts have operated.