Tata Sons’ improbable IPO: Biz is looking for ways to abide by RBI regulations

This week, numerous group stocks surged up to 36 percent on the hype surrounding the Tata Sons IPO. The conglomerate that specializes in salt to software had four of the top-performing equities out of the BSE 500.

Nevertheless, there are now indications indicating that the conglomerate’s planned listing is becoming less and less likely in the near future as the parent company of multiple Tata group companies is exploring different options to comply with RBI regulations.

Tata Sons is a ‘upper layer’ NBFC, meaning that it has to adhere to a stringent regulatory framework.

As per CNBC TV-18 source, that it is doubtful that the firm will go public.

By virtue of RBI regulations, a ‘upper layer’ NBFC or a Credit Information business (CIC) cannot be assigned to a ‘core investment business’ with assets under Rs 100 crore if it does not raise public funds. Additionally, the NBFC need not pursue a public listing.

The group debt reduction initiatives are also being assessed as a component of the compliance plan.

The only practical method to learn about this potential value-unlocking opportunity, though, is through Tata Chemicals, which owns a 3% ownership position in Tata Sons.

Spark calculated the market capitalization of Tata Sons to be around Rs 8 lakh crore, omitting holdco discounts and optionalities. It further stated that based on that computation, the value of Tata Chemicals’ equity holding in Tata Sons would reach up to Rs 19,850 crore.