Tata Trusts proposes ₹25,000 crore plan for SP Group, says listing will destroy its character

Tata Trusts has proposed a plan to provide liquidity of ₹25,000 crore to the Shapoorji Pallonji (SP) Group through monetisation of its stake in Tata Sons, saying a public listing of the conglomerate's holding company would destroy the character of the Tata Group.

Tata Trusts Chairman Noel Tata, at a Tata Sons board meeting on Thursday, tabled a proposal received from the SP Group to monetise a portion of Tata Sons shares held by Sterling Investments Corporation Pvt Ltd and Cyrus Investments Pvt Ltd.

Under the proposal, the sale of shares would generate a gross consideration of at least ₹25,000 crore, based on the minimum valuation determined under Rule 11UA of the Income Tax Rules, 1962, according to a statement issued by Tata Trusts.

The proposed share buyout would be carried out in two tranches over 18 months.

Tata Sons would initiate a selective capital reduction process through the National Company Law Tribunal (NCLT), while the shares would be valued according to their income-tax fair value.

Noel Tata suggested that the funds could be raised through various avenues, including internal cash flows, sale of listed shares, bringing investors into some newer businesses and listing some businesses through an offer for sale.

He also sought the board's approval to initiate the NCLT process and authorised Tata Sons' operating team and Tata Trusts to continue discussions with the SP Group and bankers.

The proposal comes days after the Reserve Bank of India declined Tata Sons' application to voluntarily surrender its certificate of registration as a non-banking financial company.

Tata Trusts said it had not agreed to the listing of Tata Sons and that all available options, rather than listing alone, should be examined following the RBI communication of September 11.

The Trusts pointed out that the Tata Sons board had unanimously resolved in March 2024 that the company should remain unlisted. The Sir Dorabji Tata Trust and Sir Ratan Tata Trust subsequently passed unanimous resolutions in July 2025 supporting the same position.

In his statement to the board, Noel Tata said Tata Sons' ownership structure, under which around 66% of its equity is held by Tata Trusts, was central to the group's operating model.

"That is not sentiment. It is the operating model of this House, and it has stood the test of time for more than a century. A listing will destroy its character and strike at the heart of this principle," he said.

He said dividends received by the Trusts from Tata Group companies flow into public charity, funding hospitals, universities and research.

Noel Tata also argued that a listed Tata Sons would have to answer to institutional and foreign shareholders whose mandate is financial returns, which could affect the holding company's ability to deploy capital towards distressed group companies or long-gestation businesses.

The Tata Trusts statement said the group had repeatedly taken decisions that went beyond a purely commercial calculation, citing support provided to Tata Steel, Tata Finance and Tata Teleservices.

The Trusts also called for all permissible avenues to avoid a public listing to be explored, including restructuring, and for Tata Sons to engage with the RBI for a reconsideration of its September 11 decision.

Even if listing ultimately became necessary, Noel Tata proposed that Tata Sons seek at least three years, until September 2029, to comply.

He also referred to the financial commitments of recently acquired and newly formed subsidiaries, including in civil aviation, as well as long-gestation investments in semiconductors and electronics manufacturing.

"An offering made in haste... would serve neither the Company, nor its shareholders, nor even the shareholder that seeks liquidity," he said.