Tata Trusts’ Venu Srinivasan Supports Public Listing Of Tata Sons As RBI Mandate Looms

In a first for a trustee of Tata Trusts, Venu Srinivasan has expressed support for the idea of listing Tata Sons amid the Reserve Bank of India’s looming regulatory move that would eventually mandate such a step.

Srinivasan argued that such a move would become inevitable if the banking regulator identifies the group holding company as an upper-layer non-banking financial company (NBFC), according to a report by The Economic Times.

This is the first time that a trustee of Tata Trusts has publicly supported the listing of Tata Sons. His views are in contrast to the resolution passed by Tata Trusts in July last year that pushed the idea of keeping the company an unlisted private entity.

This was in clear opposition to the RBI’s efforts towards the initial public offering of the company.

To further support his listing argument, Srinivasan said that the IPO would also allow minority shareholders to liquidate their investment in Tata Sons.

This would help companies like Shapoorji Pallonji Group, which is looking to sell some of its stake in Tata Sons to repay debts.

The construction company currently has a stake of about 18.37 percent. Tata Trusts hold the majority stake, about 60 percent, in Tata Sons.

“A public listing would not only unlock value for minority stakeholders, including providing an exit route to the Shapoorji Pallonji Group, but also equip Tata Sons with capital to sustain its growth trajectory,” Srinivasan was quoted as saying in the report.

However, many trustees of Tata Trusts are not in favour of the public listing. The trust, under the chairmanship of Noel Tata, had asked Tata Sons chairman N. Chandrasekaran to explore all ways to avoid the public listing and find options for the Shapoorji Pallonji Group to exit the company as well.

The RBI is currently working on a scale-based regulatory framework for shadow banks. Under the revised norms, it is expected that Tata Sons may not be able to get relief from listing.