Winning Bizness Desk

Mumbai.Shapoorji Pallonji backs Tata Sons listing, says move will strengthen transparency, accountability and institution

The Shapoorji Pallonji Group, which holds around 18 per cent in Tata Sons, has strongly backed the company’s listing, saying the move is aimed at strengthening the Tata institution rather than securing a victory for any one shareholder.

Group chairman Shapoorji Pallonji Mistry said the larger objective was to strengthen the Tata institution, its philanthropic work and accountability while improving partnerships and ultimately serving the country better. His comments came a day after Tata Trusts chairman Noel Tata opposed the proposed listing of Tata Sons, setting out a contrasting position on the company’s future.

Mistry says listing should unite shareholders

Mistry said the objective was not to establish one side’s victory over another but to create a stronger institution with greater accountability.

He said the listing should be viewed in a wider context, with transparency and public accountability forming an important part of the process. Tata Trusts holds around 66 per cent in Tata Sons and is the company’s largest shareholder, while the Shapoorji Pallonji Group has a stake of around 18 per cent.

• Shapoorji Pallonji Group holds around 18% in Tata Sons
• Tata Trusts owns around 66% and remains the largest shareholder
• Mistry says listing can improve transparency and accountability

RBI order brings greater clarity to future

Mistry also welcomed the Reserve Bank of India’s decision on Tata Sons, saying it had provided greater clarity on the company’s way forward. Tata Sons had been classified as an upper-layer non-banking financial company under RBI regulations. The regulatory framework required the company to comply with the applicable rules, including the listing requirement.

The RBI has rejected Tata Sons’ application to surrender its registration and asked the company to comply with the necessary regulations within the prescribed timeframe.

Noel Tata says alternatives remain available

Mistry’s remarks came after a Tata Sons board meeting on September 17, where Noel Tata questioned whether the RBI’s September 11 order necessarily made listing the company’s only option.

Noel Tata said the RBI order did not explicitly state that listing was the sole route available to Tata Sons.

He maintained that there was still room to explore alternatives and that the company should continue discussions with the RBI to retain its status as a private company.

Listing seen as more than regulatory exercise

Mistry said the proposed listing should not be viewed merely as a financial or regulatory exercise. According to him, bringing Tata Sons into the public market could increase transparency and public accountability in one of India’s largest business institutions.

He also said the development should not be seen as one shareholder defeating another. Instead, he described it as an opportunity to bring different shareholders and institutions together.

Tata-Mistry dispute dates back nearly decade

The latest disagreement comes against the backdrop of a long-running dispute between the Tata and Mistry families. The biggest public rupture between the two sides emerged in 2016, when Cyrus Mistry, who had been appointed chairman of Tata Sons in 2012, was removed from the post following a boardroom dispute.

At the time, Ratan Tata was chairman of Tata Trusts.

Dispute over leadership reshaped group relationship

Cyrus Mistry’s removal triggered a prolonged corporate and legal dispute between the Tata Group and the Mistry family. The episode became a major point of contention between the two business families and remains relevant to the relationship between their respective interests in Tata Sons.

The current debate over listing therefore involves not only regulatory requirements but also the ownership and governance structure of Tata Sons.

Key issues now shaping Tata Sons debate

The positions of the two major shareholder groups can be broadly understood around the following issues:

• Shapoorji Pallonji Group supports listing and greater public accountability
• Tata Trusts has questioned whether listing is the only regulatory route
• RBI has rejected Tata Sons’ request to surrender its registration
• Tata Sons has been classified as an upper-layer NBFC

Next steps will depend on regulatory compliance

With the RBI rejecting Tata Sons’ application to surrender its registration, the company now faces the requirement to comply with the applicable regulatory framework.

The differing positions of Tata Trusts and the Shapoorji Pallonji Group have brought the issue into sharper focus, with listing emerging as a key question in the future structure and governance of Tata Sons.