Noel Tata has presented a proposal to unlock at least Rs 25,000 crore from the Shapoorji Pallonji Group’s stake in Tata Sons, offering a potential solution to the conglomerate’s liquidity concerns without triggering a public listing, amidst ongoing ownership and governance debates.
Noel Tata has put forward a Shapoorji Pallonji Group proposal to unlock at least Rs 25,000 crore from the group’s stake in Tata Sons, in a move that could give the debt-laden conglomerate liquidity without forcing an immediate public listing of the holding company.
According to reports in India Today, Business Standard and The Economic Times, the plan was presented to the Tata Sons board on Thursday, the same day directors approved N Chandrasekaran’s reappointment as chairman for another five-year term. Noel Tata voted against that extension.
The proposal would allow the SP Group to sell part of the Tata Sons shares held through Sterling Investments Corporation Private Limited and Cyrus Investments Private Limited. The transaction would be split into two tranches over 18 months and would be routed through a selective capital reduction process before the National Company Law Tribunal, with the share value determined under Rule 11UA of the Income Tax Rules, 1962, according to the reporting.
Tata Trusts said the idea is meant to provide a fair and equitable resolution for the SP Group’s holding in Tata Sons. The Trusts also said the matter came against the backdrop of the Reserve Bank of India’s rejection on September 11 of Tata Sons’ request to surrender its registration as an upper-layer non-banking finance company.
That regulatory decision has revived debate over whether Tata Sons may eventually need to list, but Tata Trusts has not agreed to that outcome. The Trusts said the board considered the RBI communication and decided that all available options, not listing alone, should be examined before any course is chosen.
In his note to the board, Noel Tata argued that the RBI’s communication does not require a listing and does not prescribe any single remedy. He also pointed to the board’s March 2024 decision to keep Tata Sons unlisted and said that position had not been formally reopened.
His objections are closely tied to the group’s ownership model. Tata Trusts and related trusts hold about 66% of Tata Sons, and Noel Tata said that structure has allowed dividends from operating companies to support charitable work, including hospitals, universities and research. He warned that outside shareholders focused on financial returns could limit the holding company’s ability to back long-term or stressed investments.
The same board meeting also settled a separate leadership issue by approving Chandrasekaran’s return for another term after he had earlier said he did not intend to seek one. Business Standard reported that Noel Tata opposed that resolution as well, although his objection centred on governance and the wider ownership question rather than the legality of the appointment itself.
For now, the SP Group proposal adds another possible route through one of India’s most closely watched corporate disputes: how to provide liquidity for a major shareholder without changing Tata Sons’ long-standing status as an unlisted company.
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