The debt-laden Shapoorji Pallonji Group wants Tata Sons to pursue an 18-month selective capital reduction, as RBI pressure over a potential listing intensifies.
Shapoorji Pallonji Group has asked Tata Sons to move quickly on a proposed share buyback that could unlock at least ₹25,000 crore for the debt-laden conglomerate, according to reports. The plan would let the family-controlled group monetise part of its roughly 18.4% holding in Tata Sons, which is held through Sterling Investments Corp and Cyrus Investments, and would direct all proceeds towards debt repayment.
According to the Economic Times and Business Standard, the proposal was presented by Noel Tata at a Tata Sons board meeting and would be structured as a selective capital reduction carried out over about 18 months. The shares would be valued using fair value under Indian income-tax rules, and the SP Group is said to be open to receiving the money in tranches rather than in one lump sum. People familiar with the matter told the papers that Tata Sons could still choose a different route, including a special-purpose vehicle or another structure, if that proved more practical.
The timing matters because Tata Sons is also under pressure from the Reserve Bank of India. The central bank has rejected the company’s request to surrender its registration as an upper-layer non-banking financial company and has required it to comply with rules that can force such entities to list within three years of being identified. That has intensified debate inside the Tata ecosystem over whether a public listing, a buyback or some hybrid solution is the best way to handle the SP Group’s long-held stake.
The SP Group’s immediate need for cash has become more urgent after a bruising refinancing period. Reports say it recently cleared about ₹3,500 crore in bond repayments after securing fresh support from most existing lenders, easing the risk of a missed deadline in September. In July, the group completed ₹21,500 crore of refinancing after telling investors it intended to monetise part of its Tata Sons stake within 18 months through a listing or share sale. The issue remains politically and strategically sensitive: SP Group chairman Shapoorji Pallonji Mistry has argued for greater transparency through a listing, while Tata Trusts and Noel Tata have favoured alternatives that would preserve the ownership structure underpinning the group’s philanthropic model.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
