Curated By: Business Desk
Last Updated: September 18, 2023, 13:35 IST
Tata Group’s principal investment holding and promoter of Tata Group companies has been recently classified as upper layer Non-Banking Financial Company (NBFC). It is currently preparing to launch its initial public offering (IPO). As per the Reserve Bank of India’s guidelines, an upper-layer NBFC must list within three years of being notified. On September 14th, 2023, RBI notified 15 financial companies in the upper layer NBFC category including Tata Sons. As per reports, RBI has even classified another Tata group company, Tata Capital Financial Services under NBFC but it will not be required to list in the market due to its merger with Tata Sons.
RBI declared Tata Sons as upper layer NBFC, which means the company will have to be listed in the market within three years (September 2025) of getting this status. Amongst the 15 companies in the list released by RBI, Tata Sons has gained the limelight, as its IPO will be India’s largest ever. Currently, the largest IPO title holder in the history of India’s economy is Life Insurance Company (LIC). LIC’s IPO is worth Rs 21,000 crore. Reportedly, it is estimated that the IPO of Tata Sons will double this.
Tata Sons IPO will be extremely profitable for its shareholders including Tata Trust. The company value is estimated to be Rs 11 lakh crore. Tata Sons is planning to offload 5 per cent of its company shares through this IPO.
There are reports that Tata Sons is weighing its options. There is a high possibility that it may not have to launch an IPO at all. Saurabh Jain, Vice President of SMC Global Securities, believes that if Tata Sons manages to come out of RBI’s NBFC upper layer list through reorganisation, it will not have to launch an IPO.
Apart from Tata Sons and Tata Capital Financial Services, the list mentions the names of companies like LIC Housing Finance, Bajaj Finance, Shriram Finance, L&T Finance, Piramal Capital & Housing Finance, Cholamandalam Investment and Finance Company, Indiabulls Housing Finance, Mahindra & Mahindra Financial Services, Tata Capital Financial Services, PNB Housing Finance, HDB Financial Services, Aditya Birla Finance, Muthoot Finance and Bajaj Housing Finance.