Tata Sons Clears ₹20,000 Cr Debt To Avoid Share Market Listing: Report
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In a strategic move, Tata Sons, the holding company of the Tata Group, has repaid over ₹20,000 crore in debt, allowing it to remain unlisted and closely held, the Economic Times reported.

What Happened: The repayment of the debt by Tata Sons was a necessary step to avoid listing its shares in accordance with Reserve Bank of India’s (RBI) regulations. The company has now voluntarily surrendered its certificate of registration to the RBI, having repaid nearly all its borrowings.

Excluding non-convertible debentures and preference shares totalling ₹363 crore, Tata Sons has reserved ₹405 crore in bank deposits with the State Bank of India (SBI) to cover the remaining obligations. An undertaking has been provided to the RBI along with the surrender of its registration certificate.

See Also: How To Check Orient IPO Allotment Status

Tata Sons, a core investment company, was classified as a non-banking financial company-upper layer (NBFC-UL) by the Reserve Bank of India (RBI) in September 2022. This classification required Tata Sons to list its stock within three years under RBI regulations.

However, due to a significant reduction in promoter risk profile following the repayment of debt, Tata Sons is no longer obligated to list its stock. Consequently, the company has offered to surrender its certificate of registration to the RBI, effectively relieving it from the listing requirement.

As per the FY24 annual report, Tata Sons saw a 57% surge in net profit for the financial year ending March 2024, reaching ₹34,654 crore. Revenue also saw a 25% increase, amounting to ₹43,893 crore in FY24. The company transitioned to a net cash position of ₹2,670 crore as of March 31, 2024.

This development comes against the backdrop of Tata Sons considering a reduction in its equity stake in Tata Capital in preparation for a potential IPO. The stake reduction was aimed at bolstering Tata Sons’ standing as it sought an exemption from the RBI’s mandate for both Tata Sons and Tata Capital to list their shares by September 2025.

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