Shares of several Tata Group companies, such as Tata Chemicals and Tata Investment Corporation, witnessed a surge of up to 10% on Monday. This surge comes as the buzz around the anticipated Tata Sons IPO has gained pace again.

What Happened: The potential listing of Tata Sons is expected to unlock value and simplify the complex group holding structure. This move could also facilitate the liquidation of stakes held by some listed holding companies in the parent conglomerate.

The latest surge comes as media reports state that the Reserve Bank of India has denied the holding company’s request to get an exemption from listing. Separately, other reports claim that the company has not even applied to seek an exemption.

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In 2023, RBI classified Tata Sons, the primary investment holding company and promoter of Tata Companies, as an ‘upper-layer’ non-banking financial company (NBFC). As per RBI guidelines, such entities are required to list within three years of notification. This means that Tata Sons is expected to be listed on exchanges by next year September.

However, Tata Sons has been trying to prevent the listing. Tata Sons repaid over ₹20,000 crore in debt in August 2024, allowing it to remain unlisted and closely held. The repayment was a necessary step to avoid listing its shares in accordance with Reserve Bank of India regulations.

Tata Sons dismissed a proposal for an IPO from shareholder Shapoorji Pallonji Group in September 2024. The company was awaiting RBI's approval to relinquish its registration as a NBFC and proceed as an unregistered core investment company (CIC).

Price Action: Tata Chemicals’ share price was up 10.28% to trade at ₹1,200. Tata Investment was up 6% to trade at ₹7,225.20 on Monday afternoon.

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