Tata Sons, the principal holding company of the Tata Group, has dismissed a proposal for an IPO from shareholder Shapoorji Pallonji Group.

What Happened: According to a Business Standard report on Wednesday, Tata Sons is currently waiting for the Reserve Bank of India’s (RBI) approval to relinquish its registration as a non-banking finance company (NBFC) and proceed as an unregistered core investment company (CIC).

The SP Group, which holds an 18.5% stake in Tata Sons, had encouraged the company to contemplate an IPO during the annual shareholders’ meeting on Monday. The listing would have allowed the SP Group to liquidate a part of its stake and generate funds to fulfil its debt obligations.

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However, Tata Sons cleared its entire debt of ₹21,813 crore in the fiscal year ending March 2024 and petitioned the RBI to remove its classification as an NBFC upper layer. This action would exempt it from an RBI directive that necessitates all companies classified as NBFC upper-layer firms to be listed by September 2025.

The company, which recorded a 25% surge in total revenue to ₹43,893 crore and a profit before exceptional items and taxes of ₹41,116.51 crore in FY24, has petitioned the RBI for the voluntary surrender of its registration as a CIC. The RBI’s decision is anticipated shortly.

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