The biggest IPO in Indian history is in the making and is expected to hit the stock market in two years! Thanks to RBI’s latest list of NBFCs in the Upper Layer (NBFC-UL), Tata Group’s holding company, Tata Sons which is estimated to be worth Rs 11 lakh crore, may not have any choice but to go public by September 2025.
As per the Times Of India report, Tata Sons will have to be ready for a stock market listing by September 2025 with the RBI classifying it as an ‘upper-layer’ NBFC, which requires greater regulatory compliance.
Further, the report mentioned that if Tata Sons get listed, it will be a windfall for its shareholders, including Tata Trusts. At an estimated valuation of Rs 11 lakh crore for Tata Sons, a 5% offering by the holding company could result in Rs 55,000 crore IPO — which would be India’s biggest ever public offer.
Currently, the title of the all-time largest IPO in India is being held by the government-backed Life Insurance Corporation of India (LIC) with its Rs 21,000 crore worth IPO in 2022, followed by Paytm’s Rs 18,000 crore IPO in November 2021, and Coal India’s Rs 15,200 crore IPO which was launched in November 2010.
Led by chairman N Chandrasekaran, Tata Sons had reportedly sought the possibility of an exemption from RBI in the list which was first released in September 2022.
However, on September 14, RBI released yet another list of NBFCs in the Upper Layer under Scale Based Regulation for NBFCs for the year 2023-24. Under the list, Tata Sons was added to the Core Investment Company (CIC) category.
RBI also said, that despite qualifying for identification as NBFC-UL as per scoring methodology, TMF Business Services Limited (formerly Tata Motors Finance Limited) is not being included in the list of NBFC-UL in the current review due to its ongoing business reorganisation.
As per the framework, once an NBFC is classified as NBFC-UL, it shall be subject to enhanced regulatory requirements, at least for a period of five years from its classification in the layer, even in case it does not meet the parametric criteria in the subsequent year/s.
Tata Sons is the principal investment holding company and promoter of Tata companies. 61% of the equity share capital of Tata Sons is held by philanthropic trusts, which support education, health, livelihood generation and art and culture.
During FY23, the revenue of Tata companies, taken together, was $150 billion (Rs 12 trillion). These companies collectively employ over 1 million people.
As per the Tata Sons website, each Tata company or enterprise operates independently under the guidance and supervision of its own board of directors. There are 29 publicly listed Tata enterprises with a combined market capitalisation of $300 billion (Rs 24 trillion) as of July 31, 2023.
