Billionaire Tata scion faces battle of his life to avert a listing

Tata Sons is preparing for a public listing following a Reserve Bank of India directive, with February 2027 serving as a tentative target for an anticipated market debut, according to sources familiar with the matter. This move could potentially position itself as one of India's most significant and closely watched exchange entries. The process, however, is expected to be lengthy, as the preliminary work commenced before the RBI's recent decision on September 11.

Tata Trusts chairman Noel Tata, who opposes a listing, found himself in opposition to other Tata Sons board members who supported the move. Despite the team assembling the required financial and regulatory documentation shortly after the RBI directive, the listing process still requires various corporate and regulatory steps to be completed before launching a public issue.

Under the RBI's scale-based regulation framework, NBFCs classified in the upper layer must list on a recognized stock exchange within three years. This includes Tata Sons, which must review its board composition and capital structure, potentially involving decisions on a bonus issue or share split and addressing existing convertible preference shares.

Additionally, the company will need to prepare detailed disclosures on related-party transactions in the draft red herring prospectus (DRHP) and review existing shareholder agreements.

The Tata Group's crossholdings may also draw scrutiny from public-market investors, who would expect a clean look-through structure rather than circular ownership. The listing process is also likely to provide a route for addressing concerns of the Shapoorji Pallonji Group, Tata Sons' second-largest shareholder.

Despite the disagreements, Tata Sons is proceeding with the listing plan, adhering to the RBI directive, and ensuring compliance with the necessary regulatory requirements.