Tata Sons IPO: Tata Group May Sell 5% Stake to Raise Rs 55,000 Crore

Tata Sons, a holding company of Tata Group, is in the headlines after a Kotak Securities report said the group is considering selling a 5% stake in Tata Sons. Tata Sons is expected to raise Rs 55,000 crore at an estimated valuation of Rs 11 trillion through an Initial Public Offering (IPO) route.

Presently, Tata Sons, a private limited principal investment holding company, holds a bulk shareholding in the Tata Group companies. The 66% of the equity share capital of Tata Sons is held by the philanthropic trust, which supports education, health, livelihood generation, art and culture.

Tata Sons holds lands across India, tea estates and steel plants and derives its revenue from dividends from these companies and brand loyalty fees.

Tata Sons is a Upper Layer NBFC

Tata Sons is classified as an upper-layer, non-banking financial service company by the Reserve Bank of India. It has to be listed on the stock exchange by September 2025 to meet the regulatory norms. The last big IPO was from Life Insurance Corporation of India (LIC), worth Rs 21,000 crore in May 2022. Currently, LIC share price is trading at Rs 1029.90.

About The Tata Group

Tata Group was founded by Jamsetji Tata in 1868 as a trading firm. Today, Tata Group operates 30 companies in the ten business verticals. The verticals are IT, Steel, Automobile, Retail and Consumer, Infrastructure, Financial Services, Aerospace & Defence, Tourism & Travel, Telecom & Media, Trading & Investment.

The Group operates in over 100 countries and on six continents with a mission ‘to improve the quality of life of the communities we serve globally, through long-term stakeholder value creation based on Leadership with Trust’.

In fiscal 2022- 2023, the total revenue of all Tata companies was Rs 12 trillion. All companies collectively employ over 1 million citizens. Each company operates independently under the guidance and supervision of its own board of directors.

The brand valuation consulting firm Brand Finance named the Tata Brand as the most valuable brand in India in 2023.

Tata Group Shareholdings in Listed Companies

Share Price Updates of Listed Companies

Indian Hotels share price: Rs 589.35, Tata chemicals share price Rs 968, Tata Communications share price: Rs 1913.80, TCS share price Rs 4093, Tata Elxsi share price Rs 7731, Tata Consumer Products share price: Rs 1199.30, Tata Investment Corporation share price: Rs 7644.85, Tata Motors share price: Rs 978, Tata Power share price: Rs 377.35, Tata Steel share price: Rs 150.55, Titan share price: Rs 3761.05, Trent share price: Rs 3893.60, Voltas share price: Rs 1093.

Four Tata Group Companies IPO Possible

In the report, Kotak Securities mentioned that four other Tata Group companies are likely to hit the IPO market to raise funds. The firms are Tata Autocomp, Online Grocery Bigbasket, Tata Advanced Systems, and TATA Play.

Four of these companies are from different sectors: Tata Autocomp is a battery storage firm, Big Basket is a famous online grocery store, and Tata Advanced System is an aerospace firm. Tata Play is a satellite TV distribution firm. As per sources, Big Basket IPO may hit the market by early 2025, as the company is on the path to becoming profitable.

Tata Sons holds a 41.5% stake in Tata Play and has filed a confidential DRHP with the market regulator Security and Exchange Board of India (SEBI).

If the Tata Sons IPO is launched, it will lead to the exit of Shapoorji Pallonji Group, which owns an 18.4% stake in the company. As of now, “we don’t have any indication from Tata Group that they would launch an IPO of the holding company”, said a senior banker.