Tata Sons considers selling TCS shares amidst IPO bypass speculation and restructuring plans

Tata Sons plans to sell approximately 2.34 crore shares of Tata Consultancy Services (TCS), with the deal valued at around Rs. 9,300 crore. The base price for the transaction has been set at Rs. 4,001 per share, which is a 3.6% discount from Monday’s closing price. Speculation suggests that this sale may be a fundraising strategy to bypass the initial public offering (IPO) of Tata Sons, in accordance with Reserve Bank of India (RBI) regulations.
Tata Sons is exploring options to restructure its financial statements in order to avoid listing on the stock exchange. This follows rumors about the company’s plans for a massive IPO estimated at Rs. 55,000 crore, which would value the parent company at Rs. 11 lakh crore. The restructuring could involve debt repayment or transferring the ownership of Tata Capital to another entity. As a result, Tata Sons may no longer be registered as a core investment company (CIC) and a top-tier non-banking finance company.
The RBI has mandated that all top-tier non-banking finance companies, including Tata Sons, must be listed on stock exchanges by September 2025. Currently, Tata Sons has outstanding loans amounting to over Rs. 20,000 crore. If the company can reduce its loans to below Rs. 100 crore, it would no longer be subject to RBI’s core investment company (CIC) regulations. This could potentially provide an alternative route for Tata Sons to avoid going public.
The market value of Tata Sons’ listed investments is estimated to be around Rs. 16 lakh crore, while the book value of its unlisted investments is approximately Rs. 60,000 crore. The primary shareholders of Tata Sons are Dorabji Tata Trust with a 28% stake and Ratan Tata Trust with a 24% stake. Other shareholders include Sterling Investments, Cyrus Investments, Tata Motors, Tata Chemicals, and Tata Power. The combined market value of all its listed entities exceeds Rs. 30 lakh crore.