Tata Trusts moves to unlock Rs 25,000cr exit route for Shapoorji Pallonji Group

Chennai:
Tata Trusts has put forward a proposal to help the Shapoorji Pallonji (SP) Group cash out part of its long-held stake in Tata Sons, in a move that could finally resolve one of Indian corporate history's most protracted shareholder standoffs.

The plan, tabled by Noel Tata, chairman of Tata Trusts, at a Tata Sons board meeting, would see the group's holding company buy back shares from two SP Group entities — Sterling Investments Corporation and Cyrus Investments — in a deal expected to fetch at least Rs 25,000 crore.

The proposal follows a series of discussions between Tata, Tata Sons chairman N. Chandrasekaran, and Shapoor Mistry, who heads the SP Group.

Under the structure understood to be acceptable to the SP Group, the share sale would be executed in two tranches over 18 months, with Tata Sons pursuing a selective capital reduction through the National Company Law Tribunal. Shares would be valued using the income-tax fair value method under Rule 11UA of the Income Tax Rules, 1962 — setting a floor, rather than a ceiling, on the eventual payout.

Tata told the board that funding could be drawn from a mix of sources: internal cash flows, sales of listed shares, bringing outside investors into newer Tata businesses, and potential listings via offer-for-sale of some group companies. He asked the board to authorise the NCLT process and instructed the Tata Sons and Tata Trusts management teams to continue talks with the SP Group and its bankers, reporting back periodically.

The move marks the latest chapter in a dispute that has simmered since Cyrus Mistry's ouster as Tata Sons chairman in 2016. The SP Group, which holds an 18.4 per cent stake in Tata Sons, has for years sought liquidity from the unlisted holding company — a request complicated by Tata Sons' private status and the absence of a ready market for its shares.