Tata Sons Manages To Avoid Mandatory Listing Requirement, Says Report. Here's What Happened

The parent company of the Tata Group repaid its dues worth Rs 20,300 crore to the Reserve Bank of India and earned an exemption from the mandatory listing requirement of the regulator

Along with submitting its registration certificate, the firm also shared an undertaking with the RBI and set aside Rs 405 crore in deposits with the State Bank of India (SBI) to take care of the remaining dues. (Image Source: X/@TataCompanies)

Source : X

Tata Sons has reportedly surrendered its certificate of registration voluntarily to the Reserve Bank of India (RBI) to avoid a public listing. The $410 billion holding firm of the Tata Group has taken this decision after closing a debt of more than Rs 20,000 crore, media reports said.

According to a report by The Economic Times, this move will allow the company to remain a closely held firm, and avoid the mandatory listing of its shares in the stock market. This listing would have been required as part of the regulations of the central bank if the company had failed to repay its debt.

The exact debt amount of Rs 20,300 crore has helped the company cut down its liabilities by a major extent, excluding only non-convertible debentures and preference shares coming up to Rs 363 crore, the report noted.

Remaining Dues

In addition to submitting its registration certificate, the firm has also shared an undertaking with the central bank and set aside Rs 405 crore in deposits with the State Bank of India (SBI) to take care of the remaining dues.

What Happened?

Notably, earlier in September 2022, the RBI classified Tata Sons as a non-banking financial company - upper layer (NBFC-UL). As part of this category, the firms are needed to list their shares in the market in a period of three years. However, by paying its dues, the Tata Group company has successfully reduced its promoter risk profile and earned an exemption from the mandatory listing norms. This has, in turn, resulted in the company giving up its NBFC registration.

During the 2023-24 fiscal year, the company clocked a net profit of Rs 34,654 crore, surging by 57 per cent against the preceding financial year. Its revenues also grew by 25 per cent to Rs 43,893 crore, as compared to Rs 35,058 crore recorded in the 2022-23 fiscal year (FY23).