- Noel Tata urges preserving Tata Sons' century-old ownership and opposes direct public listing
- He highlights Tata Trusts' 66% equity stake linking commercial and philanthropic goals
- Noel warns listing shifts focus to financial returns, risking long-term group investments
“What is at stake is very fundamental”. Noel Tata's statement to the Tata Sons board on Thursday is laying out a detailed case for preserving the company's century-old ownership structure and against moving directly towards a public listing.
The Tata Trusts chairman argued that Tata Sons is fundamentally different from a conventional holding company because around 66% of its equity is held by the Tata Trusts, with dividends from operating companies ultimately supporting charitable activities. He said the commercial enterprise and philanthropy are effectively part of the same structure.
Why Does Noel Tata Oppose a Tata Sons Listing?
Noel Tata's central argument is that a listed Tata Sons would have a different shareholder base and, consequently, different priorities.
He said institutional and foreign shareholders would have a legitimate focus on financial returns, while the Tata Trusts' role also incorporates public-interest objectives. According to him, this distinction matters when Tata Sons is required to support distressed group businesses or fund ventures where returns could take years to materialise.
He specifically pointed to semiconductors, electronics manufacturing and civil aviation as businesses requiring investment horizons measured in decades rather than quarters.
What About The Rs 20,000 Crore Already Spent?
Noel Tata pointed to Tata Sons' decision in March 2024 to remain unlisted and the steps subsequently taken to support that position.
He said the company repaid borrowings and prematurely redeemed preference shares amounting to approximately Rs 20,000 crore, using internal resources and monetisation of group holdings. Tata Sons also avoided taking on new borrowings during the subsequent 30 months, according to his statement.
His argument: the expenditure was intended to preserve not just the company's private status, but the underlying ownership structure.
Does The RBI Order Automatically Mean Tata Sons Has To List?
Noel Tata disputed that interpretation of the RBI's September 11 communication, saying the letter did not mention listing and prescribed no specific step. He argued that Tata Sons should first understand the regulator's position, obtain detailed legal advice and examine all remaining alternatives.
Noel proposed that Tata Sons make a detailed representation to the RBI, seek a hearing, explore restructuring and obtain legal advice on possible remedies.
What Does He Want Tata Sons To Do First?
Noel Tata argued that all available alternatives should be evaluated, including regulatory engagement, legal advice and potential restructuring, before listing is treated as the only route. He has also said the Tata Trusts should be consulted before the board takes a definitive position on changing Tata Sons' ownership structure.
He drew a distinction between regulatory questions and leadership decisions, arguing that each should be dealt with on its own merits rather than one being used to determine the other. His separate board statement also said the company should follow the prescribed governance process rather than allow one issue to determine another.
What If Tata Sons Ultimately Has To List?
Even in that scenario, Noel Tata asked the board to seek three years from September 2026 to comply, taking the proposed timeline to September 2029.
He cited the work required for a listing, including changes to the Articles of Association, shareholder approvals, preparation of consolidated financial statements, due diligence and valuation. He also pointed to the financial commitments and losses at newer group businesses.
The Tata Sons board has meanwhile voted to proceed with listing-related steps and reappointed N Chandrasekaran for another five-year term, setting up a wider governance dispute with Tata Trusts.
Noel Tata ended his statement by saying that, if forced to vote immediately on a listing, he would have “no option but to veto” it.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.