Tata Group Stocks That Stand To Benefit From Potential Tata Sons IPO
The Reserve Bank of India had classified Tata Sons as an 'upper-layer' non-banking financial company, which mandated a public listing by September this year.
Tata Chemicals Ltd., Tata Steel Ltd., Tata Power Co. and Tata Motors Ltd. are some of the main group firms that could potentially benefit if holding company Tata Sons Pvt. does an initial public offering.
The Shapoorji Pallonji Group, a major shareholder of Tata Sons, is pushing for the public listing of the company. This move is expected to unlock significant value for over 1.2 crore shareholders of listed Tata Group companies.
The primary driver for the Shapoorji Pallonji Group's push is financial: an exit from its Tata Sons' stake is critical for liquidity to address its substantial debt burden. The group argues that the listing is a "moral and social imperative" that would bring greater transparency and accountability to the holding company and unlock immense value for all shareholders, including the ultimate beneficiaries of Tata Trusts.
The Reserve Bank of India had classified Tata Sons as an 'upper-layer' non-banking financial company, which mandated a public listing by September this year. Tata Sons had sought to de-register as a core investment company to avoid the mandatory listing, a decision on which is still pending with the RBI.
Cross-Holdings Within Tata Group
Tata Sons owns substantial stakes in several listed Tata companies. Conversely, some listed Tata companies also hold stakes in Tata Sons.
For example, Tata Steel and Tata Motors each own 3.06%.
Tata Chemicals holds 2.53%, while Tata Power, Indian Hotels Co., Tata Consumer Products Ltd., and Tata Investment Corp. have smaller stakes.
On the other hand, Tata Sons has a 71.7% stake worth Rs 7.86 lakh crore in Tata Consultancy Services Ltd.
It also owns 86.5% stake in recently-listed Tata Capital Ltd. valued at Rs 1.2 lakh crore.
Other significant holdings include Tata Motors, Tata Steel, Titan, Tata Power, Trent, Indian Hotels, etc.
The total value of listed holdings aggregates to around Rs 13.96 lakh crore, as per NDTV Profit calculations.
The book value of multiple unlisted entities and joint ventures like Air India, Tata Realty, Tata Electronics, Tata Digital, and many others is Rs 91,284 crore as of fiscal 2025.
The net cash on Tata Sons' books is Rs 7,117 crore.
Tata Sons Valuation
With a 50% holding company discount and two times the book value for unlisted entities, the estimated valuation of Tats Sons is around Rs 8.88 lakh crore.
The value unlocking potential for companies holding Tata Sons shares can be significant.
Tata Chemicals' stake value is nearly 98% of its current market capitalisation. Tata Steel, Tata Power and Tata Motors' stake values range from 10–12.5% of their market caps
For Indian Hotels, Tata Consumer, and Tata Investment Corp, the value is lower but notable.
