Tata Sons mulls debt restructuring to skip RBI rule-mandated IPO: Report

Tata Sons, the holding company of Tata Group is exploring restructuring its balance sheet to avoid the RBI rule-mandated IPO, reported Times of India. This holding company of the $150 billion worth conglomerate is supposed to go public in 2025.

RBI rule-mandated IPO

As per RBI any core investment company (CIC) that does not own more than Rs 100 crore in assets and doesn't raise public funds (if it repays them or transfers them to a separate entity) would not be considered as a CIC and upper layer NBFC thus side stepping RBI's grip. Such companies need not go for public listing.

Also Read: Tata Motors to spin-off business into two separate listed entities, demerger to take 12-15 months

However, Tata Sons is registered as a CIC with the RBI. The regulator has also classified it as an upper layer NBFC. This requires Tata Sons to go public within three years of being notified. The notification for Tata Sons came out in 2022.

Tata Sons debt restructure

As per Times of India, Tata Sons is exploring options of transferring its debt to a separate entity so that it is excluded from the 'upper layer' list. Tata Sons FY23 report shows that it has borrowings of Rs 20,000 crore.

Times of India quoted a lawyer and said that the company led by N Chandrasekaran has assets over Rs 100 crore and it has to reorganise its debt by either repaying its borrowings and becoming debt free or transfering it to a separate entity. This will enable the firm to deregister as a CIC from RBI.