India’s largest IPO likely from Tata Sons

Value For Retail Investors

• RBI’s ‘upper-layer’ NBFC norm makes listing mandatory
• However, Tata Sons reportedly sought exemption from RBI list
• 61% of equity of Tata Sons is held by philanthropic trusts
• Largest IPOs are LIC with Rs21k cr, Paytm with Rs18k cr and Coal India’s Rs15,200 cr
• Analysts term it as good value for retail investors

Mumbai: The biggest IPO in Indian history is in the making and is expected to hit the stock market in two years. Thanks to RBI’s latest list of NBFCs in the Upper Layer (NBFC-UL), Tata Group’s holding company, Tata Sons, which is estimated to be worth Rs11 lakh crore, may not have any choice, but to go public by September 2025.

As per reports, Tata Sons will have to be ready for a stock market listing by September 2025 with the RBI classifying it as an ‘upper-layer’ NBFC, which requires greater regulatory compliance.

Talking to Bizz Buzz, Ratan Binani, an independent trader, says, “all the retail investors should subscribe as and when it happens as it will provide a good value for their investments.”

Further, the report mentioned that if Tata Sons get listed, it will be a windfall for its shareholders, including Tata Trusts. At an estimated valuation of Rs11 lakh crore for Tata Sons, a five per cent offering by the holding company could result in Rs55,000 crore IPO - which would be India’s biggest ever public offer.

Currently, the title of the all-time largest IPO in India is being held by the government-backed Life Insurance Corporation of India (LIC) with its Rs21,000 crore worth IPO in 2022, followed by Paytm’s Rs18,000 crore IPO in November 2021, and Coal India’s Rs15,200 crore IPO, which was launched in November 2010.

Led by Chairman N Chandrasekaran, Tata Sons had reportedly sought the possibility of an exemption from RBI in the list which was first released in September 2022. Tata Sons is the principal investment holding company and promoter of Tata group companies. As much as 61 per cent of the equity share capital of Tata Sons is held by philanthropic trusts, which support education, health, livelihood generation and art and culture.

During FY23, the revenue of Tata Group companies, taken together, was $150 billion (Rs12 trillion). These companies collectively employ over 1 million people.

As per the Tata Sons website, each Tata company or enterprise operates independently under the guidance and supervision of its own board of directors. There are 29 publicly listed Tata enterprises with a combined market capitalisation of $300 billion (Rs24 trillion) as of July 31, 2023.