RBI forces Tata Sons listing, clearing path for SP Group bond yield drop

The Reserve Bank of India has refused Tata Sons’ request to give up its upper-layer non-banking financial company registration, reinstating the requirement for a public listing. The move ends months of regulatory ambiguity and should sharpen the yields on bonds issued by the SP Group, which were previously priced at very high levels. Sources say the extent of yield tightening will become apparent within the next two to three weeks.

The clearer outlook on monetising SP Group’s pledged stake in Tata Sons could lower the group’s future borrowing costs. Negotiations continue over a possible settlement, with proposals ranging from a buyback to a share-swap or new investor entry. Earlier, SP Group raised large sums through zero-coupon rupee bonds and a dollar-denominated issue, both backed by its Tata Sons holding.