Tata Trusts proposes Rs 25,000 cr liquidity deal for SP Group's Tata Sons stake

Tata Trusts announced a liquidity strategy that would require Sterling Investments Corporation Pvt Ltd and Cyrus Investments Pvt Ltd, the owners of the SP Group’s Tata Sons shares, to sell sufficient stock to raise a minimum of Rs 25,000 crore. The transaction would be valued under Rule 11UA of the Income Tax Rules, 1962 and carried out in two phases over an 18-month period, with a selective capital-reduction filing at the National Company Law Tribunal beforehand.

The move comes after discussions among Noel Tata, Tata Sons Executive Chairman N Chandrasekaran and SP Group Chairman Shapoor Mistry, and seeks to address the SP Group’s need for cash without forcing a public listing of Tata Sons. A recent RBI rejection of Tata Sons’ request to surrender its core investment company status has revived concerns about possible listing requirements. By opting for a buy-back or capital reduction, the SP Group could obtain cash while Tata Sons remains privately held, potentially altering the balance of influence among shareholders. The proposal still requires regulatory and court approvals and will be scrutinised for valuation methodology and legal compliance.