{"id":1279870,"date":"2024-03-12T06:46:01","date_gmt":"2024-03-12T01:16:01","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1279870"},"modified":"2024-03-12T06:46:21","modified_gmt":"2024-03-12T01:16:21","slug":"tata-sons-avoiding-ipo-due-to-financial-reasons-stocks-witness-10-dip","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/tata-sons-avoiding-ipo-due-to-financial-reasons-stocks-witness-10-dip\/","title":{"rendered":"Tata Sons Avoiding IPO Due To Financial Reasons; Stocks Witness 10% Dip"},"content":{"rendered":"\n

Today, the shares of Tata Chemicals nosedived over 10 percent following the media reports where Tata Sons IPO, which was earlier being seen as a value booster for the firm appeared increasingly improbable in the foreseeable future.<\/p>\n\n\n\n

\"Tata<\/figure>\n\n\n\n

How Did This Happen?<\/strong><\/p>\n\n\n\n

During this time, Tata Chemicals shares rallied 36 percent and the reports of the IPO of several Tata group firms’ parent companies gained traction. <\/p>\n\n\n\n

The conglomerate appears to be considering various avenues to adhere to the Reserve Bank of India’s (RBI) norms, the reports<\/a> noted.<\/p>\n\n\n\n

The movement was seen at 9.26 am on March 11, when Tata Chemicals shares were trading at Rs 1,207.45 on the National Stock Exchange.<\/p>\n\n\n\n

 It was trading 8 percent down  from its previous close. <\/p>\n\n\n\n

Prior to this, the stock has witnessed 27 percent in just one month.<\/p>\n\n\n\n

Not only that it has outperformed benchmark Nifty 50 which has gained 4 percent during this period.<\/p>\n\n\n\n

It appears that the Tata Sons is registered as a “core investment company (CIC)” with the RBI.<\/p>\n\n\n\n

So far, it has been classified as an “upper layer” NBFC, which requires the company to follow a strict regulatory structure.<\/p>\n\n\n\n

Under this category, it has to list on the public market within three years of being notified.<\/p>\n\n\n\n

Pertaining that the RBI issued a notification to this effect for Tata Sons in September 2023.<\/p>\n\n\n\n

Considering Options To Avoid IPO<\/strong><\/p>\n\n\n\n

This simply means that Tata Sons has to list on exchanges by September 2025.<\/p>\n\n\n\n

But, sources are pointing towards a totally different story saying the conglomerate’s much-awaited listing is unlikely. <\/p>\n\n\n\n

In the meantime, Tata Sons is considering various options they have.<\/p>\n\n\n\n

They are also considering the potential separation of Tata Capital, to ensure compliance.<\/p>\n\n\n\n

According to the RBI\u2019s rules, if a “core investment company” has assets worth less than Rs 100 crore and does not raise public funds, it can avoid being classified as a Credit Information Company or an “upper layer” NBFC and is not required to go for a public listing.<\/p>\n\n\n\n

The company is also evaluating the efforts to reduce group debt as part of the compliance strategy. <\/p>\n\n\n\n

It is noteworthy here that in case the Tata Sons IPO does not materialize then Tata Chemicals will lose on the potential value unlocking.<\/p>\n\n\n\n

And why not, as it is said to be the biggest beneficiary of the much anticipated public issue.<\/p>\n\n\n\n

So far, four Tata Group companies  including Tata Motors, Tata Chemicals, Tata Power and Indian Hotels have ownership in Tata Sons, as per the Spark Capital note.<\/p>\n\n\n\n

This appears to be the only realistic way to get exposure to this potential value \u2014unlocking opportunity via Tata Chemicals as it has a 3 percent equity stake in Tata Sons.<\/p>\n\n\n\n

Spark Capital has estimated Tata Sons’ market capitalisation around Rs 8 lakh crore by, excluding holding company discounts and optionalities. <\/p>\n\n\n\n

Tata Chemicals’ equity stake in Tata Sons could be worth as much as Rs 19,850 crore, as per the Spark Capital calculations.<\/p>\n","protected":false},"excerpt":{"rendered":"

Today, the shares of Tata Chemicals nosedived over 10 percent following the media reports where Tata Sons IPO, which was earlier being seen as a value booster for the firm appeared increasingly improbable in the foreseeable future. How Did This Happen? During this time, Tata Chemicals shares rallied 36 percent and the reports of the […]<\/p>\n","protected":false},"author":27,"featured_media":1279879,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[1081,1510],"class_list":["post-1279870","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-ipo","tag-tata-sons"],"acf":[],"yoast_head":"\nTata Sons Avoiding IPO Due To Financial Reasons; Stocks Witness 10% Dip - Trak.in - Indian Business of Tech, Mobile & Startups<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trak.in\/stories\/tata-sons-avoiding-ipo-due-to-financial-reasons-stocks-witness-10-dip\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tata Sons Avoiding IPO Due To Financial Reasons; Stocks Witness 10% Dip - Trak.in - Indian Business of Tech, Mobile & Startups\" \/>\n<meta property=\"og:description\" content=\"Today, the shares of Tata Chemicals nosedived over 10 percent following the media reports where Tata Sons IPO, which was earlier being seen as a value booster for the firm appeared increasingly improbable in the foreseeable future. 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