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The Tata Group is in discussions with its largest minority shareholder, the Shapoorji Pallonji (SP) Group, on proposals to unlock liquidity, including a potential swap of shares in listed Tata entities, as SP Group seeks funds to repay high-cost debt.
Representatives of Noel Tata are exploring a structure under which SP Group would receive shares of companies such as Tata Power in exchange for some or all of its 18.4% stake in the privately held Tata Sons. Two other options are also under discussion: a direct buyout of the stake by Tata Sons, financed through overseas bank credit, or a sale to an external global investor.
The talks have gained urgency after Tata Sons Chairman N Chandrasekaran announced this month that he will step down in February. Noel Tata, who chairs Tata Trusts which holds a 66% controlling stake in Tata Sons is leading the negotiations. He is married to Aloo Mistry, sister of SP Group Chairman Shapoor Mistry.
SP Group faces a repayment obligation of about INR 3,500 crore by the end of September. A resolution is expected within the next 18 months, the timeline for the first payout on SP Group’s recently closed bond issue, which carries an 18.95% coupon.
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