Tata Sons, the holding company of salt-to-software conglomerate, plans to do its valuation with external agencies as Shapoorji Pallonji (SP) family agreed to sell its stake back to Tata Sons, said two sources in the know. Tata group chairman N Chandrasekaran's office is likely to take the call regarding the appointment of independent agencies, they added.
There is no clarity regarding the valuation of Tata Sons, which holds the promoter stake in Tata group's operating companies, including Tata Steel, TCS, Tata Power and Tata Motors. SP family holds 18.37 per cent stake in the holding company, while Tata Trusts hold 66 per cent stake.
The SP family sources claimed that their stake is valued at Rs 1.75 lakh crore, while sources in Tata group earlier said that it would be Rs 1 lakh crore, especially in the post-COVID scenario. "The independent valuation will help the Tata Sons counsel to state the facts before Supreme Court," one of the sources said. The apex court will soon start hearing the matter related to Cyrus Mistry's removal as chairman of Tata Sons and the contentious minority shareholder rights of SP family in the holding company.
According to sources, Tata Sons will consider long-term debt financing option for buying their stake, if the legal dispute closes with an order for share transaction. With this in mind, TCS has recently announced a Rs 16,000-crore buyback programme, which eventually will result in an approximate Rs 11,000-12,000 crore windfall gain for Tata Sons. The holding company is already building a war-chest to acquire its shares owned by SP family, whose businesses are facing huge financial liabilities.
Lawyer Harish Salve, who represents Tata Sons, had informed the Supreme Court that the 150-year-old conglomerate is willing to buy the 18.37 per cent stake owned by the SP Group. Mistrys wrote a letter of departure from its association with Tatas after the statement of the counsel.
Tata Sons is the holding company for around 100 companies and is valued at around $100 billion by the experts. However, in the current global crisis, the group companies are struggling to stabilise the businesses. Several Tata companies are reeling under heavy debts, including Tata Steel, Tata Motors and Tata Power.
Tata Sons' revenue from operations, which mainly comprise dividend income and brand royalty fees, had rocketed 158 per cent to Rs 24,770 crore in the last financial year. The profit soared 130 per cent to Rs 2,680 crore, thanks to the generous IT giant.