₹25,000-crore SP Group liquidity plan separate from Tata Sons listing, says Tata Trusts

At the centre of the latest Tata group deliberations is an effort to ease the Shapoorji Pallonji Group's debt burden, with Tata Trusts clarifying that plans to unlock around ₹25,000 crore of liquidity for the group are separate from the wider debate over Tata Sons' ownership structure and any possible listing.

Speaking on the proposal to restructure Tata Sons, Tata Trusts consultant Farokh Subedar said the Trusts were working with Tata Sons and the SP Group on a liquidity solution that could address a substantial part of the SP Group's debt. He said this exercise should not be linked to discussions around Tata Sons' regulatory status.

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"We are also working with Tata Sons and Shapoorji Pallonji Group on roughly ₹25,000 crore of liquidity. That's approximately half of the SP Group debt. That's a separate subject. It is not connected with this proposal," Subedar said in response to questions on the restructuring proposal, as per CNBC-TV18.

According to Tata Trusts, the proposed liquidity transaction would lead to only a marginal reduction in the SP Group's holding in Tata Sons, which currently stands at 18.37 per cent. "The 18.37% stake will reduce only slightly," Subedar said, indicating that the objective is to provide the SP Group with liquidity rather than facilitate a significant exit from Tata Sons.

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Earlier, Tata Trusts announced a proposal to merge Tata Electronics Systems Solutions and Tata Consulting Engineers into Tata Sons. The Trusts have argued that this would turn Tata Sons into an operating company and take it outside the regulatory definitions of both a Non-Banking Financial Company and a Core Investment Company.

Under the proposal, the merged entity would report operating revenues of more than ₹1 lakh crore, reducing the proportion of financial assets and group investments that currently bring Tata Sons under NBFC and CIC regulations.

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The clarification has come days after reports that Tata Trusts chairman Noel Tata had placed before the Tata Sons board a proposal under which Tata Sons could buy back part of the SP Group's shareholding through a selective capital reduction. The plan envisages creating roughly ₹25,000 crore of liquidity for the debt-laden SP Group while allowing the conglomerate to retain most of its Tata Sons stake.

The SP Group has been looking for ways to monetise its Tata Sons investment after completing a ₹21,500-crore refinancing exercise earlier this year backed largely by its Tata Sons shares. The refinancing was aimed at easing immediate debt pressures, but it also increased the importance of securing a long-term liquidity solution.

The clarification also underlines that a potential Tata Sons listing is not a settled outcome. Tata Trusts has previously said it has not agreed to take Tata Sons public and that multiple options are being evaluated following the RBI's communication on the company's NBFC status. While a listing could theoretically offer the SP Group a market-based route to monetise its holding, Tata Trusts' latest remarks indicate that the immediate focus is on a negotiated liquidity solution rather than an IPO-driven exit.