SP Group urges Tata Sons to prioritise proposal to buy back ₹25,000 crore shares: Report

The Shapoorji Pallonji (SP) Group has reportedly urged Tata Sons to prioritise a proposal to buy back shares worth about ₹25,000 crore at the company’s next board meeting.

According to a report in The Economic Times, the proposal, initially presented by Noel Tata at a previous Tata Sons board meeting, has not been withdrawn. The Reserve Bank of India’s directive for Tata Sons to pursue a listing has not altered the SP Group’s immediate funding needs, despite their support for the regulatory move. The conglomerate aims to unlock capital to repay its borrowings, according to the report that cited sources familiar with the matter.

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The plan involves monetising part of the SP Group’s approximately 18.4% stake in Tata Sons, held through Sterling Investments Corp and Cyrus Investments. It seeks a selective capital reduction over 18 months to generate gross proceeds of at least ₹25,000 crore, with valuation based on income-tax fair value, the report added. The funds would be used exclusively for debt repayment.

Officials close to the situation said Tata Sons may decide whether to facilitate the monetisation through a buyback, a special-purpose vehicle, or another structure. However, a buyback immediately after a potential listing could affect the listing process.

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Recently, the group cleared about ₹3,500 crore in bond repayments after securing fresh funding commitments from most existing lenders. This eased near-term liquidity pressures and helped avoid a possible default ahead of a September deadline. In July, it completed a ₹21,500-crore refinancing after informing investors of plans to monetise part of its Tata Sons holding through a listing or share sale within 18 months.

The funding request comes amid uncertainty over Tata Sons’ future structure. The RBI rejected its application to surrender registration as an upper-layer non-banking financial company and directed compliance with rules requiring such entities to list within three years of identification.

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SP Group chairman Shapoorji Pallonji Mistry supports listing for transparency and public accountability. Noel Tata opposes it, while Tata Trusts, which hold a majority stake in Tata Sons, have suggested considering alternatives to preserve the ownership structure that supports their philanthropic activities.