Tata Trusts Initiates Exit Dialogue for Shapoorji Pallonji Group

In a significant move, Tata Trusts, the largest shareholder of Tata Sons, has formally directed chairman N Chandrasekaran to negotiate an exit for the minority shareholder, Shapoorji Pallonji Group (SP), from the $180-billion Tata Group's holding company.

This marks the first instance where Tata Trusts has officially instructed Tata Sons to explore an exit strategy for SP, diverging from its previous stance under late Ratan Tata's chairmanship, which rejected SP's exit proposals.

RBI's Listing Deadline Looms Over Tata Sons

With Tata Sons facing a September 30 deadline set by the RBI to list on the stock exchanges, the move could automatically facilitate SP's departure. However, Tata Trusts aims to keep Tata Sons private, having cleared its debts and sought to change its status as a core investment company to avoid listing.

Key Developments: Tata Trusts has recognized Tata Sons' efforts to avoid listing by repaying approximately Rs 30,000 crore in debts. The valuation of SP's stake remains a point of contention, with differing views on the appropriate valuation method.

Historical Context and Legal Battles

The relationship between Tata Trusts/Tata Sons and SP soured following the removal of Cyrus Mistry, SP's late scion, from Tata Sons' chairmanship, leading to a legal dispute that Tata Trusts/Tata Sons ultimately won.