Vijay Singh, a prominent trustee of Tata Trusts, has joined Venu Srinivasan of TVS Group in advocating for the initial public offering (IPO) of Tata Sons, the main holding entity of the Tata group. This stance contrasts with a resolution made by Tata Trusts last year, which favored keeping Tata Sons as a private entity.
In recent years, the prevailing sentiment has been to maintain Tata Sons’ unlisted status. However, Singh, who previously served as Defence Secretary, expressed to The Indian Express that the company’s growth and the increasing demands of capital and technology-intensive sectors necessitate a reassessment of this approach.
Discussions about the potential listing of Tata Sons have been ongoing, particularly as the Reserve Bank of India mandates that the company be publicly listed due to its classification as an upper layer non-banking finance company.
Singh articulated the historical significance of Tata Sons, stating that for over a century, it has played a pivotal role in nation-building endeavors, including steel production, locomotives, power generation, and infrastructure development. He noted that its responsibilities have now extended into high-capital sectors such as aviation, defence, semiconductors, and electronics, which require substantial internal funding that can only be raised to a certain extent.
Despite these arguments, sources indicate that Noel Tata, Chairman of Tata Trusts, is inclined to keep Tata Sons unlisted, a position echoed by his predecessor, Ratan Tata.
Srinivasan previously remarked that a public listing would not only enhance value for minority shareholders but also provide Tata Sons with the necessary capital to support its growth trajectory.
Attempts to reach out to Noel Tata, N Chandrasekaran, and other trustees for comments went unanswered.
Singh further emphasized the need for significant investment for projects such as the production of fighter aircraft in collaboration with foreign partners, asserting that essential national projects should not be compromised due to funding issues that could be resolved through a public listing.
Having served on the board of Tata Sons until 2025, Singh advocated for increased transparency given the firm’s substantial scale and operations. He remarked that Tata Sons’ value has significantly increased over the past decade, thus necessitating greater regulatory scrutiny.
According to Singh, while historical control by charitable trusts was sufficient, the current age demands more stability and a robust regulatory framework. He pointed out that recent turbulence within the Tata Trusts raises concerns about their future reliability.
When addressing whether a public listing would diminish the influence of Tata Trusts, Singh responded that he does not foresee a significant impact, noting that the trusts would likely retain their substantial shareholding and board representation, preserving their status as promoters.
Concerns have also been raised regarding the potential for another business entity to acquire shares of Tata Sons post-listing, which could lead to takeover attempts. However, Singh believes such scenarios are unlikely due to the considerable stake held by the trusts.
Tata Trusts currently maintains a 66% ownership in Tata Sons, with the Chairman selected with the trust’s consent. Singh mentioned that the governing articles of Tata Sons would need revisions to eliminate conflicts of interest and clarify that the company’s core mission is to drive the nation forward through innovative ventures, which would necessitate it being a publicly listed entity.
According to an anonymous senior director within the Tata Group, N Chandrasekaran views the listing of Tata Sons as necessary but is constrained by the company’s official stance on remaining private. This director speculated that some trustees might not oppose a decision from the RBI regarding the listing, suggesting that unanimous opposition from Noel Tata may be difficult to achieve.
