TATA Sons listing and the beneficiaries:
In September 2022, the Reserve Bank of India (RBI) classified Tata Sons as an “upper-layer” non-banking financial company. The category, among other requirements, mandates that such firms seek a public listing within a period of three years.
Understanding NBFC layers as per RBI classification; these layers are based on Size, Activity, Perceived Risk;
• Base Layer- NBFC less than Rs. 1000 Cr
• Middle Layer- NBFC more than Rs. 1000 Cr
• Upper Layer- NBFC identified by RBI as warranting enhanced regulatory requirement based. Value is no bar and at any time top 10 NBFC will be in this Layer.
• Top Layer- It ideally remains empty, if RBI sees substantial increase in the potential systemic risk in a NBFC it moves to this layer from Upper Layer.
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12179&Mode=0
TATA Sons listed investment is at Rs. 16 lakh Cr. The expected listing is to be on ~50% discount at 8 lakh Cr. (Open Source info)
Here thing to note is that TATA Sons share held by company are;
• TATA Trusts- 66%
• TATA Motors- 3%
• TATA Chemicals- 3%
• IHCL- 1%
• SP- 18.4%
• Others- 8.6%
| TATA Sons Holding Company | % Holding | Rs. Cr as Financial Asset if listed at 8 Lakh Cr valuation | Market Cap (Rs. Cr) | Yearly Sales (Rs. Cr) | PAT (Rs. Cr) | PAT Margin | CMPS | P/E | Post Listing share price | No of shares (Cr) |
|---|---|---|---|---|---|---|---|---|---|---|
| TATA Trusts | 66% | 5,28,000 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| TATA Motors | 3% | 24,000 | 372533 | 423874 | 20149 | 4.75% | ₹ 1,018 | 19.5 | 1800.00 | 383 |
| TATA Chemical | 3% | 24,000 | 30000 | 16353 | 1770 | 11% | ₹ 1,178 | 17 | 7000-11000 | 25.5 |
| IHCL | 1% | 8,000 | 81733 | 6489 | 1170 | 18% | ₹ 574 | 70 | 2000 | 142 |
Now this information is with the market since 2022 but the price of shares have not moved.
With the proceed the companies can pay off their debts and can go for expansion.
TAMO has 1.28 Lakh Cr debt and TATA Chem has 6000 Cr Debt.
Question is why?
Disc: Not invested in any of TATA Group entity.
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