SP Group presses Tata Sons to take up ₹25,000 Cr buyback plan
The debt-laden group wants its buyback proposal prioritised at the next Tata Sons board meeting, even as the RBI listing push continues.
The 30-second read
- SP Group has asked Tata Sons to prioritise its buyback proposal, worth about ₹25,000 Cr, at the next board meeting.
- The money raised would be set aside only to repay debt. Noel Tata, who opposes public listing, placed the proposal at the last board meeting.
- The RBI listing directive has not changed SP Group's funding need, and Tata Trusts say they have not agreed to a listing.
IllustrationSP Group has urged Tata Sons to take up its share buyback proposal at the next board meeting, Business Today and The Economic Times reported. The group has not withdrawn the proposal. The size is about ₹25,000 Cr, first reported by Business Today. Business Today's report relies on The Economic Times, citing sources familiar with the matter.
Noel Tata placed the proposal before the board at its last meeting. He opposes public listing. The Economic Times first reported that Shapoorji Pallonji Mistry is SP Group chairman. It also first reported that the group holds roughly 18.4% of Tata Sons, through Sterling Investments Corp and Cyrus Investments. SP Group is the second-largest shareholder and has pledged its stake against borrowings. Any money raised would be reserved strictly for paying down debt.
Under RBI rules, upper-layer NBFCs must list within three years of being identified. Both outlets say the RBI directive to pursue a listing has not changed SP Group's funding need, and the group welcomed it. The Economic Times first reported that the RBI rejected Tata Sons' application to give up its upper-layer NBFC registration, and that Tata Trusts say they have not agreed to a listing.
The Economic Times also first reported that SP Group cleared approximately ₹3,500 Cr of recent bond repayments. It reported a July refinancing of ₹21,500 Cr, with a plan to monetise part of the stake within 18 months. Uday Ved, tax partner at KNAV, told the paper: "Valuation and fairness for all shareholders could lead to challenges during the NCLT process."
Why it matters
SP Group has pledged its Tata Sons stake against borrowings, so the buyback bears on its lenders. The outcome also bears on a listing mandated by the RBI and on the philanthropic activities Tata Trusts fund through dividends from Tata companies.
The data
| Item | Figure |
|---|---|
| Buyback size | About ₹25,000 Cr |
| SP Group stake in Tata Sons | Roughly 18.4% |
| Recent bond repayments cleared | Approximately ₹3,500 Cr |
| July refinancing | ₹21,500 Cr |
