Tata Trusts on Monday proposed a strategic reorganisation of Tata Sons Pvt Ltd (TSPL) in a bid to avoid a potential IPO. The Trusts are planning to push this through the merger of two Tata group companies with Tata Sons.
The proposal is to merge Tata Electronics Systems Solutions and Tata Consulting Engineers with Tata Sons. This is said to ensure that Tata Sons would no longer come under RBI's rules of core investment companies (CIC) or a non-banking financial company (NBFC).
“The proposed strategic reorganisation of the business and operations of TSPL is not a new pathway,” a press release from the company read. "TSPL has, for almost 80 years out of its 100-year existence, always had operating businesses and operating revenues, which enabled it to fund its other, newer business ventures. To recall, as recently as 2004, Tata Consultancy Services was a business division of TSPL before it was demerged into a separate subsidiary. This was also the case with other operating businesses of TSPL."
This comes after the RBI rejected an application from Tata Sons to deregister as an NBFC, a move that pushed the company to list in the stock market.
The Tata Trusts, which is chaired by Noel Tata, hold 66 per cent of shares of Tata Sons the holding company for Tata Group.
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