MUMBAI: Tata Group companies’ shares jumped on Tuesday after Reserve Bank of India directed Tata Sons to comply with upper-layer NBFC rules – including a mandatory listing. Seven listed Tata companies together hold 11.9% of Tata Sons, and a potential IPO could unlock value for them. Tata Chemicals led the rally, hitting its 20% upper circuit to close at Rs 734.5 on BSE, valuing the company at Rs 18,712 crore.The math explains the enthusiasm. Tata Chemicals holds a 2.5% stake in Tata Sons – worth more than the soda ash maker’s entire market cap, market participants said. At a conservative valuation of Rs 10 lakh crore for Tata Sons, even after a holding-company discount, that stake alone is worth Rs 25,000 crore – 34% above Tata Chemicals’ market cap.
TATA Chemicals soars 20%
Other Tata Sons shareholders rallied too. Tata Motors Passenger Vehicles and Tata Steel, each holding 3.1% of the parent, rose 5% and 0.3% respectively. Tata Investment Corporation, another investment holding company, which owns 0.01% of Tata Sons, jumped 10.3% to close at Rs 718.35.The rally spread beyond the Tata fold. Shapoorji Pallonji Group – Tata Sons’ largest minority shareholder at 18.4% – saw Afcons Infrastructure hit its 20% circuit, touching an intraday high of Rs 304.55 on NSE. Forbes & Co surged 20% to its price band of Rs 331. Gokak Textiles climbed 10% to Rs 64.A Tata Sons IPO – combining a fresh issue and an offer for sale – could unlock value across the company and its shareholders. The fresh issue would fund Tata Sons’ capital-intensive bets in semiconductors, battery storage and aviation, while the offer for sale would let existing shareholders, Tata companies and Shapoorji Pallonji alike, monetise part of their holdings.For the debt-laden Shapoorji Pallonji Group, an IPO could offer a route to cut its roughly Rs 55,000 crore in borrowings – and relieve liquidity pressure that has dogged it for years.