Stock market veterans and common investors waiting for the listing of Tata Sons and its mega IPO are once again disappointed. The very important board meeting to be held today regarding the future of Tata Sons, the holding company of the country’s largest industrial house, has been postponed at the last moment. This joint meeting of Sir Dorabji Tata Trust and Sir Ratan Tata Trust will now be held on 16th May. It is being told that this decision has been taken due to some legal hurdles and internal disagreements.
Actually, this meeting was important because in this the stand of the trusts had to be clarified regarding the board representation of Tata Sons and listing in the stock market. Frequent changing of meeting dates is irritating market experts. Earlier this meeting was to be held on 12th May, which was preponed to 8th May and now it has been postponed again to 16th May. This ‘chess’ of dates indicates that the churning on the issue of IPO is very deep within the Tata Group.
War of representation and board between trusts
The main agenda of this meeting was to review the role of trusts and their representation on the board of Tata Sons. In fact, the matter heated up when some statements of two vice-chairmen of Tata Trusts—Vijay Singh and Venu Srinivasan—were made public. Both these stalwarts had advocated the potential benefits of Tata Sons’ listing. His statement was seen in support of the IPO, which created a stir in the market.
Sources say that the role of some nominee directors was also to be discussed in the meeting. In a company like Tata Group, where traditions and discipline are paramount, such differing voices among board members are rarely seen. This is the reason why everyone’s eyes are now fixed on the meeting of 16th May.
Noel Tata’s stance and suspense on IPO
Even though some people are counting the benefits of listing, a large section within Tata Trusts is still in favor of keeping the company private. The current philosophy of the Trust, under the leadership of Chairman Noel Tata, is that the ‘closely held’ structure of Tata Sons should not be disturbed. It is being told that the majority within the trust is currently against the listing.
According to reports, at present no formal proposal regarding IPO has come on the table. But the manner in which the meeting has been postponed clearly indicates that an internal effort is being made to bring about some major change or opinion. In such a situation, investors who were dreaming of investing money in Tata Sons shares may have to wait for a long time.
Market now eyes 16th May
There is also said to be a legal compulsion to list Tata Sons as per the rules of the Reserve Bank of India (RBI), as it is classified as an upper-layer NBFC. However, Tata Group is trying to get exemption from this rule or find some other way. When the Trust members meet again on May 16, perhaps the picture will become clear whether the future of Tata Sons lies on Dalal Street or it will continue to function in the old glorious ‘private’ style.
For now, the news is that Tata Sons’ IPO is still a long way off and the cloud of uncertainty has deepened.
