The Tatas and Mistrys try to resolve long-standing issues

The almost six-year-long dispute between two of India's biggest business groups Tata Sons and Shapoorji Pallonji group-might be on the path to be resolved. The dispute is about getting what the Shapoorji Pallonji group (SP group) claims is its 18% rightful share in Tata Sons, whose market capitalization, as on 31 December 2021, was $314 billion (Rs 23.4 trillion).

- ABHINANDAN MISHRA

Its revenue during the same period was $128 billion (Rs. 9.6 trillion).

The SP group's claim is based on the 18.37% stake that it has in Tata Sons, which operates in 160 countries across six continents and employs over 660,000 people in over a hundred operating companies, of which 29 are listed. In September 2020, drawing curtains on its over five-decade-old relationship with the Tatas, the SP group had told the Supreme Court that it wanted to separate itself from the ties by swapping the shares it held. During that period, Tata Sons had stated that it was open to buying the SP group's shares for a price of Rs 70,000-Rs 80,000 crore.

However, the SP group said it should get at least Rs 1.75 lakh crore (or Rs 1.75 trillion), much more than what the Tatas had offered.

As per the legal agreement between the two, Tata Sons has a Generic Right of First Refusal (ROFR), meaning that the SP group can sell its stake in Tata Sons to any other entity only after the Tata Sons refuses to buy it.

Now, with the fortunes of the Tata Sons seeing a mercurial rise (its market capitalization was $145.3 billion in March 2018, compared to $314 billion today), the 18% share of the Mistrys is likely to fetch much more than what it would have in 2020.

As per the Tata Sons March 2022 balance sheet, if the Tatas today agreed on what SP Group was asking, it would have to give roughly Rs 4.4 trillion to them something that the Mistry family-owned Shapoorji Pallonji group is in need of urgently to expand its reach and tide over the crisis that it is going through.