Dissent aside, Tata Trusts keen to keep Tata Sons private

Tata Trusts remains committed to its decision to keep Tata Sons private, two Tata executives told Mint, hours after the Shapoorji Pallonji Group issued a public statement seeking a public share sale of the Tata Group holding company.

- Varun Sood & Satish John

An initial public offering (IPO) will dilute Tata Trusts’ shareholding, weaken its voting rights and limit its ability to influence key decisions at Tata Sons, the executives said on the condition of anonymity. Tata Trusts holds nearly 66% in Tata Sons, the holding company of the $300 billion Tata Group, India’s largest conglomerate. Debt-ridden SP Group is the biggest individual shareholder, with 18.37% stake.

However, Tata Trusts is still open to giving an exit to the SP Group over a mutually agreeable period, provided its own interests are maintained, one of the two executives said. “We remain open to providing an orderly exit for the SP Group while safeguarding the Tata Group's interests.”

Article 75 of the Tata Sons Articles of Association gives Tata Trusts the right to buy out SP Group, a provision the latter agreed to when it obtained control of shares in Tata Sons in 1964, the executive said.