Shapoorji Pallonji group may agree to staggered payments

Shapoorji Pallonji (SP) group and Tata group are valuing the shares of Tata Sons on four parameters—the value of listed companies, value of unlisted firms, brand value and debt.

The Shapoorji Pallonji (SP) group will offer the Tata group easy terms, including the option to stagger payments, to help India’s largest conglomerate buy out the Mistry family’s Rs1.5 lakh crore stake in Tata Sons Ltd and end a festering feud between the groups that were once close allies, two people directly aware of the matter said.

A construction worker walks past a hoarding of Indian conglomerate Shapoorji Pallonji Group on the outskirts of Mumbai. (Reuters File Photo)

The Mistry family is expected to share the details of the offer in the Supreme Court, making it a part of the plea for relief it is seeking from the court in a minority shareholder oppression case, the people said on condition of anonymity. The next hearing of the case is scheduled on October 28.

“Mistry firms believe they have a strong case on oppression and pledging shares of Tata Sons. Owing to the strong legal position, the firms will include the intention to separate from Tata group as an additional relief in the main oppression of minority shareholders petition,” said one of the two people.

The Mistry family believes that a court-supervised separation will ensure a fair deal to them, said the second person. The two groups are valuing the shares of Tata Sons on four parameters—the value of listed companies, value of unlisted firms, brand value and debt.

“The legal and management teams of both groups are working on the mechanics, which would become clear in coming weeks.” By seeking to add ‘separation’ from Tata group as an additional relief, the Mistry firms are making it clear that they are not keen on an out-of-court settlement.

“Court would want to satisfy itself that the parties are serious about the exit and resolution. It would not want to go into a full-fledged hearing and would like to exhaust all options to arrive at an amicable solution. It would find a way for the Mistry family to exit, which will be a win-win for both,” said Ramesh Vaidyanathan, founding partner, Advaya Legal.