Tata Sons repays ₹20,000 crore debt to avoid mandatory listing

Tata Sons surrendered its RBI registration after repaying over ₹20,000 crore in debt to remain unlisted. This allows it to stay a closely held company.

Tata Sons voluntarily surrendered its certificate of registration to the Reserve Bank of India (RBI) after repaying over ₹20,000 crore in debt in order to remain an unlisted entity, it was reported. Following this, Tata Sons can maintain its status as a closely held company without listing its shares on the stock exchange which is required under RBI regulations, The Economic Times reported.

Tata Sons repaid ₹20,300 crore in debt and surrendered its RBI registration, avoiding listing requirements and maintaining its status as a closely held company.(Reuters)

The repayment amounts to ₹20,300 crore and is a significant reduction in Tata Sons’ liabilities, excluding only non-convertible debentures and preference shares worth ₹363 crore. Tata Sons allocated ₹405 crore in deposits with the State Bank of India (SBI) and provided an undertaking to the RBI as part of the surrender of its registration certificate.

The RBI classified Tata Sons as a Non-Banking Financial Company – Upper Layer (NBFC-UL) in September 2022 owing to which companies are required to list within three years.

Tata Sons has achieved a 57 per cent surge in net profits at ₹34,654 crore in the financial year ending March 2024 during which revenues witnessed a 25 per cent increase to ₹43,893 crore from ₹35,058 crore in the previous year.

The company’s total expenses saw a significant decline of 27 per cent in FY24, dropping to ₹2,776 crore from ₹3,794.70 crore in FY23. Meanwhile, the return on equity, before exceptional items and tax, stood at 38.15 per cent for FY24.