M&A

M&A

Tata Trusts proposes two mergers to avoid Tata Sons listing

Press Release   Mint   Tata Sons  

Tata Trusts, which holds a 65.9% stake in Mumbai-based Tata Sons, has proposed a restructuring plan that involves merging two operating companies, Tata Electronics Systems Solutions and Tata Consulting Engineers , into Tata Sons . This proposal is intended to enable the firm to move out of the core investment company (CIC) category, thereby exempting it from the Reserve Bank of India’s (RBI) requirement to list on stock exchanges. Tata Electronics Systems Solutions is an electronics manufacturing unit, while Tata Consulting Engineers is an engineering and project management firm. Tata Trusts has submitted this restructuring proposal to Tata Sons chairman N. Chandrasekaran and the RBI for review.The proposed merger aims to shift the composition of the company’s assets and revenues to align with an operating entity status. The combined company would have net assets of INR 2,00,158 Cr, with investments in group firms totaling INR 1,77,120 Cr. Under this plan, the firm would generate INR 1,05,043 Cr in operating revenues, significantly exceeding its income from financial assets.The proposal faces practical challenges as the Tata Sons board had previously resolved to comply with RBI regulations and remains divided on the matter of the company’s listing and leadership.