Tata Sons has paid back a 20,000 crore rupees loan. It is the holding company for the largest industrial group in the country, Tata Group.
The company also requested that the Reserve Bank of India surrender its Certificate of registration. Separately, the company has deposited 405 crore rupees at the State Bank of India.
After this strategic move, the company will not need to be listed. If the company had not repaid this loan, it would have had to be listed according to RBI rules.
But Tata Sons has paid off a loan of more than Rs 20,300 crore. According to the company’s annual filing, this does not include non-convertible debentures and preference shares amounting to Rs 363 crore.
The company has separately deposited Rs 405 crore with the State Bank of India (SBI) for these.
Tata Sons says that along with surrendering its registration certificate, it has also given an undertaking to the RBI in this regard.
Tata Sons, as a core investment firm, borrows money to invest in the group’s companies from banks and financial markets. In September 2022, RBI classified Tata Sons NBFC Upper Layer.
According to RBI regulations, NBFCs-UL must be listed three years after their classification. But since the promoter risk profile has come down drastically after the loan repayment, Tata Sons does not require listing.
The central bank has accepted the offer to surrender the registration certificate.
Dividends of Rs 35,000 per share
Tata Sons paid its shareholders a dividend per share of 35,000 rupees, which is the highest ever. Dorabji Tata Trust, with a 28 % percent stake in Tata Sons, is the biggest shareholder.
It is followed by Ratan Tata Trust. He has a 24% stake in the company. Sterling Investment, Cyrus Investment and Tata Motors are also shareholders.
According to data, Tata Sons received dividends of about ₹24,000 crore from its 13 listed companies.
Tata Consultancy Services (TCS) paid a dividend of about ₹19,000 crore to Tata Sons in FY24. Tata Steel and Tata Motors, who paid 1,450 crore rupees and 2,000 crore rupees respectively, followed.
Tata Sons reported a net profit of 34,654 crore rupees for the FY24 financial year, up 57 % from the FY23 annual report. The company’s revenue grew 25% to ₹43,893 crore in FY24, compared to ₹35,058 crore a year ago.
Tata Sons has not responded to any emailed questions on this. Tata Sons’ net debt was 20,642 crore rupees as of March 31, 2023.
As of March 31, 2020, the company has cash in the amount of 2,670 crore rupees. Tata Sons reduced its debt in FY23 by 25%. In March 2024, Tata Sons raised about ₹9,300 crore by selling 23.4 million shares of TCS.
Stake in TCS
Tata Sons raised more than Rs12,000 crore in December by tendering 29.6 million shares of TCS in a buyback. Tata Sons stake in TCS dropped from 72.38 percent to 71.74 percent after the stake sale.
The company stated in its annual report that it had invested in new and existing business based on the capital requirements, growth, and to reduce their balance sheet.
In FY24, the market value of Tata’s listed investments increased by 35.7% from 11,21 lakh crore rupees to 15,21 lakh crore rupees.
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