Whenever the Tata Sons IPO comes, it will break records. First of all, this will be the largest IPO to date. The size of which can be 55 billion rupees. But there is a problem regarding the country’s potential largest IPO. In fact, Tata Sons has been accused of conflict of interest. In fact, Tata Sons is still trying to avoid going public. For this, Tata Sons is supported by the scale-based regulatory framework of the RBI. This controversy has become even more complicated because Tata Sons vice-chairman Venu Srinivasan is also a member of the RBI board. Let us also tell you what it is about.
What are the RBI rules?
RBI had prepared SBR rules. According to which it is mandatory for all non-banking financial companies to be listed on the stock market. The deadline for which has been set in September 2025. A list of about 15 of these companies was published. In which many companies have been listed. Tata Sons’ name is also among the companies that have not listed. Tata Sons has demanded a concession from the RBI in this matter. On which the banking regulator has not taken any decision. Experts believe that Venu Srinivasan is a member of the board of directors of RBI and Tata Sons. In such a situation, this entire matter is related to a conflict of interest.
what is the accusation
About two years ago, in June 2022, Venu Srinivasan was appointed as a member of the RBI Central Board of Directors for four years. In such a situation, Srinivasan is accused of conflict of interest. On the other hand, Tata Sons is trying to avoid listing by repaying its loan and voluntarily surrendering the registration certificate. Experts believe that Srinivasan’s presence on the RBI board raises many questions. It has a direct connection with Tata Trust, the entire impact of which is visible in Tata Sons.
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Guidelines were issued
The RBI issued the SBR guidelines on October 22, 2021. Under which some non-banking financial companies were asked to list in the stock market. Especially these companies were classified in the upper layer of the SBR structure. These guidelines were implemented from October 1, 2022. What is special is that the specific instructions on IPO financing came into effect from April 1, 2022. Later, on June 14, 2022, Srinivasan was inducted into the board RBI directive.
What do the experts say?
Experts say Tata Sons’ IPO could unlock substantial value for shareholders, estimating that even a 5 per cent stake could raise more than Rs 55,000 crore. This will increase market liquidity and trading volume. Additionally, the listing will improve liquidity for existing shareholders and enhance the visibility of the Tata Sons brand. As of June 2024, Tata remains India’s most valuable brand, valued at $28.6 billion.
