Will Tata Group shares halt their one-way rally? Check details here

Stocks to Watch on Monday, March 11: As per multiple news reports, Tata Sons is mulling restructuring its balance sheet to get an exemption from the RBI from getting listed on the stock exchanges

Tata Group shares may witness profit booking on Monday, March 11, amid reports that the company is looking at ways to avoid going public next year.

As per multiple news reports, Tata Sons is mulling restructuring its balance sheet to get an exemption from the Reserve Bank of India (RBI) from getting listed on stock exchanges.

For the unverse, the RBI's rules state that if a 'core investment company' doesn't own more than Rs 100 crore in assets and doesn't raise public funds, then it "neatly sidesteps RBI's grip, freeing itself from being considered as a CIC and 'upper layer' NBFC, and is not required to go for a public listing". 

 

At present, Tata Sons is registered as a CIC with the RBI and has been classified as an 'upper layer' NBFC, which mandates the company to follow a strict regulatory structure and requires it to list on the public market within three years of being notified. The deadline for the same is September 2025. 

During the past one week, shares of Tata Group including Tata Chemicals, Tata Elxsi, Rallis India, Tata Power, Nelco, Tata Teleservices, and Tata Motors rallied up to 36 per cent amid the optimism that the listing of Tata Sons will unlock value and lead to the simplification of the complicated group holding structure.

"Recent news reports indicated that the company can fetch a valuation of Rs 11 lakh crore and the IPO size will likely be around Rs 55,000 crore. We believe that 80 per cent of Tata Sons' holdings may not be monetisable but the process of restructuring can trigger a re-rating," as per Spark Capital.

Assuming a market value of Rs 7 trillion for Tata Sons, Tata Chemicals’ 3 per cent stake in Tata Sons is worth Rs 21,000 crore — nearly 62 per cent of its current market capitalisation.

In the past two days, the stock price of Tata Chemicals surged 27 per cent, which in past six trading days, it zoomed 44 per cent.

With reports saying that N Chandrasekaran-led company is exploring options of transferring its debt to a separate entity so that it is excluded from the 'upper layer' list, the conglomerate's much-awaited listing is unlikely.