Noel Tata urges Tata Sons board to review Rs 25,000 crore SP Group funding plan and Trusts' restructuring proposal

Tata Sons director Noel Tata has written to the company secretary requesting that the board examine two separate proposals at its November 26 meeting. The first concerns a Rs 25,000 crore funding request from minority shareholder Shapoorji Pallonji (SP) Group, which would be financed through a selective reduction of Tata Sons’ issued share capital and a staged buy-out of SP’s 18.38% stake. Noel Tata asked management to present valuations, legal and regulatory implications, funding sources and implementation timelines for the capital-reduction scheme.

The second request seeks a detailed review of a restructuring plan put forward by Sir Dorabji Tata Trust and Sir Ratan Tata Trust. The plan proposes merging Tata Electronic Systems Solutions and Tata Consulting Engineers into Tata Sons, converting the holding company into an operating entity and thereby moving it out of the regulatory definitions of a core investment company and an upper-layer non-banking financial company. The trusts argue that the combined operating revenue of about Rs 1.05 lakh crore by March 2026 would satisfy the RBI’s criteria for a voluntary NBFC amalgamation.

Both proposals require shareholder approval, regulatory clearances and, in the case of the SP Group funding, a special resolution and consent from SP shareholders. Noel Tata also noted that senior adviser Farokh Subedar of Sir Dorabji Tata Trust is available to discuss the funding proposal if needed.

Analysts have observed that the formalisation of these matters reflects growing divisions within the board, which previously showed differing views on the reappointment of chairman N Chandrasekaran and the potential listing of Tata Sons. No decision has been taken yet, and the board has been instructed not to make public announcements on either proposal without approval.