Shapoorji Pallonji group’s new offer unlikely to sway Tatas

The Shapoorji Pallonji (SP) group’s supply to swap its stake in Tata Sons Ltd for shares in publicly traded Tata group corporations is unlikely to search out help at Bombay House, the company headquarters of India’s largest conglomerate.

The supply in its present kind might not be enticing to the group, an individual near the Tata group mentioned, including that the supply departs from the preliminary acknowledged intent of the SP group to hunt a whole separation from the Tata group.

Accepting the supply within the present kind will danger giving the SP group extra say within the listed Tata corporations, which might not be within the curiosity of Tata Sons, he added.

While the supply to swap Tata Sons’ holdings for listed Tata shares is not going to require the Tatas to boost big sums of cash, authorized specialists mentioned that the supply is perhaps a double-edged sword for the Tatas and a double bonanza for the SP group.

“Tata would have to allow the direct entity of the SP group in the listed entities as a significant minority shareholder and also cough up proportionate value for the brand value,” mentioned Jeeva Rajagopal, companion, Fox and Mandal, a regulation agency.

“SP group, on the other hand, would get access to the potential for immediate liquidity and also directly mobilise other minority shareholders to join SP in vetoing critical decisions of the listed entities,” mentioned Rajagopal.

Tata would, nonetheless, profit from not having to liquidate property to purchase the SP stake in Tata Sons, he mentioned, including that the proposal will seemingly die a pure demise by extended valuation discussions.

“That is, if at all Tata decides to play ball, even if only to appease the Supreme Court,” mentioned Rajagopal.

The newest transfer by the Mistry group to hunt cashless settlement marks a departure from an earlier stance the place it was contemplating accepting staggered funds from Tata Sons over an prolonged time period.

The association will assist cut back the potential for any further debt on Tata group, the Mistry household mentioned within the utility filed within the Supreme Court. The supply will probably be a part of the plea for reduction the Mistry household is searching for from the court docket in a minority shareholder oppression case.

The subsequent listening to of the case is scheduled for November 3.

“This seems to be a clever move by the Mistry family, but this is just one of the proposals that will go in front of the mediators,” mentioned Ramesh Vaidyanathan, managing companion, Advaya Legal.

However, he added that the presence of SP group companies on listed Tata corporations is unlikely to affect these corporations a lot.

An e mail despatched to Tata Sons didn’t elicit a response.