What’s behind the boardroom rumblings, explained in numbers

Disagreements over control over board appointments, corporate governance and strategic decisions have reached key ministers in the central government as well as the Reserve Bank of India (RBI). As individuals in the boardroom make the necessary maneuvers, the broader drama unfolds at the corporate level. Who are the key actors, what are their obligations, and what guides their actions? Mint is investigating.

Tata Sons: Shareholder differences

Tata Sons Pvt. Ltd is the main unlisted holding company of the Tata Group. According to its 2024-25 annual report, it has stakes in 355 subsidiaries, 39 joint ventures and 48 subsidiaries. Tata Sons receives dividends from group companies every year. ₹36,149 crore in 2024-25 and its stakes in Tata Group companies are worth significantly. However, for Tata Sons shareholders to make money from this value, the company must be listed on the stock exchange.

This potential listing has become a flashpoint between its two main shareholders: Tata Trusts, a group of charitable trusts, which owns about 66% stake, and Shapoorji Pallonji (SP) Group, which owns about 18% stake. While Tata Trusts wants Tata Sons to remain private, SP Group wants it to go public. In September 2022, the RBI classified Tata Sons as an “upper tier” non-banking finance company (NBFC) and set September 2025 as the deadline for listing. Tata Sons has since retired debt as a tool it can use to waive listing.

SP Group: Cash obligation

SP Group first invested in Tata Sons in the 1930s. But the once friendly relationship has now turned into a rift.

Tata Sons’ former chairman Cyrus Mistry, who was sacked in 2016, came from SP Group, which has long been pushing for an IPO to monetize its 18% stake, which is now valued between 2016 and 2016. ₹1.5 trillion and ₹3 trillion. Earlier this month, Shapoorji Pallonji Mistry published a two-page statement calling for listing in the name of “transparency and good governance”.

SP Group, whose main field of activity is construction, is stuck in debt. Its flagship company is Shapoorji Pallonji and Company Pvt Ltd and operates as a holding-operating company. This February, credit rating agency Icra Ltd reaffirmed its ‘BBB’ rating with a negative outlook on the company’s long-term debt, highlighting “ongoing stress on its liquidity position”. BBB ranks fourth on an eight-point scale, indicating “moderate credit risk.” Tata Sons’ IPO will help SP Group monetize its shares amid debt stress.

Tata Trusts: Custody value

Unlike SP Group, Tata Trusts does not face immediate financial pressures.

It is at the top of the Tata Group pyramid with a 66% stake in Tata Sons. This three-step corporate structure (operating companies, holding company and foundation) was intended to ensure a seamless and ongoing alignment between the group’s corporate interests, ownership values ​​and philanthropic goals.

Tata Trusts operates in the field of philanthropy. Disbanded in 2024-25 ₹902 billion in grants, about 85% of which goes to corporate projects or direct spending, and the rest to individuals. As the largest shareholder of Tata Sons, it is the main beneficiary of dividend payments that fund large-scale philanthropic activities. At the operational level, Tata Trusts also ensures that financing requirements are adequately met. This also affects key Tata Sons appointments that are vital in deciding whether and when Tata Sons will go public.

Tata Sons: Distribute and invest

As a holding company, Tata Sons manages both incoming and outgoing cash flows. As of March 31, 2025, only 81 of the group’s 1.15 million employees were directly employed by Tata Sons. On the revenue side, there are two main streams. The first are dividends from group companies: dividends received from group companies, which tend to be stable except for extraordinary disruptions such as the 2008 global financial crisis or the COVID pandemic, and proceeds from asset or business sales, which are unstable.

On the expenditure side, Tata Sons distributes dividends to its shareholders. But the amount it pays out in dividends is dwarfed by the investments it makes in many of the expanding Tata Group’s businesses. For example, in the last six years Tata Sons has invested approx. ₹1 trillion in subsidiaries and associate companies. Even during the Covid-affected years 2020-21 and 2021-22, when group companies reduced dividend payments, Tata Sons ₹30,000 crore as investments in group companies.

Tata companies: old and new

According to Tata Sons’ annual report, the group has performed well overall in the last five years. Between 2019-20 and 2024-25, consolidated revenues of all Tata companies increased by 1.9 times, operating profit by 1.8 times and net profit by 3.6 times. The market value of its listed companies has almost tripled. ₹9 trillion ₹28 trillion.

This happened under the tenure of N. Chandrasekaran, the second non-Tata to be appointed chairman of Tata Sons after Cyrus Mistry. Earlier this month, it was reported that Tata Trusts had given it an extension until 2032.

The list of top 10 companies by revenue shows that the group has managed to grow its existing businesses well and diversify into new business areas, primarily airlines (Air India), electronics manufacturing (Tata Electronics) and online commerce (Tata Digital). In addition to this continuing, unrest in management and shareholding will also need to be resolved.

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