Listing may change Tata way and prioritise profit over philanthropy: Noel Tata
Tata Trusts chairman Noel Tata warned that a public listing of Tata Sons could fundamentally alter the group's century-old ownership structure.
Tata Trusts chairman Noel Tata said on Saturday that a potential public listing of Tata Sons could change the group's operating philosophy. Speaking at the HT Leadership Summit, Tata expressed concern that having 30,000 to 40,000 shareholders might cause profit to take precedence over philanthropy.
According to reports from The Times of India, Financial Express, and Business Standard, the remarks come as Tata Sons faces pressure to comply with Reserve Bank of India (RBI) regulations. These rules require the holding company to list as an upper-layer non-banking financial company (UL-NBFC).
Tata noted that 66 per cent of Tata Sons' profits are currently used for philanthropic causes. He argued that the current structure provides continuity because the owner is an institution that cannot die, be bought, or retire. He added that staying private allows Tata Sons to act as a backstop for group companies in trouble.
While Tata opposed the listing, some Tata Trusts trustees, including Venu Srinivasan and Vijay Singh, have argued that listing and philanthropy can coexist. They suggested a listing could strengthen governance and transparency without diluting the Trusts' controlling stake.
Noel Tata also addressed the group's strategic direction, stating that while the direction is fine, there is a need for greater discipline in the execution of large projects. He said he does not question the direction but questions the delivery of what the group is doing.