Winning Bizness Desk

Tata Sons IPO Controversy: A Legal Battle Unfolds, IPO Expected to Be India's Largest

Mumbai. Tata Sons' long-awaited Initial Public Offering (IPO), anticipated to be the largest in India, remains mired in controversy. If the company decides to sell even a 5% stake, it could raise an estimated ₹55,000 crore. However, regulatory hurdles and legal challenges have delayed the listing, which was expected to hit the market by September 2025. The latest development involves a legal notice sent to the Reserve Bank of India (RBI), escalating the dispute further.

RBI Drawn Into the Dispute

The controversy intensified after a legal notice alleged conflicts of interest and irregularities in RBI's handling of Tata Sons' IPO case. The notice specifically raises concerns about Venu Srinivasan, a director on RBI’s board since 2022 and a key member of the Tata Trusts. It argues that his dual roles create a conflict of interest, undermining RBI's ability to make independent and impartial decisions regarding Tata Sons.

Allegations of Regulatory Violations

The notice accuses RBI of failing to enforce regulations consistently. For instance, Tata Sons has reportedly requested to deregister itself as a Core Investment Company (CIC), a move the notice claims is legally questionable. According to an RTI response, RBI is currently evaluating Tata Sons' application to surrender its CIC registration. Critics argue that such deregistration could allow Tata Sons to avoid stricter regulatory scrutiny.

IPO Deadline and Pending Listings

RBI's Scale-Based Regulation (SBR) requires 15 companies in the upper regulatory tier to list on the stock market by September 2025. Of these, 11 have already complied, while Tata Sons and three others are yet to list. The notice questions why Tata Sons should be exempted from this requirement, especially when other companies have adhered to the rules. Granting an exemption, it asserts, would be legally inappropriate.

Public Interest Concerns

The notice highlights that Tata Sons, despite settling debts recently, indirectly accesses public funds and should not be allowed to avoid listing requirements. The company has reportedly sought exemptions by surrendering its CIC status. Opponents argue that this move could set a dangerous precedent and harm public, borrower, and investor interests.

India’s Largest IPO in Jeopardy

If Tata Sons proceeds with its IPO, it would surpass all previous IPOs in India in scale. By selling just a 5% stake, the company could raise ₹55,000 crore, showcasing its massive valuation. However, the ongoing legal and regulatory challenges have cast uncertainty over the timeline and feasibility of the listing, leaving investors eagerly awaiting further developments.