Tata Sons turns 105! Here’s how much it is worth

This November, Tata Sons, the holding company of the Tata Group, completed 105 years of incorporation. While the Tata Group, with cumulative sales of ₹9.6 lakh crore, was founded as a private trading firm in 1868 by the-then 29-year-old Jamsetji Nusserwanji Tata, it was only on November 8, 1917, that Tata Sons sprung to life as a private limited company under the Companies Act, 1913.

What differentiates the conglomerate from other family-owned businesses is the group’s unique ownership structure — a majority stake (65.30%) is held by seven trusts whose stated intent is to deploy the dividend income accrued towards a gamut of philanthropic initiatives. Of the seven trusts, Sir Dorabji Trust and Sir Ratan Tata Trust collectively hold 51.54%.

Fortune India-Waterfield Advisors has valued Tata Sons at ₹14.04 lakh crore ($176 billion) based on its direct holdings in 15 listed group companies (including one non-group company), worth ₹12,42,296 crore ($156 billion) and 40 unlisted subsidiaries at ₹1,62,323 crore ($20.36 billion). Based on the company’s FY22 consolidated revenue of ₹3,10,257 crore, the multiple works out to 4.5 times.

While the wealth of 84-year-old Ratan Tata and his little-known younger brother, 81-year-old Jimmy Tata, is collectively valued at ₹23,874 crore ($2.99 billion), that of the chairman emeritus' half-brother, Noel Tata, is pegged at ₹14,014 crore ($1.76 billion). Ratan Tata's individual wealth is estimated at ₹12,609 crore, of which a majority (92% or ₹11,639 crore) is on account of his 0.83% stake in Tata Sons. The remainder ₹971 crore is the value of his holding in 28 start-ups, as per data from Tracxn.

While Ratan Tata and Jimmy Tata hold 0.83% and 0.81%, respectively, in Tata Sons, Noel Tata owns 1%. The 0.80% stake held by the family of late Minocher Tata, who comes from the Saklatvala family lineage and grandnephew of Tata Group founder Jamsetji Nusserwanji Tata, is estimated at ₹11,127 crore ($1.40 billion).

The 18.41% stake held by the Mistry family is worth ₹2,57,994 crore ($32.35 billion). The stake, as mentioned in the book, The Story of Tata: 1868 to 2021, was acquired in three tranches between 1967 and 1974.

In August 2018, at the peak of the Mistry-Tata tussle, Tata Sons received approval from the Registrar of Companies (RoC) to change its status from a deemed public limited company to a private limited one. Incidentally in 1976, on the basis of turnover, Tata Sons was deemed to be a public company as per Section 43(A) of the Companies Act, 1956. The shareholders of Tata Sons had passed a resolution favouring the conversion at an annual general meeting on September 21, 2017.

The RoC move came as a setback to the Mistry family, which was involved in a legal wrangle with the Tatas since December 2016, following the sudden dismissal of the late Cyrus Mistry as chairman of Tata Sons. The RoC development has effectively restricted the family from selling the stake to any external investor without the prior consent of Tata Sons.

Though the National Company Law Appellate Tribunal had censured the Tatas over the conversion, the SC in its final hearing stated that Tata Sons satisfied the requirements of Section 2(68) of the Companies Act, 2013 and the request to the RoC for an amendment of the certificate was a mere recognition of the status of the company and not a creation of this status.