Lok Sabha MP alleges deliberate delay in Tata Sons IPO, seeks govt intervention

Lok Sabha MP from Nalanda Kaushalendra Kumar has alleged that an initial public offering (IPO) for Tata Sons is being deliberately postponed, urging Finance Minister Nirmala Sitharaman to intervene in the matter. The four-time LS MP also said that the Tata Sons IPO could generate a lot of investment and provide a boost to the domestic stock market.

The allegations comes as the Reserve Bank of India scrutinises an application from Tata Sons, which is the holding company of the Tata Group, one of India's largest conglomerate, to be exempted from an IPO. As per regulations of the Reserve Bank of India, an upper-layer non-bank financial company (NBFC) has to be listed on the bourses within three years of being declared as one.

In the case of Tata Sons, it was first classified as an NBFC-upper-layer entity in September 2022, which means, it has time until September 2025 in order to go public.

Kumar also raised the issue of a possible conflict of interest in Tata Sons' board membership:

"I am writing to draw your attention to a matter of significant concern that has been raised repeatedly in recent news reports and is beginning to impact public perception about key institutions. Mr. Venu Srinivasan, Chairman Emeritus of TVS Motor Company, currently serves on the boards of both Tata Sons and the Reserve Bank of India (RBI). This dual role has created a situation that may represent a conflict of interest, and concerns are growing about its potential impact on the credibility of these institutions," he said.

The MP hinted that Tata Sons may leverage Srinivasan’s position at the RBI to avoid regulatory hurdles, particularly with regard to listing requirements.

"The allegations suggest that his direct access to the RBI may be used to benefit Tata Sons in a manner that undermines the integrity of financial oversight. Such practices can seriously tarnish the reputation of the RBI and, in turn, the Government of India."

Kumar also suggested that there this situation could compromised the RBI's independence and have far-reaching consequences on investor confidence and the broader financial ecosystem. "Similarly, the actions of influential corporate figures should not cast doubt on the transparency and accountability of government institutions," he said.

In light of this, Kumar urged the Finance Ministry to intervene in the matter by  reviewing Srinivasan's roles and the implications for both Tata Sons and the RBI to ensure that public confidence in these institutions is not eroded.