Tata Sons IPO Valuation: Spark PWM Predicts up to Rupees 8 Trillion

In an Initial public offering (IPO) that might take place within the next 18 months, Tata Sons Ltd. is expected to garner a valuation of up to ₹8 trillion ($96 billion), according to a Bloomberg article that cited Mumbai-based investment banking company Spark PWM Pvt.

According to the Bloomberg report, analyst Vidit Shah stated in a note dated March 4 that "there are multiple levers of value available from the unlisted investments as the group is entering into new age segments such as Semi-conductors" and EV batteries, which could deliver significantly higher value over time.

Tata Sons was categorized by the Reserve Bank of India (RBI) as an "upper-layer" non-banking financial business in September 2022. Among other things, the category requires that these companies look for a public listing within three years.

According to the source, which cited Shah, Tata Sons' privately held interests are estimated to be worth between ₹1-2 trillion, while the company's listed investments are valued at ₹16 trillion.

It also said that investors should factor in a 30–60% markdown for the holding firm.

The IPO market will rebound with the Tata Sons listing.

Many corporations have been eager to sell shares in the IPO market since prices have increased recently.

As per Bloomberg, an Initial public offering (IPO) might also result in the "simplification of the complicated group holding structure of the Tata Group," wherein certain listed corporations would sell off their shares in the software-to-salt conglomerate.

Shah said, "We think that about 80% of Tata Sons' holdings may not be monetarily viable at this time," according to Bloomberg. There might be a re-rating, nevertheless, as a result of the reorganization process."

In his comments, Shah emphasizes how restructuring may be used to improve Tata Sons' holdings' market reputation and financial sustainability.

Even five percent of the firm would be worth more than Life Insurance Corp of India's $2.7 billion initial public offering in 2022, given the company's highest valuation of $96 billion.

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