Mistry family's 18.37% stake worth Rs 80,000 cr: Tata Sons tells SC

Tata group on Tuesday told the Supreme Court that the valuation of Shapoorji Pallonji (SP) Group's stake in the salt-to-software conglomerate is between Rs 70,000 crore and Rs 80,000 crore. This is markedly lower than the Rs 1.78 lakh crore sought by the Mistry family for selling its stake in Tata Sons held via SP Group.

In its petition to the apex court, the SP Group on October 29 had submitted to end its seven-decade-old ties with the Tata group and quoted Rs 1.75 lakh crore as the value of their 18.37 per cent stake in Tata Sons. It proposed that its share of the Tata brand and of unlisted group companies be settled in cash or in marketable securities. However, the Tata group has disputed this valuation.

SP Group had submitted before the apex court that disputes over valuation can be eliminated by doing a pro-rata split of listed assets (share price value is known) and pro-rata share of the brand (brand valuation already done by Tata and published). A neutral third-party valuation can be done for the unlisted assets adjusted for net debt (i.e. debt less cash).

The 18.37 per cent stake owned by Mistry family in Tata Sons is worth as much as Rs 80,000 crore, Tata group's lawyer Harish Salve told a Supreme Court bench headed by Chief Justice S A Bobde. The court was hearing the cross appeals filed by Tata Sons and Cyrus Investments against NCLAT's order which had restored Cyrus Mistry as the executive chairman of the over $100 billion salt-to-software Tata conglomerate.

"Their investment has gone up... on our calculation, I think his share should be worth Rs 70,000-Rs 80,000 crore," Salve told the court.

Salve said the company has been "run amazingly" and between 1991 and 2012, the market cap of Tata Group went up 500 times.

However, the apex court referred to the documents placed on record before it and said the 18.37 per cent share of SP Group was valued at Rs 58,000 crore in March 2016.

The Supreme Court had on January 10 granted relief to Tata group by staying the National Company Law Appellate Tribunal (NCLAT) order of December 18 last year by which Mistry was restored as the executive chairman of the conglomerate. Mistry had succeeded Ratan Tata as chairman of Tata Sons in 2012 but was ousted four years later.

The top court had on September 22 restrained SP Group and Cyrus Mistry as also his investment firm from pledging or transferring their shares of Tata Sons. On September 5, Tata Sons had moved the apex court seeking to restrain the Mistry group from raising capital against their shares. It sought to prevent SP Group from creating any direct or indirect pledge of shares.

Tata Sons had made the averments in an affidavit filed in the apex court while responding to the cross-appeal filed by Cyrus Investments seeking removal of alleged anomalies in the NCLAT order for getting representation on the company's board in proportion to the stakes held by his family.

Mistry had also filed an affidavit to the apex court saying the Tata Group had an adjusted net loss of Rs 13,000 crore in 2019 -- the worst losses in three decades.

With PTI inputs

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