ET NEWS

Mumbai: New Delhi is stepping in to ease the turbulence building up at a critical Mumbai institution, amid mounting concerns that infighting at majority shareholder Tata Trusts could begin to impede the functioning of Tata Sons, India's most valuable business conglomerate.This week, two senior cabinet ministers will meet with four key officials of Tata group in the National Capital to discuss recent developments that have sparked concern.Tata Trusts chairman Noel Tata, vice-chairman Venu Srinivasan, Tata Sons chairman N Chandrasekaran and Tata Trusts trustee Darius Khambata are the officials who will take part in the meeting early this week. Public charitable trusts under the Tata Trusts umbrella control Tata Sons, the holding company of the 157-year-old, $180-billion, salt-to-semiconductors group.The meeting has two principal agendas, multiple people familiar with the development said. One is to discuss ways to ensure the divisions among the trustees of Tata Trusts, the majority shareholder of the group, get contained and don't impact the functioning of Tata Sons and the companies under it. Second is to discuss the way forward on the question of a public listing of Tata Sons, required under a regulation the Reserve Bank of India brought in three years ago. 124328263ET first reported on the contentious September 11 meeting of the Tata Trusts, bringing into the public domain deep divisions that have developed among trustees about a year after the death of long-serving group patriarch Ratan Tata. The trustees stand divided over a key lever of control the Trusts have over Tata Sons. This is the appointment of nominee directors to the board of Tata Sons and how much information on board deliberations is shared with the rest of the trustees.But what has sparked wider concern is the manner in which Vijay Singh, a former defence secretary, was ousted as a Tata Sons nominee director. The disruptive conduct of one trustee, in particular, has now come under wider scrutiny.ET reported on September 12 that Venu Srinivasan and Noel Tata opposed the ouster of Singh as well as the proposal to appoint Mehli Mistry, another trustee, to the board. Mistry's appointment was supported by trustees Pramit Jhaveri, Darius Khambatta and Jehangir Jehangir.It's unclear if the position of the trustees has changed since the meeting. A Tata Trusts meeting is now due on October 10.An email by one of the trustees to the others, which is being seen as a veiled threat to remove Venu Srinivasan from Tata Sons board during an upcoming meeting in a manner similar to Singh, has also escalated hostilities. "This is being seen as a move to hijack Tata Sons and wrest control, thereby affecting the entire operations of the conglomerate," one official familiar with the developments said.ET has reviewed a copy of this email. It is understood that in their deliberations in New Delhi, the officials are likely to push for a solution that allows for smooth conduct of Trusts' affairs.Tata officials who are set to be part of the meeting did not respond to email queries requesting comment.The turbulence at the Trusts has become a talking point among group executives and other stakeholders. The company has a number of board positions to fill, for instance. It's difficult to proceed with the board restructuring before the Trusts make a decision on nominee directors.The timing of the meeting also coincides with a crucial regulatory deadline for Tata Sons. September 30 marked three years since the Reserve Bank of India notified it as an 'upper layer' shadow bank, or non-banking financial company, mandated to list within three years.In March 2024, Tata Sons applied to RBI to deregister itself as an NBFC, seeking exemption from the listing requirement and the regulatory framework that comes with it. The regulator is yet to respond.Shapoorji Pallonji Group, which holds an 18.37% stake in Tata Sons even as it's been struggling to manage its debt, has been pushing for a listing to unlock liquidity.Officials said the government is particularly concerned after being apprised that some trustees have been demanding access to board agendas and minutes, wanting that key decisions be made with their prior approval, and questioning the appointment of independent directors. "A trustee has also been witch-hunting Tata Sons board members on important decisions taken around some group companies," one official said.The disquiet within Tata Trusts has been simmering for months, insiders said, with sharp divisions surfacing as terms of key trustee are coming up for renewal. The process of term extensions, which requires unanimity, may prove contentious amid charges of conflict of interest, questions over slack financial disclosures by some trustees, and a number of other issues.

ET Intelligence Group: Tata Capital, the lending arm of Tata Sons, plans to raise ₹6,846 crore through fresh equity to augment its capital base and ₹8,665.9 crore through an offer for sale. The promoter's stake will fall to 85.5% after the IPO from 95.6%. The issue is priced at a discount to peers, reflecting its lower margin and return ratios. Given these factors, investors may prefer to wait and watch the company's financial performance after listing.BusinessIncorporated in 2007, the third-largest NBFC by loan book reported a strong growth in gross loans to ₹2.3 lakh crore by June 30, 2025 from ₹1.2 lakh crore as of March 31, 2023. Secured loans made up 80% of this portfolio. The lender primarily serves retail and SME customers, who accounted for 87.5% of the total gross loans as of June 30, 2025. Its loan book is highly granular, with ticket sizes ranging from ₹10,000 to over ₹100 crore. The number of branches grew to nearly 1,500 by March 2025 from 539 in March 2023. A merger with Tata Motors Finance (TMF) in May 2025 increased Tata Capital's loan book and customer base by ₹30,227.2 crore and 2.5 million respectively. However, the new loan book came with a much higher gross non-performing asset (NPA) ratio of 7.1% compared with Tata Capital's NPA level of around 2%.124328203FinancialsNet profit rose to ₹3,665 crore in FY25 from ₹3,029 crore in FY23. Net interest income nearly doubled to ₹10,690 crore from ₹5,310 crore during the period, but the net interest margin (NIM) stayed range-bound between 5.1% and 5.2%, remaining below peers including Bajaj Finance at 9.5%, and Cholamandalam Investment and Finance at 7.8%. The lower NIM can be attributed to a surge in operating expenses to ₹5,613 crore in FY25 from ₹2,665 crore in FY23, driven by aggressive branch expansion.Given its relatively low exposure to unsecured loans, the company's yield on advances stood at 12.6%, trailing 14-18% for peers. Return on assets fell to 1.8% in FY25 from 2.9% in FY23, lower than the peer range of 2.3-4.6%. Return on equity also slipped to 12.6% from 20.6% in FY23, while peers reported returns between 11% and 19%.Tata Capital's gross NPAs increased to 2.1% as of June 2025 from 1.7% in FY23. By comparison, Bajaj Finance reported a gross NPA of 1%, while it remained at 4.5% and 4.3% for Shriram Finance and Cholamandalam Investment, respectively, as of June 2025.ValuationAt the higher price band, the issue is valued at a price-book multiple (P/BV) of 3.4 compared with 6.5 for Bajaj Finance and 5.7 for Cholamandalam Investment while HDB Financial Services and Sundaram Finance trade at a P/B of around 3.9.

Israel and Hamas are set to begin US-mediated negotiations on Monday aimed at ending a two-year conflict that has devastated Gaza and destabilized the Middle East, after US President Donald Trump hailed Hamas' offer to release all hostages.Egypt, a key intermediary in truce talks, will host delegations from both sides to discuss a possible exchange of Israeli hostages for Palestinian prisoners. US special envoy Steve Witkoff and Trump's son-in-law Jared Kushner are also travelling to Egypt to take part in the talks, which follow Hamas's request to discuss elements of Trump's 20-point plan to end the war. An Israeli official said the military had assumed a defensive posture in Gaza City, while Hamas reported that airstrikes and shelling continued, killing dozens in the enclave's de facto capital.Trump called Israeli Prime Minister Benjamin Netanyahu over the weekend to celebrate Hamas' offer, Axios reported Sunday. Netanyahu, however, called it "meaningless," prompting Trump to tell him, "This is a win. Take it." A day earlier, Trump wrote on social media that if the hostages are released, "We will create the conditions for the next phase of withdrawal, which will bring us close to the end of this 3,000 YEAR CATASTROPHE."Israel's delegation in Egypt will include Strategic Affairs Minister Ron Dermer, while Hamas will be represented by Ghazi Hamad, Osama Hamdan, and Muhamed Darwish, Kan News reported. Discussions will focus on the timing of the hostage release and the list of Palestinian prisoners to be freed.Netanyahu said Israel's military would redeploy within Gaza and left open the option of forcibly disarming Hamas. A swap of hostages and prisoners would occur immediately upon agreement, while Hamas' disarmament would follow in a second stage. "I hope that in the coming days, during the Sukkot holiday, we can announce the return of all our hostages, alive and dead, in one single release," Netanyahu said. Sukkot begins Monday evening and lasts a week. Details on Trump's plan remain scarce. His latest comments shifted pressure onto Hamas, which released a statement Friday prompting Trump to urge Israel to "immediately stop the bombing of Gaza, so that we can get the hostages out safely and quickly!"