Tata Sons' could potentially fetch a value of Rs 7-8 trillion ($96 billion) at current market capitalisation of Tata Group companies, as per investment banking firm Spark PWM.
There are multiple levers of value available from the unlisted investments as the group is entering into new-age segments such as semiconductors (by Tata Electronics).
"Thus, we believe that the group could derive another Rs 1-1.5 lakh crore of value from unlisted investments and step-down subsidiaries such as Tata Technologies, Tata Metalliks and Rallis," Spark PWM said.
The market value of Tata Sons' listed investments is estimated at Rs 16 lakh crore, while the book value of the unlisted investments is Rs 0.6 lakh crore.
It is worth noting that the market value of the unlisted investments could be much higher (Rs 1-2 lakh crore) given the group's foray into semiconductors and EV batteries, the firm said.
"While investors are likely to give a HoldCo discount of 30-60 per cent while calculating the equity value, we value Tata Sons at Rs 7.8 lakh crore post factoring for a 60 per cent HoldCo discount of its listed investments and valuing the unlisted investments at Rs 1.6 lakh crore.
"We note that the HoldCo discount given by the street to Godrej Industries and Bajaj Holdings is in a similar range. A change in the HoldCo discount assumption of 10 per cent could lead to a Rs 1.5-1.6 lakh crore change in the equity value of Tata Sons," Spark PWM said.
Tata Sons could list its IPO within the next 1.5 years, the report said.
The RBI had classified Tata Sons as an upper layer NBFC last year, which makes it mandatory for the company to list itself on the exchanges by September 2025.
"We believe that this event could likely lead to the simplification of the complicated group holding structure of the Tata Group and enable some of the listed holding companies to liquidate its holding within the giant parent conglomerate," the firm said.
"We believe that 80 per cent of Tata Sons' holdings might not be monetisable, but the process of restructuring could trigger a re-rating," it added.
Four companies (Tata Motors, Tata Chemicals, Tata Power and Indian Hotels) within the Tata Group hold ownership in Tata Sons.
(With inputs from IANS)
