InvestorQ : Is it true that the real battle between Tata Sons and the Mistry family is not about Tata Sons but about TCS?
Moii Chavate made post

Is it true that the real battle between Tata Sons and the Mistry family is not about Tata Sons but about TCS?

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Tisha Malhotra answered.
4 weeks ago
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It would not be wrong to say that because TCS continues to be the most visible, most profitable and also the most valuable company in the group in terms of market capitalization. That obviously makes TCS the centre of attraction for Mistry and Tatas.

Here is how TCS become central. Currently, Tata Sons has 72% in TCS. So, considering that Mistry has around 18.37% in Tata Sons, it translates into 13.22% stake in TCS. That is the share they would get under the swap. It would be a proportionate replacement swap.

A similar formula will be applied for all listed companies owned by Tata Sons. For unlisted assets the Mistry family has asked for a court appointed independent assessment of the value of such net assets. Mistry also wants a share of the brand net of debt.

But, you are right that, any battle for the Tata group will ultimately boil down to a battle for TCS. It is still largely owned by Tata Sons up to 72% with limited free float in the market. In addition, look at the profit and value story. TCS generates over 80% of the value for Tata Sons and almost all its profits.

Clearly, the Mistry family will not be happy with just a passive stake. They will demand directorship in some of the key business franchises of the group including TCS, Titan, Tata Motors, Tata Steel, Tata Global etc. They will want to influence policy decisions too.

At the end of the day, it will eventually boils down to the fight for the crown jewel of the Tata group i.e. TCS.

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