InvestorQ : Why is the Mistry family now insisting on separation via share swap with the Tatas?
Moii Chavate made post

Why is the Mistry family now insisting on separation via share swap with the Tatas?

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Tisha Malhotra answered.
4 weeks ago
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In the latest twist, the Mistry family has suggested a separation from the Tata group via share swap. This is latest twist in all the numerous twists and turns over the last four years since the removal of Cyrus Mistry from the helm of Tata Sons.

Pallonji Mistry, the seer of the Mistry group, has agreed to sell the stake in Tata Sons. However, instead of payment in cash, he wants proportionate ownership in Tata group stocks. Let us look at how exactly would this share swap work?

As of now it is hard to be sure because granular details are still awaited. However, the model offered for separation is both interesting and intriguing. Mistry has requested the Tatas to swap his 18.4% stake in Tata Sons with equivalent shares of group companies.

What does that mean? Effectively, there will be no cash payout but the Mistry family stake in Tata Sons will be replaced with a stake in Tata group companies in the same proportion. So, if Tata Sons has 50% in X Ltd, then Mistry gets 9% stake due to his 18% in Tata Sons.

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