Months after Ratan Tata’s death, Noel Tata seeks Rs 153000000000 approval from shareholders in…, with TCS, Tata Steel to meet…

TCL’s listing by September 2025 will mark a significant milestone for the financial services company, strengthening its market presence and enhancing its governance framework.

Tata Capital (TCL), the financial services arm of the Tata Group, led by Noel Tata, has approached its shareholders to approve related party transactions amounting to Rs 15,300 crore for the financial year 2026 with group entities Tata Steel and Tata Consultancy Services (TCS). This move aligns with pre-listing regulatory requirements as TCL is mandated to be listed by September 2025 to comply with the Reserve Bank of India (RBI) norms.

Arrangement With Tata Steel

In a regulatory filing on Tuesday, TCL disclosed that it provides factoring services to Tata Steel worth an estimated Rs 10,000 crore. These services account for approximately 55% of TCL’s annual consolidated turnover for FY 2023-24 and are part of its normal course of business.

Under this factoring arrangement, Tata Steel discounts its sales receivables with Tata Capital, arising from goods sold on credit to its customers. Tata Steel pays a discounting fee to TCL for these facilities. However, the associated risks are borne by Tata Steel for its customers.

As per SEBI’s Listing Obligations and Disclosure Requirements (LODR) regulations, these factoring transactions qualify as related party transactions. Consequently, TCL has sought shareholder approval to comply with these regulatory norms.

In addition to factoring services, TCL provides lease facilities to Tata Steel, while Tata Steel pays lease rentals to TCL. Tata Sons, the parent company of Tata Capital, holds a 93% stake in TCL and a 32% stake in Tata Steel.

Transactions With Tata Consultancy Services

TCL also engages in related party transactions with TCS, in which Tata Sons holds a 71.74% stake, classifying TCS as a related party to TCL.

As part of its broader borrowing strategy, TCL raises funds through various instruments, including term loans, inter-company deposits, and non-convertible debentures (NCDs). Transactions with TCS include NCD issuances, IT services procurement, hardware and software purchases, and leasing arrangements.

Compliance With Regulatory Norms

These transactions are part of TCL’s regular business operations, but their classification as related party transactions under regulatory norms necessitates shareholder approval. This step is crucial as Tata Capital works toward meeting pre-listing compliance and aligns with its commitment to transparency and good governance.