The Shapoorji Pallonji Group (SP) has sought a pro-rata division of all Tata Sons assets based on its 18.4 per cent stake in the holding company of the Tata conglomerate, said the group in its settlement filings in the Supreme Court.

The SP group has sought a direct stake in all listed entities of the Tata group, including a 13.22 per cent stake in the conglomerate’s crown jewel, Tata Consultancy Services. It has claimed a pro-rata share of the Tata brand and asked for a neutral third-party valuation for the unlisted assets adjusted for net debt.

The SP Group, one of India's largest construction firms, has an 18 per cent stake in Tata Sons, but the two groups have been embroiled in a legal battle since 2016 when Cyrus Mistry, scion of the family that controls the SP Group, was sacked as chairman of Tata Sons.

The SP Group said in the statement that, as a non-cash settlement, it should get pro-rata shares in listed entities of the Tata Group where Tata Sons currently owns stake. “For example, 72% of Tata Consultancy Services Ltd. (TCS) is owned by Tata Sons and SP Group’s ownership of 18.37 per cent translates to 13.22% per cent shareholding of TCS (valued at Rs. 1,35,000 crore at present market capitalisation of TCS),” the Group said in its filing.

The SP Group said in the statement that, as a non-cash settlement, it should get pro-rata shares in listed entities of the Tata Group where Tata Sons currently owns stake. “For example, 72% of Tata Consultancy Services Ltd. (TCS) is owned by Tata Sons and SP Group’s ownership of 18.37 per cent translates to 13.22% per cent shareholding of TCS (valued at Rs. 1,35,000 crore at present market capitalisation of TCS),” the Group said in its filing.

The pro-rata share of brand value adjusted for net debt (ie debt less cash and cash equivalents) can be settled in cash and / or in listed securities. For the unlisted companies, an expedited valuation can be done with a valuer selected by both sides, it said. The Tata brand was valued at $20 billion as per its last valuation.

The SP Group said the “quicker to implement” settlement is a win-win deal for both sides as control would remain with Tata Sons and it would remain promoters of group companies and also enjoy a control premium on its shareholding. “In case Tata Sons does not want to dilute its stake in certain companies, the SP Group could accept the value in either cash or TCS stock,” it said. Besides this settlement will not increase debt for Tata Sons to buy out Mistry group shares, it said.

The same scheme could also be applied to Tata group companies that have shareholding in Tata Sons to provide them with liquid assets in lieu of their shares, and bolster their net worth by over Rs 100,000 crore. The effective ownership of the Tata Trusts would be close to 100 per cent thereafter from the present 66 per cent once the Mistry family exits, the statement said.