LIC in talks to trim ₹5,000-cr NCD investments in Tata Sons

State-owned Life Insurance Corporation of India has initiated discussions to trim its over 15 per cent stake in Tata Sons after it became a private limited company.

The Insurance Regulator and Development Authority of India (IRDAI) does not consider investments by insurers into unlisted companies as secured or approved investments.

In listed companies, LIC can have an exposure of only up to 15 per cent of the equity.

LIC and Tata Sons are understood to be in talks on the strategy to be used for exiting from the investments.

A roadmap is likely to be prepared by the month-end by when LIC is also likely to have sold off some investments in the company.

Sources said that LIC’s investments in Tata Sons, which are estimated at ₹5,000 crore, is largely through non-convertible debentures over a long period of time.

“Exiting out of all investments at once may not be immediately possible for LIC and could take some time,” said a person familiar with the development, adding it is likely that the life insurer may choose to sell off part of the stake above the mandated 15 per cent immediately and dilute stake less gradually at a good price to suitable buyers.

LIC is also understood to have discussed the issue afresh with the regulator IRDAI. Tata Sons declined to comment on the issue.

In August this year, Tata Sons received the go ahead from the Registrar of Companies to a private limited company. It had sought approval from shareholders to become a private company from a deemed public company in September last year in the wake of the legal battle with Cyrus Mistry.

Since then, worried about the value of its investments, LIC is understood to have trimmed its stake in Tata Sons and group companies.

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