Tata Sons Posts 33% Jump In FY24 Net Profit Led By Other Income

The jump in the net profit was entirely led by 'other income' for the conglomerate whose main income is dividend from the Tata Group companies, especially Tata Consultancy Services Ltd.

The 'other income' component was led by the sale of investments which stood at Rs 19,902.42 crore during the financial year. During the last financial year Tata Sons received Rs 10,548.34 crore from participating in the buyback of TCS and raised a little over Rs 9,000 crore from the secondary market sale in March 2024.

Tata Sons Listing

The conglomerate has gradually de-leveraged and reduced exposure to Tata Capital so that it falls below the threshold to avoid listing of the company. The reduced capital exposure to Tata Capital could mean that Tata Sons could escape the listing requirement subject to the Reserve Bank of India approving the same.

At the end of FY24, the company used dividend received and proceeds from sale of shares to reduce the borrowings.

Tata Sons is a non-deposit taking systemically important Core Investment Company. It applied during the year to the RBI to voluntary surrender certificate of registration as Core Investment Company and continue as non-registered CIC.

The year also saw the Tata Group holding company reduce its direct and indirect investment in Tata Capital to Nil from Rs 7,496.46 crore in the previous financial year. Tata Sons had only investment in Panatone Finvest Ltd. and Tata Industries Ltd. wherein the total direct and indirect capital contribution is less than 10% of their owned funds.

Tata Capital ceased to be a CIC with effect from January 1, 2024.

Further, the company repaid all borrowings including bank borrowings during the year. It had borrowings of Rs 20,273 crore at the end of March 2023. This was paid off during FY24.

Key Investments

Tata Sons invested Rs 11,300 crore into various group companies. It invested additional Rs 2,141 crore in Tata Electronics and Rs 850 crore into Agratas Energy, its battery business. In addition, the flagship arm also invested Rs 3,800 crore in preference shares of Air India in the last financial year.