Tata Sons to utilise hefty TCS dividend to invest in new businesses

Tata Sons invested ₹3,000 cr in Tata Capital, Tata Projects rights issue in FY 2025

Tata Sons is set to receive its highest-ever dividend of ₹32,722 crore in FY25 from Tata Consultancy Services (TCS) and plans to deploy the funds for its emerging ventures like semiconductors, electronics manufacturing and aviation.

 

In March, Tata Sons invested in the rights issues of initial public offering (IPO)-bound Tata Capital by pumping in ₹1,500 crore and another ₹1,432 crore in Tata Projects. The Tata Capital IPO is expected by September.

 

The Tata group is investing ₹91,000 crore in Dholera semiconductor fab first plant project, which is expected to be completed by December 2026.

 

Another big-ticket investment is in Assam’s semiconductor ATMP project project with an investment of ₹27,000 crore. It is expected to be ready by March next year.

 

In FY24, the Tata group used the TCS dividend proceeds to fully repay bank loans, thereby becoming a debt-free company.

 

According to rating firm ICRA, Tata Sons saw its cash surplus position rise to ₹3,042 crore as of March 31, 2024. 

 

The repayment and prepayment of debt were primarily funded via dividend income and share buybacks during financial year 2023-24.

 

Tata Sons did not reply to an email seeking comments on Friday.

 

Some of its subsidiaries in the digital and aviation spaces are currently in the investment phase.

 

So, funding support to these businesses is likely to continue over the medium term, ICRA had said in a statement in February this year.

 

Despite these investment requirements, ICRA said the credit profile of Tata Sons will remain robust due to healthy dividend income/ share buyback inflows and exceptional financial flexibility on account of the significant market value of its investments.

 

Of its total dividend, TCS had paid ₹24,931 crore as interim dividend for the nine months ended December 2025 during financial year 2024-25.

 

Tata Sons' second highest dividend was in FY23 at ₹30,418 crore.

 

It has infused sizeable equity into Air India so far and another round of infusion is expected this financial year, CRISIL had said in February this year.