JAB PYAAR KIYA toh darna kya, from the Hindi movie, Mughal-e-Azam, a fictional saga of Mughal prince Salim, son of Emperor Akbar, and his tragic love affair with a court dancer, Anarkali, is one of the most poignant love songs in India's cinema history. Incidentally, the 15-song movie, bankrolled by Shapoorji Pallonji, the second gen at Shapoorji Pallonji & Company Pvt. Ltd. (SPCPL), completed 62 years of its release this August.

In fact, when Shapoorji came on board as a producer in 1951, his son, Pallonji (father of Shapoor and Cyrus), was nervous about the movie's escalating budget and wanted his father to pull the plug. Eventually, the film, nine years in the making, cost over ₹1.5 crore, equivalent to today's ₹500 crore. But its release in 1960 — 16 years after the shooting first began in 1944 — broke box-office records of its time, fetching returns in significant multiples for the Mistrys.

But the investment that altered the fortunes of the 157-year-old group and continues to power its fourth generation into India's top five richest families, is the one made by Shapoorji in Tata Sons. The 18.41% stake owned by Mistrys in Tata Group's unlisted holding company is today worth ₹2,57,994 crore ($32.35 billion) as per Fortune India-Waterfield Advisors. The stake, acquired in three tranches between 1967 and 1974, as mentioned in the book, The Story of Tata: 1868 to 2021, cost the Mistrys ₹69 crore, fetching 3,739 times in return. While the 93-year-old Pallonji, who passed away in June, held 0.03% (108 shares) in his personal name, the remainder is equally split between Sterling Investment Corporation (37,122 shares/9.19%) and Cyrus Investments Private (37,122 shares/9.19%).

Fortune India-Waterfield has valued Tata Sons at ₹14,04,619 crore ($176 billion), based on its direct holdings in 15 listed group companies (including one non-group company) worth ₹12,42,296 crore ($156 billion) and 40 unlisted subsidiaries at ₹1,62,323 crore ($20.36 billion). Based on Tata Sons' consolidated revenue of ₹3,10,257 crore in FY22, the multiple works out to 4.5 times.

Both Tata Sons and the SP Group did not participate in this article.

Unfortunately, the Mistry family cannot freely monetise the stake in Tata Sons owing to a fractious fallout with Ratan Tata, on the back of Cyrus' unceremonious exit as the chairman of Tata Sons in 2016, and a subsequent adverse Supreme Court (SC) ruling. Since Tata Sons is an unlisted private limited company, the challenge for the Mistrys is that they cannot sell the stake without the approval of Tata Sons and, second, Tatas have valued their holding at ₹70,000-80,000 crore ($10 billion), significantly lower than ₹1.75 lakh crore ($21.8 billion) sought by the Mistrys, back in 2020. The problem is compounded by the Tatas rejecting the Mistrys' proposal to swap the holding for equivalent shares in listed Tata entities, even as the SC verdict is ambivalent on the valuation aspect.

Ironically, the Mistrys' situation is best encapsulated by a dialogue in Mughal-e-Azam, wherein Akbar tells Anarkali: “Salim tujhe marne nahin dega, aur hum Anarkali, tujhe jeene nahin denge (Salim won't let you die, nor will we, Anarkali, let you live).” To put it into context, while the legacy of the Mistrys will stay alive in Tata Sons, Ratan Tata will not let the family make the most of it. Interestingly, in the good old days of bonhomie, within days of assuming office in 1991, Ratan Tata had penned a handwritten note to Pallonji stating: "Our standing together will be a matter of strength… Let me reiterate that I will never do anything to hurt you or your family."

The Mistrys' anxiety is understandable as the group is facing rough weather in its core real estate business. The group had to sell assets, including stakes in Eureka Forbes and Sterling Wilson, to repay bank loans and bring down the debt to its current level of ₹20,000 crore. Aided by fund infusion from promoters and asset monetisation, SPCPL paid off ₹10,000 crore in FY22.

Borrowings availed to fund the equity needs of other SP Group entities and projects had resulted in SPCPL's debt doubling between FY16 and FY20, amid slowing profit growth. Covid-19 further impacted operations, forcing the company to opt for an one-time restructuring scheme with the banks. Since, its exit from the scheme, SCPL has now decided to extend only need-based support towards outstanding guarantees of group entities and ensure cash flows are available to grow its core business. With an outstanding orderbook of ₹32,360 crore, as of March 2022, the company has a five-year revenue visibility.

Though the Tatas had objected to the SP Group's plan to pledge its holding in Tata Sons as collateral to cover borrowings — fearing that a default would result in the shares being forfeited by the lender — the Mistrys claimed in the SC that the Articles of Association of Tata Sons do not regulate pledging of shares, but only specifies that any stakeholder can sell or transfer their stake either to Tata Sons or entities approved by it. The SC verdict in March — which upheld Tata Sons board decision to remove Cyrus as its chairman — has not barred the Mistrys from pledging their holding. In the past, SPCPL had pledged its stake in Sterling Investment Corp., which holds a stake in Tata Sons, with Standard Chartered Bank to raise a short-term loan.

More than their own group business, the Mistrys' fortunes hinge a lot on when and how the Tatas will offer a way out. "I will not leave this battle...it is a significant amount for our next generation," Cyrus said in an interview in 2016. But after the SC ruling, Mistry can't fight but only hope.

In the 1960 epic, Akbar decides to entomb Anarkali alive behind a brick wall. But he, eventually, creates a safe passage for the lady to escape with the condition that she will never visit the kingdom ever. Wonder if the Mistrys would seek a similar outcome!

(Cyrus Mistry passed away in a road accident at Palghar, Maharashtra on September 4, while the issue was going to press)

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.