Tata Trusts have proposed a strategic restructuring of Tata Sons that could change the framework of the Tata Group’s holding company, enabling it to continue as a private unlisted entity.
The proposal follows the Reserve Bank of India’s (RBI) denial of Tata Sons’ application to surrender its registration as a core investment company (CIC), putting the group in a position where it must comply with the central bank’s regulatory requirements.
Under the proposed restructuring, Tata Electronics Systems Solutions Private Ltd (TESS) and Tata Consulting Engineers (TCE) would be merged with Tata Sons Private Ltd (TSPL).
The proposed entity is structured in such a way that it would not qualify as a non-banking financial company (NBFC) or as a core investment company, as per the proposal sent to the chairman of Tata Sons for submission to the RBI.
The restructuring would require obtaining a no-objection certificate from the RBI beforehand, and Tata Trusts are expected to engage with the central bank on the proposed framework.
The proposed merger is structured around the operating profile of the expanded entity. As of March 31, 2026, the merged entity would have operating revenues of Rs 1,05,043 crore, with revenue excluding income from financial assets reaching Rs 40,072 crore.
Based on these figures, the proposed entity would not meet the “principal business criteria” applicable to an NBFC. According to the proposal, it would also not meet the requirements for a core investment company.
This distinction is significant because Tata Sons has traditionally functioned as the holding company of the Tata Group, with substantial investments across the conglomerate’s businesses.
Tata Sons has been classified by the RBI as a systemically important, non-deposit-taking core investment company. The company had sought voluntary surrender of its CIC registration, but the RBI rejected the request earlier this month.
Tata Trusts own about 66 per cent of Tata Sons, making them the majority shareholder of the group’s holding company. The Trusts have consistently opposed a public listing of Tata Sons and have pushed for options that preserve the current Tata Group structure.
At a Tata Sons board meeting on September 17, Tata Trusts Chairman Noel Tata reiterated the Trusts’ stand that the century-old framework of Tata Sons and the Tata Group must be maintained. The Trusts said the board should explore all possible options instead of viewing a listing as the only way to achieve compliance.
The latest proposal seeks to meet the RBI’s regulatory requirements while retaining Tata Sons as an unlisted private entity. The proposed framework would also maintain what the Trusts describe as the Tata Group’s enduring operational model.
