Tata Trusts propose Tata Sons rejig to shed NBFC status, keep it private

Tata Trusts, the dominant shareholder of Tata Sons, have proposed merging two operating subsidiaries with the group's holding company, in a move aimed at removing the entity's classification as a non-banking financial company (NBFC) and a core investment company (CIC). This restructuring, announced on Monday, could potentially eliminate the need for a stock-market listing.

If approved, Tata Sons would revert to an operating company, with its business units directly reporting to the parent. The proposed structure, which the Trusts intend to present for approval to the Tata Sons board, would ensure that the reorganized entity does not meet the regulatory criteria for either an NBFC or a CIC. As of March 31, 2026, the amalgamated entity would generate operating revenues of Rs 105,043 crore, representing 64.3% of total income, while financial asset income would amount to Rs 40,072 crore.

Net assets of the combined entity would total Rs 200,158 crore, with investments in Tata Group companies making up Rs 177,120 crore. Obtaining a prior no-objection certificate from the Reserve Bank of India (RBI) would be necessary for the amalgamation, as per the RBI's Non-Banking Financial Companies - Voluntary Amalgamation Directions, 2025.

The proposed reorganization is part of ongoing tensions between Tata Trusts and the Tata Sons board, regarding the future ownership and governance of the holding company. The Trusts, chaired by Noel Tata since October 2024, have consistently opposed any listing of Tata Sons, arguing that the existing structure, which keeps the philanthropic trust in control, is integral to the Tata model.