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

The Tata Trusts has requested Tata Sons to approve a reorganization plan for Tata Sons, the parent company of Tata Group companies. If implemented, this plan would ensure Tata Sons remains neither a non-banking financial company nor a core investment company. Tata Trusts has already communicated this proposal to the Tata Sons Board, requesting them to take the necessary steps, such as applying to the Reserve Bank of India for a "no-objection certificate."

Tata Trusts, which holds a 66% stake in Tata Sons, claims the reorganization would involve merging Tata Electronics Systems Solutions Private Limited and Tata Consulting Engineers with Tata Sons. The Trust added that they will collaborate with the RBI throughout the reorganization process.

This reorganization is a point of contention between Tata Sons and Tata Trusts. Tata Trusts' chairman, Noel Tata, has expressed opposition to N Chandrasekaran's reappointment as chairman of Tata Sons. Tata Sons has announced plans to pursue a public listing, adhering to the Reserve Bank of India's directive. The Trust stated that this proposed reorganization is not a new approach, as Tata Sons has always operated with businesses and revenues, enabling it to fund other ventures over its 100-year history.

They emphasized that the reorganization will restore Tata Sons to its previous operating model, with its own operations and revenues, while also serving as a holding company for the Tata Group. This move aligns with the RBI's previous classification of Tata Steel Projects Limited as a "non-banking, non-financial company" and complies with regulatory requirements and the unanimous resolutions passed by the boards of Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025.