Tata Trusts, the majority owner of Tata Sons with a 66% stake, has proposed a strategic restructuring to the Tata Sons board to prevent the holding company from being forced to list publicly. This plan involves merging two wholly-owned operating units, Tata Electronic Systems Solutions (TESS) and Tata Consulting Engineers (TCE), into Tata Sons. The goal is to change Tata Sons' regulatory classification, as the Reserve Bank of India (RBI) had previously classified it as an Upper Layer Non-Banking Financial Company (NBFC) in 2022, requiring a public listing within three years. Tata Trusts has consistently opposed this listing, arguing it would fundamentally alter the Tata model where dividends fund philanthropic institutions.
The proposed merger would change the financial profile of Tata Sons. Based on March 31, 2026, financials, the enlarged entity is projected to have operating revenues of $105,043 crore, making up 64.3% of its total income, significantly exceeding its $40,072 crore income from financial assets. This shift in revenue composition is intended to ensure Tata Sons no longer meets the "principal business criteria" of an NBFC. Additionally, the merged entity's net assets would be $200,158 crore, with investments in group companies totaling $177,120 crore, which would be less than 90% of its aggregated assets. This would allow Tata Sons to cease being classified as a Core Investment Company (CIC), enabling it to surrender its certificate of registration.
The restructuring aims to alter Tata Sons' underlying business and asset profile rather than seeking an exemption from existing regulations. The proposal has been sent to Tata Sons Chairman N Chandrasekaran and the RBI has been informed, as the central bank's prior no-objection approval is required for the merger under the Non-Banking Financial Companies – Voluntary Amalgamation Directions, 2025. Senior lawyer HP Ranina has also questioned the RBI's legal power to compel a private company to list, suggesting that even if the restructuring doesn't proceed, the legal question of mandatory listing remains separate. The Tata Trusts, led by Noel Tata, are firm on keeping Tata Sons private, a stance reinforced by resolutions passed by the Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025.
