Tata Trusts proposes Tata Sons rejig to exit NBFC ambit, avoid listing

Tata Trusts have proposed merging Tata Electronics Systems Solutions Private Limited (TESS) and Tata Consulting Engineers (TCE) with Tata Sons Private Limited (TSPL), in a move that could change the regulatory classification of the Tata Group's holding company.

Tata Trusts, which holds a 66% stake in Tata Sons, said the proposed reorganisation would allow TSPL to cease being classified as a Non-Banking Financial Company (NBFC) or a Core Investment Company (CIC).

The proposal would also bring back an operating model for Tata Sons, under which it would have its own operations and revenues while continuing to act as the holding company for the Tata Group.OPERATING REVENUES TO FORM 64.3% OF TOTAL INCOME

Following the proposed merger, the combined entity would have operating revenues of Rs 1,05,043 crore as of March 31, 2026, according to Tata Trusts.

This compares with income from financial assets of Rs 40,072 crore. Operating revenues would account for 64.3% of the entity's total income.

Tata Trusts said the resultant entity would not meet the principal business criteria required for classification as an NBFC.

The entity's investments in group companies would also account for less than 90% of its aggregate net assets. As a result, it would not meet the conditions applicable to a CIC, according to the Trusts.

The proposed amalgamation will have to comply with the Reserve Bank of India's Non-Banking Financial Companies – Voluntary Amalgamation Directions, 2025.

This includes obtaining a prior no-objection certificate from the RBI.

As TSPL would cease to be a CIC following the proposed reorganisation, it would also have to surrender its certificate of registration, Tata Trusts said.

The Trusts have written to the TSPL Board to consider and approve the proposal and take the necessary steps, including approaching the RBI for the required no-objection certificate.

Tata Trusts and TSPL will engage with the central bank on the proposed reorganisation.PROPOSAL SEEKS TO RETAIN TATA SONS AS UNLISTED COMPANY

Tata Trusts said the proposed structure is intended to be regulatory-compliant while preserving the Tata Group's more than 100-year-old organisational structure.

The proposal is also aligned with resolutions passed by the Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025 to make efforts to retain TSPL as an unlisted private company.- Ends