Tata Trusts has proposed a major restructuring of Tata Sons aimed at retaining its status as an unlisted private company and avoiding a potential stock market listing under Reserve Bank of India (RBI) regulations. The proposal involves merging two Tata Group companies, Tata Electronics Systems Solutions Private Limited (TESS) and Tata Consulting Engineers (TCE), with Tata Sons.
Tata Trusts, which holds a 66 per cent stake in Tata Sons, has written to the company’s board seeking approval for the proposed reorganisation and requesting that the process for obtaining the RBI’s no-objection certificate be initiated.
The restructuring aims to change Tata Sons’ regulatory classification so that it no longer qualifies as a Non-Banking Financial Company (NBFC) or a Core Investment Company (CIC), both of which carry additional compliance requirements.
According to Tata Trusts, the merged entity would generate operating revenues of Rs 1.05 lakh crore as of March 31, 2026, significantly exceeding its income from financial assets, which stood at Rs 40,072 crore. This would help ensure that financial investments do not remain the company’s primary source of income.
The proposal also seeks to take Tata Sons outside the CIC classification. Following the merger, its net assets are projected at Rs 2 lakh crore, while investments in group companies would account for Rs 1.77 lakh crore, remaining below the 90 per cent threshold required for CIC classification.
Tata Trusts said the restructuring would restore Tata Sons’ earlier operating model, under which it managed businesses alongside its holding company responsibilities. Tata Consultancy Services, for instance, operated as a business division of Tata Sons before becoming a separate subsidiary in 2004.
The proposal comes after the RBI classified Tata Sons as an upper-layer NBFC, bringing enhanced regulatory obligations, including potential listing requirements.
However, the restructuring would require regulatory approval, particularly under the RBI’s framework governing voluntary amalgamations involving NBFCs.
Tata Trusts, chaired by Noel Tata, said the proposed changes align with earlier board resolutions supporting the continuation of Tata Sons’ unlisted private company status and aim to preserve the group’s distinctive ownership and governance structure.
