29 September,2026 09:57 AM IST | Mumbai | mid-day online correspondent
Representational Image. File pic.
Tata Trusts on Monday proposed merging two operating firms, Tata Electronics Systems Solutions (TESS) and Tata Consulting Engineers (TCE), with the Tata Sons, in a restructuring attempt that would make the Tata Group holding company retain its private status and avoid potential listing.
The restructuring plan will help Tata Sons Private Limited (TSPL), the holding company of the USD 180 billion Tata conglomerate, to neither be a non-banking financial company nor a core investment company, .
Tata Trusts as majority shareholders with a 66 per cent stake in Tata Sons, in a statement said the strategic reorganisation plan for the holding company "which, when given effect to, would ensure that the reorganised entity would neither be a âNon-Banking Financial Company' (NBFC) nor a âCore Investment Company' (CIC)."
The move comes after Tata Trusts Chairman Noel Tata had opposed listing the holding company had asked the Tata Sons board to explore all other options to avoid listing, after the Reserve bank of India had rejected its application to surrender its CIC registration.
"The Tata Trusts believe that the proposed reorganisation and action plan for compliance would be in the best interests of the Tata Group as well as its stakeholders, in addition to being a regulatory permissible and compliant form of reorganisation of a CIC," it said.
"The Tata Trusts have, accordingly, written to the TSPL Board to consider and approve the proposal, and to take necessary steps, including applying to the RBI for the necessary 'no-objection certificate' as required for the proposed merger and reorganisation of TSPL," it added.
According to Tata Trusts, the amalgamated entity post the merger of the two operating companies with Tata Sons, will have operating revenues of Rs 105,043 crore, accounting for 64.3 per cent of the total income of the amalgamated entity, compared to its income from financial assets of Rs 40,072 crore.
It added that the amalgamated entity will not meet the 'principal business criteria' of an NBFC and "will also not meet the conditions applicable to CIC."
The entity would have net assets of Rs 200,158 crore, of which investments in group companies would constitute for Rs 177,120 crore, or less than 90 per cent of total net assets.
The proposal would allow Tata Sons to revert to its to its previous operating model, which it followed for almost 80 years of its existence, with its own operations and revenues, in addition to being a holding company for the Tata Group, Tata Trusts said.
It pointed out that Tata Consultancy Services (TCS) was a division of Tata Sons until it was demerged into a separate subsidiary in 2004.
"This will also be in line with the previous classification (after 2004) by RBI of TSPL as a 'non-banking, non-financial company'," it said.
Tata Sons had sought de-registration in March 2024 after becoming debt free to avoid the listing requirement that applies to upper layer NBFCs. However, the RBI's rejection of the application to surrender CIC registration means the holding company faces the mandatory listing, as per the regulator's rules applicable to upper layer NBFCs.
Tata Sons Board, earlier this month had resolved to move ahead with the listing the holding company.
Tata Trusts, however, did not agree to the listing of Tata Sons, maintaining that the century-old structure of Tata Sons and the Tata Group should be preserved.
Noel Tata had pushed for the company to remain unlisted and had said, "If Tata Sons is publicly listed, the rights of Tata Trusts as majority shareholders stand to be seriously impaired."
He had also pointed out that the RBI communication on September 11 "does not mention listing" and the regulator has not prescribed any particular step, nor has it said "the company is in breach."
"What its legal effect is, and what it requires of this Company and by when, are questions upon which this
Board has formed no view," he had said.
