With the September 30 deadline fast approaching for listing of upper layer non-banks including Tata Sons, the holding company of the Tata group entities, highly placed sources say the Reserve Bank of India is ready to grant the dispensation sought by Tata group to retain Tata Sons as an unlisted private limited company.
“Tata Sons has complied with all the stipulations put forth by the RBI to hold Tata Sons as an unlisted company, including squaring off debt and surrendering the NBFC license,” said a source with knowledge of the development.
However, the regulator may also have asked the two major shareholders of Tata Sons, to take a unified decision in the matter of listing the entity. A formal communication from the regulator is expected after the company’s shareholders communicate their final decision to the RBI on whether they would like to retain Tata Sons as an unlisted entity.
Tata Trust (largely comprising of Sir Ratan Tata Trust and Sir Dorabji Tata Trust) and Shapoorji Pallonji group (SP Group, comprising of Sterling Investments and Cyrus Investments) are the two major shareholders of Tata Sons, holding 65.9 percent and 18.4 percent stake, respectively. A few Tata group companies and certain members of the Tata family hold the remaining shares of Tata Sons.
It is understood that the SP Group, owned by the Mistry family, is in favour of listing Tata Sons’ shares as this would help generate liquidity for their shareholding. The stake held by SP Group in Tata Sons is pledged with lenders.
However, Tata Trust, the majority owners of Tata Sons, are keen to retain the holding company as an unlisted entity.
Negotiations said to be ongoing between Tata Trusts, SP
Negotiations are said to be ongoing between the two shareholders and Tata Sons has offered a monetization plan to SP Group which could put an end to this logjam. A source aware of the matter said talks are ongoing between shareholders, and representatives of SP Group are yet to communicate their decision on the offer made by Tata Sons.
“The RBI wants a collective, united view on the matter from the shareholders of Tata Sons,” said another person aware of the matter. “Right now, it seems to be a divided house with the SP Group in favour of listing the holding company. Under such circumstances, merely a compliance with stipulations put forth by the RBI to retain Tata Sons as an unlisted entity will not do,” he added.
Emails sent to Tata Sons, SP Group and RBI remained unanswered till publishing the article.
A final decision of the regulator on whether to declassify Tata Sons as a NBFC-CIC (non-banking finance company classified as core investment company) and thereby exempt it from listing may be taken once the Tata Trust and SP Group have reached a consensus on the issue of listing. While the timeline specified by RBI to arrive at a decision is not clear, it is expected that the RBI may take a final call on the matter by end of this year or by March next year.
Earlier this year Tata Trusts requested N Chandrasekaran, Chairman Tata Sons, to make best efforts to ensure that Tata Sons remained unlisted. It also authorised negotiations with the SP Group to provide the latter an exit as per media reports.
In October 2022, when the RBI came out with scale-based supervision for non-banks, it classified Tata Sons as a upper layer NBFC. Under these norms Tata Sons had to list in the stock exchanges by September 2025. Subsequently, Tata Sons has pared a significant part of its debt (around Rs 1,200 crore in February 2025 as per rating agency reports) and has committed to the regulator that it would not take fresh loans on behalf of its group companies and will not provide guarantee for a fee or monetary consideration.
With these assurances--- which were made to the RBI around October last year--- it is understood that the deck has been cleared for de-recognizing Tata Sons as a NBFC-CIC which would mean that the need for listing doesn’t arise.
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