Listing dilemma of Tata Sons
- Neha Lodaya
- Oct 18
- 2 min read
👉🏼 In October 2021, the Reserve Bank of India introduced Scale-Based Regulatory (SBR) framework wherein NBFCs are sorted into four tiers: Base, Middle, Upper and Top with rising regulatory intensity.
👉🏼 In September 2022, the RBI placed Tata Sons among 16 Upper-Layer NBFCs, directing unlisted entities to list by 30 September 2025 — a move aimed at strengthening governance and promoting dispersed ownership to curb dominance risks.
👉🏼 As per FAQs issued by RBI (last updated on 08 May 2025), a Core Investment Company (a variant of an NBFC) having asset size > INR 100 cr but not accessing public funds does not require registration with RBI.
👉🏼 In August 2024, Tata Sons applied to voluntarily surrender its Certificate of Registrations as a CIC–NBFC after paying back all its debt and turned a cash-positive company.
👉🏼 Parallelly, the minority stakeholder in Tata Sons, the Shapoorji Pallonji Group, which holds 18.37% in Tata Sons, has been urging RBI support for Tata Sons listing in order to monetize its holdings therein and addressing its debt burden and financial stress.
👉🏼 However, in July 2025 a board resolution by Sir Ratan Tata Trusts (holding ~ 23.6% in Tata Sons) directed Tata Sons to exercise its best endeavors to remain an unlisted entity and explore dialogues with SP Group for its possible exit from the group. The possible reasons for resistance for going public could be as under:
a) Dilution of decision-making power
b) Constant reviews and scrutinies by SEBI
c) Holding Company Valuation discount
👉🏼 With the deadline of 30 September 2025 crossed for its listing, the RBI stated that operations of Tata Sons may continue so long as its registration stands.
👉🏼 While certain industry experts argue that Tata Sons’ has indirect access to funds from its listed conglomerates which necessitates its retention as a registered CIC-NBFC, other experts suspect the RBI may permit de-registration, considering that the company has repaid all debt in its effort to sever any direct link to public funds.
👉🏼 Against this backdrop, SP Group’s options to exit Tata Sons are narrow. Aside from a negotiated buy-out, alternatives such as a buyback, asset swap, or exchange of unlisted holdings for listed Tata shares are being discussed. Ultimately, as a minority shareholder, SP Group’s realization value will hinge on Tata Sons’ internal valuation.
It remains to be seen how RBI adjudicates Tata Sons’ case, as granting de-registration would effectively remove the entity from the regulatory ambit, differing from the preamble of SBR framework, which was to ensure investor protection within the financial ecosystem.
