Tata Trusts, which owns 66% of Tata Sons, has proposed merging two operating companies into the holding company so it can exit NBFC and CIC status and stay unlisted. Trusts chairman Noel Tata wants the RBI to engage.
The Proposal Announced on 28 September
On Monday, 28 September 2026, Tata Trusts proposed merging Tata Electronics Systems Solutions Pvt Ltd (TESS) and Tata Consulting Engineers (TCE) with Tata Sons Private Limited. The Trusts have asked the Tata Sons board to consider the plan and to seek a prior no objection certificate (NOC) from the Reserve Bank of India (RBI), as reported by Business Standard.
The idea is to turn Tata Sons into an operating company as well as the Tata Group's holding company, with businesses and revenues sitting directly inside it. The Trusts say the reorganised entity would be neither a non-banking financial company (NBFC) nor a core investment company (CIC). Once that happens, Tata Sons would surrender its CIC registration.
A CIC is a type of NBFC whose main business is holding investments in group companies. The merger would need RBI approval under the RBI (Non-Banking Financial Companies, Voluntary Amalgamation) Directions, 2025, which require a prior NOC.
The Numbers the Trusts Cite
The Trusts argue that adding TESS and TCE would change the composition of Tata Sons' income and assets enough to take it outside the CIC definition. These are the figures they gave for the combined entity as of 31 March 2026:
| Measure | Amount |
| Operating revenue | ₹1,05,043 crore (64.3% of total income) |
| Income from financial assets | ₹40,072 crore |
| Net assets | ₹2,00,158 crore |
| Investments in Tata Group companies | ₹1,77,120 crore |
The Trusts say the ₹1,77,120 crore invested in Tata Group companies is less than 90% of net assets, which is the threshold relevant to the CIC classification. These numbers come from the Trusts' own statement.
Why the RBI Raised the Listing Question
The RBI classified Tata Sons as an upper-layer NBFC in 2022. That designation carries stricter rules, including provisions that could require a stock market listing. Tata Sons then sought to exit the regulatory framework, but Business Standard, citing a Press Trust of India report, says the RBI rejected that request in September, leaving the company facing the listing question.
The Trusts have opposed a listing consistently. Their boards resolved in July 2025 that all efforts should be made to keep Tata Sons an unlisted private company. The Tata Sons board, by contrast, has backed steps towards complying with the RBI's listing framework, according to the same report.
Noel Tata's Case Against Listing
Speaking at an event organised by Republic TV, Noel Tata said he hopes the RBI will engage with the Trusts and find a solution that avoids listing. He argued that a listing would bring greater market scrutiny, more disclosure and oversight from minority shareholders, and that it would "fundamentally change the way the company and the group has been run," as reported by Business Today.
He also pointed to a tension between investors who expect quarterly improvement and the group's philanthropic aims. He noted that Tata Sons has historically acted as a backstop for group companies in difficulty and asked whether individual shareholders would support similar investments after a listing. He urged the Tata Sons board to review the merger proposal and modify it if needed.
A Boardroom Divide Behind the Plan
The proposal arrives amid a wider disagreement between the Trusts and the Tata Sons board. N Chandrasekaran has led Tata Sons since 2017. In August he said he would not seek another term when his tenure ends in February 2027, and the Trusts asked the board to start looking for a successor.
On 17 September, the Tata Sons board voted to give Chandrasekaran another five-year term. Noel Tata voted against, while the other four directors backed the move. The Trusts have argued the resolution is invalid under Tata Sons' articles of association because it lacked the support of the Trusts' nominee directors. Business Standard also reports that the board backed going ahead with steps linked to the RBI's listing requirement.
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What Happens Next
The merger plan still needs two approvals: the Tata Sons board has to consider it, and the RBI has to grant its NOC. The sources reviewed do not report a timeline for either step. Tata Sons controls more than 30 Tata Group companies, so the outcome affects how the group's ownership and governance are structured.
Tata Sons itself is not listed, so its shares cannot be bought on the NSE or BSE. The question matters to market participants because Tata Sons holds stakes in listed group companies. Until the board and the RBI act on the proposal, the listing question remains open.
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