Mumbai, September 28: Tata Trusts have proposed a major restructuring of Tata Sons that could allow the Tata Group’s holding company to remain a private, unlisted company.
The Trusts, which own a 66 per cent stake in Tata Sons, have proposed merging Tata Electronics Systems Solutions Pvt Ltd (TESS) and Tata Consulting Engineers (TCE) with Tata Sons.
The proposal has been sent to the Tata Sons board for consideration. The restructuring would also require a prior no-objection certificate (NOC) from the Reserve Bank of India (RBI).
Why are Tata Trusts proposing the restructuring?
The proposed merger is aimed at changing Tata Sons’ regulatory status.
The RBI classified Tata Sons as an upper-layer non-banking financial company (NBFC) in 2022. This classification brought the company under a regulatory framework that includes a requirement for listing.
Tata Sons later sought to exit this regulatory framework, but the RBI rejected its request in September. The listing issue has since become a major point of disagreement between Tata Trusts and the Tata Sons board.
The Trusts have consistently opposed listing Tata Sons and have instead explored alternative ways to retain its private status.
Tata Sons could become an operating company
Under the proposed restructuring, Tata Sons would directly hold operating businesses along with its existing role as the Tata Group’s holding company.
The Trusts said this could ensure that the reorganised entity would not meet the regulatory criteria for either an NBFC or a Core Investment Company (CIC).
If the restructuring is completed, Tata Sons would surrender its existing certificate of registration as a CIC.
According to the Trusts, as of March 31, 2026, the combined entity would have:
- ₹1,05,043 crore in operating revenue
- Operating revenue accounting for 64.3 per cent of total income
- ₹40,072 crore in income from financial assets
- ₹2,00,158 crore in net assets
- ₹1,77,120 crore invested in Tata Group companies
The Trusts said investments in Tata Group companies would account for less than 90 per cent of the reorganised entity’s net assets.
RBI approval will be required
The proposed merger cannot be completed without regulatory approval.
The Trusts said the amalgamation of operating companies such as TESS and TCE with Tata Sons would have to follow the RBI (Non-Banking Financial Companies – Voluntary Amalgamation) Directions, 2025.
The company would therefore need to obtain a prior NOC from the RBI.
The Trusts and Tata Sons are expected to engage with the RBI regarding the proposed restructuring and its regulatory implications.
Tata Trusts have opposed Tata Sons listing
The restructuring proposal comes amid growing differences between Tata Trusts and the Tata Sons board over the company’s future structure.
The Tata Trusts, chaired by Noel Tata, resolved in July 2025 that efforts should be made to retain Tata Sons as an unlisted private company.
The Trusts have argued that keeping Tata Sons private would preserve the Tata Group’s traditional organisational structure and allow it to focus on long-term strategic initiatives.
The listing issue became more important after the RBI classified Tata Sons as an upper-layer NBFC in 2022.
Dispute over N Chandrasekaran’s future
The restructuring debate is also connected to the leadership of Tata Sons Chairman N Chandrasekaran.
Chandrasekaran has headed Tata Sons since 2017. The Trusts had initially supported his continuation for another five-year term.
However, the question of Tata Sons remaining privately held became one of the issues surrounding his reappointment.
In August 2026, Chandrasekaran said he would not seek another term after his tenure ends in February 2027. The Tata Trusts accepted his decision and asked the Tata Sons board to begin the process of identifying a successor.
The situation changed on September 17, when the Tata Sons board voted to give Chandrasekaran another five-year term.
Noel Tata voted against the proposal, while the other four directors supported it.
The Trusts later questioned the validity of the resolution, arguing that it did not have the required support from their nominee directors.
What the restructuring could mean for Tata Sons
The proposed merger provides the Tata Trusts with an alternative route to address the RBI’s regulatory framework while seeking to retain Tata Sons as a private company.
The proposal would also bring Tata Sons closer to an organisational structure it followed historically.
For example, Tata Consultancy Services (TCS) was once operated as a division of Tata Sons before being demerged into a separate subsidiary in 2004.
If approved and implemented, the restructuring could therefore have implications beyond Tata Sons’ regulatory classification.
It could affect the future ownership structure, governance arrangements and leadership of one of India’s largest business groups.
Tata Trusts seek Tata Sons board approval
The Tata Trusts have asked the Tata Sons board to consider and approve the proposed restructuring and take the necessary steps to approach the RBI.
The Trusts said the proposal is consistent with the resolutions passed by the boards of Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025, which called for efforts to maintain Tata Sons as an unlisted private company.
The final outcome will depend on the Tata Sons board’s decision and the RBI’s consideration of the proposed restructuring.
For the Tata Group, the issue is significant because it involves both the regulatory status of Tata Sons and the long-term governance structure of the group.
