Tata Trusts proposes merger to keep Tata Sons outside mandatory IPO rules

Tata Trusts has proposed merging two group companies into Tata Sons in a restructuring intended to help the holding company avoid classification as a non-banking financial company or core investment company, and remain unlisted. The proposal would combine Tata Electronics Systems Solutions Private Limited and Tata Consulting Engineers with Tata Sons Private Limited. Tata Trusts, which holds a 66% stake in Tata Sons, said the new structure would give the holding company its own operations and revenues while preserving its role at the centre of the Tata Group.

According to Tata Trusts, the combined entity would have operating revenue of 105,043 crore rupees as of March 31, 2026. Income from financial assets would amount to 40,072 crore rupees, with operating revenue accounting for 64.3% of total income. The Trusts said the resulting company would not satisfy the principal-business criteria for classification as a non-banking financial company.

Its investments in group companies would also represent less than 90% of aggregate net assets, meaning it would not meet the conditions for classification as a core investment company. The proposed amalgamation must comply with the Reserve Bank of India’s Non-Banking Financial Companies–Voluntary Amalgamation Directions, 2025. The plan requires a prior no-objection certificate from the central bank.

Tata Trusts said Tata Sons would need to surrender its certificate of registration if it ceased to be a core investment company. The Trusts have asked the Tata Sons board to consider the proposal, obtain the required approval and engage with the RBI. The proposal is also aligned with resolutions passed by the Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025, according to the source material.

Those resolutions called for efforts to retain Tata Sons as an unlisted private company. The material did not say whether the Tata Sons board or the RBI had approved the plan. It therefore remains a proposal requiring corporate and regulatory action.