Tata Sons board members remained divided on the reappointment of N Chandrasekaran as chairman, but were unanimous on the need to form a committee to examine options for complying with RBI's regulations for upper-layer NBFCs, according to The Times of India. People privy to the discussions said there was no resolution on an IPO at Thursday's board meeting and no vote by directors on the matter. But Tata Sons directors across the board agreed that a team with representatives from Tata Sons, Tata Trusts and independent external members would need to engage with the central bank, Tata Trusts and other stakeholders to evolve a roadmap for compliance. The decision followed questions from Tata Trusts chairman and Tata Sons director Noel Tata on how the company intended to proceed and explore avenues to avoid a public listing.
Tata Sons could explore several routes to avoid a public listing, including restructuring its assets or shareholding, seeking a policy-level exemption, alongside challenging the Reserve Bank of India's decision in court. According to Business Standard, one possible route would be to reduce Tata Sons' relevant asset base below the ₹1 trillion threshold for classification as an upper-layer NBFC. However, the scope for balance-sheet restructuring could be limited, with Tata Sons' assets estimated at about ₹2 trillion, more than twice the threshold. Abhishek Paliwal from King Stubb & Kasiva noted that further debt repayment may not be enough, stating "only a divestment of core group holdings would, and that is not something a holding company built to hold controlling stakes in Tata operating companies can do without unwinding the group structure itself."
Tata Sons could restructure its shareholding through buying out the Shapoorji Pallonji group's roughly 18% stake through a selective capital reduction before the National Company Law Tribunal. According to Business Standard, another option would be to seek more time to comply rather than an outright exemption, with Noel Tata's statement that all permissible options should be examined providing scope for discussions over the compliance timeline. Tata Sons could also seek a policy-level exemption, potentially from the finance ministry, arguing that its ownership structure -- with charitable trusts as its principal shareholders -- distinguishes it from other NBFCs. Abizer Diwanji from NeoStrat Advisors suggested that the Shapoorji Pallonji group could swap its Tata Sons shares for stock in more liquid listed Tata companies, such as Tata Power or TCS, which could reduce the group's holding while giving it listed shares that could be monetised.
The Reserve Bank of India's recent rejection of Tata Sons' request to exit its NBFC registration has put significant pressure on the company to pursue a stock market listing. According to Business Standard, Tata Sons was classified as an Upper Layer NBFC in 2022 and strict rules relating to stock market listing apply to entities in this category. In a letter dated September 11, 2026, the RBI rejected Tata Sons' request to surrender its certificate of registration, stating "After considering the above and examining all the relevant factors, we advise that your request for voluntary surrender of CoR (certificate of registration) for being classified as unregistered CIC (core investment company) cannot be acceded to." The RBI advised "The board should therefore seek a period of not less than three years from the date of the communication (i.e. till September 2029) and should state plainly why such a period is necessary rather than merely comply." Tata Sons had assets of ₹2.01 lakh crore as of March 31, 2026, double the threshold required for upper-layer NBFC classification. In March 2024, Tata Sons paid off all its separate debt of nearly ₹22,000 crore and asked to deregister as a core investment company, trying to avoid a possible public listing, but the RBI's rejection has brought the listing issue back to the centre of board discussions.
Noel Tata told the board that the company would need at least three years to prepare for an IPO if one ultimately becomes unavoidable, citing the extensive corporate, financial and regulatory work involved, including changes to its articles of association, shareholder approvals, financial restatements and due diligence, as reported by The Times of India. He also pointed to the capital commitments and losses at businesses such as Air India and Tata Digital, as well as long-term investments in semiconductors and electronics manufacturing, saying a public issue at this stage could be detrimental to both the company and its shareholders. A public listing is expected to unlock value for shareholders, especially the Shapoorji Pallonji Group, Tata Sons' largest minority investor, while giving the holding company of the Tata Group greater access to capital for businesses such as aviation that require significant investment. However, Tata Trusts does not favour a public listing of Tata Sons, with Noel Tata stating that the century-old structure of Tata Sons and the Tata Group should be preserved.
