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The proposed restructuring is aimed at taking Tata Sons outside the regulatory framework applicable to non-banking financial companies (NBFCs) and core investment companies (CICs)
Tata Trusts, the majority shareholder in Tata Sons with a 66 per cent stake, have proposed a strategic restructuring of the Tata Group’s holding company that could fundamentally change its operating structure.
Under the proposal, Tata Electronics Systems Solutions Private Ltd (TESS) and Tata Consulting Engineers (TCE) would be merged with Tata Sons Private Ltd (TSPL). The restructuring is designed to ensure that the resulting entity does not qualify as either a non-banking financial company (NBFC) or a Core Investment Company (CIC).
The Tata Trusts have asked the Tata Sons board to consider the proposal and initiate the regulatory process, including seeking a no-objection certificate from the Reserve Bank of India (RBI).
Tata Sons to return to operating model
The proposed restructuring would bring operating businesses directly under Tata Sons, alongside its existing role as the holding company of the Tata Group.
The Trusts said this would effectively take Tata Sons back to an operating model that it followed for most of its history. Tata Sons had historically housed several operating businesses and used revenues from these businesses to support newer ventures.
Tata Consultancy Services (TCS), for instance, was part of Tata Sons as a business division until it was demerged in 2004.
More from Business“The proposed reorganisation will result in TSPL reverting to its previous operating model, with its own operations and revenues, in addition to being a holding company for the Tata Group,” the Tata Trusts said.
What the proposed entity will look like
Financials for the year ended March 31, 2026, show the scale of the proposed combined entity.
The reorganised Tata Sons would have operating revenues of Rs 1,05,043 crore, compared with Rs 40,072 crore of income from financial assets. Operating revenues would account for 64.3 per cent of the entity’s total income.
The Tata Trusts said the composition of the entity would mean it would not meet the RBI’s “principal business criteria” for classification as an NBFC.
The proposed structure would also take Tata Sons outside the CIC framework. The combined entity would have net assets of Rs 2,00,158 crore, with investments in group companies at Rs 1,77,120 crore. These investments would represent less than 90 per cent of the entity’s aggregate net assets.
RBI approval required
The proposed amalgamation will be governed by the RBI’s Non-Banking Financial Companies – Voluntary Amalgamation Directions, 2025.
As Tata Sons is currently an NBFC, the merger of the operating companies with Tata Sons will require a prior no-objection certificate from the central bank.
Following the completion of the restructuring, Tata Sons would also cease to qualify as a CIC and would consequently have to surrender its certificate of registration.
The Tata Trusts said they, along with Tata Sons, would engage with the RBI on the proposed reorganisation and its regulatory implications.
Tata Sons to remain unlisted
The restructuring also seeks to retain Tata Sons’ status as an unlisted private company.
The Trusts said the proposal is consistent with resolutions unanimously passed by the boards of the Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025, which called for efforts to ensure that Tata Sons remained an unlisted private company.
The Trusts said the proposed structure would also preserve the Tata Group’s distinctive organisational model, while allowing Tata Sons to have operating revenues and businesses of its own.
