Tata Sons Listing Remains Unsettled as RBI Order Opens New Regulatory and Governance Questions

The future of Tata Sons remains unsettled after a crucial board meeting exposed differences over a possible stock-market listing, N Chandrasekaran’s next term as chairman and the governance structure of the Tata group holding company. 

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The immediate trigger is the Reserve Bank of India’s September 11 decision to reject Tata Sons’ application to surrender its Core Investment Company registration. The company had applied for deregistration in March 2024 after repaying ₹21,813 crore of debt. 

With that application rejected, Tata Sons has been asked to comply with regulations applicable to upper-layer non-banking financial companies. 

Its board met on September 17 and decided to move towards a public listing as part of its efforts to comply with RBI requirements. Tata Trusts, which owns about 66% of Tata Sons, subsequently made it clear that it had not agreed to a listing. 

The Trusts said all available options should first be examined and presented to the board. A separate meeting would then be held to decide the way forward. 

Its opposition is not new. According to the Trusts, the Tata Sons board had unanimously decided in March 2024 that the company should remain unlisted. The Sir Dorabji Tata Trust and Sir Ratan Tata Trust adopted similar resolutions in July 2025. 

That leaves Tata Sons with the task of determining whether another route can satisfy the RBI’s requirements without taking the company public. 

RBI rejection narrows an option Tata Sons pursued since 2024 

The regulatory position has become more complicated after the RBI rejected the company’s deregistration application. 

The central bank has also filed a caveat in the Bombay High Court, which would allow it to be heard before a court passes any order in the event of a legal challenge to its decision. 

Tata Trusts wants alternatives to an immediate listing to be considered. Noel Tata has also proposed seeking additional time from the RBI to meet the applicable requirements. 

One option placed before the Tata Sons board concerns the Shapoorji Pallonji Group’s 18.37% holding. 

Tata Trusts proposed a structure under which the SP Group could monetise part of its stake for at least ₹25,000 crore through a selective capital reduction process before the National Company Law Tribunal. The Tata Sons shares would be valued under Rule 11UA of the Income Tax Rules. 

Funding could come from Tata Sons’ internal cash flows, sales of listed shares, investments in newer businesses and offers for sale of stakes in some businesses. 

The SP Group, however, publicly backed a Tata Sons listing on Friday, putting its position at odds with Tata Trusts on the question of taking the holding company public. 

Chandrasekaran’s third term faces a separate challenge 

Leadership has become another point of disagreement. 

The Tata Sons board approved another five-year term for N Chandrasekaran beginning in February 2027. The resolution passed 4-1, with Noel Tata voting against it. 

Tata Trusts later challenged the resolution, describing the reappointment as a “legal nullity” under Tata Sons’ Articles of Association. 

There is also a separate question surrounding Chandrasekaran’s directorship. 

His directorship was due to be considered at Tata Sons’ annual general meeting, which was adjourned in August. The Registrar of Companies has since extended the deadline for holding the AGM to December 31. 

That leaves the chairmanship decision and the directorship issue running alongside the broader debate over Tata Sons’ regulatory future. 

A listing could also reshape Tata Sons’ governance 

If Tata Sons eventually enters the stock market, the implications would extend beyond raising capital or meeting regulatory requirements. 

Tata Sons became a private company in 2017, and its existing Articles of Association contain restrictions covering share transfers and the entry of shareholders. 

A move to public-company status could therefore require changes to those Articles, including provisions that are incompatible with the requirements governing public companies. 

The issue is particularly significant for Tata Trusts because of the rights it currently holds within Tata Sons. 

Apart from owning about 66% of the company, Trust-nominated directors have affirmative rights over specified corporate decisions under Articles 104B and 121. 

How those rights would work under a listed structure would have to be addressed if Tata Sons eventually proceeds with a public offering. 

For now, none of these questions has reached a final resolution. Tata Sons must decide how it will respond to the RBI’s September 11 order, Tata Trusts continues to press for alternatives to listing, the SP Group has backed going public, and the dispute over Chandrasekaran’s next term remains open.