Noel Tata has drafted a merger plan to absorb Tata Electronics Systems Solutions and Tata Consulting Engineers into Tata Sons, a maneuver that would strip the holding company of its NBFC and Core Investment Company status and sidestep the mandatory public listing that the RBI’s regulations impose. The proposal, underpinned by a July 28, 2025 resolution, aims to keep the conglomerate private while the group still repays over ₹30,000 crore in debt.
The plan has hit an immediate roadblock at the trust level. Some trustees argued that the resolution actually empowers N. Chandrasekaran, Tata Sons’ chairman, not Noel, to keep the company unlisted and to engage with the RBI. They also pointed out that no board meeting had yet debated the merger, raising questions about whether the Sir Ratan Tata Trust, which is currently under regulatory restriction, can approve the move.
On the board, a 5:1 split now favors a public listing as the simplest route to compliance. Noel must secure the backing of trustee‑nominee director Venu Srinivasan, who previously voted for Chandrasekaran’s reappointment. Under Article 121, a single Trusts nominee vote against the merger would nullify the proposal, while a split vote would give Chandrasekaran the casting vote.
The RBI’s stance is the most formidable hurdle. Earlier this month, it rejected Tata Sons’ application to surrender its Core Investment Company registration, even after the company had repaid more than ₹30,000 crore of debt, keeping the NBFC‑CIC rules in force. The merger would require an explicit no‑objection certificate, and the regulator may scrutinise the long‑term implications if the merged entities later de‑merge for an IPO.
The Shapoorji Pallonji Group, holding 18% of Tata Sons, has long urged a listing to unlock value. A failed merger could prompt the group to challenge the restructuring in the National Company Law Tribunal as oppressive to minority shareholders. Their stance, alongside the Tata Companies’ 13% stake, could tip the 75‑percent threshold needed for approval.
The next critical juncture is a shareholder vote scheduled for December 31, 2025, where a 75‑percent consensus is required. If the vote falls short, the board may pursue a court‑based challenge, while the RBI could impose further constraints, potentially forcing Tata Sons back into the public market.