RBI Governor Sanjay Malhotra said on Friday that Tata Sons, classified as an upper‑layer NBFC, must list within three years and cannot sidestep the rule by restructuring.
The Reserve Bank’s upper‑layer list, introduced in 2022, covers core investment companies that hold majority stakes in group firms and are required to register with the RBI and, if classified as upper‑layer, to go public within a three‑year window to curb systemic risk.
Tata Sons was placed in that list in September 2022 and applied in March 2024 to surrender its core‑investment‑company status after repaying its debt, but the RBI rejected the request, citing that the company still meets the upper‑layer criteria.
Tata Trusts, which own 66 % of the conglomerate, have opposed a listing, with chairman Noel Tata warning that it would destroy the company’s character, while Shapoorji Pallonji Group, holding 18.37 % of shares, lauds the move as a ‘social and moral imperative’ and urges a public listing.
With the RBI’s denial, Tata Sons’ board now faces a hard deadline to prepare a prospectus or face regulatory enforcement; the next board meeting, slated for early June, will decide whether to proceed with a listing or seek further clarification from the RBI.