The Reserve Bank of India last week directed Tata Sons to meet upper‑layer NBFC‑CIC norms, following a 2024 bid to exit the regime after slashing debt. The RBI's criteria require that financial assets and income each exceed 50% of total assets and income, a threshold that Tata Sons would surpass if it kept operating units under its umbrella.
Noel Tata’s August 2025 proposal merges Tata Electronics Systems and Tata Consulting Engineers into the 109‑year‑old holding company, shifting the income mix toward operating revenue. With projected operating earnings of ₹1.05 lakh crore and financial income of ₹40,072 crore, the new structure would push operating revenue to 64% of total income, pushing the company outside the NBFC test.
Subedar, an adviser to Tata Trusts, said the plan “returns the group to its historic structure” after the 2004 demerger of TCS. Parikh, a partner at Katalyst Advisors, warned that a future listing of either merged unit could force a demerger, potentially dragging Tata Sons back into the NBFC‑CIC fold.
The proposal must receive RBI’s no‑objection certificate before filing with the National Company Law Tribunal, and it will need approval from at least 75% of shareholders. A July 2025 resolution had directed trustees to preserve Tata Sons as an unlisted private firm, but some trustees argue the resolution cannot be applied automatically, citing the RBI’s pending decision on the earlier deregistration request.
Employees of Tata Consulting Engineers, many of whom have served the firm for over three decades, voice uncertainty over the merger’s impact on job security and future career paths, reflecting the human cost behind corporate restructuring.