Tata Trusts has proposed a restructuring of Tata Sons Private Limited that could result in the Tata Group’s holding company no longer being classified as a Non-Banking Financial Company (NBFC) or a Core Investment Company (CIC).

Under the proposed plan, Tata Electronics Systems Solutions Private Limited (TESS) and Tata Consulting Engineers (TCE) would be merged with Tata Sons.

Tata Trusts, which owns 66 per cent of Tata Sons, said the proposed consolidation would create an operating structure for Tata Sons, giving the holding company its own business operations and revenue streams while retaining its role at the centre of the Tata Group.

Tata Sons Could Move Away From NBFC Classification

According to Tata Trusts, the merged entity would have generated operating revenue of Rs 1,05,043 crore as of March 31, 2026.

Income from financial assets stood at Rs 40,072 crore during the same period. Based on the proposed structure, operating revenue would account for 64.3 per cent of the entity’s overall income.

Tata Trusts said this composition would mean the company would not satisfy the principal business criteria required for classification as an NBFC.

The proposed restructuring would also alter the proportion of Tata Sons’ assets represented by investments in group companies.

CIC Criteria Also Expected To Change

Tata Trusts said investments in group companies would constitute less than 90 per cent of the combined entity’s aggregate net assets after the proposed merger.

On that basis, the company would not meet the criteria for classification as a Core Investment Company, according to the Trusts.

The restructuring would therefore potentially change the regulatory framework applicable to Tata Sons.

RBI Nod Required

The proposed merger will require compliance with the Reserve Bank of India’s Non-Banking Financial Companies – Voluntary Amalgamation Directions, 2025.

Tata Trusts said the transaction would require a prior no-objection certificate from the RBI.

If Tata Sons ceases to qualify as a CIC following the restructuring, the company would also be required to surrender its existing certificate of registration.

Tata Trusts has approached the Tata Sons board to consider the proposal and initiate the necessary regulatory process, including seeking the RBI’s approval.

The Trusts and Tata Sons are expected to engage with the central bank as the restructuring process moves forward.

Tata Sons To Remain Unlisted

The proposed reorganisation is also aimed at maintaining Tata Sons’ status as an unlisted private company.

Tata Trusts said the structure is intended to meet regulatory requirements while preserving the Tata Group’s long-established organisational framework.

The proposal follows resolutions adopted by the Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025, under which efforts were to be made to retain Tata Sons as an unlisted private company.

If approved by the relevant authorities and completed, the merger would give Tata Sons a more direct operating role while it continues to function as the holding company of the wider Tata Group.