Tata Sons to be split into smaller entities instead of listing? Here’s what we know

Tata Sons listing: Noel Tata, chairman of Tata Trusts, has reportedly suggested that Tata Sons consider restructuring the holding company, including the possibility of splitting it into several entities, as an alternative to a public listing to comply with Reserve Bank of India (RBI) requirements.

According to a report in The Economic Times that cited people in the know, the proposal was made at the Tata Sons board meeting on September 17. However, it remains unclear if the board will take it up, the report said. The meeting revealed a clear divide between Noel Tata and other board members, who voted to reappoint N Chandrasekaran as chairman and to begin the process of listing Tata Sons. Noel Tata opposed both decisions.

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The RBI has classified Tata Sons as an upper-layer non-banking finance company, subjecting it to stricter regulatory norms. Tata Sons has been assessing the implications of this classification and exploring possible options.

There was no vote on the resolution related to the RBI directive during the meeting, though the issue was discussed extensively. Tata later proposed that both sides form a team to study the matter in detail, it said.

Tata Sons is reported to have started preparations for a public listing following the RBI's directive, with an internal target of around February 2027 for a potential market debut.

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Experts say restructuring could be complex, involving a demerger, asset transfers to subsidiaries, mergers, or a broader scheme of arrangement. Given the size of Tata Sons, such a process may involve significant regulatory, commercial, and tax challenges.

Tata Sons holds a wide portfolio including Tata Consultancy Services, Tata Motors, Tata Steel, Tata Capital, Tata Communications, Tata Consumer Products, Tata Investment Corporation, Air India, Tata Digital, Tata Electronics, and Agratas. On a consolidated basis, its revenue for FY26 rose 17 per cent to ₹6.61 lakh crore, while net profit fell 35.7 per cent to ₹17,923 crore.

The restructuring could also raise governance questions and affect the position of listed and unlisted businesses, the report indicated.

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The Shapoorji Pallonji Group, which owns about 18.37 per cent of Tata Sons, supports a listing. The group completed a ₹21,500-crore refinancing in July after announcing plans to monetise part of its Tata Sons stake within 18 months. It faces a repayment obligation of about ₹3,500 crore by the end of September.