Will Tata Sons stay private? RBI's latest circular raises fresh questions

Will Tata Sons, the holding company of the sprawling Tata conglomerate spanning aviation to software, be required to list?

There have been a lot of debates around the potential listing of Tata Sons, with some backing it, while others preferring that it should remain private. However, the decision will ultimately lie with the Reserve Bank of India.

A fresh circular issued by the central bank this week around the surrender of NBFC registration will renew the debate on how the regulator views indirect public funds. 

In 2022, the RBI released a list of upper-layer non-banking finance companies. This list included Tata Sons as a core investment company (CIC). RBI rules mandate all upper-layer NBFCs must list within three years. 

Since then, Tata Sons has taken various steps in a bid to stay private, including applying for deregistration as an NBFC. But a decision on that application is still awaited. The central bank is expected to release an updated list of upper-layer NBFCs soon, which should bring greater clarity.

Meanwhile, on June 30, 2026, the RBI issued a seemingly procedural circular on the voluntary surrender of certificates of registration by NBFCs.

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The circular, however, referred back to the amended directions on registration, exemptions and the scale-based regulatory framework for NBFCs that the RBI issued on April 29, 2026.

The April directions clearly stated that indirect receipt of public funds refers to funds received not directly, but through associates and group entities that have access to public funds.

Basically, equity received from group companies that had access to capital may also count to indirect access to public capital. Those directions could have shut the door for Tata Sons bid to stay private. 

These amended directions were effective July 1.

In between, on Wednesday, June 24, 2026, the RBI had issued a separate circular about the final guidelines for the classification of upper layer NBFCs. These guidelines laid out a clear asset size-based definition for upper layer NBFCs. According to that any NBFC having an asset size of Rs 1 lakh crore and above as per the latest audited balance sheet for the financial year shall be considered an upper layer NBFC. 

On the asset size alone, Tata Sons estimated to be having standalone assets of over Rs 1.75 lakh crore, will easily make it to the list. 

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But those guidelines didn't have any mention of the April 29 directions and the specific issue around indirect receipt of public funds. That perhaps made some to believe that Tata Sons may get a reprieve from the listing. The June 24 guidelines were also effective from July 1. 

The circular on voluntary deregistration of certificate of NBFCs just a day before that has in a way cleared the ambiguity around how the central bank looks at the indirect receipt of public funds. 

This is crucial as several listed companies have been holding stakes in Tata Sons dating back almost three decades, when it had come with a rights issue. 

It's worth making it clear that the two circulars touch upon different issues, although pertaining to NBFCs. Also, neither the RBI nor Tatas have clarified on what's next for Tata Sons. 

The June 30 circular notes that mere submission of the application with supporting documents by an NBFC should not be construed as cancellation of its certificate of registration and NBFCs should continue to comply with all applicable guidelines/instructions issued by competent authorities and submit requisite regulatory/supervisory returns, as applicable, until the registration is cancelled.

All eyes will now be on what decision the RBI takes on Tata Sons' application and the expected updated list on upper layer NBFCs. 

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