Tata Sons Pvt. Ltd is likely to challenge the Reserve Bank of India’s directive to go public as Tata Trusts Chairman Noel Tata and a majority of trustees argue that the holding company of India’s largest business group by revenue should remain private.
“It looks like the only option is the legal route,” said one of the group’s leaders when asked whether he would accept the regulator’s position or go to court. However, the head added that a final decision has not yet been made and the future course is still being discussed.
“Everything rests on Noel’s shoulders. Either he agrees or goes to court. The entire board of Tata Trusts has taken a stand to keep it (Tata Sons) secret. So, unless Tata Trusts changes its position, they (Tata Sons) will be bound by it,” the executive said when asked if Tata Sons might reconsider its position on the IPO at the board meeting on September 17.
Tata Trusts, which owns 65.9% stake in Tata Sons, last year directed Tata Sons’ board of directors to do everything possible to maintain its confidentiality and consider exit options for its largest minority shareholder, Shapoorji Pallonji Group.
“The Chairman of Tata Sons is requested to make every effort to ensure that Tata Sons does not change its present status as a private unlisted company and that Tata Sons cooperates fully with the Reserve Bank of India in this regard,” said the resolution passed at the board meeting of Sir Ratan Tata Trusts on July 28, 2025.
In a letter dated September 11 to Tata Sons Chief Financial Officer Saurabh Agarwal, the RBI said, “After considering the above and examining all relevant factors, we advise that your request for voluntary surrender of CoR (Certificate of Registration) for classification as an unregistered CIC (Core Investment Company) cannot be granted.”
“We, therefore, advise you to immediately take necessary steps to ensure full compliance with all guidelines/instructions applicable to NBFC-Upper Tier (UL) issued by RBI.” Letter reviewed Mintdidn’t mention any deadlines.
The development comes in the backdrop of Tata Sons Chairman N Chandrasekaran’s announcement on August 12 that he will not continue beyond the current term, which ends on February 20.
“I am sure the Tata Group may want to challenge the RBI’s decision to force them to go public in court,” said Nitin Potdar, an independent corporate lawyer based in Mumbai. “This is especially due to the fact that the RBI had earlier allowed NBFCs, including Shanghvi Finance, to relinquish their principal investment company license. So, on what basis can the RBI direct Tata Sons to list?”
Shanghvi Finance Pvt. Ltd. is a private company of billionaire Dilip Shangvi, founder of Sun Pharmaceutical Industries Ltd. In 2023, it received an exemption from RBI requirements and continued to operate as a CIC.
“Secondly, as per the Companies Act, no regulatory authority, neither Sebi nor RBI, has the statutory power to force any company to go public. In fact, throughout the world, no country or regulator has a law that compels any company to go public,” Potdar said.
“On the one hand, we invite global MNCs to operate in India, regardless of their size, and allow them to delist by purchasing shares from Indian shareholders. So how can RBI force the country’s largest conglomerate to go public? The sequence and timing of events suggest that factors outside the law contributed to all of this.”
Tata Sons board meeting
The RBI decision comes less than a week ahead of the Tata Sons board meeting scheduled for September 17. One executive said the focus would be on the group’s options and the path forward.
This means that Noel Tata, who took over as chairman of Tata Trusts on October 11, 2024, two days after the death of his half-brother Ratan Tata, faces three immediate challenges: first, finding a successor to Chandrasekaran to lead the Tata Group, which includes all public and private companies, and ended ₹16,24,030 crores in revenue and ₹Profit of ₹1,70,525 crore in FY26.
This process can only begin once a five-member selection committee has been established.
However, the process has stalled as the important Sir Ratan Tata Trust (SRTT) is unable to carry out any activities. This is because the Maharashtra Charity Commissioner’s May 15 order prohibits SRTT from holding board meetings or taking decisions.
This follows allegations of wrongdoing within the trust by one of its trustees, Venu Srinivasan, and the petitioner. Three of the six members of SRTT are living trustees, which is allegedly in violation of the Maharashtra Public Trusts Rules, which stipulate that not more than a quarter of the trustees can be life members.
“I’m not surprised. It was coming,” said the founder and managing director of a Mumbai-based company that does business with the Tata Group. “If one reads RBI statements over the last one year, it is clear that [it was] in favor of Tata Sons going public. So I’d say this is a setback for Noel, who has repeatedly advocated for the company to remain private. But I certainly expect the Tatas to challenge this decision in the Bombay High Court.”
Largest minority shareholder of Tata Sons
The Shapoorji Pallonji group, which owns 18.37% stake in Tata Sons, will benefit from the possible listing as it will then be able to sell shares to service its proposed shares. ₹Debt 55,000-60,000 crore.
“Yes, SP Group gets an advantage once Tata Sons gets listed because in related party transactions, where Tata Trusts cannot vote on resolutions, SP Group can decide on the resolutions taken by the group,” senior Supreme Court lawyer HP Ranina said. “However, SP Group has always supported all Tata Group decisions so far; therefore, there is no reason to believe that it may not support the Tata Group in the future.”
Ranina added that SP Group may also get a seat on the board when Tata Sons goes public, “as the minority investor would like to have representation on the board.”
The RBI classified Tata Sons as a top-tier non-banking financial company (NBFC) in September 2022 and directed it to list publicly by September 2025.
Requests for comment sent to SP Group and Tata Trusts remained unanswered.
In early 2024, Tata Sons paid off all its debt and had a cash surplus, and on March 28, 2024, asked the central bank to delist so-called top-tier core investment companies, or large shadow banks.
Earlier this year, in April, the RBI issued another directive stating that shadow banks with assets exceeding ₹It was necessary to transfer 1 trillion. Selected assets of Tata Sons ₹2.01 trillion at the end of March 2026 exceeds the new central bank rules.
Ranin’s lawyer called the decision a setback for Noel Tata, saying he had few options other than to challenge it in court. “But generally speaking, listing will bring greater accountability, better corporate governance and will be the mother of all IPOs.”