Tata Trusts has proposed merging two operating companies into Tata Sons in a restructuring aimed at taking the group holding company outside the Reserve Bank of India’s NBFC and core investment company frameworks, potentially opening another route for Tata Sons to remain unlisted.

The Trusts, which own 66% of Tata Sons, said Tata Electronics Systems Solutions Private Limited and Tata Consulting Engineers should be merged into Tata Sons. The resulting entity would have sufficient operating revenue to fall outside the principal-business criteria used to classify an NBFC, according to a statement issued Sunday.

The proposal marks a fresh attempt to resolve the regulatory question surrounding Tata Sons after the RBI retained it in the upper layer of non-bank finance companies. It was previously reported that the RBI’s stance brought the prospect of a Tata Sons listing to the centre of a wider dispute involving Tata Trusts, the Tata Sons board and minority shareholder Shapoorji Pallonji Group.

Under the proposed structure, the amalgamated Tata Sons would have had operating revenue of about ₹1.05 trillion as of March 31, compared with ₹400.72 billion of income from financial assets. Operating revenue would account for 64.3% of total income, the Trusts said.

The combined entity would also have net assets of about ₹2 trillion, of which investments in group companies would amount to ₹1.77 trillion, below the 90% threshold cited by the Trusts for classification as a core investment company.

The Trusts said the structure would effectively return Tata Sons to an earlier operating model. Tata Sons historically housed operating businesses alongside its role as group holding company, including Tata Consultancy Services before its demerger in 2004. The Trusts said the RBI had previously classified Tata Sons as a non-banking, non-financial company after that period.

RBI Approval Still Needed

The proposal is not automatic.

The Trusts said a merger of operating companies with Tata Sons would have to comply with the RBI’s Non-Banking Financial Companies – Voluntary Amalgamation Directions, 2025, including obtaining a prior no-objection certificate from the central bank. Tata Sons would also have to surrender its registration if it ceased to qualify as a CIC.

Tata Trusts has written to the Tata Sons board seeking approval for the plan and said it intends to engage with the RBI alongside Tata Sons.

The proposal is also explicitly tied to the Trusts’ preference that Tata Sons remain private. The boards of the Sir Dorabji Tata Trust and Sir Ratan Tata Trust unanimously resolved in July 2025 that efforts should be made to preserve Tata Sons’ status as an unlisted private company, according to Sunday’s statement.

That position has become one of the central fault lines within the group. BasisPoint Insight has reported that the Trusts’ desire to preserve the Tata ownership model sits alongside the RBI’s regulatory requirements and the Shapoorji Pallonji Group’s interest in obtaining liquidity and a market-based valuation for its large minority stake.

The listing question has also become entangled with Tata Sons governance. Earlier this month, the Tata Sons board voted to reappoint N. Chandrasekaran as executive chairman even as Tata Trusts challenged the validity of the decision under the company’s Articles of Association.

The latest proposal shifts the argument from whether Tata Sons should list to whether its corporate structure can be changed sufficiently to remove the regulatory trigger for doing so.

For now, that question returns to the RBI.