Archive · 29 Sep 2026
Tata Trusts Propose Merger to Keep Tata Sons Private
Tata Trusts own about two-thirds of Tata Sons, the company that helps oversee the Tata Group.
They want Tata Sons to combine with two businesses called TESS and TCE.
These companies would bring large operating businesses and revenue directly into Tata Sons.
The combined company is expected to have about ₹1.05 lakh crore in operating revenue.
Tata Trusts says this would make Tata Sons look less like a financial investment company under RBI rules.
If the regulators agree, Tata Sons might not need to become a publicly listed company.
The plan needs approval from the Tata Sons board and a no-objection certificate from the RBI.
The RBI previously rejected Tata Sons’ request to give up its core investment company registration.
Reports also say the board has considered following RBI directions that could require Tata Sons to list.
Tata Trusts proposed merging Tata Electronics Systems Solutions and Tata Consulting Engineers into Tata Sons.
The combined entity is projected to generate ₹1,05,043 crore in operating revenue as of March 31, 2026.
Tata Trusts says the merger would take Tata Sons outside the RBI’s NBFC and CIC classifications.
The proposal requires Tata Sons board approval and a prior no-objection certificate from the RBI.
The plan follows the RBI’s rejection of Tata Sons’ request to surrender its CIC registration and reported disagreement over listing.
- Who
- Tata Trusts, chaired by Noel Tata, proposed the plan to Tata Sons; the Tata Sons board and the Reserve Bank of India must consider it.
- What
- A proposal to merge Tata Electronics Systems Solutions Private Limited and Tata Consulting Engineers with Tata Sons Private Limited.
- When
- The proposal was sent on a Monday in September 2026; the financial projections are based on figures as of March 31, 2026, and the RBI’s rejection was dated September 11.
- Where
- The proposed restructuring concerns Tata Sons and the Tata Group in India.
- Why
- Tata Trusts says the merger would restore Tata Sons’ historical operating model, alter its income and asset mix, and potentially remove the company from RBI classifications linked to mandatory listing.
Tata Trusts’ position
RBI and Tata Sons board considerations
Whether Tata Sons should remain unlisted
Tata Trusts’ position
Tata Trusts says the restructuring would preserve Tata Sons as an unlisted private company, consistent with resolutions passed by the Sir Dorabji Tata Trust and Sir Ratan Tata Trust boards in July 2025 and an earlier Tata Sons board resolution reported from 2024.
RBI and Tata Sons board considerations
The RBI’s upper-layer NBFC framework may require Tata Sons to list, and reports say the Tata Sons board agreed to follow the RBI’s direction to become a public company.
Effect of the merger on regulation
Tata Trusts’ position
Tata Trusts argues that adding operating businesses would make operating revenue dominant and reduce investments in group companies below the 90% CIC threshold, taking Tata Sons outside the relevant NBFC and CIC criteria.
RBI and Tata Sons board considerations
The RBI previously rejected Tata Sons’ request to surrender its CIC registration and instructed it to comply with upper-layer NBFC requirements; it remains uncertain whether the regulator would approve the proposed restructuring.
Authority to proceed
Tata Trusts’ position
Tata Trusts has asked the Tata Sons board to approve the merger and approach the RBI for the required no-objection certificate, describing the plan as a permissible reorganisation aligned with Tata Sons’ historical operating model.
RBI and Tata Sons board considerations
The merger cannot proceed without board and regulatory approval, while reports describe disagreement between Tata Trusts and the board over listing, governance and other company matters.
- Tata Trusts’ stake
- Approximately 66% of Tata Sons; one report specifies 65.9%.
- Companies proposed for merger
- Tata Electronics Systems Solutions Private Limited and Tata Consulting Engineers.
- Projected operating revenue
- ₹1,05,043 crore as of March 31, 2026.
- Income from financial assets
- ₹40,072 crore; operating revenue would represent 64.3% of total income.
- Projected net assets
- ₹2,00,158 crore, including ₹1,77,120 crore invested in group companies, or about 88.5%.
- Required approvals
- Tata Sons board approval and a prior RBI no-objection certificate under the 2025 voluntary amalgamation directions.
- RBI decision
- On September 11, the RBI rejected Tata Sons’ request to surrender its certificate of registration as a core investment company and advised compliance with upper-layer NBFC rules.
Sources
Tata Trusts proposes new strategy to keep Tata Sons privately held
Tata Trusts proposes Tata Sons rejig, merging two firms with it to avoid RBI listing
Noel Tata moots merger of 2 group firms with Tata Sons to keep it private
Tata Sons merger: What TCE and TESS bring to the table in Tata Trusts’ new plan
Tata Trusts proposes merger plan to keep Tata Sons unlisted
Tata Trusts moves to merge units with Tata Sons to fend off listing by RBI
