RBI Rejects Tata Sons' Application to Surrender Certificate of Registration, Listing Back in Focus

Bringing the curtain down on a question that has lingered for more than two years, the Reserve Bank of India (RBI) has rejected Tata Sons’ application to surrender its Certificate of Registration (CoR), sources close to the development told FE. This closes a key route the Tata Group ’s holding company had pursued to avoid a stock market listing. Instead, the RBI is believed to have directed Tata Sons to take steps to fully comply with regulations governing non-banking financial companies classified in the Upper Layer (NBFC-UL). The development brings the long-running question over Tata Sons’ listing back into focus at a time when the group holding company is also preparing for a leadership transition. Chairman N Chandrasekaran wrote to the Tata Sons board in August conveying his decision not to seek reappointment after his current term ends on February 20, 2027. The Tata Sons board is scheduled to meet on September 17, when the RBI’s latest communication is expected to be discussed. It is not immediately clear whether the meeting will be advanced or an emergency meeting called early next week. Both Tata Sons and the RBI did not respond to queries sent by FE till press time. Tata Sons has been classified as an Upper Layer NBFC since September 2022. Under the RBI’s scale-based regulatory framework, entities in this category are subject to enhanced regulatory requirements, including a mandate to list within three years of being classified in the Upper Layer. That deadline expired in September 2025, but Tata Sons has remained unlisted. Tata Sons had sought to exit the regulatory framework after becoming debt-free in 2024, repaying its outstanding borrowings and applying to surrender its registration as a core investment company (CIC). When the RBI included Tata Sons in its latest list of Upper Layer NBFCs in August 2026, it said the company’s application for deregistration as a CIC remained under examination. Its inclusion in the list, the regulator said, was “without prejudice” to the final outcome of the application. The RBI’s revised scale-based regulatory framework, updated in June 2026, sets an asset threshold of Rs 1 lakh crore for classification in the Upper Layer. Tata Sons reported total assets of Rs 2.01 lakh crore as of March 31, 2026, according to its FY26 annual report, more than twice the threshold. Under RBI guidelines, an NBFC seeking exemption from registration must meet prescribed conditions, including not accessing public funds, having no customer interface and having assets of less than Rs 1,000 crore. The guidelines allow existing NBFCs that do not access public funds or have a customer interface, including those holding a CoR as Type-I NBFCs, to apply for deregistration by December 31, 2026, provided they meet the prescribed exemption criteria. The RBI guidelines also specify that an NBFC classified in the Upper Layer will continue to be subject to the enhanced regulatory framework for at least five years even if it subsequently ceases to meet the qualifying criteria. The September 11 communication appears to have brought Tata Sons’ deregistration effort to a close, potentially intensifying the debate among its shareholders over whether the closely held holding company should remain private. Tata Trusts, which controls around 66% of Tata Sons through the Sir Ratan Tata Trust and Sir Dorabji Tata Trust, passed a resolution in July 2025 favouring retention of Tata Sons as a private company. The Shapoorji Pallonji (SP) Group, Tata Sons’ largest minority shareholder with an 18.37% stake, has taken a different position, viewing a listing as the most practical way to unlock the value of its holding. The SP Group is seeking to monetise part of its Tata Sons stake to repay a portion of its estimated Rs 60,000 crore debt. Some of its Tata Sons shares have also been pledged to raise funds.