- Tata Trusts propose merging firms to reclassify Tata Sons.
- Restructuring aims to restore Tata Sons’ operating business model.
- Entity will generate Rs 1.05 lakh crore operating revenue.
The Tata Trusts, which hold a 66% stake in Tata Sons Private Limited (TSPL), have proposed a strategic reorganisation of the company that would result in the Tata Group holding company ceasing to be classified as either a Non-Banking Financial Company (NBFC) or a Core Investment Company (CIC).
The proposed restructuring involves the merger of Tata Electronics Systems Solutions Private Limited (TESS) and Tata Consulting Engineers (TCE) with TSPL.
The Tata Trusts have written to the TSPL board seeking consideration and approval of the proposal and asking it to initiate the necessary steps, including applying to the Reserve Bank of India (RBI) for a no-objection certificate for the proposed merger.
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Tata Sons To Return To Operating Business Model
According to the Tata Trusts, the proposed reorganisation would restore an operating model that TSPL followed for much of its 100-year history.
The Trusts said TSPL had operating businesses and revenues for almost 80 years, which helped fund newer ventures. Tata Consultancy Services (TCS), for instance, was a business division of TSPL until it was demerged into a separate subsidiary in 2004.
Other operating businesses were also previously part of TSPL. The proposed restructuring would therefore give Tata Sons its own operating businesses and revenues alongside its role as the holding company of the Tata Group.
The Trusts said this would also align with the RBI’s earlier classification of TSPL, after 2004, as a “non-banking, non-financial company”.
The Tata Trusts today, as majority shareholders with a 66% stake in Tata Sons Private Limited (TSPL), outlined a strategic reorganisation plan for the Company which, when given effect to, would ensure that the reorganised entity would neither be a ‘Non-Banking Financial Company’… pic.twitter.com/H9yWp5pBMj
— Tata Trusts (@tatatrusts) September 28, 2026
Proposed Entity To Have Rs 1.05L Cr Operating Revenue
Under the proposed merger, the amalgamated entity would have operating revenues of Rs 1,05,043 crore as of March 31, 2026.
The operating revenues would account for 64.3% of the entity’s total income and exceed its income from financial assets, which stood at Rs 40,072 crore.
The Tata Trusts said the resultant entity would not meet the “principal business criteria” for classification as an NBFC.
It would also not meet the conditions applicable to a CIC. The entity would have aggregate net assets of Rs 2,00,158 crore, including Rs 1,77,120 crore invested in group companies. Such investments would account for less than 90% of its aggregate net assets.
RBI Approval Required For Merger
The proposed amalgamation of operating, non-financial companies such as TESS and TCE with TSPL, which is currently an NBFC, would need to comply with the RBI’s Non-Banking Financial Companies – Voluntary Amalgamation Directions, 2025.
This includes obtaining a prior no-objection certificate from the RBI.
As TSPL would cease to qualify as a CIC after the proposed restructuring, it would also be required to surrender its certificate of registration, according to the Tata Trusts.
The Trusts said they, along with TSPL, would engage with the RBI on all aspects of the proposed reorganisation.
‘Plan Will Preserve Tata Group Structure’
The Tata Trusts said the proposed reorganisation and compliance plan would be in the interests of the Tata Group and its stakeholders, while also providing a regulatory-compliant route for reorganising TSPL.
The proposal is also in line with unanimous resolutions passed by the boards of the Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025, under which efforts were to be made to retain TSPL’s status as an unlisted private company.
The Trusts said the restructuring would also preserve the Tata Group’s more than 100-year-old organisational structure, which it described as focused on long-term strategic initiatives, nation-building and the welfare of disadvantaged and excluded sections of society.
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