Mumbai — Tata Trusts has proposed a restructuring plan that would merge Tata Electronics Systems Solutions Private Ltd. and Tata Consulting Engineers with Tata Sons Private Ltd., a move aimed at taking Tata Sons outside the Reserve Bank of India’s regulatory framework for non-banking financial companies and core investment companies.
Tata Trusts, which owns about 66% of Tata Sons, said the proposed reorganization would allow Tata Sons to resume operating businesses directly while continuing to serve as the holding company for the Tata Group.
Under current RBI rules, Tata Sons’ classification as a core investment company has raised the prospect of a mandatory public listing.
In a statement Monday, Tata Trusts said the proposed restructuring would not represent a new model for Tata Sons. For much of its history, Tata Sons directly operated businesses and generated operating revenue that helped fund newer ventures.
The Trusts noted that Tata Consultancy Services was itself a division of Tata Sons until it was spun off into a separate subsidiary in 2004.
Under the proposed plan, Tata Electronics Systems Solutions Private Ltd., or TESS, and Tata Consulting Engineers, or TCE, would be merged into Tata Sons.
Tata Trusts said that, based on figures as of March 31, 2026, the combined company would have operating revenue of Rs 105,043 crore, compared with Rs 40,072 crore in income from financial assets. Operating revenue would represent 64.3% of total income.
The Trusts said the resulting company would therefore not meet the RBI’s “principal business criteria” for classification as an NBFC.
It also said the combined entity would no longer meet the requirements for classification as a core investment company. The Trusts estimated that the merged company would have net assets of Rs 200,158 crore, including Rs 177,120 crore invested in group companies, representing less than 90% of total net assets.
The proposed merger would require approval from the RBI under the Reserve Bank of India’s Non-Banking Financial Companies – Voluntary Amalgamation Directions, 2025, including a prior no-objection certificate.
If the restructuring is completed and Tata Sons ceases to qualify as a core investment company, it would also be required to surrender its certificate of registration.
Tata Trusts said it believes the restructuring would be in the interests of Tata Group and its stakeholders while remaining compliant with applicable regulations.
The Trusts have written to the Tata Sons board asking it to consider and approve the proposal and begin the process of seeking the required RBI approvals.
Tata Trusts and Tata Sons are also expected to engage with the central bank on the proposed restructuring.
The proposal follows resolutions adopted unanimously by the boards of the Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025 calling for efforts to preserve Tata Sons’ status as an unlisted private company.
Tata Trusts said maintaining that structure would help preserve the Tata Group’s century-old organizational model and its focus on long-term investments, nation-building initiatives and social welfare. (Source: IANS)
