Tata Sons remains an upper-layer non-banking financial company (NBFC-UL), the Reserve Bank of India (RBI) said on Thursday, adding that the company’s deregistration application is currently under review.
“Inclusion of Tata Sons Private Limited in the list of NBFC-UL is without prejudice to the outcome of its application for deregistration, which is under examination,” the banking regulator said.
Upper-layer NBFCs are subjected to enhanced regulatory requirements for at least five years.
The RBI’s decision on Tata Sons’ application to deregister as an NBFC will play a crucial role in determining the timeline for the company’s initial public offering (IPO).
Tata Sons was first classified as an NBFC-upper layer entity in September 2022, which means the deadline to list its shares on the bourses ends in September this year.
As per the RBI regulations, an upper-layer NBFC has to be listed on the bourses within three years of being included in the list.
According to reports, Tata Sons had submitted an application to surrender its core investment company registration last year after squaring off Rs 30,000 crore outstanding loans. Tata Sons also submitted an application for surrendering its certificate of registration as a core investment company.
The apex bank’s list of NBFCs in the upper layer for the financial year 2024-25 features 15 companies in all, including LIC Housing Finance, Bajaj Finance, Bajaj Housing Finance, Shriram Finance, HDB Financial Services, and Cholamandalam Investment and Finance, among others.
Bajaj Housing Finance was listed on the stock exchanges last year, while HDB Financial Services is currently preparing for its IPO.
Despite qualifying for identification as an upper-layer NBFC, Piramal Enterprises has not been included in the updated list because of ongoing reorganisation within the group.
“Despite qualifying for identification as NBFC-UL as per scoring methodology, Piramal Enterprises Limited is not being included in the list of NBFC-UL in the current review due to ongoing reorganisation in the business group,” RBI said.
However, Piramal Capital & Housing Finance is on the list.
RBI had introduced the scale-based regulation (SBR) framework on October 22, 2021, which classifies NBFCs into four layers: base layer, middle layer, upper layer, and top layer. The SBR framework imposes stricter governance and transparency norms on systemically important NBFCs.