Ambiguity over Tata Sons listing stays under RBI’s draft NBFC framework

In the draft guidelines released on Friday, the RBI has proposed that any NBFC with assets of Rs 1 lakh crore or more will automatically qualify as an NBFC‑UL, replacing the earlier mix of the top‑ten‑by‑size list and a parametric scoring model. RBI said this change is aimed at making the process “transparent, simple and objective,” eliminating the ambiguity that surrounded the earlier methodology. 

With Tata Sons’ FY25 asset base estimated at around Rs 1.75 lakh crore, the holding company comfortably meets the new threshold and will continue to fall under the upper regulatory layer, experts said.

However, others say the draft leaves one major question unanswered, whether a core investment company (CIC) classified as NBFC‑UL must list. “Until the RBI issues a final circular or explicitly addresses the treatment of CICs, Tata Sons and other large holding companies remain in a zone of regulatory uncertainty even as their classification under the upper layer becomes more definitive,” said a senior director of rating agency.  

In September 2025, Tata Sons missed the RBI mandated listing deadline. Although Tata Sons had applied to RBI to surrender its CIC registration to avoid the listing mandate, the regulator has not yet come out with a decision on its application.

But the jury is still out on the issue. Under the earlier regime, Tata Sons already qualified as an Upper Layer NBFC, but the parametric scoring system offered a potential escape route– the group reduced debt to bring down its score and avoid mandatory listing. The new draft rules are seen to eliminate that flexibility entirely.

Nazneen Ichhaporia, Partner at ANB Legal said, “Tata Sons seems to fall within the new definition, which would mean that if they do, they would need to go in for a listing to comply if the new regime gets effected.” He added that Tata Sons’ earlier plan to reduce debt may no longer help them avoid the listing requirement because the RBI has now anchored the classification purely to asset size. 

“This new definition is completely asset- based and not linked to any parametric scores. Just reducing the debt will not help them,” she said, emphasising that if the company meets the asset size requirements under the new regime, it “may not have the option but to go in for compliance and listing.”

CICs are also NBFCs, and the draft does not mention any exclusion for CICs. A senior official of another rating agency says, “Nothing has been mentioned to that extent. CICs are also NBFCs, implying that Tata Sons, registered as a CIC, would be treated like any other NBFC for the purpose of upper‑layer classification.” This is important because there had been industry speculation on whether CICs without external liabilities could be exempt from certain scale-based regulation (SBR) requirements. The new draft does not revisit those carve‑outs, effectively placing CICs squarely within the NBFC‑UL framework if they meet the asset threshold.

Meanwhile the draft also proposes to include state‑government‑owned NBFCs that meet the asset threshold, bringing large entities such as IRFC into the upper layer. The new guidelines will also bring Jio Financial under the NBFC-UL. “Inclusion of government owned entities too, based on their size, indicates a more harmonized way of identifying NBFC-UL. Based on the existing position, the number of NBFC-UL would go up vis-a-vis 15 entities identified previously,” said, A M Karthik, senior vice president and co-group head financial sector Ratings, ICRA.

At the same time, some NBFCs currently in the upper layer may be out if their assets are below the threshold, though the earlier rule requiring a minimum five‑year stay in the upper layer complicates this transition. “Clarity is still needed on whether the five‑year rule continues to apply under the new framework,” said Sanjay Agarwal, Senior Director at CareEdge Ratings.