Tata Trusts, which hold a 66% stake in Tata Sons Private Limited (TSPL), have proposed a strategic reorganisation of the Tata Group holding company that would result in the entity ceasing to qualify as either a non-banking financial company (NBFC) or a core investment company (CIC).
The proposal involves merging Tata Electronics Systems Solutions Private Limited (TESS) and Tata Consulting Engineers (TCE) with TSPL. Noel Tata, in his capacity as Tata Trusts chairman on Monday wrote to Tata Sons seeking consideration and approval of the proposal. He also asked the holdco to take the necessary steps, including applying to the Reserve Bank of India (RBI) for a no-objection certificate for the merger.
According to a statement by Tata Trusts, the proposed reorganisation would restore TSPL to an operating model that it had followed for most of its history, with its own operating businesses and revenues alongside its role as the holding company of the Tata Group.
The Trusts said TSPL had operating businesses and revenues for almost 80 years of its 100-year existence, which enabled it to fund newer business ventures. Tata Consultancy Services, for instance, was a division of TSPL until 2004, when it was demerged into a separate subsidiary.
The amalgamated entity, based on financials as of March 31, 2026, would have operating revenues of Rs 105,043 crore, compared with income from financial assets of Rs 40,072 crore. Operating revenues would therefore account for 64.3% of its total income, the Trusts said.
The entity would not meet the “principal business criteria” for classification as an NBFC, according to the proposal. It would also not meet the conditions applicable to a CIC, with net assets of Rs 2,00,158 crore, of which investments in group companies would account for Rs 1,77,120 crore, or less than 90% of aggregate net assets.
The Trusts said the merger would have to comply with the RBI’s Non-Banking Financial Companies – Voluntary Amalgamation Directions, 2025, including the requirement for a prior no-objection certificate from the central bank.
As TSPL would cease to be a CIC after the reorganisation, it would also need to surrender its certificate of registration, the Trusts said.
The Trusts said the proposed structure would preserve TSPL’s status as an unlisted private company, in line with unanimous resolutions passed by the boards of Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025.