The Tata group‘s absolute sway over its companies has never been questioned before. That may be about to change. The Reserve Bank of India‘s rejection of Tata Sons’ application to surrender its Core Investment Company registration has brought the conglomerate’s long-delayed listing back into focus. Observers say a listing could also trigger closer scrutiny of the special governance rights Tata Trusts enjoys through the holding company’s Articles of Association (AoA) — control that goes well beyond its roughly 66% shareholding and has so far operated outside public view.
Corporate lawyers say at the heart of the matter are provisions giving the Trusts extraordinary powers over Tata Sons. Under Article 104B, the Trusts can jointly nominate one-third of the Tata Sons board while they hold at least 40% of ordinary share capital. More significantly, Article 121 requires that any matter decided by a majority of directors must also receive the affirmative vote of a majority of Trust-nominated directors — in effect, a veto. The AoA also requires at least one Trust nominee for board quorum, and gives them three of five seats on the chairman-selection committee.
These rights would not automatically lapse on listing. They would have to be tested against the Companies Act, Sebi’s Listing Obligations and Disclosure Requirements (LODR) regulations and other securities laws, according to Yash Joglekar, advocate, Bombay High Court.
The Trust nominees’ veto covers eight broad areas: the five-year strategic plan, the annual business plan, any investment above ₹100 crore, Tata Sons‘ voting at group companies’ general meetings, borrowing beyond twice net worth, changes in capital structure, pledging or selling group company stakes, and anything affecting the Trusts’ shareholding.
Two of those clauses — Articles 121A(e) and 121A(g), which make capital issuance and dilution of the Trusts’ shareholding reserved matters requiring affirmative votes from both Trust nominees — mean Tata Sons cannot independently decide on an IPO.
Herein lies the dilemma. Tata Trusts Chairman Noel Tata wants Tata Sons to remain private — a stance the trustees had earlier collectively endorsed. But Venu Srinivasan, the Trusts’ vice chairman and second nominee on the Tata Sons board, has since reversed his position and backed a listing. With both nominees’ affirmative votes needed on reserved matters, their deadlock blocks any IPO resolution. There is no casting vote for the Tata Sons chairman; the rules make this a Tata Trusts decision.
The trustees formalised their stance in a Sir Ratan Tata Trust resolution on July 28 last year, asking the Tata Sons chairman to exercise “best endeavours” to ensure the company retains its status as “an unlisted private company” and engages fully with the RBI.
The rift comes to a head at the board meeting on September 17 — the first since chairman N Chandrasekaran said he would step down when his term ends in February. Sir Dorabji Tata Trust (SDTT), the largest shareholder, accepted the decision on August 13 and initiated a five-member search panel under the AoA. But the process has stalled amid the internal division and a regulatory order: the Maharashtra Charity Commissioner has barred Sir Ratan Tata Trust (SRTT) from holding board meetings or taking decisions, so Chandrasekaran’s renewal as director could not be taken up at the August 18 AGM for want of quorum.
A Tata Trusts executive said signing an IPO prospectus as promoter would be challenging because almost all trustees — barring Srinivasan and Vijay Singh, who favours a listing but is no longer on the Tata Sons board — have reaffirmed their preference for staying private. Article 104B contains a tie-breaker — when SDTT and SRTT differ, the majority of all trustees across both Trusts prevails — but it applies only to director appointments, and it is unclear whether it would be invoked.
The bigger question is what happens to this control architecture if it is forced to list. A listing would, for a start, require Tata Sons to convert into a public company and scrap the private-company articles that restrict free transfer of its shares and effectively bar new shareholders.
The sharper test would come from securities law. Under Regulation 31B of LODR, special rights granted to shareholders of a listed entity require a special resolution once every five years — and Sebi has specifically identified nomination and affirmative-voting rights among those covered. That could make Article 121 particularly vulnerable: while the Trusts’ nomination right may have a stronger basis to continue, the veto mechanism could need periodic shareholder approval after listing, as could the quorum and chairman-selection provisions.
The calculus differs for the Shapoorji Pallonji Group, which holds about 18.37% and has long favoured a listing. Going public would not, by itself, give the SP Group a right to nominate directors, Joglekar said — company law does not prescribe board representation by shareholding, and any entitlement would have to flow from the AoA, an enforceable agreement or the statutory appointment process.
Tata Sons has been an NBFC-Upper Layer since September 2022, requiring it to list within three years — a deadline that expired in September 2025. It sought deregistration after extinguishing its debt and turning net cash positive in FY24, but the RBI has now shut that route. Tata Sons had ₹2.01 lakh crore of assets as of March 31, 2026.
That leaves Tata Sons facing a question as consequential as the listing itself: how much of the Trusts’ control architecture can survive the listed-company regime?