Proxy advisory firm InGovern Research Services on Friday urged the Reserve Bank of India (RBI) to formally reject Tata Sons’ application to surrender its registration as a Systemically Important Core Investment Company (CIC), arguing the request no longer holds legal or regulatory ground under the revised 2026 framework.
“The RBI should issue an explicit, formal rejection of the application, thereby upholding the sanctity of the scale-based regulatory (SBR) framework and protecting the interests of over 12 million public shareholders invested in the Tata ecosystem,” the report said.
Said Shriram Subramanian, managing director at InGovern,“Tata Sons is debt-free on a standalone basis. But the RBI’s April 29 circular makes it amply clear that Tata Sons indirectly has access to public funds through its group entities. This requires it to comply with NBFC upper-layer norms and, therefore, to get listed.”
He added that provisions around direct and indirect access to funds were already outlined in the March 2024 circular but had largely gone unnoticed. “Now it makes it clear,” he said.
Indirect Public Funds
The report comes days before the RBI’s deadline to submit comments on draft guidelines for classifying upper-layer NBFCs on Monday.
InGovern described Tata Sons’ application as both procedurally time-barred and substantively inconsistent with the regulator’s current stance.
In recent months, Vijay Singh and Venu Srinivasan of Tata Trusts have expressed support for listing Tata Sons, while Chairman Noel Tata is understood to favour maintaining the status quo.
Tata Sons had sought to exit the CIC framework in 2024 after repaying over ₹20,000 crore in standalone debt, arguing that it no longer accessed public funds and therefore qualified for deregistration. However, the report noted that the April 29 circular clarified: “Due to use of leverage, multiple layers and fungibility of money, it is difficult to establish with reasonable assurance whether the equity infusion by group entities is from their owned funds.”
Around 13–14% of Tata Sons’ equity is held by listed group companies such as Tata Steel, Tata Motors, Tata Power and Tata Chemicals, all of which raise capital from public markets. According to InGovern, this cross-holding creates a continuing linkage to public funds that standalone debt repayment cannot negate.
The report also said Tata Sons continues to be classified as an upper-layer non-banking financial company (NBFC) under revised norms issued earlier this month.
Regulatory Thresholds
With assets of about ₹1.75 lakh crore, the holding company far exceeds the ₹1,000 crore threshold prescribed for voluntary deregistration and crosses the proposed ₹1 lakh crore benchmark for automatic upper-layer classification. InGovern said this scale alone places Tata Sons firmly within the regulatory perimeter.
It further argued that the September deadline for voluntary deregistration has already passed, rendering any pending application “legally defunct”. It added that the RBI now emphasises deregistration as “a privilege, not a right”, requiring strict compliance, including certification that the company has neither used public funds nor functioned as a systemically important CIC for two continuous years.
Drawing comparisons, the firm noted that other large financial groups chose to restructure within the regulatory framework rather than exit oversight. For instance, L&T Finance consolidated subsidiaries and was reclassified as an NBFC-ICC, while in other cases licences were surrendered following mergers into regulated, listed entities.
In contrast, the report said Tata Sons is attempting to retain its private holding structure while shedding CIC oversight—an approach it termed inconsistent with recent regulatory precedent.
The firm also highlighted that, as a private entity, Tata Sons remains outside the disclosure and listing requirements mandated by the Securities and Exchange Board of India (Sebi) and listing would strengthen board independence, related-party transaction oversight and transparency in group-level capital allocation.
InGovern said the RBI should ensure Tata Sons complies with mandatory listing requirements applicable to upper-layer NBFCs within the prescribed timeline. “Deviating from these standards for an entity of this size would diminish the credibility of the entire SBR framework,” the report said.
The RBI has not publicly commented on the status of Tata Sons’ deregistration plea.