Tata Trusts float merger plan to keep Tata Sons private

Tata Trusts on Monday proposed merging two operating companies into Tata Sons in a fresh bid to take the group’s holding company out of India’s core investment company category and avoid a public listing.

The Trusts, which own about 65.9 per cent of Tata Sons, want to fold Tata Electronics Systems Solutions and Tata Consulting Engineers into the parent. They argue the restructuring could help Tata Sons shed both CIC and non-banking financial company tags after the Reserve Bank of India on Sept. 11 rejected an earlier application to surrender CIC registration. Upper-layer NBFC rules generally require a public float; the Trusts have long insisted Tata Sons should stay private.

The Tata Sons board must still approve the plan. As recently as Sept. 17 the board had moved to comply with RBI rules even as Trusts chairman Noel Tata restated the preference for private ownership. Even with board assent, it is unclear whether the RBI will allow the holding company to exit the listing trigger. Global investors watching Tata Steel, TCS and Jaguar Land Rover parentage treat the governance fight as a signal about how India’s corporate giants will fund growth without diluting control.