"Required To List": On Tata Sons, RBI Governor Sanjay Malhotra Reads The Rulebook

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday avoided a direct answer on the ongoing row within Tata Sons over whether it should be listed on the stock market, but he laid out the conditions that make it mandatory. As long as Tata Sons is a core investment company classified in the central bank's upper layer, it is required to list, Malhotra said at the NDTV World Summit 2026 in New Delhi.

Asked whether a restructuring or reorganisation of a company to avoid such listing would be acceptable, Malhotra said, "As long as it's an NBFC (non-banking financial company) within our definition, it's a CIC, it has access to funds, direct or indirect, it's required to be registered. And if it is in the upper layer, then it is required to list."

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Core investment companies (CICs) are holding companies that mainly invest in their own group firms. They are a category of non-banking financial companies (NBFCs), which the RBI regulates. The federal bank places the largest and most closely supervised NBFCs in what it calls the "upper layer". "NBFCs and CICs, like for example, Tata Sons and others... are required to be registered with us," Malhotra said. He explained, "They are required to be registered because of the systemic risks, because they sit on top of group companies."

He said such companies can and do leverage funds, "and they use the balance sheets of the group companies to return those funds". 

"The funds of the public, whether it is banks, whether it is through corporate bonds and other means, are at risk when these CICs do this kind of activity," Malhotra said. "It is for these reasons that these CICs, which are a type of NBFCs, are required to be registered."

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The remarks come six weeks after the RBI rejected Tata Sons' application to surrender its CIC registration. The rejection directed the company towards compliance with the rules for upper-layer NBFCs. Those rules require such companies to list within three years of being classified.

Tata Sons was placed in the upper layer in September 2022. It had applied in March 2024 to surrender its registration, and had repaid its debt in an effort to qualify for deregistration.

The Tata Sons board has since moved ahead with steps linked to a possible public listing, while saying it will examine other options amid a deepening row within the conglomerate.

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Tata Trusts own about 66 per cent of Tata Sons and oppose a listing. On September 28, they proposed merging two operating companies, Tata Electronics Systems Solutions and Tata Consulting Engineers, into the holding company Tata Sons. The Trusts said in a statement that the reorganised entity "would neither be a non-banking financial company (NBFC) nor a core investment company (CIC)". They have asked the Tata Sons board to seek a no-objection certificate from the RBI.

Tata Trusts chairman Noel Tata has told the board that "a listing will destroy its character".

The Shapoorji Pallonji group, which owns 18.37 per cent of Tata Sons, is among those who back a listing. Its chairman, Shapoorji Pallonji Mistry, has called it "a social and moral imperative".