Tata Trusts has made a plan to free Tata Sons, the main company of Tata Group, from some strict rules and restrictions of RBI. Under this plan, two separate companies of Tata – Tata Electronics and Tata Consulting Engineers will be merged with Tata Sons. That means these three companies will be merged into one. This will make it easier for Tata Sons to work without government restrictions. The purpose of the merger is to take Tata Sons out of the category of Non-Banking Financial Company (NBFC) and Core Investment Company (CIC). Due to this, the strict restrictions of RBI on the company will be reduced. If this proposal issued by Tata Trusts on Monday is approved by the board of Tata Sons and RBI, then Tata Sons will continue to operate as an unlisted private company. Tata Trusts hold approximately 66% stake in Tata Sons. Tata Trusts, which owns approximately 66% stake in Tata Sons, has sent a letter to the board of Tata Sons. It is written in this letter that please consider this merger plan of the company and give your approval to it. Also apply to Reserve Bank of India (RBI) for approval to implement this merger and ask for No Objection Certificate (NOC). Tata Trusts said it will discuss with the RBI all aspects of the proposed merger with Tata Sons. Tata Sons’ new way to avoid public listing: Earlier this month, RBI had rejected the application of Tata Sons, in which it had sought to exclude itself from the category of investment company. According to RBI rules, it is mandatory for big financial companies like Tata Sons to be listed in the stock exchange. In such a situation, this new way has been found to avoid the compulsion of getting listed in the stock market. Instead of breaking the company into pieces, Tata Sons has decided to merge its two thriving non-financial businesses – electronics and engineering. With this, Tata Sons will not have to depend only on the profits from investments of other companies, but will also start earning direct and huge income by doing its own business. This will completely change the way the company works and there will be no pressure on it to get listed in the stock market. Earlier Tata Sons used to work like an investment company. Understand this in this way that earlier Tata Sons used to work only like an investment company. Which did not have any factory or direct sales of its own, it only invested money in other companies. However, now with the merger of two running companies, it will not be just an investing company, but will itself become a company that directly sells goods and services. Tata Sons’ earnings figures and RBI’s mathematics Tata Trusts says that after the merger, by March 2026, 64.3% of the total income of the new Tata Sons i.e. about ₹ 1,05,043 crore will come from the operating business of selling goods or services. Whereas only 35.7% share i.e. approximately ₹ 40,072 crore will come from investment and financial sources. RBI considers a company as a financial or investment company (NBFC) only when most of its income comes from money transactions or investments. Tata Trusts argue that now most of Tata Sons’ earnings will come from direct business. This is the reason why it will not meet the criteria of RBI so that it can be called NBFC. That is, it will automatically be out of the purview of RBI’s stringent financial rules. Tata Sons’ way out of Core Investment Company According to RBI rules, if 90% or more of the total assets of a company are in the form of shares or investments in other companies, then it is considered as Core Investment Company i.e. CIC. After the merger, the total assets of Tata Sons will become ₹2,00,158 crore. Out of this, the money invested in other companies will reduce to only 88.5%. That means it will fall below the government limit of 90% and the company will automatically be out of the purview of this strict rule. If this plan is completed, Tata Sons will return to its old way of working. It will not only be a company that invests money in other companies, but will also run the business directly itself and will also continue to work as the largest holding company of the Tata Group. This move is like making Tata Sons like its old days. Tata Trusts say that this move is like making Tata Sons like its old days. In its more than 100-year history, Tata Sons has run its own businesses and generated direct revenue for nearly 80 years. With this income, she used to invest money in starting new businesses of Tata Group. For example, Tata Consultancy Services was not a separate company before 2004, but was a part of Tata Sons. According to the trusts, if this new change is implemented, Tata Sons will return to its 2004 status and become a normal i.e. non-financial company under the rules of the Reserve Bank. Government approval and further process: It is very important to get the approval of RBI to implement this new plan. In this, two existing companies are being merged into one financial company (NBFC), hence Tata Sons will have to follow the new rules of 2025 of the Reserve Bank. For this, Tata Sons will first have to take NOC from RBI. After completion of the merger process and termination of the investment company status, Tata Sons will have to surrender its old registration certificate to the government. Tata Trusts believes that this change is in the benefit of the Tata Group and everyone associated with it. This is a right step being taken within the ambit of law, due to which the structure of Tata Group will remain safe and its work related to social service will continue without any hindrance. Tata Trusts said – decision taken unanimously Tata Trusts said that this decision is related to the proposals passed unanimously by the boards of Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025. Both the boards were in complete agreement that Tata Sons should remain a private (non-listed) company and every possible effort should be made for this. The Trusts believe that with this change the 100 year old structure of the Tata Group will be completely safe. This will enable the company to focus on long-term benefits without any external pressure, continue to contribute to the development of the country and continue to fulfill its core objectives related to social service. What is CIC and why does Tata Sons want to avoid listing?
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Merger plan of Tata-Trusts to save Tata Sons from listing: Electronics-Consulting Engineers will merge with Tata Sons, will get freedom from RBI rules
