Tata Trusts, which hold a 66% stake in Tata Sons Private Limited (TSPL), have proposed a strategic reorganisation of the company through the merger of Tata Electronics Systems Solutions Private Limited (TESS) and Tata Consulting Engineers (TCE) with TSPL.

The proposed restructuring is aimed at ensuring that the reorganised entity will neither qualify as a Non-Banking Financial Company (NBFC) nor a Core Investment Company (CIC). Tata Trusts have also said the move is in line with efforts to retain TSPL’s status as an unlisted private company

According to a Tata Sons statement, the Tata Trusts have written to the TSPL board seeking consideration and approval of the proposal and the necessary steps, including approaching the Reserve Bank of India (RBI) for a no-objection certificate.

Why Tata Trusts want to change Tata Sons’ structure

Tata Trusts said the proposed reorganisation would take Tata Sons back towards an operating business model that it followed for much of its history.

“TSPL has, for almost 80 years out of its 100-year existence, always had operating businesses and operating revenues, which enabled it to fund its other, newer business ventures," Tata Sons said in its statement.

The company pointed out that Tata Consultancy Services (TCS) was a business division of TSPL until it was demerged into a separate subsidiary in 2004. Other operating businesses also followed a similar structure

Under the proposed arrangement, TSPL would have its own operations and revenues while continuing to function as the holding company for the Tata Group. Tata Sons said this would also be consistent with the RBI’s earlier classification of TSPL, after 2004, as a “non-banking, non-financial company".

What the merged entity will look like

According to Tata Sons, the amalgamated entity would have operating revenues of Rs 1,05,043 crore as of March 31, 2026. This would be higher than its income from financial assets of Rs 40,072 crore and would account for 64.3% of its total income. The entity would also not meet the “principal business criteria" required to qualify as an NBFC.

It would similarly not meet the conditions applicable to a CIC. Its net assets would total Rs 2,00,158 crore, of which investments in group companies would amount to Rs 1,77,120 crore, or less than 90% of the resultant entity’s aggregate net assets.

RBI approval needed for merger

Tata Sons said the merger of operating, non-financial companies such as TESS and TCE with TSPL would have to follow the RBI’s Non-Banking Financial Companies – Voluntary Amalgamation Directions, 2025. This includes obtaining a prior no-objection certificate from the RBI.

Once the proposed reorganisation is completed and TSPL ceases to be a CIC, the company would also have to surrender its certificate of registration.

Tata Trusts said they believe the proposed restructuring and compliance plan would be in the interests of the Tata Group and its stakeholders and would provide a regulatory-permissible structure for reorganising the CIC.

Tata Trusts seek to retain unlisted status

The proposed merger is also linked to the Tata Group’s plan to retain TSPL as an unlisted private company. Tata Sons said the restructuring and related steps are in line with unanimous resolutions passed by the boards of Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025. Those resolutions stated that efforts should be made to ensure that TSPL’s status as an unlisted private company continues.

The Tata Trusts and TSPL will engage with the RBI on the proposed reorganisation, the company said.

Source: News18