Tata Sons is reportedly considering a restructuring plan to align itself with Reserve Bank of India (RBI) regulations after the RBI declined to grant any concessions following an informal request. This request sought exemption from the mandatory listing of 'upper layer' non-banking finance companies (NBFCs). Tata Sons, the holding company of the Tata Group, is exploring options such as transferring the holding in financial services company Tata Capital to another entity, which could be a key factor placing Tata Sons in the 'upper layer,' according to an executive familiar with the matter.
Tata Sons chairman N Chandrasekaran and a core team of executives have reportedly met with RBI governor Shaktikanta Das and other officials in recent weeks to discuss potential solutions. The RBI has taken a firm stance, as granting an exemption to Tata Sons might prompt similar requests from other corporate holding companies. Following the RBI's refusal, Tata Sons has sought advice from top legal and finance experts to find a resolution.
The plan, if implemented, would require approval from Tata Trusts, the philanthropic trusts endowed by members of the Tata family that hold about 66% of Tata Sons. The Mistry family of the Shapoorji Pallonji Group, which holds an 18.4% stake in Tata Sons, is another stakeholder. The relationship between Tata Sons and the Mistry family has been strained since the ousting of Cyrus Mistry as Tata Sons chairman in 2016. Tata Sons and the RBI have not commented on the matter.
