Significantly, Tata Trusts, which owns 65.9% of Tata Sons, has requested that Tata Sons continue discussions with the Shapoorji Pallonji Group, to provide an exit to the largest minority shareholder.

“The chairman of Tata Sons is requested to exercise best endeavours to ensure that Tata Sons does not change its current status as an unlisted private company and that Tata Sons fully engages with the Reserve Bank of India in this regard,” read a resolution passed at the board meeting of Sir Ratan Tata Trusts on 28 July.

Listing, SP exit

“It was agreed at the Trustees meeting of 28th May to request the Chairman, Tata Sons, to explore all possible avenues for ensuring that there was no change in the status of Tata Sons as it currently stood. This included a dialogue with the minority shareholders, i.e. the SP Group, for providing an exit to them from Tata Sons,” said the resolution, which was reviewed by Mint.

“The chairman Tata Sons is requested to keep the SRTT (Sir Ratan Tata Trust) informed of the progress of the above matters,” it said.

This development is significant for two reasons. Firstly, this is the first time the owners of the Tata Group have articulated their views on whether Tata Sons, the operating company which runs 14 listed and 16 privately held companies, should go public. These 30 companies had ₹15,34,341 crore in revenue and employed 1.15 million people at the end of March 2025.

This is also the first time that Tata Trusts, under the chairmanship of Noel, has expressed a desire to give SP Group an exit. Noel, who took over as the chair of Tata Trusts in October last year after the demise of his half-brother Rata Tata, is married to Aloo Mistry, daughter of Pallonji Mistry and sister to Shapoor Mistry.

‘Rare instance’

This is a rare instance in which the Tata Trusts has sent an advisory to the board of Tata Sons and chair Chandrasekaran, according to an executive privy to the developments. According to the executive, the advisory also indicates that Tata Trusts, under the leadership of Noel Tata, is becoming more assertive, a trait that was missing since late chairman Ratan Tata’s demise.

With Tata Trusts affirming its position of keeping Tata Sons private, the options for SP Group’s exit are limited, as the minority shareholder would have to abide by the price Tata values its shares, according to the executive cited above.

Tata Trusts is an umbrella entity that comprises 15 philanthropic entities, seven of which own shares in Tata Sons. Sir Dorabji Trust and Sir Ratan Tata Trust are the largest shareholders, owning 27.98% and 23.56% of Tata Sons, respectively, as of 31 March 2025. JRD Tata Trust owns 4.01% while Tata Education Trust and Tata Social Welfare Trust own 3.73%. MK Tata Trust owns 0.6% and Sarvajanik Seva Trust owns 0.1%.

Shapoorji Pallonji Group owns 18.38% in Tata Sons, nine Tata Group companies own 12.86%, and seven individuals own the remaining 2.87%.

Upper-layer rule

The discussion over Tata Sons going public has its genesis in a 2021 RBI order, under which all upper-layer non-banking financial companies are required to be listed on the stock exchanges by September 2025.

RBI regulations classify NBFCs into four layers—base layer, middle layer, upper layer and top layer—based on size, activity, and perceived risks. The upper layer comprises prominent names like Tata Sons, LIC Housing Finance, L&T Finance, and Shriram Finance.

Tata Sons was classified as an upper-layer non-banking financial company (NBFC) in September 2022 by the RBI. Subsequently, in FY24, Tata Sons voluntarily surrendered the Certificate of Registration as a CIC (Core Investment Company), according to Tata Sons’ latest annual report. “The application is under examination by the RBI,” said the Tata Sons annual report for last year.

“The Trustees are aware that for the past two years or so, Tata Sons has endeavoured to avoid any listing of its shares on the stock exchanges. As part of these endeavours, Tata Sons has discharged debts of approximately ₹30,000 crores to render itself debt free. The Trust agrees with the approach of the board of Tata Sons to maintain the current status of Tata Sons as an unlisted private company,” read the resolution.

Staying private

The move towards becoming debt-free is being seen as a step towards avoiding getting listed under a Reserve Bank of India (RBI) guideline, because loans from financial institutions is one of the metrics assessed by the regulator when it looks at classifying upper-layer NBFCs such as Tata Sons.

“Well, if what you are telling me is correct, then please remember that Tata Trust’s opinion is a wish or endeavour,” said senior Supreme Court lawyer H.P. Ranina. “The fundamental point is that the RBI wants all upper-layer NBFCs to go public by September 2025. It remains to be seen how long Tata Sons can continue to negotiate and remain private.”

“I can understand why Tata Trusts want Tata Sons to remain private. Going public comes with its own set of regulatory scrutiny and compliance. Moreover, going public would imply that the share capital of Tata Sons would increase, which would lead to share dilution. Then, there could be the challenge of getting a representative from a minority investor on the board of Tata Sons,” said Ranina.

“For all these reasons and more, Tata Trusts does not want Tata Sons to go public,” Ranina said.

An email sent to Tata Trusts seeking comment went unanswered.