RBI should reject the application, says InGovern Founder on Tata Sons' NBFC deregistration; calls for immediate listing to benefit shareholders

New Delhi [India], May 6 : Shriram Subramanian, Founder and Managing Director of InGovern Research Services, toldthat Tata Sons is currently non-compliant with Reserve Bank of India (RBI) norms. In his letter to the independent directors and board members of the seven listed Tata Group companies, he noted that the central bank's recent clarifications regarding Core Investment Companies (CICs) place the onus on the conglomerate to move toward a public listing, especially as it maintains indirect access to public funds through its listed subsidiaries.

"To that extent, the onus is on Tata Sons to ensure that they are compliant with RBI norms and regulations. So that is the reason as of date, Tata Sons is non-compliant and so they need to be compliant and get listed to be compliant. So it's not immediately the realm of SEBI to force Tata Sons to list, but RBI should definitely interject or should reject the application made by Tata Sons for deregistration as an NBFC," Subramanian said.

The primary issue involves seven listed Tata Group companies that together hold an approximate 12 per cent stake in Tata Sons. This ownership structure, according to Subramanian, creates a regulatory obligation for the holding company to provide transparency through listing.

"The regulatory requirement is that Tata Sons because it has indirect access to public funds because of the shareholding by these seven listed companies. The RBI has clarified through FAQs on April 29th, 2026, which is not even a week ago that companies like Tata Sons which are CICs which have indirect access to public funds need to be listed," Subramanian said.

Subramanian emphasized that Tata Sons remains non-compliant under the current framework. While the group has sought to deregister Tata Sons as a Non-Banking Financial Company (NBFC) to avoid these requirements, Subramanian argued that the RBI must intervene to uphold governance standards.

The application to deregister has been a lingering matter for the central bank. Subramanian pointed out that the request has been pending for over two years, having been filed in March 2024. He stated that a rejection of this application is the necessary trigger to force the listing process.

"This application has been pending with RBI for over two years now because it was filed in March 2024. So that is the reason RBI needs to take a decisive step in rejecting that application. That will put the ball into the court of Tata Sons to ensure that it gets listed. So RBI should send a decisive signal," he said.

The history of this shareholding dates back to 1995, following a rights issue where the listed companies utilized cash to subscribe to Tata Sons' shares. Subramanian argued that these listed entities now have a responsibility to their own 1.2 crore shareholders to ensure that this long-term investment becomes liquid.

"So essentially, listed Tata Group companies which are seven of them own 12 odd percent shares in Tata Sons. This is a history which started in 1995 where the rights issue of Tata Sons was devolved and subscribers where these seven listed companies with that cash. So it is now the onus on these Tata Group companies to push Tata sons to list so that they can unlock the value of that 12% shareholding. It is also beneficial to the 1.2 crore shareholders of these seven listed Tata Group companies," he highlighted.

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