Last week, the Reserve Bank of India Rejected Tata Sons’ application to surrender its registration as a core investment company, bringing to an end to the longstanding regulatory ambiguity on the matter. The regulator’s decision — it comes at a time when the group has been mired in internal conflicts and only a month after Tata Sons chairman N Chandrasekaran announced his decision not to seek reappointment — implies that Tata Sons will now have to be listed on the stock exchanges. The holding company has been classified as an upper layer NBFC since September 2022. Its board is slated to hold its next meeting on September 17, wherein the issue of listing and leadership should be on the agenda. Tata Trusts, which hold a 65.9 per cent stake in Tata Sons, have, however, been opposed to the idea of a public listing. In fact, last year, the Trusts had passed a resolution against the listing of the holding company. A listing could, after all, dilute the control the Trusts exercise over Tata Sons. It could remould and reshape the structures of control that have so far governed the group. The RBI’s decision may well be contested. But a listing would help bring about greater transparency in dealings and supervision of the group’s activities. That’s why the RBI’s decision is welcome. In a sprawling conglomerate like the Tatas, with interests in several areas of strategic importance, the structures of governance should be clearly delineated. The lines of decision-making and accountability need to be distinctly defined. This would also lead to greater questioning and scrutiny of decisions regarding capital allocation and also of its loss-making entities. Air India’s losses have, for example, widened to Rs 22, 238 crore in 2025-26. The Shapoorji Pallonji group, which holds an 18.37 per cent stake in Tata Sons, is known to favour a listing. The group has been looking for ways to monetise its holdings, which would help bring down its debt levels. Considering that valuation exercises carried out in the past have led to wide-ranging estimates, as per a report in this paper, a listing would also lead to a process of price discovery, helping place a value on Tata Sons. It would also shine a light on an entity that exercises considerable sway over the group’s companies that are engaged in a wide spectrum of businesses across the economy.
