RBI Examines Tata Sons’ NBFC De-registration Plea Amid Listing Pressure

Reserve Bank of India (RBI) is examining Tata Sons application to de-register it as a core investment company (CIC) under upper-layer non-banking finance company (NBFC-UL). The regulator disclosed the Tata Group’s holding company’s request while releasing the list of 15 companies that fall in the category, including Tata Sons, Tata Capital, Bajaj Finance and Aditya Birla Finance, on Thursday. 

“...inclusion of Tata Sons is the list of NBFC-UL is without prejudice to the outcome of its application for de-registration, which is under examination,” said the RBI. 

Tata Sons, a core investment company, was categorised as NBFC-UL in September 2022. According to RBI regulations, the company must get listed on the exchanges within three years of such classification. The upper-layer NBFCs are subject to enhanced regulatory scrutiny for at least the first five years. 

“NBFC-UL shall be mandatorily listed within 3 years of identification as NBFC-UL...the disclosure requirements shall be put in place on the same lines as applicable to a listed company even before the actual listing,” said RBI on its website.

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However, Tata Sons has so far refrained from getting listed and has sought exemption from NBFC-UL classification. If RBI rejects its application for de-registration, the salt-to-steel conglomerate’s holding company will have to get listed by September 2025. 

Pointing to the delay in listing, in December last year, Lok Sabha MP from Nalanda Kaushalendra Kumar had submitted a letter to finance ministry urging FM Nirmala Sitharaman to intervene in the matter, according to Daily Pioneer and Zee News report. 

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RBI in the same review also mentioned that Ajay Piramal-led Piramal Group’s Piramal Enterprises has not been included in the list despite it qualifying under the NBFC-UL classification. The regulator cited reorganisation of Piramal Enterprises as the reason for not covering its name. 

“Despite qualifying for identification as NBFC-UL as per scoring methodology, Piramal Enterprises is not being included in the list...due to ongoing reorganisation in the business group,” said the regulator on Thursday. 

The development comes at a time when Tata Sons is making strides to strengthen its finances. According to the Economic Times report, the holding company is considering a funding plan to boost its cash reserves to infuse more funds into the salt-to-steel conglomerate’s new ventures, including semiconductors, EVs and Air India. 

Speaking at the Global Alumni Meet of NIT Trichy earlier in January this year, Tata Sons chairman Natarajan Chandrasekaran mentioned that the Tata Group is committed to transforming Air India into a top-class airline and tapping the emerging semiconductor market. 

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