Will Tata Sons still have to go public? RBI’s revised Upper Layer NBFC rules explained

5 min readMumbaiUpdated: Jun 26, 2026 11:00 AM IST

The 2024 classification put Tata Sons on a path toward a public listing since September 2025, unless the RBI changed the rules or granted relief

The Reserve Bank of India (RBI) came out with revised guidelines earlier this week stating the requirement to qualify as Upper Layer non-banking finance companies (NBFC-UL) without giving clarity whether Tata Sons, the holding company of $180 billion Tata group, will have to go public with an IPO or not.

The RBI’s final list of NBFC-UL – which is expected soon — and the qualifying assets are potentially very significant for Tata Sons as they could remove the main regulatory trigger that has kept alive the possibility of a mandatory IPO.

What’s the issue?

In 2024, the RBI classified Tata Sons as an Upper Layer NBFC (NBFC-UL) under its Scale-Based Regulation framework because of its size and systemic importance. Under RBI rules, an NBFC-UL is required to list on a stock exchange within three years of being notified and comply with stricter governance and disclosure norms.

That classification effectively put Tata Sons on the path toward a public listing since September 2025, unless the RBI changed the rules or granted relief. Tata Trusts holds 66% stake in Tata Sons.

On the other hand, two trustees of Tata Trusts – Venu Srinivasan and Vijay Singh – called for the listing of Tata Sons for greater transparency and accountability. The Shapoorji Pallonji group which holds 18% stake in Tata Sons is also keen on listing as it wants to monetise its stake. However, Noel Tata, Chairman of Tata Trusts and 66% stake holder in Tata Sons, wants Tata Sons to remain unlisted. Former Tata Sons Directors like NA Soonawala, R Gopalakrishnan and Ishaat Hussain have also argued for keeping Tata Sons unlisted.

What has changed now?

Earlier this week, the RBI replaced the previous methodology to determine NBFC-UL with a simple criterion that only NBFCs with assets of Rs 1 lakh crore or more will be classified as NBFC-UL. While this is a major policy shift, it’s not clear whether Tata Sons will qualify as an NBFC-UL.

The key question is: does Tata Sons still have NBFC assets of Rs 1 lakh crore or more? In recent years, Tata Sons has repaid the debt, reduced its NBFC activities and increasingly functioned as a holding company rather than a lender. If Tata Sons is no longer classified as NBFC-UL, the RBI requirement to list as an Upper Layer NBFC would become irrelevant and the biggest regulatory reason for a mandatory IPO effectively goes.

Qualifying assets – the key factor

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The RBI has not exempted Tata Sons so far. Instead, it has changed the eligibility criteria for being classified as an Upper Layer NBFC.

According to experts, the implication is that if Tata Sons’ qualifying NBFC asset size is below Rs 1 lakh crore under the revised framework, the regulatory requirement for a stock market listing would no longer apply. Whether that happens depends on the RBI’s next NBFC-UL classification exercise and Tata Sons’ qualifying asset size under the new methodology. The latest amendments are speculated as giving Tata Sons a possible escape route to avoid a mandatory listing if it no longer meets the revised asset threshold.

The term qualifying assets in the RBI’s revised framework refers to the assets that count toward determining whether an NBFC crosses the Rs 1 lakh crore threshold for classification as an Upper Layer NBFC. It is not the same as the total consolidated assets of the Tata group or even the total assets of Tata Sons as a holding company, according to experts.

For Tata Sons, the qualifying assets would broadly include the assets on the balance sheet of its NBFC business, such as loans and advances, investments that are part of its NBFC operations and other financial assets held b the NBFC. They do not include the value of Tata Sons’ stakes in listed group companies such as TCS, Tata Motors, Tata Steel or Titan Company unless those holdings are treated as financial assets under the applicable NBFC regulatory framework for calculating asset size.

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Has Tata Sons’ asset size fallen below Rs 1 lakh crore?

There’s no clarity on Tata Sons’ current qualifying asset size. However, Tata Sons has reportedly taken several steps over the past few years to reduce the size of its NBFC balance sheet, including repayment of debt and reducing surplus financial assets. These moves led to widespread market speculation that its qualifying assets might have fallen below the new Rs 1 lakh crore threshold, but there is no public confirmation as of now.

What will settle the issue?

The key factor will be the RBI’s next annual identification of Upper Layer NBFCs. If Tata Sons appears on the list, it continues to be an NBFC-UL and the listing requirement remains. If it does not appear, it would indicate that it no longer meets the revised threshold (or otherwise does not qualify), effectively removing the RBI-driven listing obligation. As of now, Tata Sons’ exact qualifying asset figure is not publicly available, and only the company and the RBI would know whether it exceeds the new Rs 1 lakh crore benchmark.

George Mathew is an Associate Editor with The Indian Express, based in Mumbai. A veteran of financial journalism with nearly three decades of experience, he is one of the country’s most authoritative voices on banking, regulation, and the corporate sector.

Expertise & Focus Areas Mathew’s reporting covers the nerve center of India’s economy. His specialized beats include:

The Reserve Bank of India (RBI): He has tracked the central bank's policy evolution through the tenures of multiple Governors, offering deep insights into monetary policy, repo rates, and banking regulation.

Banking & Insurance: Extensive coverage of public and private sector banks, non-performing assets (NPAs), and key legislative reforms like the Insurance Amendment Bills.

Corporate Affairs: Mathew frequently breaks major stories related to India's largest conglomerates, with a specific focus on the Tata Group, documenting boardroom shifts and strategic decisions.

Financial Markets: Reporting on the complexities of Foreign Portfolio Investors (FPIs), IPOs, and currency fluctuations.

Authoritativeness & Insight With a career dating back to the late 1990s, Mathew possesses a rare institutional memory of India’s financial liberalization and market crises. His work is not limited to daily news; he frequently contributes to the "Explained" section, where he decodes complex financial legislations and market trends for a broader audience. His rigorous reporting has also been featured in scholarly platforms like the Economic and Political Weekly (EPW).

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