Tata Sons faces continued listing uncertainty after RBI classification

RBI has retained Tata Sons in the FY27 NBFC upper-layer list while reiterating that its de-registration application remains under examination, prolonging uncertainty over listing

The suspense over whether Tata Sons will be required to list on the stock exchanges continues, even as the Reserve Bank of India (RBI) on Thursday published the updated list of upper-layer non-banking financial companies (NBFC-UL) for 2026-27 (FY27). The regulator once again said the Tata group holding company’s application for deregistration as an NBFC remains under examination.

 

Tata Sons, the principal investment holding company of the $400 billion Tata group, has featured in the NBFC-UL list as a core investment company (CIC) since 2022, when the RBI introduced the scale-based regulatory framework for NBFCs. The previous list, published in January 2025 (for 2024-25/FY25), had also said that Tata Sons’ deregistration request was under consideration.

 

“Inclusion of Tata Sons Private Limited in the list of NBFC-UL is without prejudice to the outcome of its application for deregistration, which is under examination,” the RBI said on Thursday.

 

The RBI said it reviewed the criteria for identifying NBFCs in the upper layer during 2025-26 (FY26). As a result, the list for FY26 was not published. “Subsequent to the issue of the revised criteria, the list of NBFC-UL for FY27 [with reference to financials as on March 31, 2026] has been prepared based on the revised criteria,” the RBI said.

 

Under the scale-based regulatory framework, an NBFC classified in the upper layer is required to list within three years. Tata Sons’ deadline expired last year.

 

That Tata Sons would remain in the upper layer was indicated by RBI Governor Sanjay Malhotra during the post-monetary policy press conference on Wednesday. Responding to a query, Malhotra said, “It is now principle-based. According to those principles, everyone knows what the list is. That is where the matter stands.”

 

Malhotra was referring to the revised criteria for identifying upper-layer NBFCs. From June this year, upper-layer NBFCs are those with assets of ₹1 trillion or more, based on the latest audited balance sheet. Earlier, the scale-based regulatory framework identified upper-layer NBFCs using a scoring model that combined quantitative and qualitative parameters, with weights of 70 per cent and 30 per cent, respectively.

 

According to its latest annual report, Tata Sons had standalone assets of ₹2.01 trillion as of March 31, 2026.

 

“The inclusion of Tata Sons in the upper-layer list does not materially alter its regulatory position because the RBI has explicitly clarified that it is without prejudice to the company’s application for deregistration as an NBFC, which is still under examination,” said Abizer Diwanji, founder of NeoStart Advisors LLP.

 

According to Diwanji, the real issue is not whether Tata Sons meets the size threshold for the upper layer — it clearly does — but whether it should continue to be classified as an NBFC at all.

 

He said that if the RBI approves its deregistration application, the question of complying with upper-layer requirements, including listing, would cease to arise. If the application is rejected, the existing NBFC regulations would continue to apply.

 

“In my view, the debate largely centres on the interpretation of ‘public funds’. Extending that definition to include historical equity investments, particularly where they are backed by accumulated reserves rather than borrowings, appears to be an expansion of the concept. Equity is fundamentally different from debt and does not carry the same prudential concerns associated with public borrowings,” Diwanji added.

 

In updated directions issued on July 1, the RBI retained indirect access to public funds through group companies and associates as a relevant criterion. Since several Tata group companies raise funds through bank borrowings, debentures, commercial paper, and other market instruments, Tata Sons could still be deemed to have indirect access to public funds despite being debt-free. That could require it to remain registered as a CIC and continue as an upper-layer NBFC.

 

There are 17 NBFCs on the list this year, compared with 15 in FY25 and 2023-24.

 

REC, Power Finance Corporation, Indian Railway Finance Corporation, and Housing and Urban Development Corporation have been added this year.

 

PNB Housing Finance and Sammaan Capital, which were identified as NBFC-UL entities in previous years, no longer meet the revised criteria. However, under RBI norms, once an NBFC is classified as an NBFC-UL, it remains subject to enhanced regulatory requirements for at least five years from the date of classification, even if it does not meet the criteria in subsequent years. As a result, although PNB Housing Finance and Sammaan Capital do not feature in the FY27 list, they continue to remain in the upper layer.

 

Other NBFCs that continue in the upper layer include Bajaj Finance, Shriram Finance, LIC Housing Finance, Tata Capital, and Aditya Birla Capital, among others.