Tata Trusts Propose Merger of TESS, TCE With Tata Sons to Exit NBFC, CIC Classifications

The proposed merger would give Tata Sons operating revenue of Rs 1.05 lakh crore, or 64.3% of total income, the Trusts said

PGurus Newsdesk

September 28, 2026

Keeping Tata Sons unlisted: what the Trusts' restructuring plan means

Merged entity would earn 64.3% of income from operations, falling outside NBFC and CIC criteria, Trusts say

Tata Trusts, which hold a 66 per cent stake in Tata Sons Private Limited (TSPL), have proposed a strategic reorganisation of the Tata Group’s holding company that would take TSPL out of the Non-Banking Financial Company (NBFC) and Core Investment Company (CIC) categories, according to a press release from the Trusts.

The proposal

Under the plan, Tata Electronics Systems Solutions Private Limited (TESS) and Tata Consulting Engineers (TCE) would be merged into TSPL. The Trusts said the merger would restore an operating model for the company, giving it its own operations and revenues alongside its role as the Tata Group’s holding company.

What the numbers show

According to the release, the merged entity would have had operating revenues of Rs 1,05,043 crore as of March 31, 2026, against income from financial assets of Rs 40,072 crore. Operating revenues would account for 64.3 per cent of total income.

On that basis, the Trusts said the resulting entity would not meet the principal business criteria for classification as an NBFC. Its investments in group companies would also make up less than 90 per cent of aggregate net assets, so it would not meet the conditions that apply to a CIC.

Regulatory steps ahead

The amalgamation would need to comply with the Reserve Bank of India‘s Non-Banking Financial Companies (Voluntary Amalgamation) Directions, 2025, including obtaining a prior no-objection certificate from the RBI. As TSPL would cease to be a CIC, it would also have to surrender its certificate of registration.

The Trusts have written to the TSPL Board asking it to consider and approve the proposal and take the necessary steps, including approaching the RBI. The Trusts and TSPL will engage with the central bank on the plan.

Stated aim

The Trusts said the structure is intended to be regulatory-compliant while preserving the Tata Group’s organisational structure, which is more than 100 years old. They added that the proposal is consistent with resolutions passed by the Sir Dorabji Tata Trust and Sir Ratan Tata Trust in July 2025 to make efforts to keep TSPL an unlisted private company.

The development follows a separate report that the RBI is awaiting Tata Sons’ formal response on compliance with Upper Layer NBFC norms.

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