Tata Group Requests RBI Waiver From NBFC Listing
The Tata group has approached the Reserve Bank of India (RBI) to request an exemption from listing its investment holding arm, Tata Sons, on the stock exchanges.
According to sources familiar with the matter, the group argues that Tata Sons does not fit the criteria for an upper-layer non-banking finance company (NBFC) and should therefore be exempt from the listing requirements. This appeal follows internal restructuring within the organisation and a reduction in debt.
Revised RBI regulations mandate that upper-layer NBFCs must list within three years of notification. Tata Sons was among 15 companies notified on 14 September 2023 and would have to comply by September 2025.
In March, Tata Sons raised approximately Rs 9,300 crore by selling shares in its IT subsidiary, Tata Consultancy Services (TCS). Some of these funds were allocated to debt repayment, though the exact amount was not disclosed.
Tata Sons has explored various options to shed its upper-layer NBFC status, such as merging a subsidiary or reducing debt. Another possibility was seeking an extension to the regulations.
The classification as an upper-layer NBFC entails significant compliance and disclosure requirements, including banking licenses, NBFC regulations, and disclosures under Core Investment Companies regulations. The company also considered merging a non-financial services operating company into Tata Sons.
Tata Sons chairman N Chandrasekaran previously met with senior RBI officials to seek clarification and work towards a resolution on the matter.
