Proxy advisory firm InGovern Research Services has urged the Reserve Bank of India (RBI) to reject Tata Sons’ March 2024 application to surrender its Certificate of Registration as a Systemically Important Core Investment Company, and to direct the group to list as an Upper Layer NBFC by March 2027.
The proxy‑adviser’s three‑point prescription — a public rejection of the deregistration bid, a mandatory listing directive, and immediate adoption of a ₹1 lakh crore asset threshold for Upper Layer classification — is formulated as necessary to preserve regulatory consistency and protect minority shareholders.
“The RBI must issue a definitive, public order rejecting the March 2024 application for de‑registration of Tata Sons,” the report states.
The InGovern note said the company’s attempt to shed its CIC status by repaying standalone debt and claiming “no public funds” is legally and practically untenable under the Scale‑Based Regulation (SBR) framework. The advisory highlights the RBI’s April 29, 2026 clarification that equity infusions from group entities cannot be treated as purely “owned funds” because of leverage, multiple layers and fungibility — a position that, InGovern says, undermines Tata Sons’ standalone deleveraging defence.
The firm pointed out that Tata Sons’ cross‑holdings — roughly 13–14 per cent held by listed Tata group companies such as Tata Steel, Tata Motors and Tata Power — created a permanent “look‑through” link to public funds. That structural linkage means the parent cannot lawfully claim exemption from listing obligations that apply to entities of systemic scale. The paper contrasted Tata Sons’ approach with precedents such as L&T Finance, Piramal and Tata Motors Finance, where entities either merged into listed vehicles or restructured to comply with SBR norms before deregistration was accepted.
According to InGovern allowing a private holding company to control vast listed assets without the disclosure and board‑independence standards of SEBI’s LODR would perpetuate a “holding company discount” and deny millions of minority shareholders transparent valuation and exit options.