The Reserve Bank of India (RBI) continued to classify Tata Sons as a core investment company (CIC) in the upper layer, according to its latest NBFC list. It kept the Tata Group’s holding company within the ambit of potential listing requirements.
On April 10, the RBI issued a draft proposing changes in the criteria for identifying upper layer non-banking finance companies, pitching for an asset-size-based approach as against the present parametric system based on operational scale and also inclusion of state-run non-banks into the list. The central bank proposes to tag an NBFC with assets of over `1 trillion as an upper-layer entity, which will be under more regulatory scrutiny once notified.
“With a view to adopt a transparent, simple and absolute criteria for identification of upper layer NBFCs, it is proposed to replace the existing methodology with asset size criteria, which is currently proposed at `1,00,000 crore and above,” the draft paper said.
The new draft comes at a time when the listing of Tata Sons, the holding company of the $160 billion salt-to-software giant, is under intense public debate and all eyes are now focused on whether the entity, a core investment company, gets a regulatory reprieve or not.
“The new asset-size based classification leaves no leeway for Tata Sons to remain a private entity. With over `1.75 trillion in standalone assets as of March 2025, and over `6.65 trillion of consolidated assets, the proposed framework give no room them to avoid a listing,” an export on banking regulations told TNIE.
Another analyst who also did not want to be named said, “so long as the regulatory criterion of upper layer stays as it is now and when the new framework kicks in, unless given an exemption by the regulator, Tata Sons remains in the list of upper last NBFCs, at least for the next five years when a review will be undertaken for re-classification or declassification. Its purely RBI’s call now.”
The second expert also pointed out that Tata Sons remains in the upper layer NBFC list even in the January 2025 list—that’s after seeking cancellation of its licence way bank in August 2024 after turning net debt-free (which was one of the reasons for asking it in October 2022 to go for an IPO by September 2025) makes it clear that the cancellation request has not been accepted and that RBI wants to be in the upper layer core investment company list.