Mumbai: Tata Trusts has proposed merging Tata Electronics Systems Solutions Private Limited (TESS) and Tata Consulting Engineers (TCE) into Tata Sons, aiming to preserve its status as an unlisted private company.
The trusts, which hold a 66% stake in Tata Sons, have asked its board to consider the proposal and initiate the necessary process.
Operating Business Push
Under the proposed structure, Tata Sons would have operating businesses and income from them while continuing to function as the Tata group’s holding company.
According to Tata Trusts, the proposed merged entity would have operating revenue of Rs 1,05,043 crore and income from financial assets of Rs 40,072 crore, based on figures as of March 31, 2026.
The trusts argue that this structure would mean Tata Sons no longer meets the principal business criteria for classification as a non-banking financial company (NBFC).
Consequently, under their assessment, the company would fall outside the NBFC regulatory framework following the proposed merger.
CIC Status Review
The proposed entity would have total net assets of Rs 2,00,158 crore, including investments worth Rs 1,77,120 crore in group companies.
According to the trusts, these investments would account for less than 90% of total net assets. The entity would therefore no longer meet the conditions for classification as a core investment company (CIC).
RBI Approval Needed
The merger remains a proposal and would require Reserve Bank of India approval before its actual implementation.
Tata Trusts said the transaction would proceed under the RBI’s 2025 voluntary amalgamation directions, with a prior no-objection certificate required from the central bank.
Also read: RBI Rejects Tata Sons’ NBFC Exit Bid, Mandatory Listing Moves Closer
After the merger, Tata Sons would surrender its certificate of registration, as it would no longer qualify as a CIC under the proposed structure.
The proposal follows unanimous resolutions passed in July 2025 by the boards of Sir Dorabji Tata Trust and Sir Ratan Tata Trust to keep Tata Sons an unlisted private company.
