Tata seeks RBI nod to avoid listing NBFC – Banking & Finance News

The Tata group has sought a waiver from the Reserve Bank of India (RBI) to avoid listing its investment holding arm — Tata Sons — on the bourses.

The group, in its request to the central bank, has said that Tata Sons does not fall under the upper-layer non-banking finance company (NBFC) norms and should be exempt from the rules. This came after the company carried out certain restructuring within the organisation and reduced debt, sources close to the development said.

As per revised RBI regulations, it was mandatory for an upper-layer NBFC to list within three years of notification. On September 14, 2023, the regulator had notified 15 companies, including Tata Sons, under this category, following which the holding company would have to get listed by September 2025.

Earlier in March, Tata Sons raised about Rs 9,300 crore by offloading 23.4 million shares in its IT subsidiary Tata Consultancy Services (TCS) through block deals. A part of this was used to repay debt, the sources said but did not specify the quantum of debt repaid.

Tata Sons has been mulling options to shed the upper-layer NBFC tag, which included merging a subsidiary with itself or reducing debt to certain levels. Another option was to seek extension to the regulations.

Being categorised as an upper-layer NBFC would require a high degree of compliances and disclosures, including banking licence and NBFC rules, and disclosures under Core Investment Companies regulations.

The company was also mulling merging an operating non-financial services company with itself.

Tata Sons chairman N Chandrasekaran had earlier met top RBI officials to seek clarity on the issue and to reach some kind of a “solution”.