The Reserve Bank of India (RBI) continued to classify Tata Sons as a core investment company (CIC) in the upper tier, according to its latest NBFC list. It kept the Tata Group holding company within the bounds of possible listing requirements.
On April 10, the RBI released a draft proposing changes in the criteria for identifying top-tier non-banking finance companies, opting for an approach based on asset size as opposed to the current parametric system based on operational scale and also including state-owned non-banking banks in the list. The central bank proposes to tag an NBFC with assets above Rs 1 trillion as a top tier entity, which will come under closer regulatory scrutiny once notified.
“With a view to adopt a transparent, simple and absolute criterion for identifying top-tier NBFCs, it is proposed to replace the existing methodology with asset size criteria, which is currently proposed at Rs 1,00,000 crore and above,” the draft document said.
The new draft comes at a time when the listing of Tata Sons, the holding company of the $160 billion salt software giant, is under intense public debate and all eyes are now focused on whether the entity, a core investment company, gets a regulatory deadline or not.
“The new classification based on asset size leaves no leeway for Tata Sons to remain a private entity. With over Rs 1.75 trillion in standalone assets as of March 2025 and over Rs 6.65 trillion in consolidated assets, the proposed framework gives them no room to avoid a listing,” a TNIE said on export banking regulations.
Another analyst, who also did not want to be named, said, “as long as the top tier regulatory criterion remains as it is now and when the new framework kicks in, unless an exemption is granted by the regulator, Tata Sons remains in the list of last top NBFCs, at least for the next five years when a review will be undertaken for re-declaration. now.”
The second expert also noted that Tata Sons remains a top-tier NBFC even in the January 2025 list—this after it sought cancellation of its street bank license in August 2024 as it was net debt-free (which was one of the reasons for asking it in October 2022 to go for an IPO by September 20) making it clear that the RBI5 could not grant the request. wants to be on the list of top tier investment companies.
