Proxy advisory firm InGovern Research Services has called on the Reserve Bank of India (RBI) to reject Tata Sons’ application to surrender its Certificate of Registration as a Systemically Important Core Investment Company (CIC). InGovern has urged the RBI to mandate that Tata Sons list itself as an Upper Layer Non-Banking Financial Company (NBFC) by March 2027.
In its three-point recommendation, InGovern proposes a public rejection of Tata Sons’ deregistration request, a directive for mandatory listing, and the immediate implementation of a ₹1 lakh crore asset threshold for Upper Layer classification. These measures are positioned as essential for maintaining regulatory consistency and protecting the interests of minority shareholders.
“The RBI must issue a definitive, public order rejecting the March 2024 application for deregistration of Tata Sons,” the advisory report asserts.
InGovern’s analysis contends that Tata Sons’ attempt to relinquish its CIC status by eliminating standalone debt and asserting “no public funds” is both legally and practically untenable under the Scale-Based Regulation (SBR) framework. The advisory highlights the RBI’s clarification from April 29, 2026, stating that equity infusions from group entities cannot merely be classified as “owned funds” due to factors such as leverage and multiple layers of ownership. InGovern argues that this clarification undermines Tata Sons’ defense regarding standalone deleveraging.
The firm indicated that Tata Sons’ cross-holdings—approximately 13–14% held by listed Tata group companies like Tata Steel, Tata Motors, and Tata Power—establish a permanent “look-through” connection to public funds. This structural relationship means that the parent company cannot legitimately claim exemption from listing obligations that affect systemic entities. InGovern cites precedents such as L&T Finance, Piramal, and Tata Motors Finance, where entities either merged into publicly listed companies or restructured to adhere to SBR criteria before their deregistration was approved.
InGovern emphasizes that permitting a private holding company to oversee vast listed assets without adhering to the disclosure and board-independence standards set by SEBI’s Listing Obligations and Disclosure Requirements (LODR) would perpetuate a “holding company discount.” This, they argue, would deprive millions of minority shareholders of transparent valuation and exit options.
The article was published on May 1, 2026.







