Industry Odisha Bureau, Sep 14: The RBI rejected Tata Sons’ bid to surrender its NBFC licence. Three years earlier, it allowed a similar move by Shanghvi Finance. The contrast turns on scale, ownership and public-fund exposure.
The Reserve Bank of India has rejected Tata Sons’ attempt to deregister as an NBFC. That decision stands in contrast to a similar case three years ago. Shanghvi Finance, a promoter entity owned by Dilip Shanghvi, succeeded where Tata Sons did not.
Two Similar Requests, Different Outcomes
RBI first classified Shanghvi Finance as an upper-layer NBFC in September 2022. It was among 16 companies RBI wanted publicly listed by September 2025. Shanghvi Finance applied to surrender its licence in February 2023. It had paid off ₹879 crore in debt beforehand. RBI allowed the surrender in May 2023. Tata Sons, by contrast, remains the only unlisted entity on RBI’s latest upper-layer NBFC list.
Abizer Diwanji, founder of NeoStrat Advisors, said transparency would help. “Ideally, the RBI should disclose why it wants Tata Sons to list,” he said. He noted RBI’s past interpretations suggest even certain equity investments can qualify a company as a core investment company.
lIndirect Public Funds Remain a Factor
Tata Sons no longer directly accesses public funds after clearing its debt. It reportedly retains indirect access, though. Listed Tata companies including Tata Steel, Tata Chemicals and Tata Power hold Tata Sons shares. RBI defines indirect public funds as funds reaching a company through associates with their own public-fund access.
Shanghvi Finance’s binding debt was a smaller ₹341 crore in bank loans. Its remaining ₹538 crore came from promoter loans, not public funds. Tata Sons reportedly had to clear nearly 60 times that in public borrowings. It also retained the indirect holdings structure that Shanghvi Finance did not have.
Size Threshold Adds Another Distinction
RBI introduced a new size-based classification in June this year. Any non-bank with standalone assets above ₹1 trillion now falls in the upper layer. Combined with existing listing rules, that effectively mandates eventual listing. Tata Sons’ standalone assets stood at ₹2.01 trillion as of March 2026, above that threshold.
Ownership structure marks another difference. Shanghvi Finance was wholly owned by Dilip Shanghvi. Tata Sons has the Shapoorji Pallonji Group holding 18.37%, with reported debt of ₹55,000-60,000 crore. A Tata Group executive questioned linking that to Tata Sons’ listing status, saying an IPO isn’t the only way to give SP Group an exit.
Regulators May Weigh the Full Group Picture
A former RBI executive said Tata Sons’ status as a core investment company, unlike Shanghvi Finance’s ICC classification, likely shaped the regulator’s approach. He said RBI’s approach is “never a one-size-fits-all” exercise. Ashvin Parekh of Ashvin Parekh Advisory Services said regulators may weigh consolidated group-level public funding when promoter stakes are comparatively low.
Diwanji suggested the listing decision and regulatory concerns could still be discussed further between the group and RBI. For now, Tata Sons’ path to deregistration remains closed, even as the underlying questions about its structure stay open.
