Ranina said the Reserve Bank of India’s listing requirement is binding because Tata Sons falls within the category of non-banking financial companies required to comply with the rules. While Tata Sons can challenge the decision in court, he said the company could find it difficult to overturn the RBI’s order.
“I think it’s done and dusted,” Ranina said, adding that Tata Sons had already taken steps such as repaying public debt during the two-year period when the matter was under consideration.
The RBI had given Tata Sons sufficient time and an opportunity to present its case, Ranina said. As a result, he sees limited scope for the company to restructure itself to avoid the listing requirement.
A listing would give public-market investors access to one of India’s most valuable unlisted corporate entities. It could also unlock value for existing shareholders, including the Shapoorji Pallonji Group, which owns about 18.4% of Tata Sons.
Listing could reshape Tata governance
Haribhakti said the listing should not be viewed simply as a regulatory burden. Instead, he sees it as an opportunity to strengthen governance and find a structure that works for shareholders, the Tata trusts and other stakeholders.
“This can be turned into a phenomenal opportunity of demonstrating very high, superior quality of governance,” he said.
Ranina said Tata Sons would need to strengthen its board and appoint capable independent directors if it becomes a listed company. A strong audit committee would also be important because Tata Sons invests in several group companies.
Those investments could fall under related-party transaction rules and would need to be assessed on an arm’s-length basis. Investments involving businesses such as Air India and Tata Electronics, for example, could face greater scrutiny.
Ranina said the additional oversight could ultimately strengthen governance across the wider Tata Group.
Succession becomes another key issue
The listing could also bring greater focus on the leadership transition at Tata Sons.
Haribhakti said the next steps would depend on whether N Chandrasekaran seeks to continue beyond February 2027. If he does not seek an extension, Haribhakti said the group should identify his successor by December to allow sufficient time for a smooth transition.
“The option left is to make sure that a successor is named by December so that there is a little period of overlap and the succession can be smooth,” he said.
Ranina said an internal candidate could have an advantage because of familiarity with the Tata Group’s culture, businesses and regulatory requirements. However, he said the selection committee should consider both internal and external candidates before making a decision.
Haribhakti said the next leader should also have experience running a listed company, adding that suitable candidates could be found both within and outside the Tata Group.
Watch the full conversation here
Tata trusts face a fresh governance test
Haribhakti said the Tata Group should use the listing process to develop a governance model that preserves its philanthropic objectives while improving transparency and accountability.
Listing, he said, does not necessarily have to diminish the role of the Tata trusts. A carefully designed restructuring could allow the group to retain its philanthropic purpose while adapting to the higher governance standards expected of a listed company.
