It may be recollected that in April 2024, the Tata group had filed an application with the RBI to voluntarily surrender its NBFC registration. The reason was quite simple. Tata Sons was already classified as an Upper Layer NBFC, which means it had to come out with a public issue by the end of 2025. Tatas wanted to give up the NBFC registration as IPO would not have been feasible in such a short time frame. However, the application for surrender of NBFC is pending with RBI. 

For now, the latest list of Upper Layer NBFCs released in January 2025 has the name of Tata Sons also in the list. RBI has clarified that the final decision was still awaited and this list of upper layer NBFCs was no reference or pointer to the final decision by the RBI. However, it is also a hint that the RBI was not too comfortable making exceptions for just one NBFC, when most of the other key holding companies, registered as core investment companies, had either done their IPO, or were planning an IPO. The final decision from the RBI is awaited on the Tata Sons issue, but the Tata group management is also working on Plan-B. 

The Shapoorji Pallonji (SP) group and the Tata group have been at war since the ouster of Cyrus Mistry in 2016. SP group has an 18.4% stake in Tata Sons and they have been struggling to raise funds against these holdings. SP group has debt payables of over ₹22,000 crore by early next year and they will need all the help to be able to service this debt. SP group has been applying pressure on the Tatas to complete the conversion of Tata Sons into public limited company and complete the IPO soon, so that the SP group can easily monetize their Tata Sons holdings. However, it does remain to be seen how quickly that can happen. 

There are also other reasons supporting the idea of an IPO by Tata Sons. Firstly, Noel Tata is veering towards a more simplified ownership structure for the holding companies and an IPO for Tata Sons may be part of the plan. Secondly, after the unfortunate demise of Cyrus Mistry in mid-2022, there have been efforts from his wife Rohiqa Chagla to build bridges. Rohiqa is the daughter of Iqbal Chagla and the grand-daughter of the legendary jurist MC Chagla. So, she just has the right credentials. Thirdly, one must not forget that Noel Tata is married to Aloo Mistry, sister of Cyrus and the daughter of Shapoorji Pallonji! That makes it more likely that Tatas and SP group may just agree to an IPO!