Tata Group stocks rally, Tata Chemicals zooms 20 per cent

Tata Group stocks were in the limelight on Tuesday, with Tata Chemicals surging 20 per cent, amid reports that the Reserve Bank has rejected Tata Sons’ application to surrender its core investment company registration, killing the Tata Group holding company’s attempt to avoid a mandatory stock-market listing and setting the stage for it to become publicly traded.

Shares of Tata Chemicals zoomed 20 per cent, Tata Investment Corporation soared 15.24 per cent, Tata Motors Passenger Vehicles surged 5.89 per cent, TCS jumped 5.47 per cent, Tata Elxsi climbed 4.28 per cent, Tata Power was up 3.41 per cent, Tata Communications advanced 3.21 per cent, Tata Steel edged higher by 1.96 per cent and Tata Consumer Products rallied 1.72 per cent on the BSE. The Reserve Bank has rejected Tata Sons’ application to surrender its core investment company registration, killing the Tata Group holding company’s attempt to avoid a mandatory stock-market listing and setting the stage for it to become publicly traded, sources said on Saturday.

The rejection was conveyed in a letter received by Tata Sons’ company secretary and chief financial officer on Saturday, the sources said, closing out an application the company filed in March 2024 seeking to deregister as a non-banking financial company.

The decision means Tata Sons will remain classified as an Upper Layer NBFC, a category subject to enhanced regulatory requirements, including mandatory listing. The RBI first classified Tata Sons as an Upper Layer NBFC in September 2022, with such entities required to list within three years. The original deadline for Tata Sons was September 30, 2025.

Tata Sons had sought to exit the NBFC framework before that deadline. It repaid more than Rs 21,000 crore of debt in 2024 and applied to surrender its registration, effectively seeking to operate as an unregulated holding company rather than comply with the listing requirement. The RBI kept the application pending and continued to include Tata Sons in its Upper Layer NBFC lists.

The central bank’s rejection now removes the key regulatory route Tata Sons had been pursuing to remain private. The company has assets well above the Rs 1 lakh crore threshold under the RBI’s revised framework for automatically qualifying large NBFCs for the Upper Layer, making an exemption increasingly difficult.

A public listing would mark a fundamental change for the holding company of one of India’s oldest and largest business groups. Tata Sons owns significant stakes in listed and unlisted Tata companies spanning information technology, automobiles, steel, consumer products, aviation, hospitality and financial services.

The move could also bring far greater scrutiny of Tata Sons’ finances, capital allocation and investments. A listed holding company would face regular disclosure requirements and greater pressure from public shareholders for clarity on the value of its investments and returns on capital.