Corporate advisory firm InGovern has batted for turning Tata Sons public, urging the Reserve Bank of India to issue an explicit order directing the main holding company of the salt-to-semiconductor Tata Group to initiate the process for an initial public offer (IPO).

The firm argued that Tata Sons’ attempt to remain a private entity by seeking to surrender the certificate of registration as a systemically important core investment company (CIC) to the RBI is ‘dead on arrival’ with the evolving regulatory landscape in 2026.

The final nail in the coffin appears to be the critical clarification issued by RBI, where the regulator addressed the industry’s attempt to carve out equity investments sourced from “owned funds” from the definition of “indirect public funds.”

The RBI observed: “Not accepted — due to use of leverage, multiple layers and fungibility of money, it is difficult to establish with reasonable assurance whether the equity infusion by group entity is from their owned funds.”

“This clarification definitively strikes down the ‘standalone deleveraging’ argument that Tata Sons has relied upon to justify its exit from the CIC regulatory perimeter. By dismissing the fungibility defence, the RBI has effectively eliminated the primary regulatory loophole that companies like Tata Sons may seek to utilise,” InGovern observed.

InGovern’s analysis shows that there are seven Tata Group companies that together hold nearly a 12 per cent stake in Tata Sons, noting that the debt raised by these companies constitutes indirect access to public funds for Tata Sons.

According to the firm, the RBI’s latest tweaks clearly state that an NBFC with both direct and indirect access to public funds must be listed.

In March 2024, Tata Sons filed an application to surrender its registration as a CIC. By aggressively repaying over ₹20,000 crore in standalone debt, the company claimed to have renounced its access to public funds, thereby seeking to move from a “registered CIC” to an “unregistered/exempt” entity.

InGovern suggested that RBI should unequivocally reject the application, which was filed to avoid public listing. SP Group, a minority shareholder of Tata Sons, the main holding company of the Tata Group, has previously asked RBI to direct the listing of the behemoth.