India’s central bank tells Tata Sons to take conglomerate public

India’s central bank has rejected Tata Sons’ appeal against a forced public listing, requiring the privately held conglomerate to comply immediately with regulations that could produce the country’s largest-ever initial public offering. In a letter to chief financial officer Saurabh Agrawal, the Reserve Bank of India said the holding company’s application to deregister as an upper-layer non-banking financial company “cannot be acceded to” and that Tata must follow the regulator’s guidelines without delay.

The dispute dates to 2022, when the RBI classified Tata Sons, India’s largest conglomerate, among the country’s biggest non-banking financial companies and gave it three years to list as part of a broader effort to increase transparency in the financial sector. Tata Sons resisted the instruction. After reducing its debt levels, it applied in March 2024 to have the classification reconsidered. The RBI’s rejection ends that effort and sets the clock running on a listing that analysts estimate could value the group at more than $120bn.

Tata Sons is not a conventional lender. Its role is that of an investment holding company spanning hundreds of subsidiaries and 26 listed entities across defence, steel, and consumer goods. It controls Jaguar Land Rover, Air India, and Tata Consultancy Services, India’s largest IT firm. A forced listing would therefore mark a structural shift for an entity that has operated as a private family holding, with a majority owned by a set of charitable trusts. The scale of the portfolio means the transaction could become India’s largest IPO.

The decision lands at a moment of internal strain. Chair N Chandrasekaran resigned unexpectedly last month after a long-running boardroom dispute and weak performance in key businesses, including IT services and the lossmaking airline Air India. The listing question has become a further point of contention at the top of the group. Noel Tata, the family patriarch who took over as chair of the trusts after his half-brother Ratan Tata died two years ago, opposed the IPO, arguing that remaining private gave the conglomerate more freedom to make long-term investments without the pressure of quarterly reporting.

The RBI’s position reflects a regulatory judgment that size alone warrants public scrutiny. Tata Sons sits at the centre of India’s corporate economy, and its financial interconnections across dozens of listed companies make it systemically significant even though it does not take deposits or make conventional loans. The forced listing forces a trade-off between the group’s preference for patient capital and the regulator’s demand for disclosure. For investors, the prospect of a $120bn listing offers a rare chance to gain direct exposure to a sprawling portfolio that has long been out of reach. For the group, it means opening its books, submitting to market discipline, and answering to outside shareholders at a time when its leadership is in transition.

The immediate question is how Tata Sons manages the transition. Compliance with the RBI’s directive will require not only a listing but also changes to governance, reporting,