Tata Sons surrenders RBI registration

26 Aug 2024 , 12:33 PM

In a calculated move to maintain its status as an unlisted, closely held business, Tata Sons, the parent company of the $410 billion Tata Group, has requested to voluntarily surrender its certificate of registration to the Reserve Bank of India (RBI) following the repayment of more than ₹20,000 crore in debt.

Tata Sons would have had to list its shares in accordance with central bank regulations if these loans had been extended. However, Tata Sons paid back almost all of its over ₹20,300 crore in debt.

According to the company’s annual records, which ET was able to view, the repayment does not include preference shares and non-convertible debentures totaling ₹363 crore.

To pay for these outstanding debts, the company has ₹405 crore in bank deposits with the State Bank of India (SBI).

Tata Sons added that in addition to surrendering its registration certificate, it gave the RBI an undertaking to that effect.

In September 2022, the RBI categorized Tata Sons as an NBFC-Upper Layer (NBFC-UL), reflecting the company’s status as a core investment business that raises capital from markets and banks to invest in group companies. An NBFC-UL is required by RBI regulations to be listed three years after being classified in this way. However, Tata Sons has volunteered to turn in its certificate of registration to the central bank, thus it is no longer necessary to list its stock because the promoter risk profile has significantly decreased as a result of the debt repayment.

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