Tata Sons should not be compelled to go public

With its stock-listing deadline having passed, suspense hangs over the future of its ownership status. It’s time for a rethink of the RBI rule that pushed Tata’s holding company into this spot

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Ifthe Reserve Bank of India’s (RBI) October monetary policy left people and businesses looking fora rate cut glum, spare a thought for Tata Sons, the holding company of the Tata Group.

It has been caught in RBIs regulatory cleft stick, though not for any fault of its own. The privately held firm has been defined by RBI rules asa core investment company (CIC) and slotted as a non-banking finance company (NBFC) in the “upper layer’; as RBI rules mandate, companies inthis category must change their ownership status by going public and listing their shares ona stock market. The deadline for doing that was 30 September. While Tata Sons had applied for a change in classification more than ayear ago, RBI offered no indication of how this matter could be resolved in its statements of 1 October, which covered moves to liberalize rules for lenders, NBFCs included.