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Tata sons plans to merge multiple investment arms

February 14, 2023

Tata sons plans to merge multiple investment arms
Tata Sons, the investment-holding arm of Tata group companies, is planning to merge multiple wholly-owned investment subsidiaries with itself to gain an exemption to avoid the top-layer non-banking finance company (NBFC) tag.

The move will help the group avoid submitting audited financial data of each subsidiary and step-down subsidiaries as being mandated under the NBFC Upper Layer that was introduced in September 2022, sources close to the development said.

These are still in the planning stage, and if approved, this would be the first time Tata Sons would be merging investment firms with itself. This would also help in minimising of submitting financial data to the regulators, they said, but declined to provide the names of the investment firms that would be merged with Tata Sons.

Tata Sons is the principal investment holding company and promoter of all Tata group companies.

About 66% of the equity in Tata Sons is held by philanthropic trusts of Tata group (with Sir Dorabji Tata Trust and Sir Ratan Tata Trust being the biggest), which support education, health, livelihood generation, and art and culture.

Under RBI regulations, Tata Sons was classified as an upper-layer NBFC. This requires the company to be in compliance with NBFC regulations that mandate appointment of chief compliance officer, among others.

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