Tata Sons, recently designated as an ‘upper-layer’ Non-Banking Financial Company (NBFC) by the Reserve Bank of India (RBI), is now required to prepare for its stock market listing by September 2025, in accordance with RBI regulations. These guidelines mandate that an ‘upper-layer’ NBFC must go public within three years of receiving this classification. Notably, on September 14, 2023, the RBI officially categorized 15 financial firms as ‘upper-layer’ NBFCs, a group that includes Tata Sons. Interestingly, another Tata group entity, Tata Capital Financial Services, also received the ‘upper-layer’ NBFC classification but is exempt from the listing requirement due to its reported merger with Tata Sons.
With an estimated valuation of ₹11 lakh crore, if Tata Sons chooses to go public through an initial public offering (IPO) by divesting 5% of its shares, the IPO size could reach approximately ₹55,000 crore. This would potentially make Tata Sons’ IPO one of the largest ever in India. It’s important to note that, according to RBI norms, a non-listed ‘upper-layer’ NBFC must complete its IPO listing within three years of being classified as an ‘upper-layer’ NBFC. This reclassification also implies more rigorous and comprehensive regulatory compliance.
In the same context, the RBI recently categorized 15 NBFCs as ‘upper-layer’ NBFCs, including prominent names such as LIC Housing Finance, Bajaj Finance, Shriram Finance, L&T Finance, Piramal Capital & Housing Finance, Indiabulls Housing Finance, Mahindra & Mahindra Financial Services, PNB Housing Finance, Aditya Birla Finance, Muthoot Finance, Bajaj Housing Finance, HDB Financial Services, and Cholamandalam Investment and Finance Company.
