Tata Trusts Chairman Noel Tata has urged the board of Tata Sons to resist a public listing of the conglomerate's holding company, saying the Reserve Bank of India's (RBI’s) decision to reject its bid to surrender its non-banking finance registration did not explicitly require it to go public.

In a statement made at a Tata Sons board meeting on Thursday, Noel said the board should seek legal advice, engage with the central bank and explore alternatives to listing, including restructuring.

The statement lays bare a deepening divide between Tata Trusts, which owns about 66% of Tata Sons, and the holding company's board over the future of the 158-year-old conglomerate.

Tata Sons on Thursday reappointed N Chandrasekaran as chairman for another five years and decided to consider a public listing, according to Reuters. The decision came despite opposition from Noel Tata, who leads the family trusts.

A day after the Tata Sons board meeting, Shapoorji Pallonji Mistry, chairman of the Shapoorji Pallonji Group, backed listing Tata Sons, Business Standard reported.

Mistry said the objective should be to build a stronger Tata institution, strengthen philanthropy and improve accountability, rather than for either side to claim victory.

RBI Decision Leaves Room, Noel Says

Noel said the board had unanimously decided in March 2024 that Tata Sons should remain unlisted and had applied to the RBI to surrender its registration.

"The resolution remains unaltered and intact," Noel said, adding that the board should "do everything that needs to be done to ensure that the Company remains private."

The RBI declined Tata Sons' application on September 11 and told the company to take steps to comply with regulations applicable to an upper-layer non-banking financial company, according to Noel's statement.

"The communication ... does not say that listing is the only option," he said.

The RBI did not immediately respond to a request for comment.

Tata Sons was designated an upper-layer NBFC under the RBI's scale-based regulatory framework, which carries a mandatory listing requirement. The company had sought to exit that framework after repaying about Rs 20,000 crore ($2.1 billion) in borrowings and redeeming preference shares, Noel said.

The statement also calls for Tata Trusts to be consulted before any submission is made to the RBI, any adviser is appointed or any decision is taken on listing.

"Going forward, the Tata Trusts must be engaged at every step and not informed of the outcome afterwards," Noel said.

Noel Seeks Three Years

Noel also proposed that Tata Sons seek at least three years, until September 2029, to comply with any listing requirement, arguing that the company had spent two and a half years awaiting the RBI's decision.

He said a listing would require changes to the company's articles, shareholder approvals, restated financial statements and extensive due diligence.

A public offering at present would also be detrimental to shareholders and Tata Sons because of losses at Air India and Tata Digital, Noel said, without providing details.

Noel said Tata Trusts had formally resolved in 2025 that Tata Sons should remain unlisted and that those resolutions remained unchanged.

"If I am forced to vote, then I would have no option but to veto any such decision to list," he said.

SP Group Adds Pressure

The dispute comes as the Shapoorji Pallonji Group, which owns about 18.4% of Tata Sons, seeks to monetise part of its stake. Tata Trusts said on Thursday that the group had proposed a sale worth about 250 billion rupees ($2.61 billion), potentially in two tranches over 18 months.

The SP Group, which is heavily indebted, raised $2.25 billion in July and has been seeking to unlock value from its Tata Sons holding, according to Reuters.

The RBI has also filed a legal caveat in the Bombay High Court after rejecting Tata Sons' application, a move that could allow it to be heard if the company challenges the decision.