Tata Chemicals Stock Gains 5% After RBI Keeps Tata Sons In Upper Layer NBFC List
· Free Press Journal
Shares of Tata Chemicals climbed up to 5% on August 7 after the Reserve Bank of India (RBI) retained Tata Sons in the Upper Layer NBFC list, indicating that the central bank has not yet approved the company’s request to exit the NBFC framework.
After opening higher at Rs 679 apiece, the stock jumped to Rs 701, up 5.7%. At 11:40 am, Tata Chemicals shares were trading over 2% higher at Rs 677 apiece. Tata Investment Corporation Ltd (TICL) also gained nearly 6% during early trade following the RBI’s announcement.
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Stake Value In Focus
The RBI clarified that Tata Sons’ inclusion in the NBFC-UL list does not affect the outcome of its pending application for de-registration as a Core Investment Company (CIC).
RBI Retains Tata Sons In Upper Layer NBFC List; De-registration Application Under Review“Inclusion of Tata Sons Private Limited in the list of NBFC-UL is without prejudice to the outcome of its application for de-registration, which is under examination,” the central bank said.
Tata Chemicals holds around a 3% stake in Tata Sons, valued at nearly ₹20,000 crore, which is higher than the company’s current market capitalisation. The stake value has attracted investor attention following the RBI’s decision.
Tata Sons, the principal investment holding company of the Tata Group, was classified as an Upper Layer NBFC in 2022. Under RBI regulations, entities in this category are generally required to list within three years.
However, the central bank has not clarified whether the listing requirement applies while Tata Sons’ exit application remains under consideration.
Listing Debate Continues Around Tata Sons
Tata Sons had repaid debt and applied for surrendering its NBFC licence nearly two years ago in an attempt to avoid a mandatory listing. The application remains pending with the RBI.
Upper Layer NBFCs are considered systemically important financial institutions and face enhanced regulatory requirements. The category includes entities identified by the RBI based on factors such as asset size, with the threshold currently set at ₹1 lakh crore.
RBI Governor Sanjay Malhotra said Tata Sons continues to remain classified as an Upper Layer NBFC because the framework is principle-based. Tata Sons remains eligible for the category due to its large asset base.
Pressure for a listing has also emerged from Tata Sons’ second-largest shareholder, the Shapoorji Pallonji Group, which is looking to monetise its stake to reduce debt.
Tata Sons owns major businesses including Air India, Tata Digital and Tata Electronics, while also holding significant stakes in listed companies such as Tata Consultancy Services and Tata Steel.