Mumbai (Maharashtra) [India], September 29 (ANI): A public listing of Tata Sons would fundamentally change the Tata Group's long-term investment and social-development model, as the holding company would have to balance its existing purpose with the expectations of public investors seeking financial returns, Tata Trusts Chairman Noel Tata has said.

Speaking at the Republic Summit, Noel Tata talked of the relationship between Tata Sons and Tata Trusts, which holds around 66 per cent of Tata Sons.

He said the Trusts' role as a philanthropic organisation is separate from its role as the group's controlling shareholder, but the two are connected through Tata Sons.

"So the roles are separate. Tata Sons is the engine that continues to increase the value of the corpus of our trusts," Noel Tata said.

He said the corpus of the Trusts has grown at around 20 per cent annually over the last 30-35 years, with dividends from Tata Group companies providing the Trusts with the income needed for philanthropy.

"And their role is really to keep making sure that our income stays ahead of inflation, so that our spending power keeps going up year by year by year, and we do that through the companies, through the dividends that finally end up coming to the Trusts, and which gives us the power to spend from the Trust," he said.

Noel Tata said the philanthropic side of the Trusts focuses predominantly on health and education, along with some skill development.

The comments come at a time when Tata Sons is facing questions and debate over its future structure, leadership and possible listing.

The issue around Tata Sons' listing and leadership intensified in September 2026 after the Reserve Bank of India rejected Tata Sons' application to remove its "Upper Layer" NBFC status, keeping the company's obligation to list unchanged.

Following this, the Tata Sons board voted 4-1 to reappoint N Chandrasekaran as Executive Chairman for a third five-year term and decided to initiate steps to comply with the listing requirement.

Noel Tata, representing Tata Trusts, voted against the decision, with Tata Trusts holding a 66 per cent stake in Tata Sons Private Limited (TSPL). Tata Trusts has opposed the reappointment and public listing, calling the board's decision illegal.

The Trusts have also proposed a strategic reorganisation of TSPL that would result in the holding company ceasing to be classified as an NBFC or Core Investment Company (CIC), with the stated aim of changing its regulatory position and keeping Tata Sons private.

The Trusts have proposed a restructuring of Tata Sons that would bring operating businesses into the holding company. 

In his remarks, Noel Tata said the proposal involves bringing "a couple of our operating businesses, part of Tata Electronics" into Tata Sons.

He said this would restore an earlier structure in which Tata Sons had both operating and investment businesses. Tata Consultancy Services was earlier a division of Tata Sons before it was demerged and listed in 2004, he noted.

Explaining why Tata Trusts wants to avoid a public listing, Noel Tata said the change could create a conflict between the group's long-term purpose and the expectations of public investors.

"We believe that it will fundamentally change the way the company, as a group, has been run over the last 150 years," he said.

He said Tata Sons has historically invested in projects based on what the country needs, while the Trusts also have a mandate to support social development.

Noel Tata referred to the philosophy associated with JRD Tata, saying: "What India needs."

He said this approach could become more difficult to maintain if public investors enter the holding company and expect their investments to grow on a quarter-by-quarter basis.

"How do we manage these two contradictions in a way?" Noel Tata asked, referring to the group's long-term purpose and the expectations of investors seeking financial returns.

"Our companies, we believe that the operating companies are not public companies, and they manage that contradiction. They don't have to manage the contradiction because they're there to give a return to the people who have invested in them," he said.

The issue is particularly significant because of Tata Sons' ownership structure. Tata Trusts holds around 66 per cent, while the Shapoorji Pallonji Group holds 18.37 per cent and Tata Group companies hold around 13 per cent.

Noel Tata said the Trusts have already sent Tata Sons a possible solution that, in their view, fits within existing RBI guidelines and could allow the company to avoid listing.

"We would like Tata Sons to review and, if necessary, modify and engage with the RBI, as we believe that this is a solution which would enable us to avoid listing."

He said the proposal is aimed at bringing operating businesses back into Tata Sons, creating a structure that combines operating and investment activities. (ANI)