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Aug 25, 2026 · 19 min read
A view through the steward ownership lens
by Purpose Foundation
Tata Sons, one of the largest charity-owned and -controlled businesses in the world and home to some of India’s most valuable companies, may be forced to go public. One of the biggest real-world examples of an ownership structure built to keep a company value-driven and protected over the long term is now under pressure to open itself to the stock market. For us, this is a story worth examining through the lens of steward ownership.
In 2022, the Reserve Bank of India (RBI) classified Tata Sons as a systemically important financial institution, an “upper-layer non-banking financial company (NBFC)”. To reflect its system relevance and ensure accountability to the public, any institution recognised as such would be forced to list on the stock market as a way to ensure higher public scrutiny, disclosure of information and consistency amongst upper-layer NBFCs.
Tata Sons has taken several steps to shed this classification and stay private, freeing itself from all debt and seeking to be reclassified as no longer a financial institution. Driven in particular by Noel Tata, chairman of the controlling Tata Trusts, it is fighting to keep the company unlisted and preserve its private status, a fight that recently contributed to the chairman of Tata Sons, N. Chandrasekaran, stepping down. As of August 2026, Tata Sons is still on the list of the RBI. The push to list Tata Sons is also driven by one of its minority shareholders, the SP Group, which needs liquidity and wants to exit but can’t easily sell its shares due to the illiquid nature of Tata Sons.
Three forces – a regulator, the charitable owners, and a minority shareholder with illiquid shares – pulling in different directions around one question: should this company be forced to go public?
This story consists of complicated interpersonal dynamics, leadership changes, industries and companies in disruption, and many different perspectives and interpretations. But in the end, it’s a story about ownership, power and the question of which company structures are most suitable for large system players. Using our steward ownership perspective, we want to take a closer look at the case. At the same time, we understand that we are not able to provide a full and comprehensive analysis of all facts and questions and might miss nuances due to us only having access to publicly available information and also not being embedded in Indian culture, history and its legal ecosystem.
One of the largest and most influential Indian companies, Tata Sons, is majority-owned and controlled by charities in a way that includes elements of steward ownership, but only partially: the majority of control cannot be speculated with, and the majority of profits and value generated serve the purpose of the company. But the structure is entangled with private financial interests and charitable interests and heavily relies on the continuation of values-led stewardship. It shows that it is not black-and-white but rather that there is a grayscale of ownership models.
Regulatory concerns combined with liquidity concerns from a minority shareholder might force Tata Sons to become a publicly listed company. Structures including steward ownership (or ones including aspects of it) are built to ensure the long-term independence and purpose-orientation of a company. This protective layer, which Tata Sons' ownership structure currently provides over the whole group, is exactly what a listing would weaken.
A public listing became a default mechanism to increase accountability and public scrutiny. But public scrutiny is not the same as stock listing – and forcing one carries its own dangers: short-term pressure, a shift in whose interest the company must serve, and loss of the long-term freedom the structure was built to protect. Steward ownership's contribution here is to widen the solution space: transparency without financialisation.
The current situation leads to the ownership question not simply being viewed through the internal and individual design and governance questions in accordance with Tata’s values and purpose but through the broader question of ownership design for the public interest.
In the search for ownership structures best suited for serving the public good, the history between the Indian government and the Tata Group has swung from one pole to the other: first the (failed) state ownership of one of the Tata businesses and now to the potential of a forced IPO. Both poles miss what Tata already is: neither state-owned nor market-owned but held in trust to serve society.
The case is a stress test of steward ownership's hardest questions: What is actually being stewarded when the (majority) owner's purpose (philanthropy) and the company's purpose (long-term health) can diverge? What is a fair valuation of shares that are in nature illiquid and not value-maximising? And how do you give a shareholder liquidity without compromising the integrity of the structure?
Tata Sons is the holding company that controls and promotes the Tata Group, an empire of more than a hundred businesses, around thirty of which are publicly listed, spanning steel, textiles, IT services, airlines, salt and so much more. Among them are some of India’s most valuable and influential companies, with the group’s total value cited at around $360 billion [1].
66% of Tata Sons’ shares, carrying both economic and voting rights, are held by a group of charitable trusts, together called the Tata Trusts, supporting education, health, livelihood generation, and art and culture. Most notably, the Sir Dorabji Tata Trust (~28%) and the Sir Ratan Tata Trust (~24%), with allied trusts making up the rest. The Tata Trusts have significant control over Tata Sons: they directly nominate directors to the Tata Sons board and, through them, steer major strategic decisions, usually acting as one. The remaining shares are held by non-charitable players, most notably the SP Group as the single largest shareholder outside the trusts (~18%), alongside Tata family members (~1-2%) and other Tata Group companies (~12%).
The companies within the Tata Group, such as TCS, Tata Motors, Tata Steel and many more, are listed on the stock market or partly privately held but all of them are controlled by Tata Sons as “promoter” (the founding, controlling shareholder following Indian law), though it does not always hold a majority. All employees are to follow Tata’s Code of Conduct based on values of integrity, responsibility, excellence, pioneering and unity.
In practice, this means two things: On the financial side, when Tata Sons pays out dividends, roughly two-thirds flow into philanthropy while the rest goes to private shareholders. On the control side, the Tata Trusts hold the majority of voting rights as well as veto rights on specific key decisions like appointing the chairman or changes to the structure [2]. In other words: the control lies with the Tata Trusts and the majority of economic rights serve the company’s purpose or support charitable and social causes.
[1] https://www.linkedin.com/pulse/one-shareholding-three-laws-inside-tata-sons-listing-49y1f/
[2] https://www.business-standard.com/article/opinion/a-comprehensive-win-for-the-tatas-121040801739_1.html
To my father [Jamsetji Tata] the acquisition of wealth was only a secondary object in life; it was always subordinate to the constant desire in his heart to improve the industrial and intellectual condition of the people of this country and the various enterprises which he from time to time undertook in his lifetime had for their principal object the advancement of India in these important respects.
We are looking at the Tata Group through the lens of steward ownership. Steward ownership is a corporate ownership model that legally enshrines two principles in the long run:
The company cannot become an object of speculation but remains self-determined and independent in the long term. The steering wheel always remains in the hands of people who are connected to the company and its mission.
Profits are a means to an end, not an end in themselves. They serve the company’s mission and development or can be used to fund charitable activities. The value created within the company cannot be extracted by the company owners for their personal benefit.
Looking at the structure behind Tata, several qualities of steward ownership do seem to hold:
On the side of purpose orientation, it is ensured that capital is largely neutralised: the company is not primarily driven by the creation of shareholder value for private shareholders, and the majority of economic value cannot be extracted for the owners’ personal benefit. The large majority of profits is reinvested back in the group, with the stronger Tata group companies supporting weaker ones. Only a relatively small share is paid out as dividends, and of what is paid out, the majority flows into philanthropy [3]. The capital largely stays in the company and works for its long-term future rather than being extracted.
On the side of self-determination, control – the majority of voting rights and the veto rights for reserved matters – sits with the Tata Trusts. The trustees who exercise them are individuals closely associated with the group and, at least by design, connected to its values. The trusts were set up, among other reasons, to hold this control in the long run. Selling entrepreneurial control over Tata Sons is legally constrained and, in practice, close to unthinkable.
The structure is set up for the long run due to the trust's irrevocable nature.
But measured against the two principles of steward ownership – self-determination and purpose-orientation – several aspects of the structure are less clear-cut and raise questions.
Most apparent is that while two-thirds of power and money are held in the charitable Tata Trusts acting as group-level stewards, a significant share sits with non-charitable players with strong financial interests. The SP Group alone, at around 18%, is the largest single shareholder outside the trusts, and there may be additional governance rights attached to these stakes that are not publicly known. Whether this amounts to a formal blocking position on particular decisions is hard to say from the outside, but it is enough to matter, and it is the reason the SP stake sits at the centre of the current dispute.
Additionally, some of Tata Sons’ shares are held by family members and others who sit close to or even in the bodies that control decisions in Tata Sons. It is therefore possible that some financial motives of private individuals might affect the decisions taken by the Tata Trusts.
While these interests might not fully take over decisions for Tata, particularly due to the strong values enshrined in the family, the Tata Trusts and the Tata Group itself, the governance and incentive structure is, from a steward ownership point of view, intransparent and might lead to conflicting interests.
At the same time, the question of what is actually being stewarded is a relevant one in the case of the Tata Group. Steward ownership is based on the belief in the positive power of entrepreneurship and long-term stewardship of the purpose of a company, based on an incentive structure that ensures purpose orientation of the company and puts stewards who are close to the company and its values in control. In the Tata Group, the Tata Trusts control the company and hold both economic rights and voting rights. Theoretically, this could lead to a conflict of interests between the purpose of the company and the charitable purposes of the trusts, where the company is steered to maximize shareholder value and dividends for the Trusts – which is not the same as safeguarding the long-term health of the business. And even if the purpose of the company is the basis of decision-making, the trustees might be too far away from the company and its operations to be able to make decisions in line with what the company and its stakeholders need for the future. However, the purpose of Tata Sons and its subsidiaries as existing to improve the industrial and intellectual condition of the employees, customers, communities and the whole of Indian society, and the value of the long-term independence and health of the company, seems to be strongly embedded in the Trusts and the people controlling them, and governance mechanisms might be set up exactly so a focus on the Tata Group remains. Nevertheless, this is a potential conflict of interest that could undermine the structure. Companies like Bosch or Patagonia solved this problem by separating economic rights in a charitable structure from voting rights lying in a non-charitable structure that directly serves the purpose and long-term independence of the company.
It should also be noted that while true for Tata Sons, each of the companies in the Tata Group would need to be analysed individually to examine how the principles of steward ownership hold up in each of them. While some of them are majority-owned and controlled by Tata Sons, others are only partly owned by Tata Sons and publicly listed, with Tata Sons holding anything from around 72% in some down to roughly a quarter in others. In those cases, control runs less through outright majority ownership than through Tata Sons’ position as “promoter”, the founding and controlling shareholder following Indian law recognised as exercising strategic control. This control is reinforced by cross-holdings between group companies and the ability to appoint board members.
These aspects show that Tata’s structure, while close in some aspects to steward ownership, sits more on a grayscale. It relies on alignment between the individual Tata Trusts and between the Tata Trusts and the Tata Group, and on the continuation of (family) values enshrined in the stewards. Both are currently put to the test after the death of Ratan Tata, who served both as chairman of the Tata Trusts and Tata Sons, and whose succession, along with the looming regulatory changes, has put the structure under pressure.
This analysis only scratches the surface and there are many questions still open but for now, let’s turn to the situation at hand.
Having established that Tata Sons exhibits some aspects of steward ownership as a structural choice meant to ensure the long-term independence and long-term orientation of Tata Sons and the company it controls, the question at hand becomes even more pointed: should this company be forced to go public?
There are two main arguments for an IPO of Tata Sons, made by the RBI and supporters of the listing. First, that Tata Sons, as an upper-layer NBFC, carries too much systemic weight to remain private and that more transparency and public scrutiny are therefore needed. Second, that an IPO would allow existing shareholders to exit and let the public participate in the company’s value. Let’s look at these arguments separately.
The argument runs like this: listing would open Tata Sons to scrutiny by analysts and investors, force it to publish quarterly results and material internal developments, and hold it to stricter governance standards. This is what the regulator wants for every upper-layer NBFC, in the belief that it serves the best interests of the public and the Indian economy.
There is an irony worth noting here. Interestingly, another tool for imposing public oversight – state ownership – was already tried on one of Tata’s flagship businesses. Air India was taken over by the Indian state in 1953 and ran as a state-owned airline for nearly seven decades, accumulating heavy losses. Subsequently, it was bought back by the Tata Group in 2022. The instinct now is to reach for the opposite pole: dispersed public ownership via the market.
Seeking more transparency and public scrutiny of Tata Sons might be entirely legitimate, even though Tata Sons seems to already spend a lot of energy on being transparent. But the real question is whether the deeper assumption, that an IPO can actually produce public scrutiny in a meaningful sense. For this, it is worth asking what public markets actually optimise for. A stock market is, first and foremost, a mechanism for pricing and distributing financial value. What it optimises is the allocation of capital toward expected financial returns. The “scrutiny” it produces is real but it is primarily scrutiny on the financial performance of the company, repricing it in real time against the expected returns. This is not the same as accountability to the public for the company’s role in society but accountability to its financial shareholders. The two can be very different, and, as countless examples show, listing is not a guarantee of good governance or public-minded corporate behavior.
So if the stated goal is public accountability for a systemically relevant institution, it should be asked whether the stock market is really the best-designed tool for it or whether it is simply the default because it is familiar. An IPO is not a neutral tool for increasing transparency and oversight. It comes with its own logics and incentives, which it would impose on Tata Sons.
Concretely, listing would expose Tata Sons to market pressure to prioritise shareholder returns and short-term financial performance, and would reduce Tata Sons’ freedom to create long-term value and to sustain its philanthropic mission. In particular, it would reduce the ability of Tata Sons to quickly allocate capital from more successful companies to ones in need of funding, thus undermining the whole structure [5]. As one article puts it, “the unlisted structure is what allows Tata Sons to make decade-long bets that no public market would tolerate. Listing does not just dilute ownership — it dilutes patience.“ [6] The exact “strict governance standards” such as independent board directors, quarterly reports and necessary approval of related party transactions which the regulators want for Tata Sons are the exact ones the structure with its long-term governance and ownership model has been built to prevent. This view has been expressed by Noel Tata as well as current and former representatives of Tata Sons and the Tata Trusts. As one analysis summarises the arguments, “an IPO would compromise the group's century-old philanthropic structure, dilute its social mission and subject it to short-term profit pressures.” [7]
There is a long history of steward-owned, trust-, foundation- and charity-owned companies all over the world. Research suggests they tend to act with a longer time horizon, make room for innovations with a long time horizon, exhibit higher levels of sustainability and stakeholder-orientation, higher employee satisfaction rates and levels of trust amongst stakeholders. These are exactly the qualities that defenders of keeping Tata privately held have in mind when fighting to keep Tata unlisted – not only in the interest of their structure but of the Indian economy and society.
The founders left their shares in the companies to the Trusts with one message — do good for India. They never said: become the biggest company. The companies exist to serve India and improve the quality of life.
It is clear that regulations are written to last and be applied independently of individual cases. This poses a problem for regulators, as while Tata’s record may justify confidence in its structure, a regulator understandably cannot base the whole regulation of system-relevant cases on individual company structures and their history. One exemption might quickly lead to other NBFCs wanting the same. So none of this means there should be no oversight. It may well be that a company of this scale warrants greater public accountability and that regulators need more transparency. But oversight does not necessarily have to mean financialisation. An IPO might not have to be the default but could be just one path. This raises the question of whether there could be other paths the regulator could take to increase disclosure, independent oversight and reporting obligations.
Tata Sons has a long history of complying with RBI regulations and has undergone several restructuring processes to preserve its identity as a privately held and charity-owned company whilst fulfilling the needs of the regulators. It is currently working to get itself off the list, repaying its debt and changing the very nature of how it operates, reiterating its role merely as a holding company and guardian of the long-term orientation, independence and social mission of the Tata Group. Given that its major operating companies are all listed and heavily scrutinised, it is questionable if forcing it to go public would really add a valuable layer of information and compliance or, in the process, damage something valuable.
[5] https://www.linkedin.com/pulse/signature-broke-bombay-house-cayman-asset-management-private-li-suenc/
[6] https://www.linkedin.com/pulse/signature-broke-bombay-house-cayman-asset-management-private-li-suenc/
[7] https://indianexpress.com/article/opinion/columns/to-list-or-not-to-list-tata-sons-that-is-our-question-10718321/
[8] See amongst others research by Prof. Steen Thomsen https://ccg.cbs.dk/research-papers-enterprise/
Now, onto the second argument brought forward. This one is less reiterated by the regulators and rather by analysts as well as the minority shareholder in Tata Sons, the SP Group. It is really two claims bundled together, and they are worth separating.
The first is that the public should be able to participate in Tata Sons’ value. This would make a financialisation of shares necessary, which are currently close to illiquid and largely neutralised, pushing a logic of the company as a financial asset onto a structure built to ensure long-term independence and stewardship over an entire group of companies. Historically, the Tata Trusts have treated ownership of Tata Sons not primarily as wealth ownership to be maximised, but as stewardship, guarding values and long-term survival of the group. A listing could change that, and would treat the company as an asset whose worth should be unlocked and distributed, which is precisely the framing a steward ownership structure is built to resist.
And even if this financialisation of the holding company and making its value liquid and tradeable is the goal, as former vice-chairman of Tata Sons argues, there is not a lot of significant value to be “set free” here; a large part of the value of the Tata Group is already publicly accessible via the listing of its major operating companies [9].
The second claim is more concrete. The SP Group, holding around 18% of Tata Sons, wants out and desperately needs liquidity. Its stake is close to unsellable because of the nature of its ownership and the Tata Trusts holding a right of first refusal. This should not be the interest that drives the regulator to push for the IPO of Tata Sons – and should generally not be what ultimately forces such a systemic, structure-altering event. But it does require a real, working solution.
This moves the question from “should Tata Sons list” to “what solves the problem of SP’s liquidity”. There are some tools that might work here, from a buyback by the trusts or other Tata Group entities to a negotiated sale to another private buyer to a phased exit that allows Tata Sons to buy its shares back over time. None of these require changing the nature of the whole company. In fact, Noel Tata is reported to have asked Tata Sons' leadership to explore exactly this – ways to buy out the SP stake without listing Tata Sons [10]. The price question, which the IPO would have solved by using market valuation, is the crucial one here, as trustees and SP currently disagree on the valuation of the shares. But, as we have seen in other sales of private companies and in many investments in steward-owned businesses, different mechanisms for finding a price are possible, ones that don’t dismantle the very feature that defines Tata’s structure in the first place.
[9] https://timesofindia.indiatimes.com/toi-plus/business-economy/why-tata-sons-should-not-be-listed/amp_articleshow/131230013.cms
[10] https://openthemagazine.com/columns/tata-sons-listing-rbi-proposes-tata-opposes
The story is far from over and this piece only tackles a small part of the picture. We are curious to see whether RBI and Tata Sons will come to an agreement – and whether the special nature of Tata Sons, including the aspects of steward ownership, will continue to stand. IPO or not, it is to be expected that the Tata Trusts will do everything in their power to ensure that they will keep a majority of Tata Sons’ shares and control over it to steward it into the future according to its values and purpose.
Perhaps this is where the Tata story opens up into a much bigger set of questions. Looking at developments and debates like this reminds us of the importance of taking a closer look at the assumptions behind seemingly obvious solutions – and of questioning them where necessary: What do we actually mean when we call for “public scrutiny”? Does an IPO automatically create more transparency and accountability? Or is the underlying need really for greater transparency and accountability? Could these be achieved in very different ways? And when a shareholder needs liquidity, how can that liquidity be created without fundamentally changing the ownership structure of the company?
For us, these questions matter because companies are among the most powerful forces shaping our economies and societies. If they indeed hold systemic relevance and can have life- and economy-altering impacts, then questions of ownership, governance, transparency and accountability are not merely questions of corporate governance. They are questions about how we want our economy and society to function and about what structures we put in place to ensure that companies can exercise their power responsibly, while remaining independent, purpose-driven and oriented towards the long term.
There is a whole Pandora’s box of questions behind this case. We will leave it closed for now – but look forward to opening it again in future discussions.
This blog post leaves large parts of the situation and structure untouched, and consciously so. The case is far more complex than we can cover here, and our analysis is based on publicly available information through the lens of steward ownership. As we are not embedded in Indian culture, history, or the country’s legal and regulatory system, our reading may contain oversights or miss nuances that would be obvious to someone closer to the context. The information in this blog post are, amongst others, based on the following articles: