With the Reserve Bank of India’s (RBI’s) rejection of Tata Sons’ bid to shed its Core Investment Company (CIC) status making a stock market listing increasingly difficult to avoid, attention is now turning to the legal and structural groundwork the salt-to-software conglomerate will need to complete before it can file for an initial public offering (IPO).

The starting point, lawyers say, is Tata Sons’ Articles of Association (AoA). The company converted to a private limited entity in 2017, embedding restrictions on share transferability and shareholder entry that are incompatible with public listing norms. According to Tanmay Banthia, partner at TARAksh Lawyers and Consultants, the board will need to pass special resolutions reverting Tata Sons to a public company and stripping out these restrictive covenants to meet the market regulator’s baseline listing criteria.

Rohit Jain, managing partner at Singhania & Co, said that Tata Trusts’ controlling position and any trust-linked governance arrangements may require scrutiny from a disclosure, related-party transaction, and beneficial ownership perspective.

“A calibrated dilution by existing shareholders, including strategic secondary sales, could improve free float and price discovery. Ultimately, enhanced transparency, board independence, disclosure controls, and capital structure simplification would be central to IPO readiness,” he added.

Tata Trusts (led by Sir Dorabji Tata Trust and Sir Ratan Tata Trust) are the largest shareholder of Tata Sons with a 66 per cent stake. On meeting the minimum public shareholding (MPS) threshold, experts believe an offer for sale (OFS) route involving existing shareholders — rather than a fresh dilution — is the likely path. The Shapoorji Pallonji (SP) group, which holds roughly 18.4 per cent and has long pushed for a listing to ease its own debt load, is seen as a natural candidate for such an OFS, allowing Tata Sons to meet compliance requirements without loosening the Trusts’ grip on control, experts noted.

Alay Razvi, managing partner at Accord Juris, said Tata Sons’ immediate priority would be to obtain clarity from the RBI on timelines while readying a detailed IPO road map. He added that the company would need to reassess its valuation, public-float requirements, and disclosure framework, and that “the Shapoorji Pallonji group’s stake could potentially form part of an offer for sale, although its final position remains uncertain”.

Razvi also flagged the possibility of a legal pushback: “Tata Sons may challenge the RBI’s decision, but should prepare for listing unless a court grants effective interim relief.”