Shares of several Tata Group companies fell on Tuesday after Tata Trusts proposed a restructuring that could prevent Tata Sons, the group’s main holding company, from pursuing a planned public listing.

The proposal involves merging two group entities with Tata Sons.

The proposal comes after the Reserve Bank of India rejected Tata Sons’ request to give up its registration as an upper-layer non-banking financial company.

The rejection means Tata Sons remains subject to a requirement to list publicly.

A Tata Sons listing had attracted attention because investors in some Tata companies could potentially benefit from the value associated with their stakes in the holding company.

Tata Chemicals and Tata Investment Corporation were among the businesses particularly watched in connection with the possible listing.

The latest restructuring proposal has therefore created uncertainty over whether that listing will proceed.

However, the proposal still requires approval from the Tata Sons board and the Reserve Bank of India.

Shares of Tata Motors Passenger Vehicles, Tata Investment Corporation and Tata Chemicals all declined during Tuesday trading, while Tata Consultancy Services and Trent also fell.

The developments highlight the importance of Tata Sons’ ownership structure to investors across the wider Tata Group.

Source: Reuters.