India, Sept. 30 -- Tata Trusts, the group of charities that is the majority shareholder in Tata Sons, has proposed merging two Tata companies - Tata Consulting Engineers (TCE) and Tata Electronics Systems Solutions (TESS) - into the holding company. The move, analysts say, could potentially take Tata Sons out of the Reserve Bank of India's (RBI) rules for non-banking financial companies (NBFCs), which require the largest of them to list on the stock market.

The proposal follows a split on the Tata Sons board over who should lead the company and whether it should go public. On September 17, the board reappointed N Chandrasekaran for a third term as chairman over the objection of Noel Tata, who chairs Tata Trusts and is one of its nominees...