New Delhi, Sept. 13 -- The Reserve Bank of India has directed Tata Sons Pvt. Ltd. to go for an IPO after rejecting its two-and-a-half-year-old application to surrender its registration as a core investment company, marking a new challenge for Tata Trusts chairman Noel Tata, who had lobbied hard to keep the group's holding company private.

In a letter dated 11 September, the RBI told Tata Sons that it cannot accept its application, made in March 2024, for voluntary surrender of its CIC licence, potentially triggering outcomes including listing of Tata Sons-the holding company of India's largest business group by revenues.

Three executives privy to the development confirmed the central bank's communication and likely outcomes.

Saturday's...