Tata Sons’ largest shareholder has called for the holding company of India’s biggest conglomerate to merge with two of its subsidiaries to avoid a forced public listing. The proposal from the group of charitable bodies that own 66 per cent of holding company Tata Sons marks the first substantive move by family scion Noel Tata, chair of Tata Trusts, since he was outvoted in a fiercely contested board meeting that backed what would be a blockbuster initial public offering.

“In his capacity as the chairman of Tata Trusts, this is Noel’s proposal,” Farokh Subedar, an ally of Noel Tata and an adviser at Tata Trusts, told journalists on Monday. Subedar said Monday’s proposal to the Tata Sons board was a first attempt to make a listing unnecessary and other ideas could also be explored. In an escalation of a long-running battle over the future of the sprawling Tata Group’s future, the Tata Sons board voted this month to abide by an order from the Reserve Bank of India to list the holding company.

Tata Trusts said Tata Sons could merge with Tata Consulting Engineers and with Tata Electronics, which is India’s largest iPhone assembler and is building an $11bn chip plant with Taiwan’s Powerchip Semiconductor Manufacturing Corporation. The trusts said the mergers would avoid Tata Sons being classified as a shadow bank by the RBI, which has ruled that such institutions should be publicly listed in order to promote transparency and accountability.

There was no immediate reaction to the proposal from Tata Sons. Noel Tata has been isolated on the holding company’s board. The Tata Group makes products including steel, weapons, salt and Land Rovers while also spanning Tata Consultancy Services and flagship carrier Air India.