A board meeting at Tata Sons on February 25, expected to formally clear a third term for chairman Natarajan Chandrasekaran, instead exposed fresh differences within the Tata Group’s top leadership.
The decision on Chandrasekaran’s reappointment was deferred after Noel Tata, who leads Tata Trusts, sought firm assurances on key issues including a possible initial public offering (IPO), debt levels and the long-running dispute with the Shapoorji Pallonji (SP) Group.
According to people familiar with the discussions, a Business Standard report noted, Noel Tata pressed for clarity on whether Tata Sons could definitively avoid a public listing. Tata Trusts — a network of 13 charitable entities that together own about 66 percent of Tata Sons — had earlier recommended Chandrasekaran’s continuation.
The listing question stems from a 2022 decision by the Reserve Bank of India to classify Tata Sons as an “upper-layer” non-banking financial company, potentially requiring it to go public within three years to strengthen regulatory oversight.
Chandrasekaran, according to the Business Standard report, is understood to have conveyed that while he favours keeping Tata Sons private, he cannot guarantee a regulatory exemption. Any decision on listing ultimately rests with the RBI. That lack of certainty reportedly prevented consensus at the meeting.
Noel Tata is also said to have flagged the need to restrain debt, reduce losses — particularly at Air India — and reach a faster resolution with the SP Group, which holds about 18.4 percent in Tata Sons and has been seeking liquidity for its stake.
Following the discussions at Bombay House, Chandrasekaran confirmed that he had recommended deferring the decision on his own reappointment. His current term runs until February 2027, ensuring there is no immediate leadership vacuum.
The development revives memories of the 2016 boardroom battle that led to the removal of Cyrus Mistry and shook the group’s reputation for consensus-driven governance.
Since taking charge in 2017, Chandrasekaran — the first non-family chairman of Tata Sons — has overseen a near doubling of revenues and more than doubling of profits at the group’s 15 largest listed companies, including Tata Consultancy Services, Tata Steel and Tata Motors.
Analysts say the deferral appears less about succession planning and more about aligning key stakeholders on capital structure and strategic direction. With major investments under way in areas such as semiconductors and manufacturing, maintaining internal unity will be crucial for the group’s next phase of growth.
