What’s happening at Tata? A boardroom battle over group’s future

Mumbai: What began as a question over N Chandrasekaran’s succession has turned into a full-blown boardroom battle at Tata Sons, pitting the company’s board against Noel Tata-led Tata Trusts. In a dramatic turn of events, the Tata Sons board on Thursday voted to reappoint Chandrasekaran as executive chairman for another five years, even though the 63-year-old had told the board last month that he did not want a third term.

Tata Trusts, which together with affiliated trusts control about 66% of Tata Sons, has rejected the board’s decision as a “legal nullity”. The Trusts contend that the company’s Articles of Association require both Trust-nominated directors to back a resolution appointing the chairman. Noel Tata, chairman of Tata Trusts, voted against Chandrasekaran’s reappointment.

What happened?
Chandrasekaran had indicated in August that he would step down when his current five-year term ends on February 20, 2027. The decision came after the board repeatedly failed to reach unanimity on extending his tenure. Chandrasekaran joined the group's IT services arm TCS in 1987 after a master's degree in computer applications, and rose through the ranks. He first became chairman of Tata Sons in 2017 and the reappointment gives him a third term.

At Thursday’s nearly three-hour board meeting, Chandrasekaran reconsidered his decision following a request from the board. Tata Sons said he had “acceded to the Board’s request to reconsider his decision” and that the board then voted by majority to reappoint him for another five years.

Four directors voted in favour. Noel Tata voted against. The Trusts immediately challenged the decision.  According to Noel Tata, Chandrasekaran had decided to step down, the Trusts had accepted that decision and the process of identifying his successor had begun.

“The page has turned,” Noel Tata told the board, according to the Trusts’ account.

The Trusts said Noel Tata had placed before the board a legal opinion from former Chief Justice of India DY Chandrachud supporting its interpretation of the Articles of Association. The opinion, according to the Trusts, was not taken into account.

The board’s decision has effectively interrupted a succession process that was already being considered within the Sir Dorabji Tata Trust. Potential names reported to have been in consideration included Tata Steel chief executive TV Narendran, Tata Sons finance chief Saurabh Agrawal and National Stock Exchange chief executive Ashish Chauhan.

The confrontation inevitably brings back memories of Tata Sons’ previous major boardroom crisis. In 2016, Cyrus Mistry was removed as chairman, triggering a prolonged legal battle between Mistry, the Tata Trusts and Tata Sons. The dispute eventually reached the Supreme Court, which in 2021 upheld the Trusts’ authority.

What does the listing issue have to do with it?
Meanwhile, a much bigger dispute is running underneath the leadership battle: should Tata Sons remain unlisted or eventually go public?

The Reserve Bank of India’s rejection of Tata Sons’ request to surrender its registration as a core investment company has revived the possibility of a listing, making the question of who leads the holding company more urgent.

The RBI classified Tata Sons as an “upper layer” non-banking financial company in 2022, triggering a three-year deadline to list that expired in September 2025. Tata Sons sought to avoid the listing requirement after repaying more than ₹21,000 crore in debt. But the RBI rejected its request this month to surrender its registration.

The Tata Sons board on Thursday decided to move towards compliance with the RBI rules and consider a listing. Tata Sons said it would “initiate steps to comply with the applicable RBI Guidelines” and seek guidance from the RBI, Tata Trusts and other stakeholders on the compliance requirements.

The Trusts, however, want alternatives to be explored. They said the Tata Sons board had unanimously resolved in March 2024 to remain unlisted, while the Sir Dorabji Tata Trust and Sir Ratan Tata Trust adopted similar positions in July 2025.

Tata Trusts said the “Tata Model has to be saved”, arguing that Tata Sons’ ownership by charitable trusts is central to the group’s structure.

The listing question is particularly important for the Shapoorji Pallonji Group, which owns roughly 18% of Tata Sons and has pushed for a listing to unlock value from its stake. The financially stressed SP Group has proposed that Tata Sons buy back enough of its shares to generate gross proceeds of at least ₹25,000 crore. The proposal envisages the buyout in two tranches over 18 months and would require Tata Sons to initiate a selective capital-reduction process before the National Company Law Tribunal. No final agreement has been reached.

Noel Tata has asked the board to consider other ways of raising the funds, including using Tata Sons’ internal cash flows, selling listed investments, bringing investors into newer businesses and possible offers for sale linked to the listing of some operating companies. He has also sought approval for Tata Sons’ management and the Trusts to continue discussions with the SP Group and its bankers.

Tata Sons, the holding company of the Tata Group, controls more than 30 Tata companies, including TCS and Tata Motors. 

​Tata Group companies generated ⁠a combined revenue of $185 billion in the last financial year. Its 26 listed companies had a combined market capitalisation of $277 billion as of March 31.