On Thursday, the Tata Sons board approved a fresh five-year term for N. Chandrasekaran as Chairman of the holding company. This decision was taken despite opposition from Noel Tata, Chairman of Tata Trusts, setting the stage for a potential contentious battle at the shareholders’ meeting. The board also decided to list the company, in accordance with Reserve Bank of India (RBI) directives.
However, these decisions will require approval at the Tata Sons Annual General Meeting (AGM), where Tata Trusts holds a 66% stake. Venu Srinivasan and Noel Tata serve as Tata Trusts’ nominees on the Tata Sons board. Interestingly, Srinivasan supported Chandrasekaran’s reappointment and the listing of Tata Sons. If the AGM rejects these proposals, the decisions will not be ratified under the Companies Act.
The decision taken at Thursday’s board meeting comes barely five months after the board had deferred the proposal to extend Chandrasekaran’s tenure due to a lack of consensus. Subsequently, in August, Chandrasekaran announced that he would not seek another term once his current tenure ended on February 20, 2027.
According to sources, Tata Sons director Noel Tata opposed the reappointment during Thursday’s board meeting.
The board’s latest decision has altered that situation, placing the question of Chandrasekaran’s continuation directly before the shareholders. According to sources, Tata Sons director Noel Tata opposed the reappointment during Thursday’s board meeting.
This issue is significant because Tata Trusts holds an aggregate stake of approximately 66% in Tata Sons and has wielded considerable influence over the holding company’s structure. Disagreements regarding Chandrasekaran’s continuation have been part of a broader governance-related tussle within the Tata Group. Earlier disagreements centered on issues such as capital allocation, losses in certain unlisted group businesses, and concerns regarding the future structure of Tata Sons.
Eight key unlisted Tata companies incurred a combined loss of approximately ₹33,538 crore in the 2026 fiscal year; notably, Air India accounted for ₹22,238 crore of this loss, while Tata Digital recorded a loss of ₹4,974 crore. A test of the balance of power within Tata Sons.
The board’s decision follows a directive from the RBI that effectively pushed Tata Sons toward a public listing. On September 11, the RBI rejected Tata Sons’ application to surrender its registration and continue operating as an unregistered core investment company. Instead, the RBI directed the company to take the necessary steps to comply with applicable regulatory norms.
According to sources, the board decided during Thursday’s meeting to comply with the RBI’s directive and initiate the necessary procedures for listing Tata Sons.
There are differences of opinion within the Tata Trusts regarding the listing. While Noel Tata and some former directors of Tata Sons oppose taking the holding company public, other trustees, Srinivasan and Vijay Singh, support the move. The Shapoorji Pallonji Group, which holds an approximately 18.37% stake in Tata Sons, also favours the listing.
However, the immediate hurdle is the Tata Sons Annual General Meeting (AGM). The AGM, originally scheduled for August 18, was adjourned due to a lack of quorum (the minimum number of members required to hold the meeting). This occurred because the Sir Ratan Tata Trust (SRTT), which holds a 23.56% stake in Tata Sons, was unable to complete the process of nominating its representative for the meeting due to regulatory restrictions imposed upon it. Under the Articles of Association, the presence of an authorised representative jointly nominated by the Sir Dorabji Tata Trust and SRTT is mandatory for a quorum.
Chandrasekaran’s reappointment as a director must be approved at the AGM. This is crucial because his continuation as a director of Tata Sons is a prerequisite for him to remain the Chairman. Consequently, this proposal could become the next major flashpoint in the conflict between the Tata Sons board and the Tata Trusts. Noel Tata and the Trusts might oppose this proposal at the AGM, potentially turning the shareholders’ meeting into a decisive test of the power balance within Tata Sons.
