NEW DELHI: India’s Tata reappointed N. Chandrasekaran as chairman on Thursday and decided to consider a public listing, defying the family charity which controls the salt-to-software conglomerate and laying bare a schism within the 158-year-old group.
Chandrasekaran and the Noel Tata-led Tata Trusts, which owns 66% of Tata’s holding company, have sparred over issues ranging from a potential listing of Tata Sons and Air India’s mounting losses to a planned exit by a minority shareholder.
The 63-year-old chairman’s reappointment came as a relief for the group which faces deepening losses at Air India, a sharp slump at Jaguar Land Rover and the fallout from a data breach, lifting the shares of Tata Group companies.
Boardroom disputes are not new to Tata Sons. In 2016, the board sacked its then-chairman after he fell out over governance issues with group patriarch Ratan Tata, Noel’s half-brother who headed the charity arm before his death in 2024.
Chandrasekaran had last month said he would not seek another term as chairman after February 2027. But Tata Group said in a statement the board this month requested him to reconsider his decision in “larger interests”, which he accepted on Thursday.
Noel Tata, 68, opposed Chandrasekaran’s reappointment as well as the potential listing of Tata Sons, in a statement at Thursday’s board meeting, highlighting the disagreements.
The reappointment is “illegal” according to the Articles of Association of Tata Sons, Tata Trusts said in a statement, adding that both of the two trusts’ nominees on the board are required to vote in favour, but Noel Tata had voted against.
Tata Sons did not respond to a request for comment on those allegations.
Chandrasekaran joined the group’s IT services arm TCS in 1987 after a master’s degree in computer applications, and rose through the ranks. The group has publicly referred to him as a “Tata lifer”. He first became chairman of Tata Sons in 2017, and the reappointment will be his third term.
“Retaining Chandrasekaran removes a potential leadership uncertainty and reassures investors,” said Aishvarya Dadheech, founder and chief investment officer at India’s Fident Asset Management.
Potential listing
Tata Sons, which is the apex holding company of the Tata Group, controls more than 30 Tata companies, including IT firm TCS and Tata Motors.
Tata Group companies had combined revenue of $185 billion in the last financial year. Its 26 publicly listed companies had a combined market capitalisation of $277 billion as of March 31.
Thursday’s board decision also comes days after the Reserve Bank of India (RBI) rejected Tata Sons’ request to be exempted from rules that would require it to list, something it has been trying to avoid having to do.
The RBI classified it as an “upper-layer” non-banking financial company (NBFC) in 2022. Companies in that category are subject to enhanced regulation and a listing requirement.
The board on Thursday said it would move towards that compliance requirement and consider a listing, a source with direct knowledge of the situation told Reuters.
Tata Sons stopped short of making that explicit, saying it will “initiate steps to comply with the applicable RBI Guidelines and will seek guidance from RBI, Tata Trusts and other stakeholders on applicable compliance requirements.”
