Tata Sons at Crossroads: Key Questions Delay Chandrasekaran's Reappointment

Tata Trusts Chairman Noel Tata indicated that a formal discussion on the reappointment of Tata Sons Chairman N Chandrasekaran for a third term would be premature, as several key issues remain unresolved, according to a report by the Economic Times.

Tata Trusts holds a 66% stake in Tata Sons, the group's holding company. The Shapoorji Pallonji (SP) Group holds an 18% stake in Tata Sons, which it seeks to divest to repay debt.

May 26 Board Meeting

Tata Sons held a special board meeting on May 26, convened by Chandrasekaran to address concerns raised by Noel Tata at a previous board meeting on February 24, at which Chandrasekaran's reappointment had already been deferred.

At the May 26 meeting, chief executives of Air India, Tata Electronics and Tata Digital made presentations on their respective businesses. Noel Tata is learnt to have provided detailed feedback on BigBasket, according to the report.

It was the first time in Tata Sons' history that a special board meeting was called by its chairman specifically to present a business review to the Tata Trusts chairman.

Noel Tata's Concerns

Towards the close of the May 26 meeting, a few directors informally raised the question of whether Chandrasekaran's reappointment could be taken up at the next meeting. Noel Tata indicated it was still too early, citing unresolved matters that require further engagement, the report added.

Noel Tata has sought clarity from Chandrasekaran on three specific issues like the group's five-year strategic roadmap, a framework for offering an exit to the SP Group that does not require Tata Sons to go public and Chandrasekaran's formal position on the long-discussed question of listing Tata Sons. He has also indicated that any timeline for considering the reappointment must be arrived at through consensus.

Earlier, at the February 24 meeting, Noel Tata had raised concerns over losses at Air India and BigBasket and called for course correction.

Tata Sons, classified as an upper-layer non-banking finance company, is required by regulation to launch an initial public offering (IPO), which could dilute ownership. The company has sought an exemption from the RBI on this requirement.

Officials close to the matter told the Economic Times that discussions on an exit plan for SP Group remain inconclusive until the RBI provides clarity on the listing matter. "The value of Tata Group is too high to easily consider a non-listing option to buy back stakes from SP Group. Until there is clarity from RBI on the matter, no one can proceed," one executive reportedly said.

Chandrasekaran's Position

Chandrasekaran is learnt to be not in favour of outlining a formal five-year growth plan at this stage, and is similarly not pressing for a quick resolution on his reappointment, according to the report.

During the tenure of the late Ratan Tata, reappointments were typically considered a month before the end of a term. It was Tata Trusts that passed a resolution in 2025 to begin discussions on Chandrasekaran's reappointment a year before his term ends, in the interest of leadership continuity.

Tata Sons is scheduled to hold its next board meeting on June 12 to discuss annual accounts. The May 26 meeting was described as constructive and largely free of conflict, according to a previous report.