Tata Sons Could Give Air India A Billion Dollar Breather

Tata Sons’ board has given in-principle approval for a fresh capital infusion of more than ₹10,000 crore into Air India, one of its biggest commitments to the airline since acquiring it in 2021, according to The Times of India report.

The approval was given at a June board meeting chaired by N Chandrasekaran and attended by Tata Trusts chairman Noel Tata and vice-chairman Venu Srinivasan. However, the funding will not be unconditional. Air India and other Tata group companies will have to present a business case whenever they seek capital, according to the news publication.

The move comes more than a year after Tata Sons halted equity injections into Air India. The airline’s losses more than doubled to ₹22,238 crore in FY26, adding pressure on its finances.

Air India Debt Rises As Equity Funding Stays Frozen

Tata Sons’ FY26 report showed that its investment in Air India remained unchanged at ₹22,618 crore, indicating that no fresh equity was added during the financial year.

With equity funding on hold, Air India relied on borrowings and other sources of financing. Its outstanding debt has risen to around ₹40,000 crore across 11 lenders. State Bank of India has the largest exposure at ₹18,500 crore, followed by Bank of Baroda at ₹5,938 crore.

Tata Sons’ ability to provide additional support to lenders is also limited by its decision to stop issuing corporate guarantees and letters of comfort. Its application to surrender its core investment company registration is still awaiting approval from the Reserve Bank of India, according to the report.

Tata Trusts’ Role And SIA’s Stake

The approval also comes against the backdrop of Tata Sons’ governance structure. Under Article 121A of its articles of association, investments above ₹100 crore require majority support from Tata Trusts’ nominee directors.

The news publication reported that restrictions preventing Sir Ratan Tata Trust (SRTT) from holding board meetings do not affect the voting rights of Tata Trusts’ nominee directors at Tata Sons. SRTT has been barred from holding board meetings since May amid an inquiry into alleged violations of the Maharashtra Public Trusts Act.

Tata Sons currently owns 73.8% of Air India, while Singapore Airlines holds 24.7% and employees hold about 1.5% through SBICAP Trustee Co. If Tata Sons’ fresh investment does not dilute existing holdings, SIA would need to invest around ₹3,350 crore to maintain its stake, according to TOI.

Tata Sons’ board is scheduled to meet on September 17, after a Tata Trusts meeting on September 11, excluding SRTT.