How did Ratan Tata look at the listing demand for Tata Sons?
He was completely opposed to listing. He believed it would destroy the group's fundamental structure, which serves as an efficient vehicle for philanthropy. Even during the height of the legal battle with Cyrus Mistry, Ratan's goal was to ensure the group's structure was not disturbed.
If he were alive, he would have been fighting listing with all his might. It would have broken his heart even to think that Tata Sons could be listed. He feared that if it happened, its CEO would chase quarterly profits to satisfy shareholders, particularly the FPIs' [foreign portfolio investors’] quest for profits and the social under-pinning of the group would be lost.
Is that what is causing the friction right now?
Besides the issue of selecting a new chairman for Tata Sons, listing is one of the main causes of friction within the group. Unfortunately, it is being spearheaded by those who, I believe, despite their many years of association with the group, have not been able to understand and appreciate the Tata philosophy.
In this context, one question rattles me. Why did they not express their favourable view towards listing when Ratan Tata was alive? This sudden change in position is indeed flummoxing.
I recently heard a leading lawyer [reportedly hired by one faction] speak on the group's structure and declare that philanthropy begins and ends with the Tata Trusts, and that Tata Sons should be run like an organisation existing only for profit. I found that appalling. Such learned minds have a poor understanding of the rationale behind the present structure of Tata Sons and the founding father's philosophy.
Listing would put in jeopardy the practice of Tata companies spending more than what CSR [corporate social responsibility] mandates and undertaking projects beyond what commercial interests dictate. A company focused on only making profits would run counter to the founder's vision.
We should remember that for Jamsetji [Tata, founder of the Tata group], 'In a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence'.
The listing demand began even when Ratan Tata was alive. Did he take a decisive stance at the time?
He was completely opposed to listing. He took the position that if their debts were causing Tata Sons to be categorised as an upper layer NBFC [non-banking financial company], then the holding company should immediately pare them down.
Acting on his advice, Tata Sons paid the ₹20,000cr and applied for deregistration as a core investment company so it could be excluded from the upper-layer categorisation. Even after that, the RBI said no, which means it wants the company to list.
1 September 2026
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There should be no fight. It is inconceivable that a chairman can perform without the support from tata trusts
Isn't that the very nature of Reserve Bank of India’s (RBI's) regulatory style?
Are you implying that the RBI's rule paints everyone with the same brush? If you are, my answer is, sadly, yes.
From a regulatory standpoint, Tata Sons' categorisation as an upper layer NBFC warrants serious re-examination. Changing the criterion after it repaid the debt is perplexing. A rational analysis of the group would reveal that it is not like other for-profit companies. They stand on different footing.
If we appreciate why both Dorabji and Ratan Tata, the founder's two sons, transferred their interests in Tata Sons to Tata Trusts, none other than those with only commercial interests in mind would support listing. RBI has failed to understand that the Tata companies are ‘socially oriented for-profit' entities and must therefore align with that vision.
I am not suggesting that RBI should not exercise any control. But it should do nothing that would destroy the time-tested model. It can certainly mandate that one of its deputy governors be a permanent director on the Tata Sons' board and have veto power. With its direct oversight, it can both achieve its regulatory goal while allowing the group to exist for philanthropy.
The listing question is also because of the Shapoorji Pallonji (SP) Group’s debt issue. How should that be dealt with?
It is correct that the SP Group should have an exit. But the model need not be dismantled for that.
Tata Sons can transfer some of its holdings in several of its companies to the SP Group. I'm sure that Noel [Tata, chairman of Tata Trusts] would not be ill-disposed to finding a way. They are all relatives.
Is the dyarchy at the top, with two separate leaders of Tata Sons and Tata Trusts, causing the current friction?
I think that Ratan did right by separating the two. ‘Power corrupts, and absolute power corrupts absolutely.’ This quote from Lord Acton [19th century historian John Emerich Edward Dalberg Acton], in Essays on Freedom, underscores the need to separate powers and create checks and balances. I agree there is friction. But some friction is necessary for stability.
Is there going to be another Mistry vs Tata battle?
I hope not. I hope they can settle their differences amicably. No individual is more important than an institution; however, capable a person thinks he or she is.
There should be no fight to be the chairman of Tata Sons. It must happen through a selection process approved by the majority owner. It is inconceivable that a chairman can perform without the Trusts' support.
If Ratan were alive, none of this would have happened. Any fight can only damage the storied institution, and Tata Sons should be preserved. The person who is in the eye of the storm should graciously step back. He should realise that he has had an opportunity to make his mark and has played his innings and that the Tata Sons board had on March 26, 1992, approved a rule that none can hold executive positions beyond 65 years of age.
