The Tata Sons board meeting, which discussed extending the tenure of Tata Sons chairman N Chandrasekaran, took an unexpected turn on Tuesday after he himself urged directors to defer the matter amid emerging differences. Chandrasekaran’s move to step back came after Noel Tata, chairman of Tata Trusts, highlighted the weak performance of new businesses of Tata Sons that has led to raising more debt to cover losses. The process of raising further debt will force the group holding company to go for an IPO under RBI guidelines, Noel Tata noted in the meeting.

According to people in the know, the discussion on Chandrasekaran’s reappointment began as a routine agenda item until Noel Tata weighed in with his views. Chandrasekaran responded to the composed views and requested unanimity for the extension of his tenure to a third term.

Noel Tata, who is a nominee of the Trusts on the Tata Sons board, raised concerns about mounting losses in some of the group’s newer businesses, including Tata Electronics, Tata Digital (which runs the Super App), and the airline business under Air India. His remarks triggered a detailed exchange among directors on the financial trajectory of these ventures. Several board members backed Chandrasekaran’s continuation, arguing that the losses stem from greenfield projects that typically take time to become financially stable. However, Noel Tata seemed firm in his views, a source said.

Noel Tata is joined on the board by vice chairman Venu Srinivasan as a Tata Trusts nominee.

Chandrasekaran, who is serving his second term as chairman, which will end in February 2027, did not want his extension agenda to go for voting. The other board members — Harish Manwani, Saurabh Agrawal (CFO), Anita George, and Venu Srinivasan — supported the extension during the discussion, sources said.

When discussions intensified, some directors suggested resolving the matter through a vote. But Chandrasekaran recommended postponement, emphasising that the group functions most effectively when Tata Sons and Tata Trusts act in alignment rather than at cross purposes.

Earlier, Tata Trusts had passed a resolution to grant a third term to Chandrasekaran, but the criticism from Noel Tata was unprecedented, other sources said.

Granting Chandrasekaran a third term would require shareholder approval through a special resolution at Tata Sons. It would also need an exemption from Tata Sons’ retirement policy, which caps the age for non-executive roles at 65. Chandrasekaran, who turns 63 in June, has led the conglomerate since 2017, overseeing a period defined by internal restructuring, deleveraging, and tighter capital allocation.

During the meeting, Noel Tata is understood to have outlined a few broad expectations that should be addressed before any renewal is considered, according to sources. These included ensuring Tata Sons’ status as an unlisted entity. He also wanted the group companies to become debt-free and cautioned against aggressive capital spending in high-risk areas. He called for closer scrutiny of losses linked to acquisitions, including Air India and BigBasket.