Tata Sons approves ₹10,000 crore fresh capital infusion into loss-making Air India

Tata Sons’ board has given in-principle approval for a fresh capital infusion of more than ₹10,000 crore, or about $1.1 billion, into Air India, marking one of the group’s biggest financial commitments to the airline since its ₹18,000-crore acquisition in 2021

According to the media reports, the approval was granted at a board meeting held in June and chaired by Tata Sons chairman N Chandrasekaran. Tata Trusts chairman Noel Tata and vice-chairman Venu Srinivasan also attended the meeting.

The investment approval covers Air India and other Tata group ventures, but the funding will be subject to certain conditions. Under Article 121A of Tata Sons’ articles of association, investments exceeding ₹100 crore require majority support from Tata Trusts’ nominee directors.

Air India’s losses have doubled

The decision 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 to concerns over its financial performance. 

Air India’s losses were also among the issues that contributed to tensions between Noel Tata and Chandrasekaran.

Tata Sons’ FY26 report showed that its investment in Air India remained unchanged at ₹22,618 crore, suggesting that no fresh equity was infused during the financial year. The airline instead depended on borrowings and other sources of financing, taking its outstanding debt to around ₹40,000 crore across 11 lenders.

State Bank of India has the largest contribution to Air India at ₹18,500 crore, followed by Bank of Baroda with ₹5,938 crore.

Tata Sons’ ability to provide additional support to lenders is also limited after it stopped issuing corporate guarantees or letters of comfort while its application to surrender its core investment company registration remains pending with the Reserve Bank of India.

Tata Sons holds a 73.8% stake in Air India, while Singapore Airlines owns 24.7% and employees hold about 1.5% through SBICAP Trustee Co. To prevent dilution of its holding, SIA would need to invest around ₹3,350 crore.

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

Report say that the ban on Sir Ratan Tata Trust does not affect the voting rights of Tata Trusts’ nominee directors. Appointed under Article 104B, these directors owe their primary fiduciary duty to Tata Sons, while their voting rights under Article 121A remain valid unless they resign or are formally removed.