Noel Tata awaits N. Chandrasekaran’s response on three key issues raised by him at February board meeting

Tata Trusts chairman Noel Tata wants N. Chandrasekaran, chairman of Tata Sons, to express his views on the three key issues raised by Tata in the last board meeting of Tata Sons in February. "Tata wants to know Chandrasekaran's views in each of the issues he raised. He is open to discussing it anytime directly. So far, nobody has clarity on what are Chandrasekaran's views," said sources close to the developments.

However, sources close to Chandrasekaran revealed that he would explain his position on the matter at the next board meeting of the holding company which is scheduled for June.

The first key issue cited by Tata at the February board meeting was maintaining Tata Sons’ private company status. Last year, the Tata Trusts board, while passing a resolution to grant another term to Chandrasekaran, had delegated the group chairman to engage with the Reserve Bank of India (RBI) and ensure Tata Sons complies with the central bank’s rules to exit the ‘Upper Layer’ non-banking financial company (UL-NBFC) status.

Companies categorised as UL-NBFCs are mandatorily required to list on stock exchanges. However, Noel Tata is of the view that the holding company should remain private to avoid external shareholder interference in its overall growth strategy. Staying private would also allow the Tata family and philanthropic trusts to retain influence over key decisions across the group. Former Trusts chairman late Ratan Tata also wanted to keep Tata Sons private.

Noel Tata’s second key concern was the mounting losses in businesses under Tata Sons—primarily Tata Digital and Air India. “In the first three quarters of FY26, the losses are huge,” said a source. Noel Tata is concerned that continued losses may force Tata Sons to raise debt, which could push it back into the UL-NBFC category. In 2024, the holding company repaid about ₹20,000 crore to clean up its balance sheet and become eligible to surrender its UL-NBFC status. The RBI is yet to respond to Tata Sons’ request.

The third issue raised by Tata at the board meeting was how Chandrasekaran plans to facilitate the exit of the SP Group from Tata Sons’ shareholding. The SP Group holds an 18.37% stake in Tata Sons, the holding company of nearly 100 Tata group firms. The stake is equally split between Sterling Investment Corp. Pvt. Ltd. and Cyrus Investment Pvt. Ltd., both owned by the families of Shapoor Mistry and the late Cyrus Mistry.

Chandrasekaran held initial talks with SP Group chairman Shapoor Mistry—Noel Tata’s brother-in-law—last year, but there has been no progress since, sources said. The SP Group has previously spoken publicly about the need to list Tata Sons to facilitate its exit. Cash-strapped SP group is looking to monetise its stake to repay its debt and revive its businesses, the sources added.

Emails sent from Fortune India to all parties involved did not elicit any response until the time of publication.