Tata watchers hope for amicable resolution amid fresh Tata Sons board row

In a dramatic turn of developments at Bombay House , Tata Sons chairman N Chandrasekaran on Tuesday sought to defer a discussion on his reappointment for a third term.

This follows disagreements at a board meeting of Tata Sons where Tata Trusts chairman Noel Tata was reported to have raised certain observations relating to some capital allocation decisions taken by the Tata Sons boss.

According to reports, Noel Tata flagged concerns over losses incurred by some of the Tata Group 's newer ventures, prompting an extensive discussion among directors. The trusts cumulatively own nearly 67% in Tata Sons, which is the holding company of the $410 billion Tata Group.

Chandrasekaran’s current term, which began in February 2017, is set to end in February 2027.

Well-known legal expert and long-time Tata watcher HP Ranina told Fortune India: “It is indeed sad and distressing that the process of reappointment of N Chandrasekaran has been deferred. It should have taken place in the interest of both continuity and good governance.”

Shailesh Haribhakti, one of India’s most respected statutory auditors and corporate governance experts, offered a frank and far-reaching assessment of what this boardroom moment means for the Tata Group and for India.

Speaking to Fortune India, Haribhakti said: “It remains to be seen who finally wins—whether it’s the professional conduct of N Chandrasekaran or the positioning and the brand of Noel Tata. But it could well be a win-win for both," he said, hoping for an amicable resolution to the matter.

According to reports, Noel Tata is understood to have put forth a few conditions tied to Chandrasekaran's reappointment. One of which is that the holding company should not be listed.

Tata Sons and the listing conundrum

Tata Sons had been classified as an Upper Layer NBFC by the Reserve Bank of India in September 2022, which mandated a public listing within three years. To qualify for an exemption, Tata Sons repaid over `20,000 crore in debt.

The company, which has been registered as a Core Investment Company (CIC) with the Reserve Bank of India, then applied for a voluntary surrender of the Certificate of Registration as a CIC and to continue as an ‘Unregistered CIC.’

Despite the September 30, 2025, listing deadline having passed, Tata Sons' application to cancel its CIC registration is still pending with the regulator, which has stated that an entity can continue business until its registration is formally cancelled.

Haribhakti points to a specific and often-overlooked reason why Noel Tata is keen to keep Tata Sons off the public markets. “Noel does not want to list Tata Sons as there is the potential of the leveraged Shapoorji Pallonji (SP) Group selling value in the holding company of Tata Sons—and that could erode value. Noel has to preserve the Tata legacy from the group’s point of view,” he explained.

The SP Group , which holds an 18.38% stake in Tata Sons, has been under financial strain for several years. A listing could provide that group with an easier route to monetise its stake.

Even as Tata Sons seeks to position itself as a purely private holding company, Haribhakti cautions against overlooking its systemic importance. "Though they have paid down the debt, there is still significant public interest given its stake in listed companies. So, there is public interest involved," he said.

Hoping for a resolution

Meanwhile, Ranina hoped the matter would not escalate. “In the event of Chandrasekaran not being reappointed, the process of looking for an alternative will need to start. That will be time-consuming and only lead to more uncertainty,” he said. 

Any disagreement before the reappointment, he said, should have been discussed before the board meeting. “There is no doubt consensus is necessary, but a decision of this nature should be driven by the long-term vision of growth and stability.”

Tata Sons, the $410-billion holding company of the Tata Group, controls 323 subsidiaries along with 39 associates and 32 joint ventures, many of which are publicly listed. Its decisions ripple through India's capital markets and millions of retail investors.

Government unlikely to step in again

On whether the government, which recently intervened in the Mehli Mistry-Noel Tata faceoff, might once again play a role, Haribhakti’s assessment was: “Tata Group is critically important for India. The government has already intervened once to resolve the tussle in the board and it would want the current differences of opinion to be amicably settled at the board level as well. It's unlikely that the government will intervene in this case again.”

Amid speculation about whether the deferral signals an early end to Chandrasekaran's tenure, Haribhakti thinks otherwise: "Chandra is a thorough professional and will complete his term. There is absolutely no chance of him stepping down abruptly.”