Why N. Chandrasekaran’s long bet on new businesses aligns with Noel Tata’s strategy

Tata Group chairman N. Chandrasekaran has quietly redrawn Tata Sons’ growth architecture over the past several years by building new businesses in electronics and semiconductors, battery cells, electric mobility, digital commerce and new materials. He has also brought a sharper focus to FMCG and financial services through the merger of group assets. This calibrated strategy of creating long-term assets and routing larger investments into them through the holding company, Tata Sons, is expected to get the full backing of Noel Tata, who completed one year at the helm of the Tata Trusts last month.

After a prolonged period of internal disagreements following his entry, Noel Tata successfully reconstituted the boards of two major trusts by removing dissenting member Mehli Mistry and inducting his son Neville Tata and Tata group veteran Bhaskar Bhat as trustees of the Sir Dorabji Tata Trust for three years. Noel represents the Trusts on the Tata Sons board, along with vice-chairman Venu Srinivasan, and both hold veto power over critical decisions. His firm footing in the holding company strengthens Chandrasekaran’s hand as the group accelerates investments in new businesses.

Three of the new unlisted businesses—Air India, Tata Electronics Pvt. Ltd., and Tata Digital Pvt. Ltd.—emerged as the group’s highest revenue contributors in FY25 after Tata Motors , TCS and Tata Steel . Tata Electronics posted a marginal loss of ₹70 crore on revenue of ₹66,601 crore. Air India recorded revenue of ₹78,636 crore with a loss of ₹10,859 crore, while Tata Digital reported a loss of ₹4,610 crore on revenue of ₹32,188 crore. Industry experts say that given their scale, these companies have the potential to become future flagships if they continue to receive sustained investments.

Instead of chasing quick gains through acquisitions or making massive, scattered investments, Chandrasekaran has steered the group toward building platforms from scratch and committing capital for the long term. He aims to create deeply integrated, fully controlled businesses in sectors where the group wants enduring relevance, said a senior group executive. This capability-driven, measured aggression is expected to define the next horizon for the Tata Group.

What makes this approach more compelling today is its alignment with Noel Tata’s philosophy of long-term, steady and disciplined growth. Both leaders share a similar management instinct rooted in patience, operational rigour and sustained capital prudence.

Noel Tata’s leadership record—particularly at Trent—stands out for consistency rather than flamboyant expansion. Trent’s evolution from a modest retailer into a category-leading business was driven by years of careful scaling, strong unit economics and disciplined brand building. He demonstrated that retail can grow profitably when fundamentals are strong and the promoter remains invested for the long haul. This thinking blends seamlessly with Chandrasekaran’s groupwide strategy.

Across the Tata Group, each large operating company today invests in sharper focus, a healthier balance sheet and simplified structures. The stable foundation gives the group the capacity to commit capital to high-gestation ventures without destabilising existing businesses.

The initial ramp-up in electronics manufacturing, the strong traction in Tata Motors’ EV portfolio and the integration efforts across Tata Digital’s consumer platforms have encouraged analysts to believe that top management will continue allocating capital to new businesses even when they are still in the red. Tata Sons has already invested $1.3 billion in its iPhone assembly venture since its inception four years ago.

At its June board meeting, Tata Sons approved a fresh $3.5 billion investment in new businesses. Earlier, the group had committed $120 billion to these emerging areas.