Tata Sons board approves reappointment of N Chandrasekaran for 5 years as chairman

All board members voted in favour of N Chandrasekaran's reappointment except Noel Tata, chairman of Tata Trusts, who voted against the resolution. The resolution was passed by a majority.

In Short

• Noel Tata outvoted as board backs N Chandrasekaran's reappointment
• Tata Sons board approves Chandrasekaran's fresh 5-year term
• Chandrasekaran had earlier decided not to seek reappointment

The Tata Sons board has approved a fresh five-year term for N Chandrasekaran as executive chairman, weeks after he told directors he did not intend to seek another term, people familiar with the deliberations said.

The reappointment comes after the Reserve Bank of India rejected Tata Sons’ request to surrender its non-banking financial company registration, reviving the prospect of a listing. The leadership continuity could pave the way for Tata Sons to prepare for a likely listing, although no initial public offering (IPO) has been formally announced.

All board members voted in favour of Chandrasekaran’s reappointment except Noel Tata, chairman of Tata Trusts, who voted against the resolution. The resolution was passed by a majority.

The Nomination & Remuneration Committee will formally ask Chandrasekaran to reconsider the decision he communicated to the board in August. His current term ends on February 20, 2027.

RBI RULING CHANGES THE REGULATORY PICTURE

The latest decision comes days after the RBI rejected Tata Sons’ application to surrender its registration as a core investment company.

Tata Sons had sought to exit the regulatory framework after strengthening its balance sheet and repaying more than Rs 21,000 crore in debt. The move was aimed at avoiding the listing requirement applicable to upper-layer NBFCs.

The RBI had classified Tata Sons as an upper-layer NBFC in September 2022 under its scale-based regulatory framework. The designation required the company to list within three years.

That deadline expired in September 2025, while Tata Sons’ request to deregister as a core investment company remained pending. The RBI rejected the application on September 11, bringing the listing question back into focus.

Board members also viewed continuity in leadership as important for prospective investors if Tata Sons moves towards a listing process, sources said.

NOEL TATA VOTES AGAINST REAPPOINTMENT

Noel Tata, whose Tata Trusts and affiliated trusts control around 66% of Tata Sons, voted against the resolution.

Noel Tata has opposed a listing since at least February, when the issue was reportedly among the conditions attached to his support for Chandrasekaran’s previous term renewal.

The Shapoorji Pallonji Group, which owns roughly 18% of Tata Sons, has favoured a listing.

The board’s decision puts the succession process that had begun in anticipation of Chandrasekaran’s departure on hold. The chairman-selection process initiated by the Sir Dorabji Tata Trust is expected to be paused or discontinued, according to sources.

Tata Sons and Tata Trusts did not immediately comment on the outcome of the board meeting.

WHY CHANDRASEKARAN HAD DECIDED TO STEP DOWN

Chandrasekaran had told the board in August that he did not intend to seek another term. The decision came after months of uncertainty over his reappointment.

The board had first deferred a decision on his third term in February, after Noel Tata raised concerns during a nearly three-hour meeting at Bombay House.

His planned departure followed months of reported differences with Noel Tata over the listing question and capital allocation at newer Tata Group ventures, including Air India, Tata Digital and BigBasket, which have posted losses.

Tata Sons had subsequently started exploring succession options, with Tata Steel chief executive TV Narendran, Tata Sons group chief financial officer Saurabh Agrawal and National Stock Exchange chief executive Ashish Chauhan among the names reported as potential contenders, along with other internal candidates.

The latest board decision effectively changes that succession plan and keeps Chandrasekaran at the helm.

Chandrasekaran has led Tata Sons since 2017, when he succeeded Ratan Tata as chairman after the board removed Cyrus Mistry. He was reappointed for a second five-year term in 2022.

His third term will now take him through another five years if the formal reappointment process is completed.

The RBI’s decision and the board’s latest vote also put Tata Sons’ ownership structure and potential listing under renewed scrutiny.

A future Tata Sons listing could be one of the largest in India, given the holding company’s stakes in major listed Tata Group companies across sectors including automobiles, steel, software services, hospitality and aviation.

However, any IPO or stake sale would depend on the company’s regulatory, governance and other formal processes, and Tata Sons has not announced an IPO.

- Ends