Tata Sons Defers Decision on N Chandrasekaran’s Third Term Amid Governance Concerns

The board of Tata Sons has postponed a decision on extending the tenure of chairman Natarajan Chandrasekaran for a third term, signalling internal deliberations within the holding company of the diversified Tata Group.

Chandrasekaran’s current term is scheduled to end in February 2027. The board had been considering his reappointment when Noel Tata, chairman of Tata Trusts — the principal shareholder that holds a majority stake in Tata Sons — reportedly proposed a set of conditions, leading to the deferral of the decision.

Sources indicated that Noel Tata raised concerns about financial performance in certain group companies and highlighted issues related to debt levels at Tata Sons. Additional borrowing could potentially trigger regulatory requirements that might compel the holding company to list on stock exchanges.

Noel Tata is also understood to be opposed to listing Tata Sons and is believed to have sought a written assurance on the matter. However, Chandrasekaran reportedly explained that providing such a commitment may not be feasible, as regulatory developments could influence future decisions.

The board meeting, held at Bombay House in Mumbai, involved extensive discussions. Other directors — including Venu Srinivasan, Harish Manwani, Anita George and Saurabh Agrawal — were reportedly supportive of the reappointment proposal.

Chandrasekaran is said to have received backing from several board members who argued that losses in specific group companies should not overshadow the broader performance and strategic progress achieved under his leadership. When suggestions were made to put the proposal to a vote, Chandrasekaran recommended deferring the decision to allow further consultations.

Regulatory and Listing Concerns

Under Reserve Bank of India (RBI) regulations, certain large core investment companies were given a deadline to list by September 30, 2025. Tata Sons has applied to surrender its Core Investment Company registration to avoid mandatory listing requirements. A decision from the regulator is still awaited.

Leadership and Strategic Impact

Chandrasekaran joined the Tata Group in 1987 and rose to become CEO of Tata Consultancy Services before being appointed chairman of Tata Sons in 2017. He is widely credited with steering the conglomerate through restructuring and consolidation while strengthening financial performance across major listed companies.

During his tenure, the group pursued major strategic initiatives, including the acquisition and revival of Air India, expansion in electric mobility and technology sectors, and advancing plans for semiconductor manufacturing in India.

Founded in 1868 by Jamsetji Tata, the Tata Group remains one of India’s largest and most respected business conglomerates, spanning industries such as automobiles, steel, aviation, consumer goods, and information technology.

With Tata Trusts holding decisive ownership influence and Tata Sons serving as the principal holding entity, governance decisions at the apex level carry significant implications for the group’s future direction.

There is currently no timeline for the next board meeting. Sources indicate that discussions may resume once key concerns are addressed and consensus emerges on governance and regulatory matters.