Tata Sons Board Defers Decision on Chairman N Chandrasekaran's Tenure Extension Amid Concerns Over Group's Newer Ventures

In an unexpected development, the Tata Sons board on Tuesday deferred a decision on extending Chairman N Chandrasekaran’s tenure for a third term beyond February 2027, after differences surfaced during a four-hour meeting. Chandrasekaran told reporters that the proposal to defer the matter was his. “Nothing changes in the Tata Group,” he said. Sources said he was keen to avoid a vote, believing Tata Sons and its principal shareholder, Tata Trusts, should remain aligned to ensure stability at the conglomerate. The divergence emerged after Tata Trusts Chairman Noel Tata raised concerns over mounting losses in some of the group’s newer ventures. Tata Trusts owns 66% of Tata Sons. Anita George, who heads the board’s reappointment committee and other directors supported Chandrasekaran, arguing that large greenfield bets — from electronics to aviation — take time to mature. A third term would require a special resolution, as it would exceed Tata Sons’ retirement norm of 65. Chandrasekaran turns 63 in June. Tata is believed to have outlined a few conditions that he wants addressed before any extension of Chandrasekaran’s tenure is considered The first is that Tata Sons should remain unlisted, in line with the Reserve Bank of India’s requirements applicable to upper layer non-banking financial entities, a category that includes large conglomerates such as Tata Sons. The second condition is that the company should operate without debt. The third stipulation is aimed at preventing excessive capital expenditure on high-risk ventures that could deplete the company’s financial reserves. The fourth condition relates to limiting losses arising from some acquisitions. The episode comes as Tata consolidates influence at Tata Trusts. His son Neville was appointed trustee late last year, while Mehli Mistry — seen as a rival voice — stepped down. Former Citibank India CEO Pramit Jhaveri also chose not to seek reappointment as trustee earlier this month. The timing is sensitive. In the latest annual report, Chandrasekaran highlighted that over five years the group nearly doubled revenue and more than tripled net profit and market capitalisation, while investing Rs 5.5 lakh crore to make the conglomerate “future fit”. Revenues of listed Tata companies rose from Rs 6.13 lakh crore in FY17 to Rs 11.65 lakh crore in FY25, a CAGR of 8.36%. Net profit grew at 14.33% CAGR, while market capitalisation stood at Rs 27.77 lakh crore as of February 23. Yet challenges persist — including pricing pressure at Tata Consultancy Services and a cyberattack at Jaguar Land Rover that disrupted production. More than a year after the death of Ratan Tata, renewed tensions within Tata Trusts have revived memories of the 2016 public clash between Tata Sons and its shareholder trusts — a battle that bruised the group’s reputation. The eventual decision on Chandrasekaran’s tenure will now signal not just leadership continuity, but the evolving balance of power between Tata Sons and Tata Trusts.