A power struggle between Tata Sons and Tata Trusts has brought the future of one of India’s most influential business groups into question, after the holding company extended chairman N Chandrasekaran’s tenure and moved towards a possible public listing.
The decisions have set the board of Tata Sons against Tata Trusts, the family-linked charitable organisation that owns 66 per cent of the company. The dispute is expected to move into the courts and could affect a corporate empire spanning more than 100 countries.
Its 26 listed companies, including Tata Consultancy Services and Tata Motors, have a combined market value of $277 billion and influence 17.7 million retail shareholders, as well as pension funds, insurers and mutual funds, according to governance advisory firm InGovern.
Tata Sons chairman reappointed
At a board meeting on September 17, Chandrasekaran was reappointed by four votes to one, despite opposition from Noel Tata, the Tata Trusts chairman and its nominee on the board.
Chandrasekaran had said the previous month that he would not seek another term after February 2027. Tata Group said the board had asked him to reconsider in the “larger interests” of the group, and that he had agreed.
Noel Tata, 68, described the reappointment as “illegal”. He argued that the trust nominees were required to vote together, although the other nominee, Venu Srinivasan, supported Chandrasekaran.
Noel Tata became chairman of Tata Trusts after the death of Ratan Tata in 2024. He is Ratan Tata’s half-brother and the only family-linked senior executive currently serving at the top of Tata Sons.
The disagreement over the chairmanship is bound up with a wider dispute over the structure and ownership of Tata Sons, the principal holding and investment company of the Tata Group.
Why Tata Sons may go public
India’s central bank requires companies with assets above $10.45 billion to list publicly. Tata Sons had sought to avoid that requirement by deregistering as a non-bank finance company, but the Reserve Bank of India rejected its request shortly before this month’s board meeting.
Tata Sons has since said it will take steps to comply with the central bank’s requirements, bringing the holding company closer to a stock market listing.
The prospect has been opposed by Noel Tata, who says a listing would change the character of a group whose structure has enabled it to support philanthropic activities.
“A listing will destroy its character and strike at the heart of this principle,” Tata Trusts has argued.
Noel Tata has said the group “was conceived as a national service carried on through business”, and that it had been able to act in the country’s service in ways that “a purely commercial calculus would not have supported”.
The holding company’s unusual position has intensified the debate. Although many businesses beneath it are publicly traded, Tata Sons itself has remained outside direct public-market scrutiny while controlling a large industrial network.
The Shapoorji Pallonji stake
A further point of contention is the 18.4 per cent stake held by the Shapoorji Pallonji Group, Tata Sons’ second-largest shareholder.
The infrastructure and construction group, which is carrying heavy debt, wants to monetise its holding. Tata Trusts said Noel Tata had put forward a plan to sell part of the stake for $2.61 billion. Tata Sons has not commented on the proposal.
The Shapoorji Pallonji Group supports a public listing of Tata Sons and opposes Noel Tata’s position. Its patriarch, Shapoor Mistry, is Noel Tata’s brother-in-law.
A wider test for Indian corporate governance
The Tata Group began more than 150 years ago and now operates across information technology, automobiles, steel, power, aviation, chemicals and consumer goods. Under Ratan Tata, who became chairman in 1991, it expanded internationally through acquisitions including Tetley, Corus and Jaguar Land Rover.
The group is also developing an iPhone assembly operation in India, alongside semiconductor fabrication and chip-assembly businesses.
Ratan Tata had chaired both Tata Sons and Tata Trusts, providing a link between the company and its majority shareholder. After his death, divisions that had been contained within that relationship gradually became more visible.
Santosh Mehrotra, an Indian development economist, said Tata Sons should be listed because “there is a law for everyone, and Tata cannot be an exception to that”.
InGovern said a holding company with influence over businesses of such scale could not reasonably remain outside the transparency and governance expectations applied to systemically important financial and industrial conglomerates.
Both sides have instructed prominent lawyers. Harish Salve, a former solicitor general of India, is leading the Tata Sons legal team, while Abhishek Singhvi, an opposition Indian National Congress MP, is representing Tata Trusts.
The dispute echoes the group’s previous boardroom crisis. Cyrus Mistry, the younger brother of Shapoor Mistry and Noel Tata’s brother-in-law, was removed as Tata Sons chairman in 2016 after disagreements with Ratan Tata over strategy, governance and the use of capital.
The Supreme Court upheld Tata Sons’ decision in 2021. It also confirmed that voting rights granted to Tata Trusts-nominated directors were legal and valid.
Noel Tata and Venu Srinivasan are currently the two Tata Trusts nominees on the Tata Sons board. Whether their differing votes created a legal problem is now expected to be tested in court.
Singhvi said the dispute had left him with “sadness and regret that these issues could not be solved amicably”, warning that separating Tata Trusts from Tata Sons would be “unthinkable”.
