Lagatar24 Desk
Mumbai: The Tata Sons board has approved a fresh five-year term for N. Chandrasekaran as executive chairman of the Tata Group, reversing his earlier decision last month not to seek reappointment, according to sources cited by news agencies, with the decision approved at a board meeting held in Mumbai on Thursday.
RBI Rejection of NBFC Deregistration Application Revives Listing Requirement
The development follows the Reserve Bank of India’s rejection of Tata Sons’ application to surrender its non-banking financial company (NBFC) registration on September 11, reviving the regulatory requirement for the company to pursue a stock market listing. Tata Sons had been classified as an “upper layer” NBFC by the RBI in September 2022 under its scale-based regulatory framework, a status that required the company to list within three years, a deadline that lapsed in September 2025 while its deregistration application as a core investment company remained pending.
Reappointment Follows Succession Debate Within Tata Trusts
The reappointment comes after Tata Trusts had signalled interest in initiating a change in leadership. Tata Trusts chairman Noel Tata had wanted the Tata Sons board to formally begin the process of identifying a successor to Chandrasekaran, whose current term was set to end on February 20, 2027, believing that Chandrasekaran’s earlier decision not to seek another term should be honoured. The Sir Dorabji Tata Trust had also indicated the need to form a selection panel to identify a successor.
Board Split on Extension, Noel Tata Opposes Reappointment
Tata Trusts had earlier unanimously resolved to recommend extending Chandrasekaran’s tenure by another five years, but at a February board meeting, four directors supported the extension while Noel Tata opposed it, prompting Chandrasekaran to write to the board noting the proposal lacked unanimous support. On Thursday, Noel Tata, who chairs Tata Trusts controlling roughly 66 percent of Tata Sons alongside affiliated trusts, voted against Chandrasekaran’s reappointment, though the resolution was ultimately approved by majority vote. The Shapoorji Pallonji Group, holding around 18 percent of Tata Sons, has favoured listing the holding company. As a result of Thursday’s decision, the chairman-selection process initiated by the Sir Dorabji Tata Trust is expected to be paused or discontinued.
No Decision Yet on Tata Sons Listing
While the board approved Chandrasekaran’s reappointment, no decision has been made regarding the listing of Tata Sons, a question that has gained renewed significance following the RBI’s rejection of the company’s deregistration application. Under Tata Sons’ articles of association, a five-member panel is required to recommend a chairman candidate, with three members jointly appointed by the Sir Dorabji Tata Trust and Sir Ratan Tata Trust, and the remaining two nominated by the Tata Sons board; Thursday’s decision effectively removes the immediate need for this succession process.
Chandrasekaran’s Tenure and Potential Successors Considered
Chandrasekaran has served as Tata Sons chairman since 2017 and was previously reappointed for a second five-year term. Ahead of Thursday’s reversal, Tata Sons had reportedly been exploring potential successors, with names including Tata Steel CEO T.V. Narendran, Tata Sons group CFO Saurabh Agrawal and National Stock Exchange CEO Ashish Chauhan under discussion. A potential future Tata Sons listing could rank among the largest IPOs in Indian history, with a 1 percent stake sale estimated at Rs 15,000-20,000 crore, implying an overall valuation of approximately Rs 20 lakh crore, or roughly $230 billion.
