Behind the Transition at Tata

On the morning of August 12, N. Chandrasekaran, Chairman of Tata Sons, sent a letter to the board stating he was not offering himself for reappointment at the end of his term. His reappointment was expected to come up at the AGM on August 18. Chandra, as he is known, took over the top job at the conglomerate in February 2017, and this is his third term.

For several months now, there has been an internal battle at the group that essentially germinated from what appears to be multiple points of dispute between Tata Sons, the group’s holding company, and Tata Trusts, which owns two-thirds of the former.

It started soon after the death of Ratan Tata in October 2024, when Noel Tata assumed charge of Tata Trusts. It has been a tumultuous period for the group since Tata Sons’ board meeting in February, relating to the reappointment of Chandrasekaran as Chairman. Before this, two key trusts—Sir Dorabji Tata Trust and Sir Ratan Tata Trust—had given their approval for the same.

“Subsequently, the resolution was tabled at the Tata Sons board on February 24, 2026. However, the proposal was not carried through because one of the board members did not support it, and in the absence of unanimous support, I chose to defer the decision,” Chandrasekaran said in his letter.

All eyes, understandably, are on how the succession will play out and who the new Chairman will be. “A proper and seamless alignment with Tata Trusts is most critical. To that extent, an amicable relationship must prevail between them and Tata Sons,” says Shriram Subramanian, Founder and Managing Director of InGovern Research Services, a corporate governance advisory firm. He maintains that Chandrasekaran’s exit at the end of his current tenure without seeking reappointment was unexpected.

How the incoming chairman steers the huge losses at Air India and pilots the way forward for Tata Digital (also in the red) will be closely watched.

Then, there is the challenge of cash-guzzlers like semicon­ductors, for instance. Chandrasekaran’s tenure was marked by Tata Steel making large buyouts to formulate an India-specific strategy, Tata Motors getting a healthy share of the electric vehicle (EV) market, growth in Tata Consumer Products, and Titan becoming an even larger entity. “It must be understood that the external environment for Chandrasekaran became extremely challenging and he still managed to grow various businesses,” says Kavil Ramachandran, a former Professor at the Indian School of Business and a long-time tracker of the group. “The priority for the successor is to reassure all stakeholders that things are in control,” he adds.

Who moves into the top job now is hard to guess, and a host of names (including Tata Steel’s T.V. Narendran) are doing the rounds. Sources indicate that Tata Sons too will get in new board members, citing Bhaskar Bhat, Titan’s ex-boss and Yezdi Nagporewallah, KPMG India’s CEO, as potential contenders. By all counts, the process to decide all this will begin soon. Given the enormity and complexity of the group, time is of the essence.

According to Swapnil Kothari, Managing Partner, S. Kothari & Co, the new Chairman must address the issues that affect the perception of the group. “The message that all is well with corporate governance at the group must be conveyed to restore investor faith,” he says. Then, underperforming segments of the business would also need to be dealt with. “That must be done with a ruthless bottom-line endeavour as both management skills and investor money are at stake,” explains Kothari.

Managing succession has been a task at many large Indian companies, especially the ones that are family-owned and promoter-led. In the case of the Tata Group, Kothari adds, the successor “has big shoes to fill and must do so with aplomb.”  

@krishnagopalan