Tata Sons board approves five-year term extension for N Chandrasekaran as chairman

PTC News Desk: The Tata Sons board has approved a new five-year term for N Chandrasekaran as executive chairman, reversing his decision last month not to seek another term.

All board members supported the resolution, except Noel Tata, who voted against Chandrasekaran’s reappointment. This makes Noel Tata the only board member to oppose his continuation.

The decision comes days after the Reserve Bank of India (RBI) rejected Tata Sons’ request to give up its registration as a core investment company. The move has brought Tata Sons closer to a possible stock market listing under RBI rules.

Chandrasekaran’s current term is scheduled to end in February 2027. The reasons for the change in his decision were not immediately known.

Chandrasekaran earlier decided to step down

On August 12, Chandrasekaran had informed the Tata Sons board that he would not seek another term after his current tenure ends on February 20, 2027.

His decision came after months of uncertainty over his continuation. At a board meeting in February 2026, a proposal to give him another five-year term did not receive unanimous support. Chandrasekaran later deferred the decision, but said in August that six months had passed without a resolution.

His decision led to the beginning of a succession process. The Sir Dorabji Tata Trust said it would set up a selection committee to recommend his successor.

Reports at the time suggested that Chandrasekaran and the Tata Trusts had differences over several issues. The trusts control around 66% of Tata Sons.

The reported disagreements involved corporate governance, allocation of capital, the performance of some newer businesses and the future ownership structure of Tata Sons. Whether Tata Sons would remain unlisted was also a key issue.

The situation became more complicated due to uncertainty over Tata Sons’ regulatory status and the possibility that it could be required to list on the stock market.

Chandrasekaran’s decision also came shortly before Tata Sons’ annual general meeting. The meeting was later adjourned after the two main Tata Trusts failed to jointly nominate a representative.

RBI decision brings back issue to focus

The latest reversal comes after the RBI rejected Tata Sons’ request to surrender its core investment company status.

Tata Sons had applied in March 2024 to exit the regulatory framework after repaying more than Rs 21,000 crore in debt and strengthening its financial position. The company wanted to avoid the stock market listing requirement applicable to upper-layer NBFCs.

With the RBI rejecting its request, the possibility of Tata Sons being required to list on the stock market has once again become a key issue.