N Chandrasekaran to exit as Tata Sons chairman, Tata Steel, Tata Motors too

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The Tata Group will have to search for a successor to Chandrasekaran in the six months. “The group is likely to consider people from inside and outside the group for a successor,” said a Tata group source.

Chandrasekaran is also Chairman of many leading Tata group companies like Tata Steel, Tata Motors, TCS and Indian Hotels. All these companies will get a new Chairman by February 2027.

Chandrasekaran’s tenure as Chairman commenced in February 2017. He got one extension in February 2022.

‘Majority of Tata Trustees against Chandrasekaran’s tenure renewal’

At the Tata Sons AGM on August 18, shareholders were expected to consider the reappointment of Chandrasekaran as a director. “With majority of trustees against renewal of his tenure, he might have decided to announce his exit before the AGM,” said a source.

On February 24, the outcome of the board meeting of Tata Sons was unusual as Noel Tata surprised other Directors, raising questions on losses made by several unlisted companies in the $180 billion group. While the extension of Chandrasekaran for a third term of five years was agreed upon earlier by Tata Trusts trustees, Noel Tata raised several queries at the board meeting and put across several conditions for approving another term for him.

Four Tata Sons Directors were then in favour of extending the tenure and were ready to put the issue for voting, but Chandrasekaran proposed postponement of the decision as he apparently felt decisions in Tata Sons should be on consensus based, a tradition followed by late Ratan Tata. In short, he wanted the approval of Noel Tata for the extension.

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Tata losses in focus

A major reason for the differences of opinion between Noel Tata and Chandrasekaran is the losses suffered by unlisted Tata companies. Air India’s losses more than doubled to Rs 22,238 crore in FY26 from Rs 10,859 crore in FY25. At the same time, its revenue declined to Rs 71,870 crore from Rs 78,636 crore during the year. Tata Digital made a loss of Rs 4,974 crore during the year. The worsening Air India’s financial performance comes as the Tata group continues to integrate and restructure its airline businesses. The group has been investing in fleet expansion, technology, infrastructure and improving the customer experience as it seeks to turn Air India into a globally competitive full-service carrier.

The Tata Trusts board is scheduled to meet on August 13 to consider and approve the accounts and other matters ahead of the Tata Sons annual general meeting (AGM) on August 18.

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The Trusts have also approached the Maharashtra Charity Commissioner seeking a one-time waiver to enable trustees of the Sir Ratan Tata Trust (SRTT) to hold a meeting and consider its accounts and other matters. The move assumes significance as the SRTT is currently restrained from holding meetings, creating uncertainty over its proposed grants of around Rs 400 crore as well as its Tata Sons dividend.

The SRTT could also face difficulty in exercising its voting rights at the Tata Sons AGM on August 18 unless it obtains approval from the Charity Commissioner. The issue has added another layer of uncertainty to the crucial shareholder meeting.