Chandra bows out: Tata Sons Chairman to exit after nearly a decade

Mumbai: N Chandrasekaran will step down as chairman of Tata Sons when his second term expires in February 2027, ending a nearly decade-long tenure in which he reshaped India’s largest conglomerate with a series of big bets on aviation, semiconductors, electronics and hardware, newage energy and digital business.

Failure to be elected as a director at the Tata Sons annual general meeting (AGM) next week could have immediately ended his executive tenure, people familiar with the matter told ET. Chandrasekaran, 63, told the Tata Sons board on Wednesday that he would not seek reappointment.

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He will remain chairman until February 20 next year, and asked the board to begin the succession process soon to ensure a smooth transition. ET first reported the development in its edition dated August 12.

The decision came after six months of uncertainty over his reappointment and ahead of a potentially contentious Tata Sons shareholder meeting scheduled August 18. Tata Sons, controlled by Tata Trusts and with a minority shareholding of the Shapoorji Pallonji (SP) Group, is the holding company of the group.

In a letter to the board, Chandrasekaran said the Sir Dorabji Tata Trust (SDTT) and Sir Ratan Tata Trust (SRTT) had unanimously recommended a five-year extension of his term in September 2025. The Tata Sons Nomination and Remuneration Committee and board had also unanimously supported the recommendation, he said.

‘Necessary to have a leader in place’

But when the proposal was formally tabled at the Tata Sons board on February 24, it failed to pass after one board member did not support it. “In the absence of unanimous support, I chose to defer the decision,” Chandrasekaran said. “It has been six months since that board meeting, and no resolution has been reached till date.”

The prolonged uncertainty was no longer sustainable for Tata Sons, he said, given the number of strategic projects at critical stages of execution. “It is not only necessary to have a leader in place to lead the group beyond February 2027, but also, clarity on leadership is important for employees, investors, partners and other stakeholders,” he said.

While Chandrasekaran is expected to continue until his term ends, much will depend on the August 18 Tata Sons meeting. If Tata Trusts gets the required quorum at this AGM and votes against

Chandrasekaran’s directorship nomination, his tenure as the Tata Sons chairman could end immediately, people familiar with the matter said. Tata Trusts owns about 66% of Tata Sons. People familiar with the matter said the Tata Sons board had deferred the reappointment proposal in February after Noel Tata, chairman of Tata Trusts, raised concerns about the performance of newer businesses and favoured a two-year executive term, in line with Chandrasekaran’s age and the group’s retirement policy.

The stance marked a reversal from about a year earlier, when the trusts had unanimously recommended a five-year extension for the incumbent. The governance uncertainty was compounded by a dispute involving SRTT. The Maharashtra Charity Commissioner has barred SRTT from taking important decisions. Under Tata Sons’ Articles of Association, trustees jointly nominated by SRTT and SDTT are authorised to vote at the AGM.

Several SRTT trustees, including Tata, Darius Khambata and Jehangir Jehangir, sought permission from the charity com-missioner to participate in the August 18 AGM. Vijay Singh, who stepped down as a trustee of SRTT, and another trustee, Venu Srinivasan, did not sign the request to attend the AGM. The uncertainty had raised the possibility of a vote that could have forced a more abrupt leadership change. Chandrasekaran’s move, however, caught Tata and several chief executives by surprise, people familiar with the matter said.

Officials said there was no direct interaction or communication between the Trust's chairman and Chandrasekaran after the decision on Wednesday. The chairman, meanwhile, continued with his routine.

ACHIEVEMENTS

His departure will have implications across the group. Chandrasekaran is chairman of Tata Consultancy Services, Tata Motors and Tata Consumer Products, among other companies, and has been the central figure in the group’s strategy since taking the helm at Tata Sons in 2017.

Also read: Sir Ratan Tata Trust may skip Thursday's Tata Trusts meeting as charity commissioner's restraint order stays


He became the first professional manager to lead the holding company. Under Chandrasekaran, Tata returned to aviation with the acquisition of Air India, and expanded aggressively into semiconductors, electronics manufacturing, batteries, electric vehicles and digital businesses.

The expansion has transformed the group’s scale but also required heavy investment, contributing to disagreements within the trusts over the performance and capital needs of newer businesses. Aggregate Tata group revenue rose from Rs 7.89 lakh crore in FY20 to Rs 16.24 lakh crore in FY26, according to figures provided by the group. Profit after tax increased more than five-fold to Rs 1.71 lakh crore from Rs 32,000 crore.

The combined market capitalisation of listed Tata companies rose to Rs 24.39 lakh crore in FY26 from Rs 9.31 lakh crore in FY20, though it was higher at Rs 27.85 lakh crore in FY25. Chandrasekaran’s exit comes amid wider tensions within the group following Ratan Tata’s death in late 2024. Several trustees have left, while government officials have urged the trusts to prevent internal differences from affecting the group’s businesses.