Tata Sons has postponed a decision on extending Chairman N. Chandrasekaran’s term for another five years, following questions raised by Tata Trusts chairman Noel Tata. The issue, expected to be straightforward, was deferred after Chandrasekaran proposed waiting until a consensus was reached, following the tradition of the late Ratan Tata, and specifically seeking Noel Tata’s approval.
Concerns Over Losses in Unlisted Companies
Noel Tata, who is cautious about accumulating debt, highlighted losses across several unlisted group companies as a condition for approving Chandrasekaran’s extension. Air India reported a consolidated net loss of ₹10,859 crore in FY25, up nearly 48% year-on-year, covering Air India, Air India Express, and related subsidiaries.
Tata Play faced a loss of ₹529.43 crore in FY25, nearly 50% higher than the previous year, amid pricing pressures in the DTH and streaming market. Tata Digital posted a net loss of around ₹828 crore, an improvement from FY24’s ₹1,201 crore, though the e-commerce and digital portfolio collectively lost ₹4,609.9 crore, up 9.5% year-on-year. Retail arm BigBasket recorded a net loss of ₹2,006.8 crore, up about 42% from the prior year, facing stiff competition from rivals like Swiggy Instamart, Blinkit, and Zepto.
Listing and Regulatory Issues
Noel Tata is reportedly opposed to listing Tata Sons on stock exchanges. The company has applied to the RBI for deregistration as an NBFC, aiming to avoid regulatory requirements that apply to “upper-layer” NBFCs. Other directors argue that the matter should be decided by the RBI, as listing would subject the company to stricter disclosure norms under SEBI.
The Shapoorji Pallonji group, holding around 18% of Tata Sons, has pushed for listing. Noel Tata, married to Aloo Mistry, sister of the late Cyrus Mistry, is also keen to settle the long-running dispute with the SP group.
Restricting Fresh Investments
With several unlisted companies posting losses, Noel Tata has advocated restricting new investments until existing losses are contained. Other directors support continued investment for long-term growth. Some firms, like Air India, carry significant debt, while Tata Capital and Tata Technologies have recently raised funds via IPOs. The group is also in the process of acquiring Italian truck maker Iveco.
June Meeting to Be Crucial
The next Tata Sons board meeting in June is expected to be pivotal, as directors will need to resolve the question of Chandrasekaran’s extension. Sources suggest the issue is likely to be settled before then, noting that prolonged uncertainty could affect the stability and strategic direction of the Tata group.
