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RBI listing, N Chandrasekaran's decision on agenda: What's in store as Tata Sons meet today?
Tata Sons board meeting on Thursday will address the RBI's public listing mandate and outgoing Chairman Natarajan Chandrasekaran's resignation. Friction with Tata Trusts Chairman Noel Tata over listing issues has led to tensions within the board.
The board of Tata Group’s holding company, Tata Sons, is set to meet on Thursday at a time when India’s oldest conglomerate is going through turbulent times. According to reports, the RBI’s mandate to take the holding company public and the future of outgoing Chairman Natarajan Chandrasekaran are set to dominate the agenda of the meeting.
According to a Bloomberg report, the Board is likely to ask Chandrasekaran, who last month announced his resignation ahead of the end of his second term in February 2027, to reconsider his decision. The Nomination and Remuneration Committee is expected to recommend asking Chandrasekaran to reconsider his resignation, the report, which cited people with knowledge of the matter, said.
His planned exit followed months of friction with Tata Trusts Chairman Noel Tata over the listing issue and capital allocation across the sprawling conglomerate.
The Reserve Bank of India (RBI) has mandated Tata Sons to go public, rejecting their application for exemption from the listing requirement due to their assets exceeding 1 trillion rupees.
Chandrasekaran's resignation is significant as it follows months of friction over the listing issue and capital allocation, which raises concerns about leadership continuity during a crucial time for Tata Sons.
Tata Sons can comply with the RBI's requirements by proceeding with the mandatory public listing, seeking a legal review of the RBI's directive, or considering business restructuring to reduce its balance sheet.
Experts suggest that Tata Sons should prioritize pursuing an IPO rather than engaging in prolonged litigation, as the RBI's position is firm and the market conditions may not favor extended legal battles.
Going public would subject Tata Trusts' special rights to greater scrutiny and require increased financial disclosures, potentially diluting their influence over the conglomerate's operations.
Noel Tata, who succeeded his late half-brother Ratan Tata as the Chairman of Tata Trusts, has not been keen on taking the holding company public.
As per reports, the issue of listing the business was also among the reasons that led Noel Tata to vote against the reappointment of Chandrasekaran.
According to PTI, Noel Tata wanted a commitment from Chandrasekaran to ensure that Tata Sons is not forced to list.
While the Noel Tata-led Tata Trusts, which holds over 65 % of Tata Sons, is reluctant to take it public, Shapoorji Pallonji Group, its largest private shareholder with around 18 %, has been pushing for the group to list.
The Reserve Bank of India (RBI) on September 11 rejected Tata Sons' application to surrender its registration as a Core Investment Company, forcing the holding firm to move forward with a mandatory stock market listing.
Under RBI rules, all non-bank financiers, including core investment companies with assets exceeding 1 trillion rupees ($10.45 billion) or access to public funds are required to list.
Tata Sons reported standalone assets of 1.75 trillion rupees as of March 2025, the latest data available.
Tata Sons had sought an exemption from the listing requirement to avoid tighter regulatory scrutiny and expanded public disclosures.
The RBI has filed a caveat in the Bombay High Court, which will allow the central bank to be heard if a petitioner challenges its decision or seeks a stay.
The Tata Sons board meeting also comes at a time when one of the companies under the Tata umbrella - Air India is going through a transition of its own.
Former Ethiopian Airlines Group chief Tewolde Gebremariam is set to take charge as the MD and CEO of Air India later this month, replacing Campbell Wilson, who had been at the helm since July 2022.
In his letter in the Tata Sons Annual Report for 2025-26, which was released in July, N Chandrasekaran had said that Air India's transformation journey must be seen as a five- to ten-year journey, considering the years-long supply chain disruptions in key components, the need to overhaul the legacy systems, culture, fleet and creation of a large cadre of airline professionals.