Chandra exit underscores Tata troubles that began after Ratan Tata death

Natarajan Chandrasekaran, chairman of Tata Sons Pvt. Ltd., has told the company’s board that he will not seek reappointment when his current tenure ends in February 2027, deciding against a third term seven months before his second five-year term expires. He will continue as chairman until then.

Chandrasekaran became chairman of Tata Sons in January 2017, after spending three decades at Tata Consultancy Services Ltd., including as its chief executive. His decision to step down comes at an unsettled moment for the House of Tata, with questions over succession, governance, capital allocation and the direction of the group’s newer businesses.

Since Ratan Tata’s death on 9 October 2024, the balance of power between Tata Sons and the Tata Trusts has come under greater scrutiny. Disagreements among trustees and over the future direction of the $400-billion-plus conglomerate. have tested a system that was for years largely driven by consensus.

Here is how trouble unfolded.

9 October 2024: Ratan Tata dies

Ratan Tata’s death removed a key bridge between Tata Sons and the charitable trusts that own about 66% of the holding company. His death left the Tata Trusts facing a leadership transition even as Tata Sons continued to function under Chandrasekaran. Two days later, Noel Tata, Ratan Tata’s half-brother, was appointed chairman of Tata Trusts.

The transition appeared orderly, but an important constraint was already in place. Changes to Tata Sons’ rules meant that the chairman of Tata Trusts could not simultaneously become chairman of Tata Sons. Noel therefore became a director of Tata Sons, while Chandrasekaran remained at the helm of the holding company.

Late 2024: The pressure to list

The leadership transition was unfolding alongside a separate issue for Tata Sons: its status as an unlisted company.

The Reserve Bank of India had classified Tata Sons as an upper-layer non-banking financial company (NBFC). Under the RBI’s framework, such companies were required to list within three years of being classified, putting Tata Sons on course for a September 2025 deadline.

Tata Sons did not want to go public and sought an exemption from the listing requirement, but the RBI has not granted one yet.

July 2025: Trying to stay private

By July 2025, Tata Sons had taken a significant step to strengthen its case for staying private. It repaid about ₹30,000 crore of debt, effectively making itself debt free. The move removed one factor the RBI considers when determining whether an NBFC belongs in the upper layer.

ALSO READ | The case against a Tata Sons listing, from one of Noel Tata's closest advisers

September 2025: The first big rupture

Tensions inside Tata Trusts surfaced publicly when Vijay Singh, one of the trusts’ nominees on the Tata Sons board, was removed at a meeting on 11 September.

Four of seven trustees opposed his continuation. At the heart of the dispute was a complaint that the three Tata Trusts nominees on the Tata Sons board had not adequately kept the other trustees informed about important developments at the holding company.

ALSO READ | The inside story of how the schism at Tata Trusts came about

September 2025: Listing deadline passes

Tata Sons reached the RBI’s September 2025 deadline without going public. The company had sought an exemption from the listing requirement and reduced its debt to strengthen its case for remaining private, but the RBI had not granted the exemption.

October 2025: Another Tata-Mistry flashpoint

Tensions widened when Noel Tata and two senior trustees opposed the reappointment of Mehli Mistry, a long-time confidant of Ratan Tata, as a permanent trustee.

Mistry had played a role in Noel’s appointment as Tata Trusts chairman just days after Ratan Tata’s death. His removal opened another front in the battle over control of the trusts and raised the prospect of a legal challenge.

ALSO READ | Another Tata vs Mistry feud is brewing at Bombay House

February 2026: Questions over Chandra’s future

The question of Chandrasekaran’s third term returned to the Tata Sons board in February.

The two principal Tata Trusts had supported a five-year extension, which was also recommended by the Tata Sons nomination and remuneration committee and the board. But the proposal did not receive unanimous support.

Chandrasekaran later said that, in the absence of unanimity, he chose to defer the decision. Six months passed without a resolution.

May–July 2026: The numbers add to the pressure

The leadership debate coincided with growing scrutiny of Tata Sons’ newer businesses, including Air India, Tata Digital, Tata Electronics and Agratas.

The board spent hours reviewing these businesses as their losses mounted. Losses across Tata Sons’ 16 privately held businesses had nearly doubled to ₹27,854 crore in FY26 from ₹15,311 crore a year earlier. The newer ventures accounted for much of the losses.

ALSO READ | Decoded: Tata Sons' annual report

July 2026: Ratan Tata’s shares come under scrutiny

The tensions also reached into Ratan Tata’s estate.

The transfer of 3,368 Tata Sons shares owned by Ratan Tata to two charitable foundations he had created was stalled following a complaint concerning an earlier 1989 share transfer. The matter is being examined by the Maharashtra charity commissioner.

August 2026: Chandrasekaran chooses the exit

Chandrasekaran has decided not to seek another term when his current tenure ends in February 2027.

In his letter to the board of Tata Sons, Chandrasekaran, who has completed 40 years of his professional life at Tata Group, said Sir Dorabji Tata Trust (SDTT) and Sir Ratan Tata Trust (SRTT) had unanimously recommended extending his tenure by another five years and a resolution was tabled at the Tata Sons board meeting on 24 February 2026.

“However, the proposal was not carried through because one of the Board Members did not support it, and in the absence of unanimous support, I chose to defer the decision,” Chandrasekaran wrote.

His decision sets in motion a formal process to identify his successor ahead of February 2027.