Tata Sons board to discuss keeping Chandra as chairman post RBI's IPO push

The board of Tata Sons Pvt. Ltd. will meet Thursday to discuss how to handle a listing mandated by the Reserve Bank of India, including if outgoing Chairman Natarajan Chandrasekaran should be asked to stay on.

A last-minute addition to the meeting agenda is a discussion of the Nomination and Remuneration Committee’s recommendations, according to people with knowledge of the matter. The so-called NRC is expected to recommend asking Chandrasekaran to reconsider his decision to step down, the people said, asking not to be identified discussing internal matters.

The Reserve Bank of India’s refusal to relax listing rules for Tata Sons has turned what was meant to be a routine board meeting into a high-stakes discussion on the way forward.

Chandra, as he’s commonly known, said last month that he plans to step down when his term ends in February, forcing the group to prepare for a leadership transition. His planned exit followed months of friction with Tata Trusts Chairman Noel Tata over listing and capital allocation across the sprawling conglomerate.

A Tata Sons representative did not respond to a request for comments.

Tata Sons had sought an exemption from the listing requirement to avoid tighter regulatory scrutiny and expanded public disclosures. A public float would force the holding company to reveal far more about the finances and governance of the group’s sprawling businesses—from steel and autos to software, airlines and consumer goods—and could dilute the influence of Tata Trusts, a group of charities that control the company.

The Tata Group values its current ownership structure, arguing that it allows the business to take a long-term view across its portfolio without public-market pressures. The group, with $185 billion revenue, controls over two dozen listed companies, and is also key to India’s high-end technology ambitions—having committed to producing the first homegrown semiconductor chips.

After rejecting Tata Sons’ plea for listing exemption, the RBI also filed a caveat in the Bombay High Court to ensure its position is heard before any order is passed should Tata Sons seek legal relief.

The RBI’s public-float mandate aligns with long-standing demands from the debt-laden Shapoorji Pallonji Group, Tata Sons’ biggest minority shareholder, which has been pressing for a listing to unlock value from its 18.4% stake.