Tata Group has approved a third executive term for N Chandrasekaran, as per a report by The Economic Times. This is the first time a group executive will remain in an active role past the retirement age. The ET report suggests it was a unanimous decision by Tata Trusts’ members, where Noel Tata and Venu Srinivasan stated that continuity is key for the group’s business overhaul.
Financialexpress.com could not independently verify the report and there is no official statement regarding the same.
1. Tata Trusts cites key projects to back Chandrasekaran’s third term
“For the sake of continuity in functioning, it was felt that executive leadership was necessary to see through critical projects like semi-conductors, batteries for electric vehicles and Air India,” The Economic Times writes citing a person known to the matter.
“The Trusts resolution was sent to Tata Sons, which will of course have to decide when approving a third term from 2027,” the person said according to ET Now.
2. Tata Group’s revenue doubles, profit triples under Chandrasekaran’s leadership
Chandrasekaran, a Tata Consultancy Services (TCS) veteran, was appointed chairman of Tata Sons in January 2017 and began his second five-year term in February 2022.
Under his leadership, the Tata Group’s revenue nearly doubled and net profit more than tripled in the past five years, with total spending of Rs 5.5 lakh crore. The group reported Rs 15.34 lakh crore in revenue and Rs 1.13 lakh crore in profit in FY25. Tata Sons’ net worth also surged to Rs 1.49 lakh crore from Rs 43,252 crore in 2018.
3. Expanding footprint and new ventures
During Chandrasekaran’s tenure, Tata Group launched new businesses in high-growth sectors. Tata Electronics entered semiconductor manufacturing, while Tata Digital expanded its footprint through platforms like Tata Neu, BigBasket, 1mg, Croma, and Tata Cliq.
The group also brought back Air India after 69 years, merged Vistara and AirAsia India under the Air India brand, acquired Tejas Networks, and began work on indigenous telecom and battery manufacturing projects in India and the UK.
Chandrasekaran’s reappointed? No official comment yet
The Tata Sons board met on Friday, October 11, to address differences over the appointment of the reappointment of N Chandrasekaran for a third term exceeding the retirement age limit as he will turn 65 in February 2027, when his current term ends. According to Tata Group’s policy, executives are expected to step down from such roles upon turning 65. According to ET, Tata Trusts will formalise the decision in Feburary next year, which holds a 66% stake in Tata Sons.
Tata Sons listing another reason of rift
Another major issue of conflict is the proposed listing of Tata Sons. The Shapoorji Pallonji (SP) Group, which holds 18% in Tata Sons, is pushing for the listing, while another faction led by Noel Tata and Venu Srinivasan is opposing it. The SP Group, owned by the Mistry family, is heavily indebted and sees the listing as a way to unlock value and raise funds.
In September 2022, the Reserve Bank of India (RBI) classified Tata Sons and Tata Capital as upper-layer NBFCs, requiring them to go public within three years. While Tata Capital’s shares are set to list on Monday, Tata Sons’ plans remain unclear. The RBI has not yet clarified whether it has granted Tata Sons an exemption or intends to enforce the listing rule. There is no update on this as well from the Tata Group.