A crucial Tata Sons board meeting on Tuesday is set to bring three of the conglomerate’s most contentious issues to the table: whether the group’s holding company can continue to remain privately held, a third term for Chairman N Chandrasekaran and how it can absorb mounting losses from newer businesses such as Air India and Tata Digital.
Chandrasekaran and Tata Trusts Chairman Noel Tata, who is also a Tata Sons director, are expected to meet privately ahead of the formal meeting, according to people familiar with the matter.
Regulatory Deadlock
The listing question has emerged as the sharpest flashpoint within the Tata ecosystem. Tata Sons was classified as an upper-layer non-banking financial company (NBFC) in September 2022, triggering a requirement to list by September 2025. The company subsequently applied to the Reserve Bank of India (RBI) for deregistration and exemption from the listing mandate after repaying more than Rs 20,000 crore of standalone debt.
However, the RBI’s recent regulatory clarification has significantly narrowed Tata Sons’ argument. The regulator adopted a “look-through” approach that considers indirect access to public funds through group companies such as TCPL, Tata Steel, Tata Motors and Tata Power — all of which raise capital from public markets. As a result, almost all corporate structures with assets of about Rs 1.75 lakh crore continue to remain classified as an upper-layer NBFC, strengthening the possibility of a listing.
People familiar with the matter said the RBI has informally conveyed that exempting Tata Sons could weaken regulatory consistency and encourage similar demands from other large conglomerates.
The listing issue has also exposed divisions within Tata Trusts. While Noel Tata is understood to favour retaining Tata Sons’ unlisted status, trustees Venu Srinivasan and Vijay Singh are reportedly backing a listing.
The meeting assumes added significance as the last one held on February 24 had deferred a decision on a third five-year term for Chandrasekaran. At the last meeting, the directors of Tata Sons had disagreed with Noel Tata’s view on Chandrasekaran’s reappointment.
Since then there has been a communication breakdown between the stakeholders, according to people with knowledge of the matter. Chandrasekaran’s second term ends in February 2027. It remains to be seen whether Tuesday’s meeting takes a call on the issue amid mounting differences between Noel Tata and Chandrasekaran over capital allocation, high-risk investments and future strategy.
Capital Allocation Strain
The relationship has come under strain following concerns around losses at new businesses, including Air India and Tata Digital, and the group’s continuing investment in them. Chandrasekaran is expected to present detailed business updates before the board and review the progress of the group’s “BigBasket plan”.
The financial strain from Tata Sons’ newer ventures has also become a major flashpoint within the group. Aggregate losses across these businesses are estimated at around Rs 29,000 crore in FY26, according to people familiar with the matter.
A large part of the concern centres on Tata Digital, the umbrella entity for platforms such as BigBasket, Tata 1mg, Croma, Tata CLiQ and Tata Neu, into which Tata Sons has already deployed more than Rs 24,000 crore, including acquisitions, without achieving profitability.