The Tata Sons board — meeting for the first time since Chairman N Chandrasekaran’s announcement that he would not offer himself for a third term — is expected to discuss two issues with far-reaching implications: Top leadership at Tata Sons and future of the holding company as a listed entity, according to sources.
Chandrasekaran’s (Chandra as he’s called) letter to the board members last month that he would not seek reappointment once his term as chairman comes to an end on February 20, 2027, could be one of the main subjects for deliberation, a source in the know said. Board members, including the nomination and remuneration committee (NRC), would possibly back a third term for Chandra, bringing the issue back on the table.
More than six months ago, in February 2026, the discussion on Chandra’s third term got stalled after Tata Trusts chairman Noel Tata red-flagged the financial performance of some group companies such as Air India and Tata Digital even as other board members supported the renewal of his tenure.
Chandra’s letter of August 12, 2026, referred to “one board member” not supporting his reappointment though Tata Trusts, the largest shareholder of Tata Sons with a 66 per cent stake, had passed a resolution last year recommending a third five-year term for him as executive chairman of the company.
The board’s resolve to press for a third term for Chandra, 63, is believed to have been strengthened after the recent RBI directive to Tata Sons to go for an immediate listing. The RBI rejected the Tata Sons application of March 2024 seeking to deregister as a core investment company (CIC) to be able to continue as a privately-held entity.
It all started in September 2022, when the RBI classified Tata Sons as an upper layer non-banking financial company (NBFC), making a stock exchange listing mandatory within three years. Tata Sons has remained unlisted beyond the September 2025 deadline, while becoming debt-free and applying to the RBI for deregistration as a CIC. The RBI has closed the matter now, rejecting Tata Sons’ application.
On listing of Tata Sons, the board of directors are likely to discuss the way forward including the timing and size of the IPO, as well as the other implications for the group and shareholders. While the latest valuation of Tata Sons is not known, sources said the IPO size could be around at least $5 billion, but it could vary depending on how much stake is diluted. A source put the value of 1 per cent share of Tata Sons at somewhere between ₹15,000-20,000 crore, implying that the estimated valuation of the company could be as much as ₹20 trillion (over $200 billion). The rules of Securities and Exchange Board of India (Sebi) stipulate a minimum dilution of 2.5 per cent stake during IPOs of very large companies. On the timing of the IPO, one of the sources cited above said: ‘’Tata Sons is not a complex company and it (IPO) can be done in a few months.’’ The Tata Sons IPO is expected to exceed the size of other major offerings such as Hyundai Motor India’s in 2024 and the Life Insurance Corporation of India’s in 2022. The upcoming Reliance Jio IPO is estimated at around $3.8-4 billion at this point.
Noel Tata, who’s one of the two nominee directors on the Tata Sons board, is opposed to the idea of listing Tata Sons and it’s possible that he could express his disagreement on the matter at the Thursday meeting, a source said. The other nominee director and Tata Trusts vice-chairman, Venu Srinivasan, is in support of listing Tata Sons. There’s no talk of any legal course of action at this point on the issue of listing. The second largest shareholder of Tata Sons, the Shapoorji Pallonji group, has been pushing for a listing of Tata Sons so that part dilution of its stake could be used to fund the debt-ridden company.
Tata Trusts had last year passed a resolution opposing listing of Tata Sons and even sought commitment from Tata Sons on that matter. During the ongoing leadership turbulence at the Tata group, divergent views on Tata Sons listing among the leaders may have been a key problem, one of the sources said. Tata Trusts risks losing its veto powers once Tata Sons is listed, people in the know said while explaining the reason for its stand. While Tata Sons applied for deregistration as CIC in 2024 to be able to continue as a privately-held entity, its stand on listing may have changed during the turmoil in the group over the last many months since the passing of Ratan Tata in October 2024, a source said. That would have resulted in the leadership clash at Tata Sons and Tata Trusts, he added. Although the issue of executives at the Tata group retiring at 65 years has also been cited as a reason for Noel Tata’s opposition to renewal of Chandra’s term, alternative options of offering a non-executive chairman’s position to Chandra have not been discussed, it is learnt.
- RBI directive to Tata Sons mandates immediate listing of the Tata group holding company
- Tata Sons board meeting on Sep 17 may discuss the leadership question, and the holding company’s future as a listed entity
- Board members could back a third term for Tata Sons Chairman N Chandrasekaran. The support is believed to have been strengthened after the RBI directive
- Estimated at over $5bn, Tata Sons’ IPO size could exceed that of Hyundai Motor India, LIC, and the upcoming RIL Jio listing
