Noel Tata’s tough ask on IPO stalled vote on Chairman tenure

An early agenda item for Tata Sons Pvt.’s six board directors when they convened at 11:30 a.m. on Tuesday at Bombay House the group’s storied headquarters was expected to be straightforward: approving a third term for Natarajan Chandrasekaran as chairman.

Within two hours, the conversation had veered off course. What had looked like a done deal, with Tata Trusts itself recommending the reappointment just months ago, quickly unraveled.

Noel Tata, the head of Tata Trusts, began pressing Chandra — as he’s widely known — with tough questions. Most critically, Noel sought assurances that the group’s holding company could avoid a public listing, people familiar with the matter said, asking not to be named as the discussions were private. Tata Trusts is a collective of 13 charities, which together control two-thirds of Tata Sons.

Noel also laid down several conditions: restraining debt levels, stemming losses — especially at Air India, and reaching a swift settlement with Tata Sons’ largest minority shareholder, the Shapoorji Pallonji Group, the people said. The SP Group, which owns about 18.4%, was locked in a corporate and legal battle with Tata Sons for years and is still looking to monetize a part of its stake.

While some of Noel’s demands were negotiable, discussions hit a wall when Chandra said he couldn’t guarantee a waiver from India’s banking regulator on the listing issue since that decision lay outside his control, the people added.

Tata Sons’ potential listing stems from a regulatory classification. In 2022, the Reserve Bank of India designated the company as an “upper-layer” non-banking financial institution — a category that requires firms to go public within three years to enhance transparency and governance. That meant a deadline of September 2025 for Tata Sons to list its shares. There has been no update from the RBI or Tata Sons on the state of play on this front.Despite the mandate, Tata Sons has made no immediate preparations for this share sale. Its leadership believes the regulator will extend the deadline, and after recent engagements with officials, expects formal communication from the RBI granting more time.Chandra has made clear that while he personally favors keeping Tata Sons private, he cannot offer an absolute guarantee. Should the RBI insist on a listing, compliance would take precedence over internal preferences, the people said, citing Chandra as having informed the directors.That uncertainty weighs heavily on the Shapoorji Pallonji Group. Any delay in an IPO effectively closes off a potential liquidity window for the debt-laden conglomerate, which has struggled with financial stress exacerbated by the pandemic. Its stake in Tata Sons remains illiquid, making a resolution critical to its debt-reduction plans.

While Chandra enjoys strong support from the Indian government — earned through execution of high-stakes national projects such as semiconductor fabrication and mobile manufacturing — Noel Tata draws strength from a different source: the deep-rooted confidence and blessings of the Parsi community whose members have controlled the Tata Group since its inception in 1868.

Appointed in 2017 to steady the ship after the ouster of Cyrus Mistry, Chandra has done more than just restore confidence. Under his leadership, revenue for the group’s 15 largest listed entities has nearly doubled while their profits have more than doubled.

His tenure is also defined by high-stakes ambition, from launching India’s first homegrown semiconductor plant to navigating TCS through the volatile rise of artificial intelligence to turning around the unprofitable carrier, Air India.

“Nothing changes,” Chandra said Tuesday, when asked about the immediate impact on Tata Group’s leadership, before his car pulled away.