N Chandrasekaran has decided to step down as chairman of Tata Sons, announcing that he will continue until the end of his tenure in February 2027. Many believe that the 63-year-old’s multiple disagreements with the head of Tata Trusts, Noel Tata, over board representation and losses at Air India triggered his decision to resign
The Tata Group has received a huge jolt as N Chandrasekaran has stepped down as chairman of Tata Sons, bringing an abrupt end to his nearly decade-long tenure. The 63-year-old has, however, announced that he would complete his tenure, which runs until February 2027.
The news of N Chandrasekaran’s resignation shook the Tatas’ performance at the stock market; Tata Consultancy Services led the losses, sliding 4.2 per cent, while Jaguar Land Rover-parent Tata Motors PV fell 2.5 per cent. Other group stocks, including Titan and Tata Steel, slipped about two per cent each.
Many are now asking what led N Chandrasekaran to resign? Also, who could be in the running to replace N Chandrasekaran?
N Chandrasekaran steps down from Tata Sons
On August 12, it was announced that N Chandrasekaran was stepping down as chairman of Tata Sons, the principal shareholder of the Tata Group. He will continue until February 2027 when his current tenure ends.
This marks the end of Chandrasekaran’s long tenure at the Tata conglomerate. He joined Tata Consultancy Services almost 40 years ago in 1987. He was eventually named its chief executive and managing director in 2009. In 2017, he was named chairman of Tata Sons. He then got an extension in February 2022.
More from Explainers
N Chandrasekaran has been a lifelong Tata loyalist. He began his career at Tata Consultancy Services almost 40 years ago in 1987. File image/Reuters
In a statement, Chandrasekaran said, “I have completed 40 years of professional life at the Tata Group. I am grateful for the immensely satisfying opportunity to contribute to this venerable institution. Leading Tata Sons over the past decade has been a great honour and a profound responsibility.
“My current tenure as the chairman of Tata Sons comes to an end on Feb 20, 2027. Sir Dorabji Tata Trust and Sir Ratan Tata Trust had unanimously resolved and recommended the extension of my next term for a period of five years, which was recorded and recommended by the Tata Sons Nomination and Remuneration Committee and the Board. Subsequently, the resolution was tabled in the Tata Sons Board on Feb 24, 2026. However, the proposal was not carried through because one of the Board Members did not support it, and in the absence of unanimous support, I chose to defer the decision.
“It has been six months since that Board meeting, and no resolution has been reached to date. Tata Sons is a very large institution and there are many strategic projects that are under critical stages of execution. It is not only necessary to have a leader in place to lead the Group beyond Feb 2027, but also clarity on leadership is important for employees, investors, partners and other stakeholders.
“Under these circumstances, earlier today, I have communicated to the Tata Sons Board, that I have decided not to offer myself for reappointment when my term ends on Feb 20, 2027. I have asked the Board to decide on the succession soon to ensure a proper transition.”
Tensions with Noel Tata and Tata’s growing losses
A source told Reuters that the primary reason behind Chandrasekaran’s exit was the many disagreements the 63-year-old was having with the Tata Trusts, namely the chairman of the Trusts, Noel Tata, the half-brother of the late Ratan Tata.
Another source was quoted as telling the Indian Express that Chandrasekaran resigned assuming he wouldn’t get an extension at the upcoming Tata Sons Annual General Meeting (AGM) on August 18. “With the majority of trustees against the renewal of his tenure, he might have decided to announce his exit before the AGM,” said the source.
Differences between Noel Tata and N Chandrasekaran came to the fore in February when board members of Tata Sons met for a meeting. At this meeting, Noel, according to a report by Fortune India, pressed N Chandrasekaran to offer assurances of keeping Tata Sons, the holding company, private and convince the RBI of the same. However, Chandrasekaran declined, saying the issue was a policy matter and beyond his control.
Disagreements with Noel Tata are the primary factor behind N Chandrasekaran’s exit. File image/Reuters
Another bone of contention between the two is the financial performance of some of the group’s ambitious new businesses. Air India’s losses more than doubled to Rs 22,238 crore in FY26 from Rs 10,859 crore in FY25. At the same time, its revenue declined to Rs 71,870 crore from Rs 78,636 crore during the year. Similarly, Tata Digital made a loss of Rs 4,974 crore during the year.
In fact, Chandrasekaran himself told shareholders that transforming the airline should be viewed as a five-to-10-year journey.
This has resulted in a debate in just how much money should Tata Sons commit to businesses whose returns may take years, and also how those investments should be funded.
Beyond this, the fractions within the Tata Trusts may have also weighed on N Chandrasekaran, say some insiders. Following Ratan Tata’s death in October 2024 and Noel Tata’s elevation as chairman, disagreements emerged among trustees over appointments, tenure, representation on the Tata Sons board and governance, reports Moneycontrol.
Following the exit of N Chandrasekaran, the Tata Group has six months to find his replacement. File image/AFP
Chandrasekaran’s exit and a succession battle
With Chandrasekaran exiting, Tata Sons will have to look for a new chairman.
According to the Articles of Association of Tata Sons, the chairman will be appointed by a five-member selection committee. Three persons are nominated jointly by Sir Dorabji Tata Trust (SDTT) and Sir Ratan Tata Trust (SRTT); one person is nominated by and from amongst the Tata Sons Board; and one independent outside person is selected by Tata Sons. The Chairman of this Committee will be selected by SRTT and SDTT from its three members from the panel.
The committee then recommends a candidate, whom the Tata Sons board can then appoint as chairman.
The Tata Group will have to search for a successor to Chandrasekaran in the six months. “The group is likely to consider people from inside and outside the group for a successor,” said a Tata group source to Indian Express.
With inputs from agencies
