Tata Sons Chairman N Chandrasekaran may not offer to helm the conglomerate for a third term, sources said, though he will be drawing up a detailed plan for the future growth trajectory of the group and setting out timelines for loss-making entities within the group to start showing profits.
With several dynamics playing out among the trustees and divided loyalties, the situation has become uncomfortable for Chandra, who has all along been seen as the one stable element among the power shifts within the various factions, said insiders.
Under the lens
While he is still respected and well regarded, they said the fact that the performance of the group under his watch has come under scrutiny is casting a shadow over his continued presence. The overall robust performance of the group under his tenure has been overshadowed by the losses in entities such as Air India, Tata Digital, Tata Projects and Tata Electronics.
The next meeting of Tata Trusts, slated for June, will be crucial as the trustees are set to review the performance roadmap of the group, resources going into the new businesses and the returns, and plan to reduce losses in several of the new ventures and make them profitable. This also includes Air India, which returned to the Tata fold in 2022 and has been struggling to take off.
Chandra’s reappointment next year will also be part of the discussions, and it may be conditional, the sources said. There was no response from Tata Sons to an email seeking confirmation and clarification.
Rising losses
Media reports have indicated that the losses of the new businesses have widened and been more than expected, raising concerns about the money poured into them.
Tata Trusts, which owns two-thirds stake in Tata Sons, has considerable say in the running of the holding company and Tata Trusts chairman Noel Tata has been asserting himself more.
In February, at a meeting of the trustees where the reappointment of Chandra for a third term was supposed to be approved, the decision was deferred as Noel Tata brought up the question of the loss-making entities, allocation of resources and a clear timeline for their revival.
Along with Noel Tata, some other board members also expressed reservations about the extension to his tenure and Chandra, as he told the media after the meeting, recommended that the decision be deferred, “because of request from some directors”.
Noel Tata also sought an assurance from Chandra that Tata Sons will remain unlisted, and sources said that such a firm undertaking may be difficult to give, as it depends on the Reserve Bank of India and how it stands on the issue.
Chandra had assumed charge as Tata Sons chairman in 2017 for five years, was reappointed in 2022 for another five years, with the current term ending in February 2027. A further extension was expected to signal continuity in policies and stability.