Tata Sons Appoints N Chandrasekaran to Fresh Five-Year Term as Chairman Amid Listing Queries

Tata Sons has appointed N Chandrasekaran to a fresh five-year term as executive chairman, undoing the plan that was set for leadership change after he decided not to seek reappointment last month. 

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Chandrasekaran is currently serving until February 2027. He has been leading Tata Sons since 2017 and has been awarded his second five-year term in 2022. 

It comes at a crucial juncture for the conglomerate. The Reserve Bank of India has last week refused the application by Tata Sons for surrendering its non-banking financial company registration, which has brought back the issue of stock market listing into focus. 

Tata Sons had been working to ensure that it doesn’t get listed for over a year and has repaid over ₹21,000 crore as part of such an effort. 

The question of continuing leadership has now become relevant along with the regulatory move. Those aware of the situation have informed that some board members thought that continuity at the top was very important if Tata Sons moves ahead for listing because it will help reassure potential investors. 

Reappointments pass in face of opposition 

The decision was not unanimous. 

As per sources quoted in the report, Noel Tata, chairman of Tata Trusts, voted against the reappointment of Chandrasekaran. Tata Trusts and the other trusts associated with it own approximately 66% of Tata Sons. 

Notwithstanding his opposition, the resolution was passed with a majority vote from the board. 

However, the debate over the future of Chandrasekaran had started way back this year. A proposal for extending his tenure by five more years failed due to lack of unanimous consent. 

Following that, in April, Chandrasekaran had announced that he would not look for another term when his present term expires as there is a need for clarity on the future leadership of Tata Sons with many strategic ventures in a crucial stage. 

Stocks of Tata group firms increase 

Stocks of various Tata group-listed firms witnessed an upward movement in the wake of the announcement about Chandrasekaran’s reappointment. 

Stocks of Tata group firms rose in the range of 0.15 to 5 percent on Thursday after the news of the appointment of Chandrasekaran came out. 

Tata Motors Passenger Vehicles rose by 5 percent, whereas Tata Motors increased by 3 percent. Stocks of Tata Consultancy Services went up as much as 3 percent before falling and ended at about 0.2 percent. 

The positive market response to the news about the leadership of the company aside, it is yet to be seen whether Tata Sons will finally go for a public listing. 

This is now possible owing to the refusal of the Reserve Bank of India of the application submitted by Tata Sons.