New Delhi, Aug 12 (PTI) N Chandrasekaran will step down as chairman of Tata Sons when his current term ends on February 20, 2027, wrapping up a nine-year tenure that transformed the scale and breadth of one of India's most influential conglomerates but ended with a standoff with Tata Trusts Chairman Noel Tata over his reappointment.

Chandrasekaran, 63, who has spent 40 years with the Tata Group, told the Tata Sons board on Wednesday that he would not offer himself for another term and asked the directors to decide on a successor soon to ensure an orderly transition. His decision comes after a six-month impasse over his reappointment and marks the end of what would have been an unprecedented third five-year term at the helm of Tata Sons.

"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," Chandrasekaran, widely known as Chandra, said in a statement.

Tata Sons is the principal investment holding company and promoter of the Tata Group, controlling more than 30 companies, including Tata Consultancy Services, Tata Motors and Air India. Tata Trusts collectively own about 66 per cent of Tata Sons, giving the philanthropic arm decisive influence over the group's governance.

Chandra said the Sir Dorabji Tata Trust and Sir Ratan Tata Trust, which together hold 51.54 per cent of Tata Sons, had unanimously recommended extending his term by five years. The recommendation was recorded and backed by the Tata Sons Nomination and Remuneration Committee and board before being put to directors on February 24.

"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," he said. "It has been 6 months since that Board meeting, and no resolution has been reached till date." While he did not name the board member, Noel Tata, who took over as chairman of Tata Trusts in 2024 following the death of Ratan Tata, had wanted certain assurances from Chandra before giving him another term.

Noel sought greater clarity on the group's five-year strategic roadmap, the handling of losses at newer businesses and a way to provide an exit to the Shapoorji Pallonji Group without taking Tata Sons public, according to people familiar with the matter. He also sought Chandra's position on the long-debated question of listing Tata Sons.

Chandra was reportedly unwilling to commit that Tata Sons would never be listed, making the potential IPO one of the key fault lines between the operating company and its controlling trusts. The two sides have also differed over board representation and capital allocation.

The board's differences, however, did not completely paralyse its functioning. A Tata Sons meeting in May was described by people familiar with the deliberations as constructive, with Noel Tata focusing on businesses, including Air India and BigBasket, while Chandrasekaran led reviews of group companies.

But with no agreement even after reached after six months, Chandra said the uncertainty could no longer continue.

"Tata Sons is a very large institution and there are many strategic projects that are under critical stages of execution," he said. "It is not only necessary to have a leader in place to lead the Group beyond February 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 February 20, 2027. I have asked the Board to decide on the succession soon to ensure a proper transition." A DECADE OF SCALE AND EXPANSION ----------------------------------------- Chandrasekaran joined the Tata Group in 1987 as an intern at TCS, rose through the ranks to become the IT company's chief executive in 2009 and was appointed Tata Sons chairman in 2017, succeeding Ratan Tata's interim tenure after Cyrus Mistry's ouster. He was the first non-Parsi chairman of Tata Sons and was credited with bringing stability to the group after the bruising 2016 boardroom battle.

Under him, the group expanded aggressively into aviation, electronics, semiconductors, batteries and digital commerce while strengthening its traditional technology, automotive and steel businesses. Tatas acquired Air India from the government in 2022 and subsequently consolidated Air India, Vistara, Air India Express and AIX Connect into a major airline operation.

Tata Digital acquired majority stakes in BigBasket and 1mg in 2021, while Tata Electronics emerged as a vehicle for the group's semiconductor and electronics ambitions. The group also pursued major manufacturing investments and strategic partnerships, including in batteries and mobile-device manufacturing.

The scale-up has been reflected in the group's financial footprint. Tata companies reported aggregate revenue of more than USD 180 billion in 2024-25, employed more than one million people, and the group's 26 listed companies had a combined market capitalisation of more than USD 328 billion as of March 31, 2025.

Chandrasekaran also pushed for portfolio consolidation. Tata Coffee was merged with Tata Consumer Products, while Tinplate Company of India, Tata Metaliks and Tata Steel Long Products were folded into Tata Steel. The listings of Tata Technologies and Tata Capital further expanded the group's listed universe and unlocked value for investors.

GROWTH AND SETBACKS --------------------------- The expansion was not without significant challenges. Air India has remained a recurring source of scrutiny over service standards, operational disruptions and pilot-related incidents, while the fatal crash of an Air India Boeing 787 in Ahmedabad in June 2025 became the most serious crisis of Chandrasekaran's tenure.

The group's technology business has also faced pressure from the global shift towards artificial intelligence, while Jaguar Land Rover has endured a sharp downturn in sales and a major cyberattack. Newer ventures, particularly Air India and Tata's digital and e-commerce businesses, have required substantial capital and continued to weigh on returns. Reuters reported that the group is now facing mounting losses at Air India alongside pressure at TCS and JLR.

His exit therefore, comes at a delicate moment. The next chairman will inherit a much larger and more diversified group, but also a heavy investment pipeline and several businesses still seeking to deliver sustainable returns.

The immediate challenge will be execution rather than re-invention: turning around Air India, scaling Tata Electronics and its semiconductor ambitions, improving returns from digital businesses and preserving the cash-generating strength of TCS, Tata Motors, Titan and other established companies.

The new chairman will also have to navigate Tata's unusually complex governance structure and repair the relationship between Tata Sons and Tata Trusts. Questions over capital allocation, board representation, the future of Tata Sons and the possible listing of the holding company remain unresolved.

The succession is particularly significant because the Tata group has experienced a major governance rupture before. In 2016, the Tata Sons board ousted Cyrus Mistry, triggering a bitter public dispute with Ratan Tata and years of litigation. Chandrasekaran was subsequently chosen to restore stability.

His departure now puts succession and governance back at the centre of the group.

ADDRESS TO STAFF --------------------- For Chandrasekaran, however, the decision represents the end of a tenure that he described in his statement as a period of immense responsibility. He said leading Tata Sons over the past decade had been "a great honour and a profound responsibility", and expressed gratitude to the group's employees, investors, partners and other stakeholders.

Addressing a town hall at the Bombay House in the afternoon, Chandrasekaran said he had been "touched with the love and affection" of employees over the years.

"Tata is a revered name and that is because of the efforts of employees like you," he said, according to people present at the meeting.

"Do not pay much attention to the gossip, theories, conspiracies that you hear (about the leadership transition)," he urged the staff.

The Tata Group would continue to make progress and they would continue to have opportunities within the organisation, he told the employees. PTI ANZ VHI VHI