Key facts
- Tata Sons' board approved a fresh five-year term for Chairman N. Chandrasekaran.
- Chandrasekaran had previously indicated he would not seek reappointment.
- The Reserve Bank of India directed Tata Sons to list as an upper-layer non-banking financial company.
- Tata Sons' application to surrender its shadow bank registration was rejected by the RBI.
- The Tata Trusts, which hold a majority stake, have historically preferred the company remain unlisted.
The board of India's Tata Sons has approved a fresh five-year term for N. Chandrasekaran as executive chairman, a source familiar with the matter said on Thursday. This decision reverses Chandrasekaran's earlier indication that he would not seek reappointment when his current term ends in February 2027. The reasons for the change in decision were not immediately clear.
The board meeting on Thursday also addressed the Reserve Bank of India's directive classifying Tata Sons as an "upper layer" non-banking financial company, requiring it to list on stock exchanges within three years. Tata Sons had applied to surrender its registration and repaid over ₹21,000 crore of debt to remain private, but the RBI rejected this application last week. The company may now have to proceed with a listing unless the Tata Trusts decide to challenge the regulator.
Sources indicated that the Nomination and Remuneration Committee (NRC) had decided to seek Chandrasekaran's reappointment. The terms of his reappointment, including whether it would be a full executive term or a combination of executive and non-executive tenures, were expected to be debated. The voting rights of Tata Trusts nominees and the chairman under Tata Sons' articles of association were also under scrutiny, particularly if the board faced a contentious vote on challenging the RBI directive, which Noel Tata, chairman of the Tata Trusts, reportedly opposed.