Bengaluru/Mumbai: Natarajan Chandrasekaran’s decision to step down as Tata Sons chairman and not seek another term followed a months-long standoff with Tata Trusts chairman Noel Tata over the performance and strategic direction of some of the group’s new businesses, according to people familiar with the matter.
The decision came six days before the Tata Sons annual general meeting, scheduled for 18 August, and caught Noel Tata and most of the Tata Trusts trustees off guard, two executives aware of the development said.
On Wednesday evening, Chandrasekaran called about two dozen senior Tata Group executives to Starbucks on the ground floor of Bombay House, the corporate headquarters of Tata Sons, according to people aware of the development.
In a 20-minute pep talk, he sought to assuage concerns among employees, telling them that Tata was a revered name with a strong talent pool. He signed off by telling them not to take the interaction as his farewell speech, as he would remain with the Tata Group until February.
A senior Tata Group executive termed the resignation “irresponsible”. You were part of the Nomination and Remuneration Committee, and you did not start the succession planning exercise. The Tata Group has stood by you for the last nine years. And days before the shareholder meeting, the senior leader decides to put in his papers.”
Chandrasekaran, who was first appointed chairman of Tata Sons in February 2017 and began a second five-year term in 2022, announced on Wednesday that he would not seek an extension beyond the end of his current term on 20 February 2027.
The decision followed an unresolved impasse over his reappointment. Tata Trusts had agreed in July 2025 to recommend a fresh five-year term for Chandrasekaran. The recommendation was subsequently taken up by the Tata Sons board on 24 February.
However, the proposal was not carried through after Noel Tata sought a clear roadmap for the performance of some of the new businesses launched under Chandrasekaran’s watch, including e-commerce, aviation and semiconductors, according to a person familiar with the matter.
In his resignation letter on Wednesday, Chandrasekaran did not name Noel Tata, but said his decision not to seek another term was linked to the reappointment proposal not receiving unanimous support from the board.
“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,” Chandrasekaran wrote in his letter.
“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,” he said.
The Tata Sons board comprises Chandrasekaran, Noel Tata, TVS Motor Company chairman emeritus Venu Srinivasan, Tata Group chief financial officer (CFO) Saurabh Agrawal, and independent directors Harish Manwani and Anita Marangoly George.
The February episode was a rare challenge to Chandrasekaran, who had previously enjoyed the confidence of the Tata Sons board. It also exposed growing differences between the holding company’s board and Tata Trusts, which owns 65.9% of Tata Sons.
The two sides continued discussions after the February meeting. Over the past six months, Chandrasekaran and Noel Tata held at least two closed-door meetings to discuss the group’s roadmap, one executive said.
In the last week of June, senior executives from Air India, Tata Electronics and Tata Digital also made presentations to Noel Tata, Chandrasekaran and members of the Tata Sons board, the executive said, adding that the presentations did not resolve Noel Tata’s concerns about the financial performance and longer-term roadmap of the new businesses.
