Noel Tata’s tough ask on IPO stalled vote on Chairman tenure

During a recent board meeting at Tata Sons, the anticipated approval of Natarajan Chandrasekaran's third term as chairman encountered unexpected challenges. Noel Tata, head of Tata Trusts, raised significant concerns regarding the company's potential public listing, which could be mandated by the Reserve Bank of India (RBI). The RBI's designation of Tata Sons as an 'upper-layer' non-banking financial institution requires a public offering by September 2025, prompting Noel to seek assurances that a listing could be avoided. He also outlined conditions aimed at stabilizing the financial health of the group, particularly addressing the losses at Air India and resolving disputes with the Shapoorji Pallonji Group, which holds a substantial minority stake in Tata Sons. While Noel's demands were open to negotiation, discussions faltered when Chandrasekaran could not promise a waiver from the RBI regarding the listing requirement, as it is beyond his jurisdiction. This uncertainty poses a risk to the Shapoorji Pallonji Group, which is under financial strain and relies on resolving its stake in Tata Sons for liquidity. Although Chandrasekaran has government backing for his initiatives, the internal tensions around the future of Tata Sons and the IPO timeline remain critical topics for the board and stakeholders.