By: John Elliot
The unexpected announcement on August 12 that Natarajan Chandrasekaran will not seek a third five-year term as executive chairman of Tata Sons, India’s biggest conglomerate, marks the climax of bitter family differences and ego clashes that have colored events at the top of the $280 billion group for decades.
Noel Tata, chairman of the Tata Trusts that control the group, has come out the winner, having triggered Chandrasekaran’s decision to leave when his current five-year term ends next February.
With Chandrasekaran going, Noel is gaining the group leadership that he was denied when his elder half-brother, Ratan Tata, retired as Tata Sons chairman in 2012. At the time, he was seen by many in Mumbai and elsewhere as the natural successor.
Noel’s managerial advancement was also restricted by Ratan during the 21 years that he was chairman, allegedly because he doubted Noel’s ability, but basically, observers say, because of their family history.
Ratan Tata’s parents had a difficult divorce. His father later married Simone Dunoyer from Switzerland, and Noel was born. The two boys grew up separately and it seems that Ratan never accepted his stepmother or half-brother. Noel then complicated the family base by marrying Aloo Mistry, the daughter of Pallonji Mistry whose Shapoorji Pallonji group is Tata’s largest minority shareholder with an 18 percent stake (which it now wants to sell).
Helped initially by his mother, Simone, who was regarded as a trailblazer in cosmetics and fashion retailing, Noel proved his ability by turning Tata’s Trent retail business into a success against strong competition, hitting $2 billion in revenues last year. He also developed Tata’s international trading company and had boardroom roles in various companies.
But Ratan is quoted in a recent biography saying, somewhat dismissively, “perhaps, if Noel had had the experience of handling difficult assignments, he could have established his credentials more forcefully… For Noel to compete successfully for the top post he should have greater exposure than he has had… Partly, his not having it has been his own choice.”
Tata is generally revered as India’s most respectable large business, devoted to charitable enterprises and patriotic principles that guide corporate decisions over its 1.1 million employees and 30 operating companies, ranging from salt to software and Jaguar cars, and hotels to aviation and defense,
The image, however, began to unravel after Ratan retired as chairman of Tata Sons in 2012. He remained head of the trusts that have a controlling 66 percent share in the group and, in 2016, at age 78, he staged a boardroom coup that ousted his chosen successor as chairman, 50-year-old Cyrus Mistry (brother of Noel’s wife). Ratan replaced him with Chandrasekaran, who ran the highly profitable Tata Consultancy Services software business, again sidelining Noel. (Cyrus died later in a car crash).
The coup was widely criticized. “The halo that once surrounded the Tata name has gone. The group looks like just one more conglomerate that has lost its way,” wrote Swaminathan S Anklesaria Aiyar, a respected veteran economic affairs columnist, in The Economic Times.
Mistry had not been removed for bad management, though there were criticisms of his style and some of his decisions. He went primarily because he did not show sufficient respect and deference to Ratan. Some of his more brash aides also upset the serenity of Tata’s Bombay House headquarters.
Unlike Mistry, Chandrasekaran managed his relationship with Ratan expertly, but he does not seem to have felt the need to do the same with Noel Tata, probably because, like others, he underestimated Noel’s ability to be tough and exert authority.
Chandrasekaran has had some failures, notably trouble-prone Air India, and there have also been losses on new digital and other ventures with major expansion into AI. But growth has been good with revenues of $185 billion, and many of the problems left by Ratan, such as the Tata Motors’ declining Indian car business, have been turned into successes. That is reflected in a bullish annual report for 2025-26.
Air India’s losses more than doubled to nearly $3 billion in 2025-26 and accounted for some 80 percent of the group companies’ total losses. The airline’s reputation has been hit by a fatal crash last year and by a pilot losing control of an aircraft for four seconds earlier this month. There have been a series of other problems, not least rising fuel costs and restrictions on international flight routes. The airline has just appointed a new chief executive – Tewolde Gebremariam who earlier ran Ethiopian Airlines.
Tata bought Air India from the government in 2022. Ratan, who died in 2024, was still running the trusts and will have had some influence on the decision. Commercially it was a disaster, but it helped the government because there was no other viable buyer, and it was a homecoming for the group that founded the airline in 1932 and lost it to nationalization in 1953.
There were splits among trustees throughout last year about appointments and governance issues. This escalated to the point where Chandrasekaran and Noel went to Delhi last October for a meeting with Amit Shah, the home minister and the prime minister’s troubleshooter, and Nirmala Sitharaman, the finance minister. Chandrasekaran had good links with the government because he had hired S. Jaishankar as a global affairs adviser for a few months in 2018-19 after Jaishankar retired as foreign secretary and before he was appointed foreign minister. But it seems he over-estimated the support that access could yield.
Despite the problems – and tensions over whether Tata Sons should follow a Reserve Bank of India instruction to be floated on the Bombay Stock Exchange – the two main trusts proposed Chandrasekaran for a third term. This however was questioned at a Tata Sons board meeting in February by Noel who was critical about losses. Not a risk-taker, Noel has also raised concern about Chandrasekaran’s $120 billion five-year expansion plan for the group.
The proposal for a third term “was not carried through because one of the Board Members did not support it,” Chandrasekaran said in his resignation statement, referring to Noel without naming him. In the absence of unanimous support, Chandrasekaran said he had, as chairman, deferred the decision. Noel apparently did nothing after that to solve the impasse, so Chandrasekaran made his statement on August 12, avoiding the risk of an embarrassing situation at Tata Sons’ annual general meeting planned for August 18 which was postponed because of separate issues involving one of the trusts.
Noel lacks Ratan’s commanding (though shy) presence, but now has the opportunity to prove that he can preside over the group as head of the trusts. He cannot also be chairman of Tata Sons because Ratan, after he retired from that position, changed the rules so that one person cannot hold both posts.
Ratan having not married, Noel is securing his own family’s role in Tata’s future. He has appointed his 32-year-old son Neville, who has managerial roles in the retail businesses, to the two top trusts. Noel’s two daughters, Leah and Maya, are employed in the group’s hotels and in retail.
First, however, Noel needs to lead the choice of a strong candidate to succeed Chandrasekaran, and then allow the winner freedom to run the group and be its public face.
John Elliot is a veteran observer of India. This is reprinted with permission from his blog, Riding the Elephant.
Discussion about this post