Tata Sons Chairman N. Chandrasekaran will not seek another term, opening a succession fight that threatens the group's costly bets on semiconductors, iPhone manufacturing, and Air India. The exit follows a reported rift with Tata Trusts over capital allocation to loss-making units, and comes as Tata Consultancy Services, the group's main profit engine, faces pressure from artificial intelligence.
Chairman's exit puts capital-heavy bets in doubt
The future of India's first semiconductor plant and the country's push to replace China as a top Apple supplier faces growing uncertainty after Tata Sons Chairman N. Chandrasekaran said he would no longer seek another term. Under his leadership, Tata Group acquired national carrier Air India in 2022. It also began iPhone production after buying Wistron and Pegatron, reportedly overtaking Foxconn's India unit to become the country's largest Apple supplier.
In 2024, the group unveiled plans for India's first semiconductor plant, worth $11 billion, with Taiwan's Powerchip Semiconductor Manufacturing Corp. All these initiatives remain in early investment cycles and are not yet profitable, while Tata Consultancy Services, the group's top money-spinner, grapples with the impact of artificial intelligence on the information technology sector.
Boardroom tensions with Tata Trusts
The current struggle between Tata Trusts and Tata Sons stems from capital allocation to loss-making businesses, Ruchir Khare, chief investment officer at Two X Capital, told CNBC. Chandrasekaran, in his resignation letter, said the proposal to extend his term had been pending for six months and was not carried through because one board member did not support it. According to local media reports cited by CNBC, he had disagreements with Noel Tata, chairman of Tata Trust, over weakening profitability and capital allocation.
Sir Dorabji Tata Trust, part of the key trusts that together hold a 66% stake in Tata Sons, said it respects the decision and extends support toward an orderly leadership transition. During the financial year ended March 2026, Tata Sons' consolidated net profit slipped 35% to 266 billion rupees, about $2.78 billion, as losses from Air India, Tata Digital and Tata Electronics piled up. Over the same period, the market capitalization of Tata Group's listed companies dropped 12% as TCS shares corrected on concerns over long-term growth.
A familiar power struggle
This is not the first time dual power centers have unsettled Tata's leadership. The same dynamic led to the exit of former chairman Cyrus Mistry, ousted in 2016 after public spats with Ratan Tata. According to CNBC: "I look at the current situation with a lot of irony", said Ramesh Vaidyanathan, managing director at BTG Advaya, noting that Mistry once pushed to cut back investments while Ratan Tata wanted bolder bets — roles that have now reversed.
Tata Sons has convened its annual shareholder meeting for Aug. 18, where the board is likely to discuss succession. Chandrasekaran's term formally ends in February next year.
Source: CNBC
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