Noel Tata Is Asking The Right Questions, But Himself Has Some To Answer

Tata Sons must have a clear policy on capital allocation

Noel Tata Is Asking the Right Questions of the Tata Sons Boss, but There Are Some Questions He Himself Must Answer

The Tata Sons board decided on Tuesday (24 February 2026) to defer a decision on giving its executive chairman N Chandrasekaran an extension. The move was precipitated by Noel Tata, chairman of the Tata Trusts, which own a majority of shares in Tata Sons. He asked Chandrasekaran some tough questions on losses in several parts of the conglomerate.

Among other things, Noel Tata wanted Chandrasekaran's extension to depend on the latter giving the board assurances on how he plans to tackle a few key challenges. These include stemming losses at Air India and Tata Digital; protecting cash at Tata Sons by monitoring spends in the semiconductor and batteries businesses; maintaining Tata Sons' unlisted status (the RBI wants it to list, given its size); and finding a way to give the Shapoorji Pallonji (SP) group an exit from Tata Sons. The SP group owns 18.37 per cent of Tata Sons and is the single biggest shareholder after the Tata Trusts. The group also wants to use funds currently locked up in illiquid Tata Sons shares to build its own businesses.

To give us a flavour of the kinds of losses being made by some of the big companies in the Tata group, here are some examples.

Air India is facing losses of Rs 15,000 crore in fiscal 2025-26, thanks in part to the crash in Ahmedabad of an Air India international flight last year. Tata Digital (which runs e-commerce companies like BigBasket) has accumulated losses of nearly Rs 17,000 crore and has been given board approval to spend Rs 4,000 crore more. Tata Motors, thanks to a cyber attack on Jaguar Land Rover (JLR) last year, has reported massive losses of Rs 3,486 crore in the last quarter (October-December 2025).

To make matters worse, Tata Consultancy Services (TCS), whose dividends power Tata Sons' cash flows, lost 30 per cent of its market value over the last one year, thanks to fears of artificial intelligence (AI) denting its labour-arbitrage-based revenue model and weak business growth in North America.

So, yes, Noel Tata is asking the right questions. The primary task of a conglomerate...