Editorial     

Published: August 15, 2026
Updated: August 15, 2026

Chandra exit points to Tatas’ ‘trust’ deficit

The sudden, unexpected exit of Natarajan Chandrasekaran, chairman of the Tata group, has stunned not only Bombay House, the headquarters of the illustrious industrial empire of the Tatas, but also India Inc. In fact, it has become a hot topic throughout global industry.

The Tata supremo’s resignation has come at a time when Tata group companies are facing headwinds. The 158-year-old salt-to-software conglomerate is incurring heavy losses in Air India, which returned to the group after several decades upon being acquired from the Indian government. The group’s prestigious flagship company, Tata Consultancy Services Ltd, is losing its sheen and its stock price has fallen substantially. During fiscal 2026, Tata Sons, which manages the Tata business empire, saw its consolidated net profit slip 35% to Rs 266 billion as losses from Air India, Tata Digital and Tata Electronics piled up. These are the group’s unlisted companies, but even its listed companies are concerned as the market capitalisation of the Tata group has dropped 12% during the same period.

These developments have irked the Tata Trusts, which own almost 66% of the equity in Tata Sons. In particular, Tata Trusts’ chairman Noel Tata is against making heavy allocations to loss-making businesses. The Tata Trusts rely on income generated by Tata Sons, and want to be conservative with capital allocation at a time when the key cash-generating IT services business is under pressure.

Chandrasekharan’s exit points to a purported dichotomy of two power centres within the group – Tata Sons and Tata Trusts. This is thought to have been the reason for the erstwhile Tata Sons chairman, the late Cyrus Mistry, quitting the post in 2016. And the latest ‘victim’ of this scenario is Chandrasekaran.

Whatever be the wheels within wheels of this development, Chandrasekharan’s exit has unnerved investors. The moment the news spread, Tata group stocks lost $ 4.6 billion in value – but subsequently recovered.

Though the Tata management is held in high public esteem, domestic and global institutional investors as well as retail investors are seemingly losing patience over what is seen as a tussle between two power centres within the group. It is feared that this ‘dichotomy’ could tarnish the reputation of a group that was lifted to the commanding heights by the iconic likes of former chairmen like JRD Tata and Ratan Tata. Questions are also doing the round on the status of projects initiated by Chandrasekaran.

It must be said to Chandrasekaran’s credit that during his 10-year tenure at the helm of Tata Sons, the combined market capitalisation of Tata companies rose to $ 277 billion by March 31, 2026, from $ 76 billion when he became chairman in 2017. On the flip side, Tata Sons under his stewardship has made capital-intensive bets impacting the profitability of the group – projects which he characterised as ‘building blocks’ for India’s path to becoming a developed country by 2047.

Post this Game of Thrones in India’s largest conglomerate, the technocrat-turned-Tata Sons supremo’s sympathisers could be forgiven for asking: Did Chandrasekharan not deserve an opportunity to implement his vision for the group?