Tata Trusts, through various entities, collectively holds about 66% stake in Tata Sons and exercises significant influence over the governance of the conglomerate.

The issue of Chandrasekaran’s continuation as chairman had come up earlier this year but was deferred amid differences within the board.

On February 24, a decision on granting Chandrasekaran a third extension was postponed after he himself requested the Tata Sons board to defer consideration of the matter.

The request came after disagreements reportedly surfaced during a board meeting.

Although Chandrasekaran’s second term as chairman is set to conclude only in February 2027, directors of Tata Sons had earlier expressed support for granting him a third extension.

However, concerns were reportedly raised during discussions by Tata Trusts Chairman Noel Tata regarding the performance of some group companies and losses incurred in certain businesses, according to sources familiar with the deliberations. Following the discussions, Chandrasekaran requested that the matter be taken up at a later stage. Noel Tata serves on the Tata Sons board as a representative of Tata Trusts.

Chairman Emeritus of TVS Motor Company Venu Srinivasan is also a Tata Sons director representing the Trusts.

Noel Tata, Chairman of Tata Trusts, has been stoutly opposing the idea of listing Tata Sons on the stock exchanges though some trustees have recommended for listing.

The developments come at a time when Tata Sons has reported a decline in profitability in its latest financial results. The unlisted holding company posted a standalone net profit of Rs 26,231.74 crore for the financial year ended March 2025, marking a decline of 24.3% from Rs 34,653.98 crore reported in the previous fiscal year. Despite the fall in profits, the board of directors, headed by Chandrasekaran, recommended a significantly higher dividend payout.

The company proposed a dividend of Rs 64,900 per share, equivalent to 6,490%, for FY25, compared with Rs 35,000 per share, or 3,500%, paid for the previous financial year.

Tata Sons’ total revenue also registered a decline during the year. Revenue fell by 11.52 % to Rs 38,834.58 crore in FY25 from Rs 43,893 crore in the preceding year, according to the company’s annual report.

The company clarified that the previous year’s revenue included a one-time profit of Rs 9,375.66 crore arising from the sale of investments.

Excluding this exceptional gain, the comparison presents a more moderate picture of the company’s operating performance.