Noel Tata takes charge of a Tata Sons running on empty

Air India remains loss-making three-and-a-half years after the Tatas bought it back from the state. A new chief executive, Tewolde Gebremariam, was named only this month to succeed Campbell Wilson and steady an airline still recovering from last year's crash.

None of these businesses generates cash yet. All of them consume it. “Diversification is not necessarily par for the course and history shows us that widely diversified conglomerates become unwieldy beyond a point and lose value,” said Kannan Ramaswamy, professor at the US-based Thunderbird School of Global Management. “Ideally, the diversification strategy must ensure that the investment portfolio is continually pruned and nurtured to enable new growth.”

The real danger is to the ATM that funded all of it. TCS, the group's cash machine, cut its dividend for the year to March 2026. Tata Sons' take fell about 12% to ₹28,291 crore, the squeeze compounded by the artificial-intelligence pressures now bearing down on the IT sector. “If I were an investor, this would be my most significant worry,” said Ramaswamy. “It is most vulnerable due to the emergence of AI.”

The next chairman will inherit a portfolio of long-dated, unfinished bets at precisely the moment the engine funding them is losing power.

Tata Sons' board currently has six directors: Chandrasekaran, Noel Tata and a second Trust representative Venu Srinivasan, group CFO Saurabh Agrawal, and two independent directors, Harish Manwani and Anita George. Chandrasekaran leaves next February; Manwani's second term ends that May. If a departing chairperson is replaced, the board holds at six, another exit will leave it at the threshold of five.

A board refresh is tied to how quickly SRTT receives the Mumbai Charity Commissioner's go-ahead to continue operations. A September 2025 Maharashtra ordinance now requires trustee appointments to be unanimous rather than carried by a majority, which, in a divided house, could make expansion of the Trusts and consequently the board of Tata Sons difficult.

Noel must also manage the government relationship. The semiconductor plants depend on public subsidies that can run to half their setup cost; Air India needs official goodwill on routes and aircraft. Both Chandrasekaran and Noel have, by some accounts, briefed the government separately about their rift – an awkward indication of how entangled the group has become with New Delhi.

In between, he has to find an exit for the Shapoorji Pallonji Group, which owns 18.38% in Tata Sons. “Noel recognises that it is only fair to give the SP Group an exit,” a group executive said. Options include selling shares in Tata Capital, Tata Auto Components, or any other company ready to be listed.

The biggest immediate challenge is appointing a new group chairman. For close to a century, Tata Sons supervised. It owned the group's companies and let their bosses run them; when a business faltered, its chief had to answer. “The question will be whether the next Tata Sons chair will be a super-CEO like Chandra or go back to the old soft-touch way,” a second group executive said.

Noel Tata has not really been tested in this role, he ran Trent well: under his chairmanship, it became one of the group's fastest-growing businesses by market value. Trent was merely a group company, and Noel was kept on the fringes of the succession line for years. Now he has at last reached the centre. He arrives to find the levers jammed, the treasury thinning, the flagship bets unfinished, and the state as a partner he cannot afford to alienate.

“Season 1 is over,” a person close to the new order remarked after Chandrasekaran resigned. “Let's see what is in store.”