When the top brass of Tata Sons rush to Delhi amid rumours of a ‘second coup,’ it inevitably set alarm bells ringing among investors. As the privately-held holding company of India’s most respected corporate group with an estimated economic value of over Rs45 lakh crore, the Tatas have long epitomised stability and integrity in Indian business.
There have been several cracks in this façade over the past few decades; but the group’s unique corporate character and the enduring contributions of its philanthropic arms—the Tata Trusts—have allowed the group to weather several controversies without any damage to its pristine reputation (Ta-ta Governance?).
The question is: Can this resilience continue indefinitely? A year ago, after the passing of Ratan Tata (RNT), a power tussle threatened to spill into public view. A decisive intervention from New Delhi is understood to have ensured a seemingly smooth succession, with Noel Tata taking over as chairman of Tata Trusts and joining the Tata board. I then wrote (Tata Group’s Succession Drama: Will Noel Tata Restore Stability or Trigger New Tensions?): “… a sense of continuity, provided by Noel Tata’s appointment might be critical as a quiet power struggle unfolds within the group, closely watched by the government.” This did not happen.
The Mehli Mistry faction, which wielded considerable influence during the controversial ouster of Cyrus Mistry (Ta-ta Governance?), led by RNT in November 2016, is again at the centre of the storm. The power struggle this time involves three different groups, each with conflicting aims affecting ownership, management, legacy, leadership and, ultimately, performance. The extraordinary decision to seek government intervention to resolve these private disputes is a tacit admission that internal consensus has failed. But it is also a decision with potentially far-reaching implications for the Tata group.
Three Factions and Two Power Centres
Of the three factions, the first is the Shapoorji Pallonji (SP) group. Holding an 18.4% stake, it is the single largest shareholder in Tata Sons and has been unfairly cornered and side-lined since the late Cyrus Mistry’s removal in 2016. The SP group is now led by his brother, Shapoor Mistry, after the demise of Cyrus and their father Pallon Mistry.
The second is Noel Tata, RNT’s half-brother, who carries the family name and has a credible track record running Trent and Tata International. Married to Aloo Mistry, sister of Cyrus and Shapoor Mistry, Noel was appointed chairman of Tata Trusts last year after RNT’s passing. Tata Trusts collectively own 66% of Tata Sons making the chairmanship one of the most powerful positions in the group, but one fraught with complexity.
The third is Mehli Mistry, a low-profile, but powerful, businessman with close connections and significant dealings with the Tata group. He wielded immense influence over RNT, is an executor and beneficiary of his Will and also shares family ties with the SP group.
At the heart of the new turbulence are the divergent motivations of these three factions and the group’s two power centres: Tata Trusts and Tata Sons. The internal workings of both are hidden from the public scrutiny, while their directors wield enormous influence over the group and its listed entities. This has, once again, come to the fore in a series of media reports.
The current dispute stems from Noel Tata refusing to endorse the appointment of Mehli Mistry to the Tata Sons board. Although Mr Mistry reportedly said that he had “no desire to be on the board,” the very fact that the issue surfaced and that Noel Tata reportedly objected to his appointment, speaks volumes about the internal power calculus.
It is clear that of the three powerful factions, Noel Tata and the SP group view Mr Mistry with suspicion. The fact that he covets a Tata Sons directorship, despite being on the board of the powerful Tata Trust, is the clearest indication of the opaque dealings of the two power centres and their considerable influence over the group companies including their business plans, management and board appointments. This structure goes against all tenets of good governance and transparency that the market regulator imposes on other listed entities.
The inability of the three factions to sort out their differences, without seeking government help, raises a bigger question: Will the Tata legacy survive this tussle and allow the group and its vast philanthropic footprint to remain intact? And is this even a desirable outcome? Let’s examine each of them.
Noel Tata carries the Tata name, but was never RNT’s protégé and, in fact, was kept at arm’s length, despite his remarkable success with Trent. Even if he manages to gain the support and trust of N Chandrasekaran, who is Tata Sons’ chairman since 2017, this position will remain delicate so long as the two power centres operate behind a veil of secrecy. At a time when the group is struggling to assimilate Air India (especially after the recent crash), it hardly seems fair to burden him with the responsibility of constantly navigating between the SP group’s push for liquidity, Noel Tata’s effort to assert his authority and the turmoil caused by the lingering influence of RNT confidants such as Mehli Mistry and his supporters on the board. This issue will not go away.
The SP Group’s Long Quest for Exit
The minor power centres in the group believe that Cyrus Mistry’s appointment as chairman of Tata Sons was the root cause of friction. They saw it was the first step to the SP group acquiring control over the Tata empire and its legacy. This triggered the machinations against him, culminating in his dramatic ouster. Since then, the SP group has faced a series of vindictive actions, was excluded from all decision-making and has been prevented from monetising its stake in Tata Sons.
The SP group, strapped for liquidity after its construction arm’s debt crisis, has had to pledge its shares to raise money. It has repeatedly asserted the need for Tata Sons to be listed, so that its shares are made marketable. It has submitted repeated legal opinions to the Reserve Bank of India (RBI) in support this stand.
After the failure of Infrastructure Leasing & Financial Services (IL&FS) in 2018 triggered a systemic shock, RBI introduced the scale-based regulatory framework introduced in October 2022, which classifies non-banking financial companies (NBFCs) into four layers based on size, activity, and risk. Under this, it had mandated a public listing of Tata Sons by 30 September 2025.
The deadline is now past and RBI has remained mum on the issue. This is how regulation works in India—regulatory deadlines turn supple and malleable when a corporate group seeks intervention from New Delhi. In 2024, I had argued that an “exemption from listing to the fourth largest NBFC, would call into question the robustness of RBI’s entire SBR framework.” I had also pointed out that RBI’s failure to supervise IL&FS was questioned by the serious frauds investigation office (SFIO), but the investigation was buried. That RBI is dragging its feet over the listing of Tata Sons indicates that no lessons were learnt (As RBI Weighs Tata Sons' Plea To Stay Private, Public Interest Favours Listing).
The current controversy makes the listing Tata Sons is imperative, at least to keep warring factions under scrutiny. Its shares would be a prized holding in all large portfolios and sharp scrutiny by institutional and retail investors as well as proxy advisory, also reflected in its stock price, may prevent regulators from sleeping on their job, as happened with IL&FS. The alternative may be a series of messy legal battles and increased interference by politicians and bureaucrats which cannot be in anyone’s interest.
The Deeper Problem
Historically, the Tata group prided itself on independence from political favour. It funded social causes, built institutions and, usually, stayed clear of political patronage. Perhaps the most troubling development is the decision by some Tata directors to ask New Delhi to mediate. Resorting to government intervention betrays desperation as well as misjudgement: business autonomy cannot coexist with selective recourse to political rescue when internal governance fails.
The deeper problem is existential. The Tata group has outlived its founders. There is no Jamsetji Tata to set vision, no JRD Tata to inspire, no Ratan Tata to ensure loyalty. What remains is an intricate structure of trusts, boards and directors, who run their own business empires. It is not a structure that works at a common legacy.
The Tata group is a private empire with deep public relevance. It employs nearly a million Indians and straddles sectors from aviation to salt and software The brand still commands immense goodwill but can it survive sustained internal warfare? When corporate boards bypass governance to seek political mediation, it is a sure sign of lost internal trust. The group’s diversity—once its strength—could become its weakness, inviting politically-connected acquirers to circle for control.
A break-up of the Tata group once seemed unthinkable. But India’s business landscape has changed. The State now plays king-maker, deciding who wins and who fades. A divided Tata group would be easy prey for pressure, persuasion, or worse.
The trustees and directors of the Tata Trusts and Tata Sons need to wake up to the implications of their actions and rise above personal differences to heal rifts. In practical terms, that means:
Ending the vendetta against the SP group through a transparent exit process.
Listing Tata Sons and clarifying the role and composition of Tata Trusts to end the impression of ‘super boards’ pulling the strings from behind.
The Tata name has survived wars, crises and nationalisation. It would be a pity if it faltered now—not from outside assault, but from differences within.
I think the family relation of Noel Tata with SP Group should have been an enabler to join hands and create a bigger, larger and formidable "group" for governance and management of Tata Trusts and in turn, of Tata Sons. Mehli Mistry may have been a trusted confidant of RNT but times have changed. Political interference could and should have been avoided.
Very well analysed. Looking at Central Government for settling their petty ego clashes is the worst thing that happen to Tata Group. RNT failure to forsee such a eventuality after his passing away is sad. He should have ensured orderly transition to a identified successor
Excellent & honest analysis of the Tatas. Manipulation for personal gains seems to be the prime agenda.
RBI indecision has shown it is a slave in the hands of large corporates. Hope good sense prevails & transparency is brought in Tatas sons management.
Very well written piece. Both internal and external challenges to the TATA group are staggering in an environment of uncertainty and shifting geopolitics. TATA stakeholders must come together, bury their differences and ensure stability & continuity in their vision, businesses, plans, projects and performance
A brilliant summary of this convoluted drama.
The only comparable entity in the US that comes to mind is the Rockefeller.
The current Indian barons, Ambani and Adani, don't have an idea in their heads besides self-enrichment. The Ambanis' attempts to garner adulation and praise, epitomized by Nita Ambani, shows how far they are from even understanding what grace is all about.
One thing that stands out is how inadequate the RBI has been as a watchdog. It has shown poor judgement and rank incompetence yet its employees have never faced an investigation or penalty for their actions or lack of actions.
Unfortunately, this comes at a time when the political dispensation at the Center has no credibility, having shown how it twists the rules for its own benefit, with no mind to the damage it causes to India's political structure.
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This means access to other articles (outside the subscription period) are not included.
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India's smartphone exports to the United States have slumped sharply, according to the Global Trade Research Initiative (GTRI). Shipments fell from US$2.29bn (billion) in May to US$646.8mn (million) in August, a 58% decline. Exports...
AND CAN IT NOT BE REVIEWED
AND MODIFIED ???
Thank you.
Prakash Chandra.
TAS 1963 batch.
RBI indecision has shown it is a slave in the hands of large corporates. Hope good sense prevails & transparency is brought in Tatas sons management.
The only comparable entity in the US that comes to mind is the Rockefeller.
The current Indian barons, Ambani and Adani, don't have an idea in their heads besides self-enrichment. The Ambanis' attempts to garner adulation and praise, epitomized by Nita Ambani, shows how far they are from even understanding what grace is all about.
One thing that stands out is how inadequate the RBI has been as a watchdog. It has shown poor judgement and rank incompetence yet its employees have never faced an investigation or penalty for their actions or lack of actions.
Unfortunately, this comes at a time when the political dispensation at the Center has no credibility, having shown how it twists the rules for its own benefit, with no mind to the damage it causes to India's political structure.