Shares of Tata Chemicals, Tata Steel, Tata Motors PV and other Tata Group companies traded with marginal gains and losses on Friday after Tata Sons rejected Tata Trusts Chairman Noel Tata ’s objections over the reappointment of N Chandrasekaran as Tata Sons’ chairman.
Tata Sons said its board had approved the reappointment of N Chandrasekaran by a majority, adding that the special procedure under its Articles of Association (AoA) cited by Noel Tata did not apply to an incumbent chairman. In a September 24 letter to Noel Tata, the company said the board had acted in accordance with applicable law and its AoA.
The company said it had acted on legal advice in interpreting the AoA and maintained that Chandrasekaran’s reappointment was valid. Earlier, Tata Sons approved a fresh five-year extension for Chairman N Chandrasekaran’s tenure, setting the ball rolling for the much-awaited IPO of the group holding company, followed by Tata Trusts chairman Noel Tata challenging the validity of Chandrasekaran's appointment.
In a strongly worded letter, Tata Trusts chairman Noel Tata challenged the decision's validity. "I write in my capacity as the chairman of Tata Trusts and a nominee director on the board of Tata Sons to place on record my serious disappointment and indeed my strong objection to the conduct of the meeting of the company today," Tata wrote in the letter, the contents of which were described to an ET reporter.
"I record that I maintain that the vote taken on the captioned matter (reappointment of the chairman) and any resolution claimed to have been passed is null and void ab initio and of no legal relevance, efficacy or effect whatsoever."
Tata Trusts, which controls 66% of Tata Sons through the Sir Ratan Tata Trust and the Sir Dorabji Tata Trust, passed a resolution in July 2025 seeking to keep the holding company privately owned. The Shapoorji Pallonji Group, Tata Sons’ largest minority shareholder with an 18.37% stake, meanwhile views a listing as the most practical way to unlock value.
Senior advocate Abhishek Singhvi, who was appointed to represent Tata Trusts, said he is entering the fray with "sadness and regret" as these issues could not be amicably solved. In a post on X, the lawyer said the fundamental rights of shareholder-owners cannot be nullified in the manner in which they have been.
However, Tata Sons' latest letter to Noel Tata marks the first formal response to questions from the controlling charities collectively known as the Tata Trusts.
Shares of Tata Group companies have seen sharp upswings and downswings since last week amid the ongoing boardroom developments within the Tata Group. These, however, may continue to create near-term volatility across its listed companies, but investors should look beyond short-term corporate noise and focus on earnings growth, business fundamentals, cash-flow generation and valuations, said Uttam Kumar Srimal, Deputy Head of Fundamental Research at Axis Direct.
Sunny Agrawal from SBI Securities also said a few fundamentally strong businesses can be considered for a portfolio and accumulated at current levels irrespective of the ongoing developments at the Tata Group.
From a fundamental perspective, Tata Steel remains Axis Direct’s preferred Tata Group stock, given the potential for earnings improvement and the underlying strength of its business, Srimal said.
From the automobile segment, Agrawal from SBI Securities particularly likes Tata Motors’ Commercial Vehicle business. Industry volumes are showing signs of revival, while the government’s planned capex programme provides a structural tailwind for the sector, he said while naming the stock one of his preferred picks.
On the consumption side, the analyst likes all three businesses - Indian Hotels from the hospitality segment, Titan as a play on jewellery, eyewear and accessories, and Tata Consumer, which offers a diversified consumer-staples portfolio spanning categories such as salt and beverages. “We expect these businesses to deliver healthy, mid-teen growth going forward. The recent volatility in Tata Group stocks , therefore, could provide an opportunity to accumulate these businesses from a longer-term perspective,” he said.