Tata Sons board set for a refresh
has done great work.”
Chandrasekaran and Saurabh Agrawal, the group’s chief financial officer, are the two executive members on the Tata Sons board. Venu Srinivasan, chairman-emeritus of TVS group and former defence secretary Vijay Singh are the two nominee directors from Tata Trusts.
Ajay Piramal, chairman of Piramal group; Leo Puri, former chair of JP Morgan Chase for South and Southeast Asia; Manwani; and Anita Marangoly George, formerly with Canadian Pension Fund CDPQ, are the four independent directors.
Tata Sons mandates all executives to retire at 70, but does not have a cap for independent directors or nominees of Tata Trusts. Hence, Vijay Singh, who turns 75 and Srinivasan, 71, can continue on the board.
The Tata group has a complex structure, under which business and philanthropy are run through three layers. At the top are the self-governing
Tata Trusts that are chaired by Ratan Tata, chairman emeritus of the Tata group. Tata Sons is owned 65.90% by the trusts, 12.87% by half a dozen Tata group companies, and the rest 18.4% by the Mistry family. Tata Sons is the holding company of Tata group companies in the middle layer, which Chandrasekaran runs. Tata Sons, in turn, owns shares in two dozen public companies, forming the third layer, and which together had over $150 billion in revenue at the end of March 2023.
A second executive said Tata Trusts can nominate up to three executives on the board of Tata Sons, and it remains to be seen if the trusts would appoint a third nominee during the board refresh.
An email sent to a Tata Sons spokesperson seeking comment went unanswered.
The board rejig comes at a time Tata Sons plans to become a debt-free company. The company had ₹20,642 crore in debt at the end of March 2023. The Reserve Bank of India classified Tata
Sons Pvt. Ltd as an “upper layer” non-banking financial company (NBFC) in 2022, necessitating a public listing within three years. The deadline to meet the norms ends in September 2025. However, there is near unanimity in the group to clear the debt at Tata Sons and obviate the need for a public share sale.
Last month, Tata Sons received ₹9,362 crore when it sold 0.65% of Tata Consultancy Services (TCS) Ltd shares. The country’s largest technology services firm also announced a final dividend of ₹28 a share, which translates into an additional ₹7,270 crore for parent Tata Sons. A significant share of this ₹16,632 crore is expected to pay off Tata Sons borrowings, according to the two executives cited above.
“The entire approach is to go debt-free ASAP,” said the first executive. “The remaining ₹4,000 crore debt can again be cleared from the proceeds through an interim dividend from TCS in the current year or another sale of shares if needed.”