Tata Group stocks are expected to be in the spotlight on Monday, September 21, after a sharp slide in Friday’s trade amid fresh developments over Natarajan Chandrasekaran’s reappointment as chairman.
In a fresh development, the Tata Trusts have challenged the validity of Tata Sons’ September 17 decision to reappoint N Chandrasekaran as chairman, arguing that the company’s Articles of Association require affirmative support from a majority of its Trust-nominated directors and that a chairman’s casting vote cannot override that condition.
Boardroom disagreements at India’s largest conglomerate escalated last week after Tata Sons’ directors approved a fresh term for executive chairman N Chandrasekaran in a vote the group’s biggest shareholder called illegal.
Noel Tata, who chairs the network of charitable trusts holding roughly two-thirds of Tata Sons’ shares, cast the sole vote against extending Chandrasekaran’s tenure by five years. Venu Srinivasan, the other Tata Trusts nominee on the Tata Sons board, supported the extension.
In a statement, the Trusts said there was no deadlock at the board meeting and that the resolution could not have been validly passed after one of the two Trust-nominated directors voted against it.
The statement by Tata Trusts said, “There are two Tata Trusts nominees on the Board of Tata Sons. Majority amongst two is two and not one. On September 17, 2026, one such Director voted against the resolution. Thus, the affirmative support of Tata Trusts Nominee Directors as mandated by the AoA was not given. The condition failed, and so did the resolution.
“The Chairman’s casting vote is available only where there is equality of votes at the overall board level. It does not apply amongst Tata Trusts’ Nominee Directors. Whether the result of the vote was 4:1, or any other figure, is irrelevant. A condition is either met, or it is not. In this case, the condition was not met,” it said.
The state further said that the resolution to reappoint N Chandrasekaran as the Chairman of Tata Sons, considered at the Board meeting on September 17, 2026, was not validly passed and has no legal effect. In the eyes of the law, it is void ab initio.
“Void ab initio” is a legal term meaning “void from the very beginning.” It means a decision, agreement, or action is treated as having had no legal validity from the outset, rather than becoming invalid at a later point.
What happened in Friday’s session
Major Tata Group stocks ended lower on Friday after advancing in the previous session, with Tata Chemicals tumbling over 11% amid a boardroom battle at the group after Tata Sons’ directors approved a fresh term for executive chairman N Chandrasekaran.
Shares of Tata Chemicals tanked 11.14%, Tata Technologies fell 4.65%, TCS dropped 4.33%, Tata Motors Passenger Vehicles declined 3.45%, Tata Investment Corporation was down 2.32%, and Titan edged lower by 2.11% on the BSE.
Tata Steel dipped 1.73%, Tata Elxsi 1.33%, Tata Communications 1.10%, Trent 0.64%, and Voltas 0.50%.
The combined market valuation of these firms eroded by over ₹58,000 crore.
TCS was the biggest laggard among the 30 SENSEX firms.
On the NSE too, the stocks saw a sharp decline.
Details for market participants
Tata Sons is facing a fresh boardroom dispute after directors voted to reappoint N Chandrasekaran as executive chairman for another five-year term, with Tata Trusts challenging the validity of the resolution and raising questions over the governance of the conglomerate.
The nearly three-hour meeting in Mumbai on Thursday (September 17) produced rival claims over the validity of the vote, a legal opinion from former Chief Justice of India D Y Chandrachud and a fresh confrontation over whether Tata Sons should remain private or pursue a stock-market listing.
Chandrasekaran, 63, told the board last month that he would not seek another term when his current tenure ends on February 20, 2027. His decision followed repeated failure by the board to reach unanimity on his renewal.
The board reversed course after the Reserve Bank of India rejected Tata Sons’ application to surrender its registration as a core investment company, reviving the prospect of a listing and increasing pressure for leadership continuity.
Tata Sons, in a statement, said Chandrasekaran had “acceded to the Board’s request to reconsider his decision” and that the board “thereafter resolved by a majority vote to re-appoint him as Executive Chairman for a further term of five years”.
Four directors supported the resolution, while Noel Tata, chairman of Tata Trusts, voted against it.
Tata Trusts, which, together with affiliated trusts, controls about 66% of Tata Sons, rejected the decision.