TCS, Tata Motors PV, Tata Steel shares slide up to 6% as N Chandrasekaran steps down; key details

Shares of Tata Consultancy Services (TCS) were trading sharply lower in the morning trade on Wednesday, August 12, after N Chandrasekaran, the chairman of Tata Sons — the principal investment holding company of the $400-billion Tata Group — said he will not seek reappointment when his current term ends on February 20, 2027.

The development ends months of uncertainty over the leadership of the Tata Group's holding company.

Chandrasekaran, widely known as Chandra, said the Sir Dorabji Tata Trust and Sir Ratan Tata Trust, which together hold 51.54% of Tata Sons, had unanimously recommended a five-year extension of his term. The proposal was subsequently recorded and recommended by the Tata Sons Nomination and Remuneration Committee and the board, Chandra said.

The proposal was tabled at a February 24 board meeting but was not carried through after one director did not support it.

In his statement, Chandrasekaran said, "I have communicated to the Tata Sons Board that I have decided not to offer myself for reappointment when my term ends on Feb 20, 2027. I have asked the Board to decide on the succession soon to ensure a proper transition..."

Tata Trusts, the group's charitable arm, owns about 66% of Tata Sons, which controls more than 30 group companies, including Tata Consultancy Services (TCS), Tata Motors, and Air India.

At 11:41 AM, TCS shares were trading at ₹2,351.70 apiece on the NSE. The stock tumbled as much as 5.95% to ₹2,300.10.

Tata Sons and Tata Trusts have reportedly clashed over board representation, strategy and the planned exit of minority shareholder Shapoorji Pallonji, with the differences contributing to the ouster of a Tata Sons director, according to media reports.

What shareholders need to know

Natarajan Chandrasekaran (Chandra) is currently serving as the Chairman of Tata Sons Private Limited (Tata Sons), the holding company and promoter of all Tata group companies. Chandra joined the Board of Tata Sons in October 2016 and was appointed as Chairman in January 2017.

Chandrasekaran also chairs the Boards of several group operating companies, including Tata Steel Limited, Tata Motors Limited, Tata Motors Passenger Vehicles Limited, The Tata Power Company Limited, Air India Limited, Tata Consumer Products Limited, The Indian Hotels Company Limited.

Before becoming the Chairman, he was Chief Executive of Tata Consultancy Services Limited (TCS) in which he served for 30 years, including eight years, until 2017, as the Chief Executive Officer and Managing Director (CEO & MD). "Under Chandra’s leadership, TCS became the country’s most valuable company," as per the IT services major's official website.

Born in 1963, Chandra is a Bachelor in Applied Sciences and has Masters in Computer Applications.

Tata group stocks under pressure

Apart from TCS, Tata Steel shares were down 1.75% at ₹184.95 on the NSE, while Tata Power Company was down 1.28% at ₹375.15. Tata Motors Passenger Vhcls was down around 2.5% at ₹339.20, and Tata Consumer Products (TCPL) was trading at ₹1,059, down 1.76%.

The Indian Hotels Company traded over 1.4% lower at ₹713.80 on the NSE.