The resignation of N Chandrasekaran as chairman of Tata Sons earlier this month has created a vacancy at the helm of the Indian conglomerate. Finding a successor is expected to be a challenging task for the group, which has a $300bn empire including Jaguar Land Rover and Air India.
Mr Chandrasekaran's departure reportedly stemmed from a deadlock over his reappointment and a growing rift with Tata Trusts, the charity arm holding controlling shares in the unlisted commercial holding company. Disagreements are said to have focused on a potential public listing of Tata Sons and capital allocation for new unlisted businesses, such as semiconductors, e-commerce, and aviation, which are currently incurring losses.
Hetal Dalal from Institutional Investor Advisor Services (IiAS) told the BBC that the new leader will need to assess and absorb risks from the group's rapid expansion. Nirmalya Kumar, former head of strategy at Tata Sons, noted that the complexity of the role has increased as collective losses from new businesses exceed cash flow from older companies like TCS, the group's software arm, whose business model has been challenged by AI.
Experts suggest that the resignation is likely to lead to a period of prolonged uncertainty for investors. New leadership is expected to bring a change in strategic direction regarding the ambitious expansion undertaken by Mr Chandrasekaran. Repairing the relationship between Tata Trusts and Tata Sons will be a key priority for the incoming chairman, according to Mukund Rajan, former brand custodian at Tata Sons.