Tata Sons board reviews turnaround plans for loss-making ventures

Air India and Tata Digital losses under scanner.

The board of Tata Sons on Tuesday reviewed turnaround strategies and business transformation plans for several of the $180 billion group’s loss-making ventures as the conglomerate seeks to strengthen growth while containing mounting losses across key businesses, with reviews indicating that Air India and Tata Digital are expected to continue reporting losses for the next three years.

According to sources familiar with the discussions, chief executives of major unlisted companies under the Tata Group umbrella, including Air India, Tata Digital and Tata Electronics, made detailed presentations before the board. The presentations, attended by Noel Tata and other Directors, focused on long-term business strategies, operational restructuring, revenue expansion and capital requirements for the coming years.

Sources indicated that the meeting primarily centred on the financial performance and future roadmaps of these companies, many of which are in investment-heavy phases. However, there was no discussion on the listing of Tata Sons or on any extension of the tenure of Chairman N Chandrasekaran, whose current term has often been the subject of market speculation.

The Tata Sons board is expected to convene again on June 12 for further deliberations on the group’s strategic priorities and funding plans.

Among the companies reviewed, Air India and Tata Digital are expected to remain under financial pressure over the next three years. Air India, which is undergoing an extensive transformation programme, continues to incur significant costs related to fleet modernisation, integration, operational restructuring and service upgrades. Tata Digital, which has been investing heavily in building digital commerce and consumer platforms, is also projected to post losses as it expands its ecosystem and scales operations.

Losses of unlisted units are expected to touch Rs 29,000 crore for FY26. Air services disruption and rise in fuel costs in the wake of the West Asia conflict have impacted airlines in India, including Air India.

In contrast, Tata Electronics emerged as a bright spot among the group’s unlisted entities. The company is rapidly expanding its manufacturing and semiconductor-related operations and is expected to cross revenues of more than Rs 1 trillion in FY2026. The company is also likely to turn profitable, aided by strong demand, capacity expansion and strategic investments in India’s electronics manufacturing sector, said a source.

Despite these positives, concerns remain over the financial burden posed by Air India and Tata Digital. “Both companies will continue to weigh on Tata Sons financially for the foreseeable future,” a source said, adding that it’s unclear how the group plans to fund the sustained capital requirements of these businesses in the years ahead.

The board meet on June 12 is likely to take up the extension of tenure of Chandrasekaran. On February 24, the outcome of the Tata Sons board meeting took an unexpected turn when Noel Tata surprised fellow directors by questioning the losses incurred by several unlisted companies within the conglomerate. Although the Tata Trusts trustees had already agreed to extend Chairman Chandrasekaran’s tenure for a third five-year term, Noel Tata emerged as a demanding voice during the meeting, raising multiple concerns and setting several conditions before backing the extension.

While four Tata Sons directors supported the renewal and were prepared to put the matter to a vote, Chandrasekaran proposed deferring the decision. He apparently supported the view that key decisions at Tata Sons should continue to be based on consensus, a tradition closely associated with the late Ratan Tata. In effect, Noel Tata’s endorsement is crucial before moving ahead with the extension.

Ahead of the Tata Sons board meet, the board of Tata Trusts — excluding the Sir Ratan Tata Trust (SRTT) — is expected to meet on June 8 to deliberate on a broad set of governance and strategic issues. Among the key matters expected to come up for discussion is the future of Venu Srinivasan’s role as a nominee director on the board of Tata Sons. The review assumes significance because Srinivasan had reportedly diverged from the stance adopted by the Tata Trusts by supporting the view that Tata Sons should become a listed entity.

On May 16, Tata Trusts decided to defer the much-awaited board meeting of SRTT following an order from the Charity Commissioner of Maharashtra on the issue of perpetual trustees.

The board of Tata Sons on Tuesday reviewed turnaround strategies and business transformation plans for several of the $180 billion group’s loss-making ventures as the conglomerate seeks to strengthen growth while containing mounting losses across key businesses, with reviews indicating that Air India and Tata Digital are expected to continue reporting losses for the next three years.

According to sources familiar with the discussions, chief executives of major unlisted companies under the Tata Group umbrella, including Air India, Tata Digital and Tata Electronics, made detailed presentations before the board. The presentations, attended by Noel Tata and other Directors, focused on long-term business strategies, operational restructuring, revenue expansion and capital requirements for the coming years.

Sources indicated that the meeting primarily centred on the financial performance and future roadmaps of these companies, many of which are in investment-heavy phases. However, there was no discussion on the listing of Tata Sons or on any extension of the tenure of Chairman N Chandrasekaran, whose current term has often been the subject of market speculation.

The Tata Sons board is expected to convene again on June 12 for further deliberations on the group’s strategic priorities and funding plans.

Among the companies reviewed, Air India and Tata Digital are expected to remain under financial pressure over the next three years. Air India, which is undergoing an extensive transformation programme, continues to incur significant costs related to fleet modernisation, integration, operational restructuring and service upgrades. Tata Digital, which has been investing heavily in building digital commerce and consumer platforms, is also projected to post losses as it expands its ecosystem and scales operations.

Losses of unlisted units are expected to touch Rs 29,000 crore for FY26. Air services disruption and rise in fuel costs in the wake of the West Asia conflict have impacted airlines in India, including Air India.

In contrast, Tata Electronics emerged as a bright spot among the group’s unlisted entities. The company is rapidly expanding its manufacturing and semiconductor-related operations and is expected to cross revenues of more than Rs 1 trillion in FY2026. The company is also likely to turn profitable, aided by strong demand, capacity expansion and strategic investments in India’s electronics manufacturing sector, said a source.

Despite these positives, concerns remain over the financial burden posed by Air India and Tata Digital. “Both companies will continue to weigh on Tata Sons financially for the foreseeable future,” a source said, adding that it’s unclear how the group plans to fund the sustained capital requirements of these businesses in the years ahead.

The board meet on June 12 is likely to take up the extension of tenure of Chandrasekaran. On February 24, the outcome of the Tata Sons board meeting took an unexpected turn when Noel Tata surprised fellow directors by questioning the losses incurred by several unlisted companies within the conglomerate. Although the Tata Trusts trustees had already agreed to extend Chairman Chandrasekaran’s tenure for a third five-year term, Noel Tata emerged as a demanding voice during the meeting, raising multiple concerns and setting several conditions before backing the extension.

While four Tata Sons directors supported the renewal and were prepared to put the matter to a vote, Chandrasekaran proposed deferring the decision. He apparently supported the view that key decisions at Tata Sons should continue to be based on consensus, a tradition closely associated with the late Ratan Tata. In effect, Noel Tata’s endorsement is crucial before moving ahead with the extension.

Ahead of the Tata Sons board meet, the board of Tata Trusts — excluding the Sir Ratan Tata Trust (SRTT) — is expected to meet on June 8 to deliberate on a broad set of governance and strategic issues. Among the key matters expected to come up for discussion is the future of Venu Srinivasan’s role as a nominee director on the board of Tata Sons. The review assumes significance because Srinivasan had reportedly diverged from the stance adopted by the Tata Trusts by supporting the view that Tata Sons should become a listed entity.

On May 16, Tata Trusts decided to defer the much-awaited board meeting of SRTT following an order from the Charity Commissioner of Maharashtra on the issue of perpetual trustees.