Tata’s Mega Investments Raise Stakes In Boardroom Battle

By Govindraj Ethiraj

In 2024, Tata Electronics announced plans to build a state-of-the-art semiconductor assembly and test facility in Jagiroad, Assam, a Rs 27,000 crore ($3.2 billion) outlay projected to generate 27,000 direct and indirect jobs in the region.

A neat "27 for 27." 

In the same year came an even grander gamble: a mega semiconductor fabrication facility in Dholera, Gujarat, in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation, carrying a total price tag of roughly Rs 91,000 crore, or $10 billion. 

Complementing these mega-projects, Tata Electronics and its subsidiaries have executed a string of aggressive alliances, acquiring the Indian manufacturing operations of Wistron and Pegatron to anchor its iPhone assembly and consumer electronics supply chains.

And that brings us to the point, so to speak. 

Inside The Friction

These high-tech bets sit at the very center of what is shaping up to be a bitter battle for control atop one of India’s oldest conglomerates.

Tata Electronics, alongside the loss-making revival of Air India and the e-commerce venture Tata Digital, has emerged as a primary capital sink for group holding company Tata Sons. 

It is also a fully owned subsidiary of Tata Sons.

As is Tata Digital, owner of BigBasket and 1mg which has swallowed Rs 26,000 crore in capital while piling up over Rs 17,000 crore in losses. 

The present boardroom clash between Tata Sons Chairman N Chandrasekaran and Noel Tata, who represents the 66% controlling stake held by the historic Tata Trusts, is linked in good part to these massive balance-sheet drains. 

As sources tell us, the core grievance is not merely that these investments were made, but that Noel Tata was denied the depth of information he requested, with major strategic moves presented instead as a fait accompli. 

Boardroom eyebrows have inevitably been raised over why capital was partly directed to remote Assam over established industrial ecosystems in Gujarat or Karnataka.

There are two distinct trains of thought surrounding the friction in the boardroom. 

Critics of "Chandra" within the Noel camp readily acknowledge his hard work and extraordinary track record at Tata Consultancy Services (TCS), where as CEO he lived on the road courting global enterprise clients. 

Yet they legitimately question whether he possesses the same instinct for volatile, consumer-facing businesses like Air India or digital retail. 

The late Ratan Tata, who appointed Chandra, likely reasoned that a group chairman is not meant to be a hands-on functional CEO of individual units. 

Except, of course, these current mega-investments sit directly on the Tata Sons balance sheet. 

The Commercial Conundrum

In retrospect, one might ask why TCS, the group's prodigal cash cow, did not simply run these digital and electronic forays. The answer is obvious: public shareholders would have baulked and sold off their shares in the IT giant.

The second and more important train of thought concerns the geopolitical imperative driving the electronics outlay. 

New Delhi wants national champions like the Tatas to weigh in on critical, capital-intensive sectors like semiconductors. 

The Tatas undeniably possess the institutional knowledge, technical ambition, and balance-sheet capacity to take on the challenge. 

But the bets are exceedingly large, as we have discussed, and the commercial outcomes remain far from clear. 

Moreover, even when shareholders are conceptually aligned with the national interest, they may not all be on the same page regarding execution and disclosure. 

Even as Tata Sons struggles with Air India, matching Rs 22,000 crore of fresh investments with Rs 22,000 crore in losses, the government elsewhere has reportedly been nudging other domestic business groups to start airlines to address industry capacity shortages. 

This creates a fraught tension between political mandates and commercial realities. 

Steering Tata Sons now, or in future, will remain a precarious balancing act for precisely these reasons.

Want to get the most out of ChatGPT?

ChatGPT is a superpower if you know how to use it correctly.

Discover how HubSpot's guide to AI can elevate both your productivity and creativity to get more things done.

Learn to automate tasks, enhance decision-making, and foster innovation with the power of AI.

Download the free guide

$221.4 billion

That’s how much India’s software services exports were worth in 2025-26, up 8.2% year-on-year, according to the Reserve Bank of India’s annual survey. The figure excludes sales made through the overseas commercial presence of Indian companies.

The US remained India’s biggest market, accounting for 54.1% of software exports, or $119.7 billion. Europe accounted for 31.8%, with the UK alone contributing 15.4%.

Share of exports by country:

• US —> 54.1%

• Europe —> 31.8%

• Asia —> 6.3%

• Australia & New Zealand —> 2.5%

Breakdown: Computer services made up 69.3% of total software services exports, while BPO remained the largest component of IT-enabled services.

The RBI contacted 7,569 software-exporting companies, of which 2,363 responded, including most large companies. These respondents accounted for around 89% of estimated software services exports.

Software exports were also overwhelmingly delivered remotely: 91.7% came through off-site services, up from 90.7% a year earlier.

Trusts Holds Firm On Chandra’s Vote

Tata Trusts on Sunday intensified its objection to N Chandrasekaran's reappointment as Tata Sons Chairman, saying the company's rules require not just a majority of the full board, but also the backing of most of its own nominee directors.

The Lead: Since Venu Srinivasan backed the resolution while Noel Tata opposed it, the Trusts said the mandatory condition failed, rendering the September 17 resolution "void ab initio." It rejected claims of deadlock, calling the outcome simply "the constitution working as it was written to work," and noted the chairman's casting vote applies only to overall board ties, not nominee-director disagreements.

Catch Up Quick: The Trusts also invoked the 2021 Supreme Court Tata-Mistry verdict, where Tata Sons itself successfully defended these nominee voting rights under Articles 104B and 121, arguing the company cannot now disown protections it previously fought to preserve.

Setup: On the proposed listing, the Trusts maintained Tata Sons already meets public-company governance standards voluntarily, making an IPO unnecessary.

AI Giants Sued

Anthropic, OpenAI, Google and SpaceXAI are facing a US antitrust lawsuit over allegations that they agreed to slow the pace of AI development.

Context: The lawsuit, filed in California, follows Anthropic CEO Dario Amodei’s call for AI companies to coordinate on slowing development to give safety measures time to catch up. OpenAI CEO Sam Altman, Google DeepMind’s Demis Hassabis and Elon Musk subsequently expressed support for the idea.

The Turning Point: The plaintiffs argue that companies can independently slow development, but competitors cannot collectively agree to restrain it. They say this could reduce the value consumers get from paid AI subscriptions. “It is clear that an agreement among the chief rivals in AI that their progress should be slower than competition would otherwise produce has an anticompetitive effect on consumers,” the lawsuit says.

Global Uncertainty Rises

Foreign portfolio investors (FPIs) pulled out Rs 20,974 crore from Indian equities so far in September, reversing the buying seen in July and August.

Fast Facts: FPIs had invested Rs 20,200 crore in July and Rs 29,630 crore in August. But September’s selling has taken their 2026 equity outflows to Rs 2.45 trillion, already surpassing the Rs 1.66 trillion withdrawn during all of 2025.

How We Got Here: Analysts say global uncertainty is pushing investors towards safer assets as US interest rates and bond yields remain elevated. Higher US yields can make emerging-market assets such as Indian equities less attractive.

Brent crude has stayed above $100 a barrel amid geopolitical tensions, raising concerns over India’s import bill, inflation and the rupee. The rupee fell 1.1% last week, its sharpest weekly decline in four months, adding to concerns for foreign investors.

7 Stocks to Ride The A.I. Megaboom

The next A.I. boom could create massive winners just like the 1990s tech surge.

We identified 7 small tech companies positioned to benefit from the next phase of A.I. growth.

See them inside this free report 7 Stocks to Ride The A.I. Megaboom.

View the 7 Stocks