Tata Sons chair defends nation-building bets over short-term returns

Tata Sons Pvt. Ltd. Chairman Natarajan Chandrasekaran said the group will keep building what India and the world need, including semiconductor chips, even if these projects are slow to deliver amid a tussle with owners who are pressing for quicker returns.

The group’s semiconductor push shouldn’t be judged on whether it meets the numbers in two to three years, he said at Bloomberg’s New Economy Forum in New Delhi on Tuesday.

“Direction is certain, need is certain, ability to execute is certain,” Chandra said. Chips will be fundamentally required, and advanced manufacturing is here to stay, he said, adding that India has the talent, the market and ability to step up.

His defence of nation-first projects, which has helped win Chandrasekaran the government’s goodwill, comes as the group’s controlling shareholders reassess capital allocation. Tata, the nearly 160-year-old group that posted $185 billion in revenue last fiscal, has made a $120 billion wager on future growth, including India’s first chip-making unit seen as key to the country’s high-tech manufacturing push.

Tata Trusts Chairman Tata in board meetings in recent times over capital allocation decisions and projects that can show returns on a swifter timeframe. Tata Trusts owns about 66% of Tata Sons—the holding company of the sprawling group behind brands such as Jaguar Land Rover, Air India, Taj hotels and Tetley tea.

Tata Electronics, which is building India’s first large-scale chip fab or production plant, has faced operational and technology-access delays, people familiar with the matter have said earlier.

Chandra acknowledged a rough run, citing an air crash, a cyberattack and supply-chain disruptions, but said the group still delivered double-digit growth, with margins holding up.

Past decisions have “all been proved right in the long term,” he said, and when things go wrong, “you course-correct.” On the path ahead, he said: “We can’t be reckless.”

He added a measure of caution, saying the group has to keep an eye on the balance sheet and see where demand is. On whether a bet is financially viable, he said the numbers won’t be tidy: “You need to feel the stones and cross the river. It is not that you are going to have a very clean spreadsheet in this uncertain world.”

The comments come as Tata faces a boardroom crisis. Chandra said in August that he would not seek another term when his current one ends in February 2027, citing a lack of unanimous support on the Tata Sons board. Noel had raised concerns in February that led the board to defer a decision on a third term. Tata Trusts accepted his decision, and initiated steps to find a successor.

Last month, however, the Tata Sons board reappointed Chandra as chairman for five years. Noel Tata, one of the Tata Trusts’ two nominees on the board, voted against the decision. The Trusts subsequently called the reappointment illegal under the company’s articles, citing legal opinion. Tata Sons disputes the position.

Asked what worries him most, Chandra named technology in the hands of bad actors and labour restructuring.

“The other thing I worry about is the war situation. I think we seem to be opening wars in every front and nothing is getting closed. So I don’t know somebody is going to press a button which I worry about a lot.”

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