Family feud within Indian business giant threatens stability of markets, industries

One of India's largest conglomerates, Tata Group, is grappling with its most serious internal conflict in years as a feud escalates between members of its founding family and key shareholders over whether to take one of its holding companies public.

Tensions have been mounting since the death of former chairman Raman Tata in October 2024, which, according to the Sri Lanka Guardian, exposed deep fractures within the group’s unusual governance structure.

The entity at the centre of the dispute is Tata Sons, the holding company that oversees major businesses in IT, steel, automobiles and aviation. Its majority owner is Tata Trusts, led by Noel Tata, the half-brother of the late chairman. The publication notes that he is determined to keep the firm private to preserve the Trusts’ influence.

His stance has put him directly at odds with the Shapoorji Pallonji (SP) Group, a long-standing shareholder and powerful business house with deep family ties to the Tatas, whose companies collectively contribute nearly 5% of India’s GDP.

The Reserve Bank of India has also urged nonbanking giants like Tata Sons to list publicly, arguing that transparency and oversight are essential to safeguarding the wider economy. SP Group has embraced that mandate, calling the move to take the company public "a moral and social imperative" that would strengthen governance and unlock value for millions of Tata’s investors.

The feud has revived memories of the bitter fallout over the 2016 ouster of Cyrus Mistry, a member of the Pallonji family who was serving as Tata’s chairman. He was replaced by his predecessor Ratan Tata, with analysts speculating that the conflict stemmed from strategic disagreements — the Tata family reportedly unhappy with Mistry’s inclination to sell off parts of the business rather than retain assets and expand the firm’s global footprint.

The publication notes that the turmoil has also spilled into Tata Trusts, where board member Mehli Mistry, another member of the Pallonji family by marriage, announced his resignation after warning Noel Tata that rising tensions could inflict "irreparable damage" on the group. His departure followed internal clashes over appointments to the Tata Sons board, with Noel Tata reportedly blocking Mistry’s attempts to join it.

Tata Group’s 26 listed companies play a major role in India’s economy, raising the stakes for the government. Finance Minister Nirmala Sitharaman and other officials have held meetings urging a swift resolution to the crisis amid concerns that prolonged infighting could unsettle the markets.

According to the article, the group’s longstanding tradition of substantial charitable spending is also under scrutiny. It cites analysts who warn that listing Tata Sons could shift the conglomerate toward a more profit-driven culture, marking a departure from the decades-long focus on social contribution embedded by its founders.

However, the publication also highlights risks associated with remaining private. Tata Trusts could attempt to buy out SP Group’s stake, and the conglomerate faces mounting operational challenges — including the fatal Air India plane crash, involving an airline founded and still majority-owned by a Tata company. A cyberattack that halted production at Jaguar Land Rover in August further raised concerns about safety, oversight and resilience across the Tata ecosystem.

For now, the future of Tata Sons and the balance of power within the $180 billion conglomerate remain uncertain, with the potential to reshape India’s economy and industrial landscape.

By Nazrin Sadigova