Noel Tata worries market listing will change the 'Tata way'

Tata Trusts chairman Noel Tata said on Saturday he was worried that listing Tata Sons would change the way the Tata group works. He said that with tens of thousands of shareholders, profit could one day take priority over philanthropy.

“My worry is that listing, which is what some people are proposing, will change this way, the Tata way. And one day, if we have 30,000, 40,000 shareholders, profit may take precedence over philanthropy. And I think that will fundamentally change the Tata way of working,” Tata said at the 24th Hindustan Times Leadership Summit, in conversation with Suhel Seth. Track LIVE updates from Hindustan Times Leadership Summit here

Tata’s remarks are one of his most direct public comments yet on listing, which has split the group. Tata Trusts owns more than 66% of Tata Sons.

Asked to define the Tata way, Tata said it rests on one idea: “The Tata way, the way I see it, revolves around a single premise: charity precedes commerce. It’s not the other way around.” Profits from group companies become “tomorrow’s hospital, tomorrow’s library, tomorrow’s educational institutions, tomorrow’s relief for people in crisis… This profit becomes in a way a public good. And it repeats itself every year, year on year, by design.”

He said this works because of how Tata Sons is owned. “The owner cannot die, the owner cannot be bought, and the owner cannot retire. So there is a continuity in what happens in the Tata way.”

Tata’s comments come days before a November 26 Tata Sons board meeting. Since Ratan Tata’s death in October 2024, Tata Trusts has been split over how it exercises control over Tata Sons. The disagreement has played out over board seats and trustee reappointments, and, more recently, over whether Tata Sons should list.

Tata also said a private Tata Sons acts as a backstop for any group company that gets into trouble. “That is an important glue which keeps the entire group together,” he said.

He said outside investors would bring different priorities. A separate set of investors would ask why money was going into a company that needed funding, and would want capital sent to the most profitable ventures. “Therefore, the nature of the group is going to change,” he said. “Why tinker with something which has delivered such value for 150 years?”

He said the Trusts “will play a constructive role with regulators and others to try and find a solution which keeps the Tata way the way it is.”

Tata said the trust has two roles. The first is direct philanthropy, through grants to NGOs and support for beneficiaries. The second works through Tata Sons, which invests in and nurtures projects of national importance. He cited the group’s history of firsts: the first steel plant, hydroelectric plant, nitrogenous fertiliser plant and truck manufacturer. He also pointed to the group’s current projects, including India’s first semiconductor project, its first EV battery plant and a large phone assembly plant to make in India and export.

“From a trust perspective, we stand 100% behind Tata Sons’ efforts to invest in projects of national importance,” he said. These projects “have a longer gestation period. They might have a little more risk… but the hope is that eventually those projects will become public companies and prosper in the marketplace.”

The dispute at Tata Trusts has spilled into letters between trustees and into regulatory and legal forums. It also comes as Tata Sons approaches a leadership decision, with chairman N Chandrasekaran’s term ending in February 2027. Saturday’s remarks were the first time Noel Tata has publicly made his case on why the Tata model should stay as it is.