Family links and proven business acumen could make Noel Tata the front-runner to replace Ratan Tata as the patriarch of Tata group.
Executives who have closely worked with Ratan Tata in the past, cite three reasons why Noel could get the job. First, he has led Trent to profitability despite massive competition. Second, he stood by Ratan Tata during the spat with Cyrus Mistry even giving his step-brother power of attorney to vote on his behalf, and finally, he is being seen as someone who could restore the relationship with Tata Sons’ second-largest shareholder, the Shapoorji Pallonji Group, since he is married into that family.
“Given his focus on future planning all his life, it will be very surprising if Ratan Tata has not left instructions on who should succeed him. Either way, Noel Tata seems to be the likely choice. The Tata Trusts are family trusts and historically it has been led by someone from the Tata family. That family network is very strong as we saw when they were fighting Cyrus Mistry. Every member, including Noel, gave power of attorney to Ratan Tata to vote as he wishes. It will be unlikely that the trustees will vote for an outsider,” said an executive who worked with Ratan Tata between 2010 and 2018.
Proven records
But beyond family links, Noel has proven his mettle with the growth of Trent amid massive competition in retail space. Thus far in the calendar year 2024, the stock price of Trent has zoomed 172 per cent pushing the market capitalisation of the company towards ₹ 3 lakh crore mark. According to sources close to Noel, he has been preparing to take the baton from Ratan Tata since he joined as a trustee on the board of Sir Ratan Tata Trust and Sir Dorabji Tata Trust.
Currently, Noel is the Chairman of Trent, Tata International Ltd, Voltas & Tata Investment Corporation and the Vice-Chairman of Tata Steel and Titan Company Ltd. He has been associated with the Tata group for 40 years. Recently, his three children, Leah, Maya, and Neville, have been taking active role in the group’s businesses.
Mukund Rajan, who served as Ratan Tata’s executive assistant and then principal staff officer from 1996 to 2008, however, said that while Noel has an advantage, the trustees could still pick someone else. “Clearly, there is the expectation that an important role will continue to be played by his step brother Noel Tata, who has been a Tata group veteran throughout his career. He is also someone who is already on the Tata charities as a trustee. That would be in his favour. But Ratan Tata himself, including in his nomination of Chandra as the Chairman of Tata Sons, was not necessarily hugely motivated by considerations of family, religion, or community. For him, it was always about finding the best person for the job,” Rajan told businessline.
Other contender
The final decision will be made by consensus among 13 trustees. This includes Mehli Mistry, a close confidant of Ratan Tata, who could be other major contender.
Legal experts said the Tata Trusts should not delay announcing the next leader. Jidesh Kumar, Managing Partner, King Stubb & Kasiva, Advocates and Attorneys said in the absence of a named successor, it could lead to potential delays in decision-making, as well as internal disagreements among trustees. “The resulting leadership vacuum may raise concerns about the Trusts’ ability to continue their governance functions efficiently and in a manner consistent with their historical objectives and the legal frameworks governing trusts in India,” Kumar said.
However, there may not be any impact on Tata group entities. The structure between Tata Sons and Tata Trusts have been clearly demarcated which gives operational control to the holding company. “ The charities would need to appoint someone who could play the role that Ratan Tata did in terms of offering guidance. But many of the group companies are listed entities and they have powerful boards of their own. And to the extent their strategies are working, there may be less requirement for any intervention,” Rajan said.