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The recent appointment of Noel Tata, half-brother of the late Ratan Tata, as the new Chairman of Tata Trusts has significantly shifted the power dynamics within the Tata Group. This move places Noel Tata at the helm of the controlling shareholder of Tata Sons, the parent company of the conglomerate, granting him considerable influence over the Rs 34 lakh crore business empire. Tata Trusts, with its 66% stake in Tata Sons, effectively commands the direction of the Tata Group.
The Tata Group, a behemoth founded in 1868 by Jamshedji Nasirwanji Tata, has grown into a global force with over 100 companies operating in more than 100 countries. The group boasts a staggering market cap of $403 billion (approximately Rs 33.7 trillion). While Tata Sons is the holding company, the 14 trusts under the umbrella of Tata Trusts hold the majority of the shares, including land, tea estates, and steel plants. Their revenue primarily comes from dividends and brand loyalty fees.
The power of Tata Trusts stems from its controlling stake in Tata Sons. The two main trusts, Sir Ratan Tata Trust and Sir Dorabji Tata Trust, collectively hold a 52% stake, while the remaining 14% is distributed among other trusts. This structure allows Tata Trusts to exert considerable influence over the Tata Group's operations. It has the authority to appoint and remove directors of Tata Sons, and its approval is crucial for any decision taken by the holding company.
The influence of Tata Trusts became more solidified when Ratan Tata, during his tenure as Chairman, amended the group's rules upon his retirement in 2012. Changes in the Companies Act, allowing Tata Trusts to vote directly in the Tata Sons board, further strengthened their position. This shift, orchestrated by Ratan Tata, cemented the Trusts' power within the Tata Group.
With Noel Tata now at the helm of Tata Trusts, his authority within the Tata Group is undeniable. However, it is important to note that his power is derived from his position as Chairman of the Trusts, not from personal ownership of Tata Sons shares. His personal stake in the company is a separate matter. The significant influence he wields through the Trusts makes him a key figure in shaping the future of the Tata Group.