MUMBAI: Tata Sons’ board has cleared a fresh capital infusion of over Rs 10,000 crore (about $1.1 billion) into Air India, one of its largest commitments to the airline since the Rs 18,000-crore acquisition in 2021, though the approval comes with conditions, people familiar with the matter said.The decision was taken at a June board meeting chaired by N Chandrasekaran and attended by Tata Trusts chairman Noel Tata and vice-chairman Venu Srinivasan. Under Article 121A of Tata Sons’ articles of association, investments above Rs 100 crore require majority backing from Tata Trusts’ nominee directors.The board granted in-principle approval for fresh investment in Air India and other group ventures, subject to conditions, the people said. “Any capital infusion will require Air India and other investee companies to present a business case when funding is sought,” one person said.The approval comes more than a year after Tata Sons paused equity injections into Air India, whose losses more than doubled to Rs 22,238 crore in FY26. The losses were among the key issues that drove a rift between Noel and Chandrasekaran, culminating in the latter’s Aug announcement that he will step down when his term ends in Feb 2027.
Tata Sons’ board is due to meet on Sept 17, a week after Tata Trusts, excluding Sir Ratan Tata Trust (SRTT), meets on Sept 11. SRTT has been barred from holding board meetings since May, pending an inquiry into alleged violations of the Maharashtra Public Trusts Act.The people said the ban does not affect voting rights of Tata Trusts’ nominee directors. Nominee directors, appointed under article 104B, owe their primary fiduciary duty to Tata Sons, and their voting rights under article 121A remain intact unless they resign or are formally removed.Tata Sons’ FY26 report showed its investment in Air India unchanged at Rs 22,618 crore, indicating no fresh equity was injected during the year. The airline relied on borrowings and other financing, pushing outstanding debt to about Rs 40,000 crore across 11 lenders. State Bank of India has the largest exposure at Rs 18,500 crore, followed by Bank of Baroda at Rs 5,938 crore.Tata Sons’ ability to backstop those lenders is also constrained by its decision to stop issuing corporate guarantees or letters of comfort while its application to surrender its core investment company registration awaits RBI approval.Tata Sons owns 73.8% of Air India, employees hold about 1.5% through SBICAP Trustee Co and Singapore Airlines holds 24.7%. To avoid any dilution, SIA would need to invest about Rs 3,350 crore ($351 million) to maintain its stake.Tata Sons and Tata Trusts both declined to comment.
