N Chandrasekaran's exit puts Tata Digital, semiconductor bets in focus

Tata Digital's continuing losses and the long gestation period of the group's semiconductor projects have come under sharper scrutiny amid questions over future funding

As N Chandrasekaran, chairman of Tata Sons, announced his resignation after nearly a decade at the helm of the salt-to-software conglomerate, his tenure will also be remembered as a period when the group forayed into diverse segments such as digital commerce and semiconductors.

 

But questions raised by the board during recent deliberations over how long these businesses would remain loss-making have brought some of these bets under scrutiny.

 

While the group’s foray into semiconductors and its decision to set up the country’s first fab have been lauded, the entry into and performance of the digital business under Tata Digital have been contentious.

   

Media reports have suggested that the board was divided over the need for continued funding for these businesses as they continued to report losses.

 

Tata Digital reported a loss of ₹ 4,974 crore in FY26, even as revenue touched ₹35,990 crore.

 

The group has invested around ₹26,000 crore in the business, mainly across its platforms BigBasket, 1mg and Tata Cliq. But with the emergence of quick commerce and the need to compete with rivals, the group will need to continue investing.

 

Moreover, Tata Digital has been affected by leadership churn. The current chief executive officer, Sajith Sivanandan, is the third so far, and every leadership change has led to an overhaul of senior management. Under Sivanandan, the company also saw layoffs as he rejigged the firm.

 

Under its semiconductor initiative, Tata Electronics is investing roughly ₹91,000 crore to set up a fab plant in Dholera and ₹27,000 crore in an upcoming outsourced semiconductor assembly and test (OSAT) facility.

 

The projects also receive subsidies from the central and state governments. However, both remain at an early stage of development.