An intense boardroom battle is brewing at India’s giant Tata Group

An intense boardroom dispute is brewing for control of Tata Group, the Indian multinational conglomerate that owns Jaguar Land Rover and Air India, and is a key supplier for Apple.

On Thursday, Noel Tata, the heir of the Tata family and the chair of Tata Trusts, said that the reappointment of N. Chandrasekaran as the chairman of Tata Sons earlier in the day was “illegal.”

Noel Tata wants to keep Tata Sons private to safeguard its current ownership, experts said, while Chandrasekaran wants to grow the business by making large, bold bets that require massive capital.

If the dispute lasts beyond six months, as happened 10 years ago, it may delay the prospective listing of Tata Sons — a crucial part of Chandrasekaran’s strategy to get the funding he needs.

“The deadlock could slow down capital-intensive bets in Air India, semiconductors and batteries where leadership continuity and trust are as important as balance sheets,” Jaydeep Mukherjee, professor of Economics at Great Lakes, Chennai, told CNBC. “Tata needs to split operational leadership from shareholder-trust politics.”

Tata Group has made some big capital commitments under Chandrasekaran’s leadership, which in the latest letter to shareholders he described as the building blocks for India’s road to becoming a developed country by 2047.

These include the purchase of beleaguered national carrier Air India in 2022 and follow-up investments for its turnaround, plans to set up a $11 billion semiconductor plant and bets on low-margin electronic assembly work for Apple.

Tata Sons needs over 290 billion rupees ($3 billion) annually to support its loss-making businesses such as Air India, Tata Digital, Tata Electronics, and another 900 billion rupees to invest in the new semiconductor plant, Deven Choksey, managing director of Mumbai-based DRChoksey Finserv, told CNBC.

But it earns little over 300 billion rupees in dividends, he said, leaving a large funding gap. Listing the company might be one way to rectify that — Tata Sons could fetch a gross valuation of over 12 trillion rupees, Choksey said.

Last month, Chandrasekaran had expressed his displeasure over the delay in finalizing his reappointment and announced that he would not seek another term. The decision was accepted by the Tata Trusts, and it advised Tata Sons to initiate the process for setting up a selection committee for appointing a successor.

On Thursday, however, Tata Sons said in a release that its board, with a “majority vote,” approved the re-appointment of…