The board of Tata Sons has approved the public listing of India's biggest conglomerate at a highly contested meeting where it also gave its chair, N Chandrasekaran, a five-year extension. The board decision on Thursday dramatically reversed Chandrasekaran's previously announced plan to step down in February amid a bitter boardroom battle with Noel Tata, the family scion who heads Tata Trusts, the charitable bodies that own two-thirds of Tata Sons' shares.

However, Tata Trusts immediately contested the vote to extend Chandrasekaran's tenure as chair, saying it was "illegal". The extension and the board's decision to abide by the Indian central bank's directive to take Tata public were passed by majority, with only Noel Tata opposing the two decisions, according to two people briefed on the meeting. The Tata Sons board had "resolved by a majority vote" to reappoint Chandrasekaran as executive chair "for a further term of five years upon the expiry of his current tenure", the company said in a statement.

The board also "resolved to initiate steps to comply" with the Reserve Bank of India's order to list the Tata holding company and would "seek guidance from RBI, Tata Trusts and other stakeholders on applicable compliance requirements", the statement said. The RBI at the weekend rejected an appeal by the software-to-Range Rover maker conglomerate for an exemption from rules requiring it to list its holding company. A listing may value Tata Sons at more than $120bn, according to analyst estimates, which would make it India's largest-ever initial public offering.