Tata Group to bring consolidation, simplification into play: Chandrasekaran

Tata Group, India’s largest conglomerate is looking to simply overlapping business operations, prune its expansive portfolio by consolidation and creating new business clusters like defence, infrastructure, consumer and retail, financial services and hotels and airlines. It also aims to support the growth of three of its largest companies, Tata Consultancy, Tata Steel and Tata Motors. Read more

In an interview with Economic Times, Tata Sons chief N Chandrasekaran said, “We would like to see ourselves as 5,6,7 groups as opposed to 110 companies. The more we see ourselves as 110-120 companies, nothing will get done.”

Chandrasekaran had taken charge as the chairman of Tata Sons about eight months ago, after a bitter boardroom battle that saw the ouster of Cyrus Mistry. He also emphasised that he wouldn’t shy away from tough decisions to drive agility, increase accountability and ensure high performance.

Reducing cross-holdings among the 150-year-old conglomerate has been one of the top priorities of the chairman since he took charge on February 21. In order to achieve the objective of simplification, Tata Sons will explore all options from consolidation to reducing subsidiaries as it seeks to create value. This was in line with the ‘One Tata’ focus by Chandra.

Its 50:50 joint venture with ThyssenKrupp will form Europe’s second largest firm, after ArcelorMittal. Tata Steel has said it would shift 2.5 billion euros of its debt to the new entity. ThyssenKrupp would also be shifting its liabilities worth 3.6 billion euros that it had gathered from its pension schemes.This partnership will give a financial boost to Tata Steel and will help to create a strong, clean balance sheet. “We have delinked the Indian and European operations of Tata Steel,” Chandra said. Read more

Talking of the loss-making telecom arm, Tata Teleservices, he said that it needed urgent attention. However, in order to be revived, it would require an investment of Rs 50,000-60,000 cr. This he believed would make little sense. Read more

In an interview with CNBC-TV18, excerpts of which were released on Monday, he also expressed the group’s interest into the Air India disinvestment.

He promised to scrutinise capital allocation to a Tata company, rigorously. “Unless we are fully convinced, we will be stingy with capital. I think for the right project we will find money.”

Extending the One Tata concept to the workforce, he said they were working towards building a new team. Talking about changes in the composition of the board, he said, “With the right set of people and collaboration, you can do it.”

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