Tata Group to rationalise portfolio of companies, to take tough calls: N. Chandrasekaran
Mumbai: Tata Group is trying to dramatically reduce the number of companies in your portfolio and make tough calls to companies that do not have performance and debt even when it wants to be much more disciplined on capital allocation in companies group, N. Chandrasekaran, CEO of Tata Sons, told Economic Times on Monday.
The rationalization of the portfolio from 110 to a maximum of five six or seven will help the conglomerate 150 years, it boasts an expansive presence of steel and automotive technology and infrastructure to simplify the complex structure, as it seeks to be more agile and strengthen its presence in existing segments.
“We like to see ourselves as 5, 6, 7 groups opposed to 110 companies. The more we consider ourselves as 110 or 120 companies, nothing will be done, “he said in the interview with the financial daily. To achieve the goal, Tata Sons explore all the options of consolidation or virtual vision, to reduce the subsidiaries in their quest to “create value” Chandrasekaran, who took office on February 21 after Cyrus’s withdrawal said – P. P. Mistry as chairman of the group on 24 October.
Among other things, Tata Teleservices, the telecommunications branch of the bleeding group, will surpass Chandrasekaran’s priority. “Tata Teleservices is in very bad shape … There are important things, but some are urgent. Like Tata Teleservices. It needs urgent attention, “he said. If Tata Teleservices needs to be revived and must remain in the game, it would require a commitment of another crore Rs50,000 to Rs60,000 crore, he said in the ET interview.
“Ideally, our interest will be to get out of the wireless business. We need to see if we can bring these companies together,” he said in the interview. Mint reported on September 27 that as the group drops out of mobile telephony, it is evaluating other options for more profitable companies, such as fiber optics.
In 2016-17, Tata Teleservices Rs11,650 crore equity was eroded while their losses were extended to Rs4,617 crore, compared to a loss of Rs2,409 crore a year ago, according to the presentations company with the Registrar. Turnover fell to Rs 9,666 million in FY 2017 from Rs. 10,708 million a year ago. In an interview with CNBC TV18 on Monday, Chandra said he would take a call within the current prosecutor.
Meanwhile, Tata Sons will rigorously review the allocation of capital to a Tata company. He would be “stingy of capital”, unless he is convinced that he has a business case, Chandrasekaran said in the ET interview. The next thing I would do is to “bring the One Tata concept” back in terms of leadership development and talent management. “All aspects, skills, talent opportunities, CSR consumers to leverage the power of the group is multiple if we can bring together,” he said.