Tata Group Has ‘Far Too Many’ Companies, Says N Chandrasekaran
Tata Sons chairman stresses on the need to consolidate businesses.
Tata Sons chairman N Chadrasekaran has once again stressed the need for the salt-to-software conglomerate to cut down on the number of businesses it owns.
“We have far too many companies in the Tata group and some level of consolidation is essential,” Chandrasekaran told Tata Review, the in-house magazine of the group.
Our aim should be to achieve the optimal level of consolidation without losing the entrepreneurial spirit we are famous for.N Chandrasekaran, Chairman, Tata Sons
Chandrasekaran took over the reins of the $100-billion group in February after a messy boardroom and legal battle triggered by the ouster of former Chairman Cyrus Mistry. He had warned of writeoffs worth Rs 1.18 lakh crore from “legacy hotspots”, referring to debt-laden and non-performing companies within the group.
The Tata Group has over 100 companies that span diverse businesses. However, a huge chunk of its revenue comes from two of them – Tata Consultancy Services Ltd. and Tata Motors Ltd. Chandra, as he is called, was tasked with improving the operating performance, capital allocation and boosting shareholder returns. “We have to be performing at the highest level in every business we are in,” he said.
While the emphasis on returns and capital allocation remains intact, the group will not necessarily exit a business just because it is underperforming, Chandrasekaran said.
We will always work hard together to realise the potential of every Tata business. There will be times, though, when hard decisions are inevitable.N Chandrasekaran, Chairman, Tata Sons
Since his arrival at the Bombay House, Tata Group companies have seen several leadership changes. Chandrasekaran said he is trying to enhance the group’s “core capabilities”.
He added that the group will now focus and shape itself to adapt to the “rapidly evolving digital world”. Digitisation is an area where the group has “lot a to achieve”, Chandrasekaran said. “The world is changing rapidly; every physical aspect now has a digital overlay. Tata companies have to think through their digital journey,” he explained.