Tata Sons board discusses way forward at London

Chairman will present future course next month to group leadership

For the past two days, St James’ Court, a Taj Hotel in London, became Tata Group’s de-facto headquarter with its board deliberating on the company's future course under new chairman N Chandrasekaran. Chandra, as the chairman is popularly known, took over the reins of $104-billion group in February.

This is the second consecutive year when the conglomerate's board is meeting outside India, emphasising its global aspirations. On top of the agenda was the future course for stressed businesses such as Tata Steel Europe and Tata Teleservices.

In February, debt ridden Tata Steel signed a definitive agreement to sell its UK specialty steels business to Liberty House Group for £100 million (~838 crore). The company has been holding talks to merge its European steel business with Germany's Thyssenkrupp for a year now. Last month, German labour union IG Metall demanded Thyssenkrupp should end merger talks. The strategy for Tata Steel was one of the key discussion points for the 10member board that includes group’s financial veteran Ishaat Hussain.

“Future course of action for Tata Steel and Tata Teleservices with various options were deliberated by the board for the two days,” a person familiar with the developments said. "Inputs provided by all members have been taken and the future course finalised," he added.

Also, the strategy for growth under Brexit in UK and immigration challenges in the US were discussed. The group earns over 67 per cent of its $104-billion revenue from outside India. Out of this, a major chunk comes from Jaguar and Land Rover, Tata Steel Europe and Tata Tetley, which are based in UK.

Chadra presented his strategy to rationalise the business portfolio of the group, which has over 100 companies. The strategy includes creating six to eight business groups so that synergy can be created among the overlapping businesses. Retail, infrastructure, information technology and defence are some of the proposed groups. Also, the names that can head some of the groups were discussed.

Former chairman Cyrus Mistry had also created four business clusters for the group, which could not really take off. Chandra wants to ensure that synergy among the group is achieved — especially for businesses such as defence, where combined strength will be required to fight competition.

The board, which includes Vijay Singh, Nitin Nohria, Ronen Sen, Farida Khambata, Venu Srinivasan, Ajay Piramal, Amit Chandra and Ralf Speth, provided its view on Chandra’s plan for creating synergy. “All the input from the board members will now be incorporated in the final strategy that Chandra is going to present to CEOs of the group next month at the Annual Group Leadership Conference,” another person familiar with the board meet said.