Chandra reiterates need for Tatas to consolidate

NEW DELHI: Tata Sons Ltd chairman N Chandrasekaran reiterated the need for the $100.3-billion group to consolidate as he focuses on returns and capital allocation, in an interview to the group’s in-house magazine.

He also described India as the fastest growing market for group businesses.

“We have far too many companies in the Tata group and some level of consolidation is essential. Our aim should be to achieve the optimal level of consolidation without losing the entrepreneurial spirit we are famous for. We have not worked out all the details. We have our thoughts on this and we will consider them carefully,” Chandrasekaran said in the interview to Tata Review.

Under the new chairman, the group’s strategy is to create clusters that will provide focus and drive growth under a so-called “One Tata” approach. After taking charge, Chandrasekaran has overseen the merger of Tata Steel Ltd’s European unit with Thyssenkrupp AG. He also sold the debt-ridden consumer mobile business to Bharti Airtel Ltd virtually for free.

“One of the initial areas of focus has been on building a team with the requisite skills to get the immediate job done. From a business perspective, we have focused on situations that required priority intervention, such as the Tata Steel-thyssenkrupp merger and the Tata Teleservices-bharti deal. Suffice to say, we are focused on the issues that need our attention,” said Chandrasekaran.

He, however, emphasised that the group would not exit businesses indiscriminately. “I have clearly stated the emphasis on returns and capital allocation, but that does not mean we will exit a business that does not meet our targets. We will always work hard together to realise the potential of every Tata business. There will be times, though, when hard decisions are inevitable.

In the interview, Chandrasekaran also talked about the business opportunities in India.

“The opportunity for many of our businesses in India is fantastic. They should use this opportunity to make investments and participate in and contribute to India’s growth story. I’m quite bullish about the country’s economic prospects. No other market, I believe, is going to grow faster than India in the next 10-20 years.”