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Tata group to invest Rs 1.2 trillion in 5 years; aims for $150 bn revenue

Tata group to invest Rs 1.2 trillion in 5 years; aims for $150 bn revenue
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First Published: Mon, Apr 18 2011. 12 27 AM IST
Updated: Mon, Apr 18 2011. 12 27 AM IST
New Delhi: Diversified conglomerate Tata group will invest up to Rs 1.2 trillion across sectors in the domestic market in the next five years as it looks to more than double its revenue to $150 billion (around Rs 6.64 trillion).
The group, which has over 90 operating companies, will put in half of the planned investment in the power sector, while other significant portions will be in steel and automobiles.
“We have become a significant player globally in each of the sectors that we are present in. In the next five years, the pace of growth of the group will continue,” Tata Industries managing director Kishor A. Chaukar said.
“The current investment assessment for the next five years is around Rs 1.1 lakh crore to Rs 1.2 lakh crore,”Chaukar said.
Tata Industries is an investment arm of Tata group.
The investment has been planned essentially for the Indian market and will be pumped in across various sectors such as power, steel, automobiles, telecommunications and chemicals, he said while announcing the ambitious road map for doubling turnover of the group in less than five years.
Chaukar said the Mumbai-based group has invested around Rs 70,000 crore in the last three years and the Rs 1.2 trillion would be in addition to this.
When asked about expected revenue of the group after the investment, Chaukar said: “It will be more than double in less than five years. I think it’ll be around $140 billion to $150 billion.”
The group has expanded to nearly $68 billion at present from around $8 billion 10 years ago, and it will maintain such growth, he added.
The mode of funding the investment will be a mix of internal accruals and debt, he said.
“We are generating a considerable amount of internal accruals, and at the same time, also reducing current debt, which will enable us to raise debt,” Chaukar said.
“For this investment, the debt and equity ratio will be around 2:1,” he added.
Tata companies clocked an overall revenue of $67.4 billion (around Rs 3.19 trillion) in 2009-10.
Out of this, about 57% was contributed by the domestic businesses.
Elaborating on investment plans, Chaukar said: “The major sector will probably be power as we are constructing an ultra-mega power project in Gujarat, and it requires quite a substantial amount. About half of the planned investment, that is Rs 50,000-60,000 crore, will be by Tata Power in the next five years.”
The other significant investment will be in steel, for which the group has earmarked an investment of Rs 35,000 crore, over and above the Rs 15,000-16,000 crore it has already invested, Chaukar said.
“Besides, Rs 12,000 crore will be invested by Tata Motors, and Rs 8,000-10,000 crore will be in the telecommunications division,” he said.
While the rest will be in other business segments, such as chemicals, and Tata Sons Ltd, which invests capital in areas like retail, Chaukar said.
Chaukar said the group will look at acquisitions depending on opportunities.
The group has operations in over 80 countries in six continents, and its companies export products and services to 85 countries.
The group, which employs around 395,000 people globally, is present in seven sectors—communications and information technology, engineering, materials, services, energy, consumer products and chemicals.
The major Tata group entities include Tata Steel Ltd, Tata Motors Ltd, Tata Consultancy Services Ltd, Tata Power Co. Ltd, Tata Chemicals Ltd, Tata Global Beverages Ltd, The Indian Hotels Co. Ltd and Tata Communications Ltd.
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First Published: Mon, Apr 18 2011. 12 27 AM IST