N. Chandrasekaran says Tata Group will take tough calls on non-performing, debt-laden companies even as it strives to be far more disciplined in capital allocation in group firms
Mumbai: Tata Group is looking to drastically prune the number of companies in its portfolio and take tough calls on non-performing, debt-laden companies even as it strives to be far more disciplined in capital allocation in group firms, N. Chandrasekaran, executive chairman of Tata Sons, said in an interview to the Economic Times, published on Monday.
The rationalization of the portfolio from the current 110 to a maximum of up to five six or seven will help the 150-year-old conglomerate that boasts of an expansive presence from steel and automobiles to technology and infrastructure, to simplify the complex structure as it seeks to be more agile and strengthen its presence in the existing segments.
“We would like to see ourselves as 5, 6, 7 groups as opposed to 110 companies. The more we see ourselves as 110 or 120 companies, nothing will be done," he said in the interview to the financial daily.
To achieve the objective, Tata Sons will explore all options from consolidation or a virtual view, to reducing the subsidiaries as it seeks to “create value", said Chandrasekaran, who took the top job on 21 February after the holding company removed Cyrus P. Mistry as chairman of the group on 24 October.
Among other things, Tata Teleservices, the group’s telecom arm that has been haemorrhaging, will top Chandrasekaran’s priority. “Tata Teleservices is in really bad shape... There are important things but some are urgent. Like Tata Teleservices. It needs urgent attention," he said. If Tata Teleservices has to be revived and it has to stay in the game it would require a commitment of another Rs50,000 crore to Rs60,000 crore, he said in the ET interview.
“Ideally, our interest will be to get out of the wireless business. We have to see if we can bring these enterprises businesses together," he said in the interview.