Independent director urges Noel Tata to refocus Tata International amid losses

The director, Harish Manwani, a veteran of global fast-moving consumer goods giant Unilever, shared his views with Noel Tata, chairman of Tata Trusts—the promoter of Tata Sons—during a board meeting of the latter last week. The meeting was also attended by Tata Sons chairman Natarajan Chandrasekaran and other board members.

At the meeting, Manwani pressed Noel Tata to clarify the strategic purpose of Tata International, highlighting the need for clearly defined objectives, according to the executives cited above who spoke on the condition of anonymity.

He suggested that the privately held trading and distribution arm of the Tata Group risks remaining an entity with a loosely organized mix of activities that relies on short-term transactional opportunities.

“Manwani questioned TIL’s strategic purpose and suggested focusing on trading to avoid remaining unfocused and transactional," the first executive said. “He emphasised the necessity for a robust strategy to drive recurring profits."

Notably, Tata International, which primarily trades iron ore, coal and agricultural goods, including oilseeds and pulses, has been in losses for the past two fiscal years.

Manwani’s observations came following Tata Sons’ decision in a board meeting last September to invest ₹1,000 crore in Tata International, along with a commitment to provide additional funding. At that meeting, Noel Tata revealed plans to bring in external partners to infuse additional capital and intent to invest $100 million in two joint ventures with Mitsubishi Corp. and Mercuria, as reported by Mint in its edition dated 14 September.

In the meeting earlier this month, Noel Tata acknowledged the strategic challenge for Tata International, explaining to the board the factors behind the company's losses. He noted that Tata International needs a total of ₹3,000 crore, but is currently seeking only ₹1,000 crore in new capital.

Tata Trusts chairman Noel Tata also serves as the chairman of the seven-member board of Tata International, which includes managing director Rajeev Singhal, Tata Steel chief executive officer (CEO) T.V. Narendran, and Tata Chemicals CEO R. Mukundan. Noel also serves as chair of Trent Ltd, Voltas Ltd and Tata Investment Corp. Ltd.

An email sent to Tata Sons seeking a comment on the discussions went unanswered.

The first executive cited earlier attributed Tata International’s ₹477 crore loss last year to trading remaining a low-margin business and forex losses. Some of the other reasons cited by Noel Tata were the cancellation of an exploration licence in Madagascar and the restructuring undertaken by the company.

Tata International ended FY25 with revenue of ₹31,868 crore, with trading generating 84% ( ₹26,251 crore) of the revenue, and distribution and manufacturing accounting for 9% and 7%, respectively.

Tata International last reported a profit of ₹100.23 crore in the year ended March 2023, followed by a loss of ₹213 crore in 2024 and a loss of ₹477 crore last year.

Tata Sons, the primary holding company for the conglomerate, has invested about ₹780 crore to increase its stake to 66.85% in Tata International.

Since 2020, the company's turnover has doubled; however, both profitability and net worth remain a challenge, with the company needing a “repair both on the balance sheet and on the operating side", according to the second executive cited earlier.

Additionally, Tata Group companies, such as Tata Chemicals and Tata Steel, have their own divisions exporting their products, which can sometimes compete with the trading subsidiary of the Tatas.

Tata International’s annual report points to the fact that India contributed 37% of the business, while Asia accounted for 48%, Africa 7%, and the remaining 8% coming from the rest of the world.

The second executive emphasised that, as a trading company, Tata International should be profitable, particularly considering that other group companies have export divisions.