N Chandrasekaran plans to merge over 1,000 Tata subsidiaries: Report
The process of reducing the number of Tata group’s operating companies will take 12-18 months.
MoneyControl: As he enters his third year as the Chairman of Tata Sons, N Chandrasekharan plans to shrink over 1,000 subsidiaries of the Tata Group, to make it easier to manage. He will also try to stabilise loss-making Jaguar Land Rover unit on priority and pave a better way for its weak aviation and infrastructure businesses, a senior official told The Economic Times.
The Tata Group will foray into the e-commerce business, and it has applied to register at the ministry of corporate affairs. The official added that the business model will be different than that of Flipkart and Amazon.
“The group has over 1,000 subsidiaries. We don’t need so many. A restructuring of this kind is going on in every large Tata operating company. The number of subsidiaries that are tackling runs to a dozen in some companies,” the person said.
The process will take 12-18 months as the company is yet to obtain the required consents. Apparently, one group company has 33 subsidiaries and 33 boards. Hence, Tata Sons will work on reducing the number of operating companies it owns.
The official said that on the retail front, the company is doing much better with a quick rollout of Titan, Westside and Croma outlets as compared with previous years. The company will also ramp up Star Bazaar’s model, as it is bullish on the retail business. Meanwhile, JLR needs to be “nursed back to profitability”. Tata Motors had to write down 3.1 billion pounds as impairment charges due to Brexit and problems in the China market, and the official dismissed talk of any further impairments.
A group director, on condition of anonymity, said that Chandrasekaran has a better understanding of issues of the company now. “Instead of the initial narrative of just focusing on growth and deal-making, the strategies are well-considered,” the director added.
Chandrasekaran has been pushing the company to focus on India rather than the overseas market. “In India, there is a lot of demand. Once the European merger goes through for Tata Steel, we’ll be completely focussed on India,” the executive said.
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