Mumbai: After solving some of the challenges he inherited in the first year, Tata Sons Ltd chairman N. Chandrasekaran is set to focus on new businesses in the fields of smart mobility and smart cities.
Chandrasekaran will also consolidate the group’s disparate defence businesses into Tata Defence, which will then emerge as the country’s largest defence company, a person with direct knowledge of the matter said on condition of anonymity.
Tata Defence, instead of just supplying products to the armed forces, will provide complete solutions to the forces including their attire and gear. Tata Power, on the other hand, will expand in the mobility space including setting up charging infrastructure for electric vehicles.
The company will also play a crucial role in the Tata group’s ambitious smart city projects, which is being developed on the lines of Jamshedpur.
“Essentially, in terms of simplifying the group structure, the basic call is to look at the group as a cluster and aligning companies to these clusters to bring in more synergies in terms of common platforms and supply chain,” the person said.
A Tata Sons spokesperson declined to comment on the story.
All Tata companies will be classified into 7-8 sectors rather than over 100 operating companies right now.
Tata Consultancy Services Ltd (led by chief executive Rajesh Gopinath); Tata Steel Ltd (led by chief executive T.V. Narendran); and Tata Motors Ltd (led by chief executive officer Gunter Butshcek), will function as three separate clusters.
Banmali Agarwal, a former top GE India executive, will lead the fourth cluster that would consist of Tata’s businesses in aerospace, defence and infrastructure space.
All the Group’s consumer businesses including food, beverages, Titan Co. Ltd, etc will come under the fourth cluster.
The group’s hospitality businesses including hotels and airlines will be the fifth cluster and the telecom business including direct-to-home services and fixed line will become the sixth cluster.
Tata Capital chief executive Rajiv Sabharwal is responsible for bringing all of group’s financial businesses under one cluster. They include Tata Capital, Tata Mutual Fund, Tata-AIA and TATA AIG.
The move is in line with Chandrasekaran’s objective of simplifying the holding structure of the group and allocating capital more efficiently.
The plan will help the 150-year-old conglomerate that boasts of an expansive presence, from steel and automobiles to technology and infrastructure, to become more agile and strengthen its presence in existing segments.
“Leadership of the big companies are being worked with chairman and CEOs and CXOs—to bring simplification in their structure—reducing number of subsidiaries, closing down ineffective subsidiaries, removing cross holdings, etc” the person cited above said.
Challenges, however, remain related to making the group’s three-tier structure that comprises Tata Trusts, Tata Sons and Tata group companies, more robust and accountable.livemint