Tata Sons bets on a trusted face for the next phase

Tata Sons’ decision is the seal of approval for Chandrasekaran’s group operations, which have led to nearly three-fold increase in the market value of all group companies in their first term despite disruptions, especially the coronavirus pandemic.

Ratan Tata, family scion and chairman emeritus, who was a special invitee to the board meeting on Friday, expressed satisfaction over the progress and performance of the Tata group under Chandrasekaran, according to a statement by Tata Sons. The board members lauded Chandrasekaran’s performance and unanimously approved his reappointment.

Chandrasekaran said, “It has been a privilege to lead the Tata Group for the last five years, and I am delighted to have the opportunity to lead the Tata Group over the next five years.” Managing Director of Tata Consultancy Services Limited, India’s top software services exporter.

Chandrasekaran took over as chairman in 2017 after a tumultuous boardroom battle that saw Cyrus Mistry ousted as chairman.

Under Chandrasekaran, the market capitalization of all listed Tata group companies climbed 8.16 trillion by Jan-end 2017 23.46 trillion as of Friday.

Tata Sons is the principal investment holding company and promoter of Tata companies. Charitable trusts hold 60% of Tata Sons’ equity share capital, which support education, health, livelihood generation and arts and culture. The Trust is run by Ratan Tata.

In 2020-21, the Tata group of 30 companies across 10 verticals reported combined revenue of $103 billion ( 7.7 trillion). These companies collectively employ over 800,000 people.

There are 29 publicly listed Tata enterprises with a combined market value of $314 billion ( 23.4 trillion) by the end of December. These include Tata Consultancy Services, Tata Motors, Tata Steel, Tata Chemicals, Tata Consumer Products, Titan, Tata Capital, Tata Power, Tata Communications, Indian Hotels, Tata Digital and Tata Electronics.

Under Chandrasekaran’s leadership, the group recently took over control of loss-making national carrier Air India.

Under Chandrasekaran’s tenure, the group shifted its focus to digital businesses, where it has been building an e-commerce superapp, along with exiting some struggling businesses such as wireless telecom.

In a year-end communication to employees, Chandrasekaran highlighted digital, new energy, supply chain resilience and health as key focus areas for the group in the coming years.

“Our companies are already embracing these changes, and we are seeing a strong performance. Our new pilots and businesses, from 5G to TataNeu and Tata Electronics, are set to benefit from these four themes,” he wrote .

On the digital front, the group has made several acquisitions and investments over the past year, beginning with buying a controlling stake in online grocer BigBasket, followed by the acquisition of online pharmacy 1mg. The group also picked up a controlling stake in telecom gear maker Tejas Networks in 2021, announcing plans to invest heavily in manufacturing mobile phones and components under Tata Electronics.