The Tata Group plans to invest up to Rs. 1.2 lakh crore across sectors in India over the next five years as the group looks to more than doubling its revenues to $150 billion (about Rs. 6.6 lakh crore).
The group, which has over 90 operating companies, will put in half of the planned investment in the power sector, while the other significant portions will be in steel and auto sectors.
“We have become a significant player globally in each of the sectors that we are present in. In the next five years, the pace of growth of the group will continue... The current investment assessment for the next five years is around Rs. 1.1-1.2 lakh crore,” said Kishor A Chaukar, managing director, Tata Industries, the investment arm of the Tata Group.
The group has already invested about Rs. 70,000 crore in the last few years and Rs. 1.2 lakh crore would be in addition to that.
When asked about the expected revenue of the group after the investment Chaukar said, “It will be more than double in less than five years. I think it'll be around $140-150 billion.”
Asked about the mode of funding this investment, Chaukar said it will be a mix of internal accruals and debt.
“We are generating a considerable amount of internal accruals and at the same time also reducing current debt, which will enable us to raise debt. For this investment, the debt and equity ratio will be around 2:1.”
The Tata Group companies clocked an overall revenue of $67.4 billion (around Rs. 299,265 crore) in 2009-10. Out of this, about 57% was contributed by domestic businesses.
“The major sector will probably be power as we are constructing an ultra-mega power project in Gujarat and it requires quite a substantial amount. About half of the planned investment, that is Rs. 50,000-60,000 crore will be by Tata Power in the next five years,” he said.
The other significant investment area will be the steel sector, for which the group has earmarked an investment of Rs. 35,000 crore, over and above Rs. 15,000-16,000 crore that has already been invested.
Besides, Rs. 12,000 crore will be invested by Tata Motors and Rs. 8,000-10,000 crore will be in the telecommunications division, he said, adding, the rest will be in other verticals such as chemicals.