Even as sparks fly in the boardroom of Tata group’s holding company, Tata Sons, there is one area that ousted chairman Cyrus Mistry and interim chairman Ratan Tata seem to agree on – the importance of the digital business in the group’s future plans.
Neither the digital operations, which have so far seen investments of more than R1,500 crore, nor Tata Industries, which houses a crucial part of the $103-billion conglomerate’s future plans, figured in the letter that Mistry sent to the directors of Tata Sons after his ouster, where he alleged irregularities and corporate governance issues in various group subsidiaries.
The corresponding lack of mention even by the current Tata Sons board about one of the most ambitious moves by Mistry – retail e-commerce Tata Cliq, big data analytics Tata iQ and Tata Digital Health – have also raised questions on whether this is an area that both sides concur.
Mistry has been charting his presence in the group through the digital medium.
While Tata Sons did not respond to queries on the issue, sources in the group said: “It is not appropriate to focus on one business or the other. The current situation is much larger than that. It is not within the limits of any particular business alone.”
Cyrus Mistry’s office did not respond to HT’s queries.
“Mr (Ratan) Tata has been known to promote startups and has personally invested in such entities. So he clearly sees digital as a strong future trend, which will decide the way Indian companies go,” said a person familiar with the group’s strategy.
The Mumbai-based conglomerate with large interests in old economy businesses such as steel, automobiles, chemicals, has been making visible efforts to grow its digital businesses, under the stewardship of Tata Industries executive director KRS Jamwal. Apart from Jamwal, RR Bhinge is the other Tata nominee on board. Incidentally, Mistry continues to be the chairman of Tata Industries and while the board has recently seen the exit of director Nirmalya Kumar, other members on the board include independent directors Ashish Dhawan and Ireena Vittal. There needs to be a vote from at least one independent director in the event of any proposal to replace Mistry.
The group is looking at the three ventures as vehicles to boost future growth. In an earlier interaction with HT, former director Nirmalya Kumar had outlined digital as the growth area for the group, in line with what Mistry also mentioned at an in-house leadership conference.
Among the three, the omni-channel e-commerce market place, Tata Cliq, is the largest and integrates store shopping and online buying. The data analytics firm will be based out of Bangalore and will manage data based on customer approval. The health platform is the third initiative, which connects doctors and healthcare providers with laboratories and diagnostic centers with patients.