Just who will head the sprawling Tata empire after group chairman Ratan Tata’s impending retirement? That question is yet to get a clear answer but investment plans to double revenues over a five-year period show an institutional strength in the industrial house.
However, it is clear that the new chairman would have to play a sheet anchor role in deciding on both organic growth and inorganic mergers and acquisitions.
Functional heads for various group companies, however, are well in place. The chairman is due to retire in December 2012 and his successor may well take a while to fit into his shoes.
The salt-to-software group that gets 57% of its revenues now from outside India aims to take total revenues to $150 billion from the current $67.3 billion by investing in Rs 120,000 crore, according to Tata Industries managing director Kishor A Chaukar. While there may be apprehensions outside on such ambition, bold steps show the mood in Bombay House, the group’s headquarters.
Some Tata watchers say a lot will depend on the functional heads.
“The successor to Ratan Tata will be expected to give strategic advice without necessarily interfering in the individual business plans of various companies,” said the chief executive officer (CEO) of a mutual fund, who did not want to be identified.
But some think the new chairman must be hands-on.
“The targets mean the successor will not just have to maintain what is going on but will have to grow it to the next level and may be look for more markets and more acquisitions,” said Aseem Dhru, CEO, HDFC Securities.
The revenue goal implies a compounded annual growth rate (CAGR) of 17.4%, a no mean task.
A lot would depend on the three group pillars Tata Motors, Tata Consultancy Services and Tata Steel, all of whom have strong overseas revenues.
“In the last four or five years, the group has grown its topline exponentially through acquisitions and it is quite likely that the individual companies within the group may be looking for some inorganic growth possibilities,” said the mutual fund CEO.