Tatas plan financial umbrella
The Tata group is forming a new company for financial services that is to be named Tata Capital, report Suprotip Ghosh and Venkatesh Ganesh.business Updated: Jun 15, 2007 00:44 IST
The Tata group is forming a new company for financial services. This company is to be named Tata Capital, according to sources in Tata Sons familiar with the development. Praveen P Kadle, Tata Motors’ chief financial officer would head the new company.
“Tata Sons or Tata Motors will not comment on these issues as a matter of policy,” said a Tata group spokesperson.
According to earlier reports, Tata Capital will have the form of a broad group holding company under which the different businesses will be organised as divisions.
The Tatas have four companies in the financial services segment: Tata Financial Services, Tata Investment Corporation, Tata Securities and Tata Asset Management. Tata Financial Services is an in-house financial consultancy services company that undertakes financial planning for all Tata group companies. Tata Investment Corporation along with Tata Sons is a promoter of Tata Mutual Fund, and Tata Asset Management is one of India’s oldest fund houses with a million-strong investor base.
However, the place of the group's two insurance joint ventures is not clear in this consolidation plan at the moment. The insurance arms, one in life and the other in general, were set up as joint ventures with insurance giant AIG.
Kadle will head this yet-to-be formed company that will bring back the dissolved Tata Finance, which was merged into Tata Motors. Kadle was unreachable for comments. His shoes in Tata Motors will be filled by C Ramakrishnan, vice-president, chariman’s office Nicknamed the turnaround man, Kadle was instrumental in turning Tata Motors around after 2001 when the company reported its biggest loss after its move to enter the passenger car segment in the late 1990s.
In 2000-01, Tata truck and bus sales plunged by 40 per cent, and the company lost Rs 500 crore. It was the first time the company’s profits had gone into the red since 1945, when the company was founded to make railway engines.
Since then, Kadle has been a critical cog in the wheel that has turned an ailing company into India’s automobile powerhouse. He is also credited with the integration and transformation of the erstwhile Telco to Tata Motors.