Five years of stability

If there is one thing Chandra’s tenure at Tata Sons from 2017 to 2022 will best be remembered for, it is stability. In late 2016, Cyrus Mistry was ousted from the chairmanship of Tata Sons and in the midst of the legal wrangles, the need of the hour was stability, predictability and a sense of investor confidence. That is something Chandra has provided amply to the group as a whole and to the Tata group shareholders over last 5 years. 

Group market cap boost

One of the big changes that Chandra did usher in the Tata group was the focus on shareholder value, which is captured by the market cap. In the last 5 years, the Tata group market cap appreciated by 190% when the Nifty market cap was up just about 132%. Today, Tatas are the most valuable group with an overall market cap in excess of $300 billion. One can argue that TCS is still the dominant player with over $200 bn market cap, but the share of TCS has come down from 85% to 70%. Other Tata group stocks like Titan, Tata Steel, Tata Motors and Tata Consumer have all been instrumental in generating huge value for shareholders in last 5 years. 

Simplifying the group business

When Chandra took over, almost every group company was into every possible activity. That has been simplified. For example, salt was taken out of Tata Chemicals and added to TCPL. Similarly, the defence businesses under various group entities were consolidated. The big contribution to the value accretion in the last five years has been gradual reduction in debt of companies like Tata Motors and Tata Steel. While TAMO is still making losses, Tata Steel has made the best of the commodity cycle. Above all, both Tata Motors and Tata Power are at the forefront of the green shift in their respective industry groups.  

Making Tata group tech-savvy

The Tatas surely could not get a more apt person than the former head of TCS to drive the tech shift. The Tata App is already work in progress wherein all the retail properties and interfaces would be integrated into a single front-end. One of the big tasks that Chandra is putting in place is to convert the staid group from a process based business house to a technology driven business house. It is on these lines that Tatas are making a big bet on online retail with acquisition of stakes in Big Basket and 1MG, the online pharma retailer. One big change that Chandra is attempting in the next 5 years is to bring about better alignment between capital allocation and  market value. That will be the big challenge!