Tata Sons likely to earn record Rs 27,797 crore from its listed firms

 The analysis is based on the annual dividend paid/declared by listed Tata group companies every financial year

Tata Sons, India’s biggest promoter in the private sector, is expected to earn a record Rs 27,797 crore via equity dividend and proceeds through share buyback from its listed group companies for the financial year 2021-22. This amount is up 17.6 per cent from Rs 23,663 crore that it pocketed in FY21. Nearly two-thirds of these proceeds will show up in Tata Sons’ financial results for FY22, thanks to the quarterly interim dividend by its cash cow Tata Consultancy Services (TCS). The software major also completed its Rs 18,000 crore worth of share buyback programme for FY22 …

Tata Power to raise Rs 2,600 crore from Tata Sons via preferential issue

Tata Power board approves setting up of renewables InvIT

Company News: Private power producer Tata Power on Thursday said the company’s board had approved an increase in its promoter Tata Sons’ stake to 45.2 per cent for Rs 2,600 crore. Tata Power’s board also approved setting up an infrastructure investment trust (InvIT) for its renewable business on Thursday. The move, the company said, is part of a strategic turnaround plan.

The company in its statement said Tata Power would raise Rs 2,600 crore through a preferential issue to Tata Sons at a price of Rs 53 per equity share. The issue price for the equity shares has been fixed, representing 15 per cent premium to Wednesday’s closing price. Pursuant to the equity issue, Tata Sons’ shareholding will increase to 45.21 per cent, from 35.27 per cent. Consequently, Tata Group’s shareholding will increase to 46.86 per cent, from 37.22 per cent.

In its statement to the BSE, Tata Power said, “The board of directors of Tata Power has approved issuance of 490,566,037 equity shares on a preferential basis to Tata Sons for an aggregate consideration of Rs 2,600 crore.” The issue is subject to approval and Tata Power will seek shareholder approval at its annual general meeting on July 30...

Srinath, Tata Teleservices MD, emerges frontrunner for Tata Trusts CEO post

Tata Trusts was established in 1919, but the activities took off in a big way when Sir Dorabji Tata set up a trust in 1932

At a time when Tata Trusts is caught in a legal tangle over the cancellation of registration of six trusts, it’s set to get a chief executive officer (CEO). After a search process stretching over more than eight months, an old-timer from the group, N Srinath, managing director, Tata Teleservices, has emerged a frontrunner for the CEO’s post, according to sources in the know. Tata Trusts does not have any comment to make, a spokesperson told Business Standard on the matter.

In February, R Venkataramanan (popularly known as Venkat) had stepped down as managing trustee of Tata Trusts, which owns 66 per cent in the salt-to-software group’s holding company Tata Sons. The new CEO, likely to be appointed soon, would possibly have similar powers as Venkat, but he won’t be designated managing trustee.

A search committee, headed by the group’s chairman emeritus Ratan Tata, has over the last many months interviewed several internal employees as well as professionals from elsewhere to select a CEO. A final call on the selection of the CEO is expected to be taken by the committee before the year ends. Venkat’s resignation followed the Income-Tax Department’s scrutiny of his annual salary of Rs 2.66 crore, and the subsequent withdrawal of tax exemption given to Sir Dorabji Tata Trust, which is the largest among the clutch of trusts under Tata Trusts.

TCS spend on employees is justified: Tata Sons chairman N Chandrasekaran

Chandrasekaran said sometimes specialist skills don’t depend on the qualifications but on the employee’s experience

Tata Consultancy Services (TCS) shareholders cheered the company’s movement to the spot ahead of IBM in market cap at the 24th annual general meeting on Thursday, though many of them were apprehensive of the rising employee cost, especially retaining some staff beyond the age of 60 and even in some cases 72. Some of them raised concerns that the company may be splurging a lot of money given that over 100 employees now earn more than Rs 1 crore towards salary.

Tata Sons Chairman N Chandrasekaran, however, justified the employee costs. “It’s not correct to say that the company is paying too much to the top management. If you see, TCS management deserves a lot of credit across the board for producing excellent results and the company would like to reward them,” he said.

Chandrasekaran, who had a long stint at the TCS helm before taking over as the chairman of Tata Group, said sometimes specialist skills don’t depend on the qualifications but on the employee’s experience. “Some employees have been requested to work with us despite crossing their retirement age,” he said, “because of the value addition they offer to a very complex organisation”. While the company will not compromise on the industry leading employee cost to revenue ratio, they will seek to optimise cost further, he said.

Among other top concerns the shareholders raised were about the need to have more clarity on digital revenues and various technology areas within the new technology services to which the company attributes 28 per cent of its revenues.

NCLT overrules Mistry in Tata boardroom battle, says he lost board’s trust

Mistry, who was the sixth chairman of the group, was removed from the position in October 2016

 

The National Company Law Tribunal (NCLT) dismissed on Monday Cyrus Mistry’s plea against his ouster as the chairman of the Tata Sons group and allegations of mismanagement in the company, TV news channels reported.

NCLT ruled that Mistry openly went against the board of directors, according to the reports. NCLT also said the board was competent to remove an executive chairman, a ruling that is being viewed as a vindication of the group after a long-drawn boardroom battle.

Mistry’s petition filed under the Companies Act claimed that his removal was due to the result of mismanagement by the board’s trustees and oppression of minority shareholders of the group. (TATA MOTORS SHARE PRICE)

“This has never been a battle of egos, but fight for good governance. (We) will look to appeal on all counts,” ET Now quoted Mistry’s counsel as saying.

Mohan Parasaran, counsel for Ratan Tata, told ET Now: “(We) Have to see fineprint of the NCLT order. I believe all appeals have been dismissed.” Parasaran also told CNBC-TV18 that the plea with regard to the conversion of Tata Sons into a private company would be heard later. Parasaran added that Mistry might file an appeal in 2-3 weeks against the NCLT’s order.Mistry, who took over as the chairman in 2012 after Ratan Tata announced his retirement, was removed from the position in October 2016.

His ouster sparked a lengthy corporate feud involving an unprecedented war of words in the Tata Group’s 150-year-old history. Both sides exchanged barbs through defamation suits, hundreds of affidavits and references to past emails and letters.

Mistry’s camp alleged excessive interference by Tata Trusts and said Ratan Tata’s influence was behind Mistry’s ouster. But NCLT said Mistry was removed because the board and its members lost confidence in him, according to news agency PTI.

Article Source : BS

Tata Motors hits over 5-year low; stock falls 41% in 2018 on JLR concerns

The stock dipped 5% to Rs 253 in intra-day trade after the CEO of JLR reportedly warned that a hard Brexit would cost 1.2 billion pounds.

Shares of Tata Motors hit an over five-year low of Rs 253 per share, down 5% in intra-day trade, after the CEO of company owned Jaguar Land Rover (JLR), Britain’s biggest carmaker, reportedly warned that a hard Brexit would cost 1.2 billion pounds a year. The stock was trading at its lowest level since April 8, 2013 on the BSE.

“Extra costs and delays in parts deliveries coming from outside the U.K. would cut profit by 1.2 billion pounds a year, Ralf Speth, chief executive officer of the manufacturer owned by Tata Motors Ltd., said late Wednesday in an emailed statement,” the Bloomberg report suggested. 

Thus far in the calendar year 2018, Tata Motors underperformed the market by falling 41%, has seen market capitalisation erosion of Rs 547 billion at Rs 822 billion. On comparison, the S&P BSE Sensex was up 4.7% during the period.

Analysts at Prabhudas Lilladher expect volumes for JLR to be subdued over the next few quarters due to global headwinds and uncertainty over diesel engines, however the brokerage firm believe the management’s aggressive cost reduction efforts would enable JLR to achieve its stated near term EBIT margins of 4-7% over FY19-21.

Overall it seems capex will remain elevated for the next 3 years and hence free cash flow at JLR will remain weak hence constraining valuations. Tata Motor’s more immediate investment case then rests on a faster than- expected turnaround in India business on the back of growth and market share gains in CV business and net debt reduction, according to analysts at JP Morgan.

JLR faces challenging operating conditions given negative sentiment on Diesel in the UK/EU, higher incentives and elevated investment spending partly offset by higher growth in China. The India business (50% of SOTP) is clearly showing signs of improvement but reflation here may not be enough to offset the profitability drag from JLR. While absolute downside on the stock may be limited, a case for reflation may not be there until JLR starts closing the margin gap with luxury OEs. JLR’s model cycle remains exciting, in our view, and higher-than-expected volume could be a positive surprise, it added.

At 10:36 am; Tata Motors was trading 3% lower at Rs 259 on the BSE, as compared to 0.14% decline in the S&P BSE Sensex. A combined 9.48 million equity shares changed hands on the counter on the BSE and NSE so far.

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Nano, which was unveiled in January 2008 at the Auto Expo with much expectations of being the people’s car, could not live up to the billing

 

Tata Motors’ small car Nano is inching closer towards the end of its journey with just one unit produced in June, although the company maintained that no decision has been taken yet on stopping its production.

The entry level car, brainchild of Ratan Tata who envisaged giving a safer and affordable alternative to families riding on two-wheelers, sold just three units last month in the domestic market.

In a regulatory filing, Tata Motors said there was no export of Nano in June this year. It had shipped 25 units in the same month last year.

In terms of production, only one unit was produced last month as against 275 units in June 2017.

Domestic sales were at three units in June as against 167 units in the year-ago month.

When contacted for comments on whether the company has taken a decision to stop Nano production, a Tata Motors spokesperson said, “We are well aware that the Nano in its present form cannot continue beyond 2019 and may need fresh investments to survive. No decision has been made yet in this regard.”

The spokesperson further said, “Meanwhile, we continue to produce Nano catering to customer demand in key markets.”

Nano, which was unveiled in January 2008 at the Auto Expo with much expectations of being the people’s car, could not live up to the billing.

The car was launched in the market in March 2009 with an initial price of close to Rs 100,000 for the basic model despite cost escalations, with Ratan Tata insisting that “a promise is a promise”.

However, from the beginning, Nano courted trouble. It was originally planned to be rolled out from Tata Motors‘ proposed plant at Singur in West Bengal, where it faced intense political and farmer protests against land acquisition.

The company had to shift its production to a new plant at Sanand in Gujarat.

Instances of the car catching fire initially after it was launched didn’t help its cause either.

Ratan Tata had admitted that the company made the mistake of promoting the Nano as ‘the cheapest car’.

It become a loss-making model for Tata Motors with ex-Tata Sons chairman Mistry, who was abruptly removed from the post, even went on to claim that the Nano “consistently lost value, peaking at Rs 10 billion”.

Mistry also termed the Nano as one of the “legacy hotspots” and there was “no line of sight to profitability for the Nano, any turnaround strategy”.

He had also claimed that Tata Motors did not stop producing the car due to “emotional reasons”.

READ MORE : TATA MOTORS SHARE PRICE 

NCLT to pronounce order on Tata-Mistry battle today: All you need to know

Business Standard reflects on the 18-month-old battle

The Mumbai Bench of the National Company Law Tribunal (NCLT) will pronounce its order on the Tata-Mistry battle on Wednesday.

The legal feud has been replete with war of words, both sides exchanging barbs through defamation suits, hundreds of affidavits and references to past emails and letters, unprecedented in the Tata Group’s 150-year-old history and in the history of corporate India. The judge’s order will set a landmark precedence for corporate feuds particularly, for promoter-led firms. Business Standard reflects on the 18-month-old battle.

Mistry firms’ allegations against Tata Sons at NCLT

• Mismanagement at Tata Sons and oppression of minority shareholders
• Corporate governance breakdown and excessive interference by Tata Trusts
• Illegal removal of Cyrus Mistry
• Abuse of Articles of Association
• Violation of insider trading norms

Tata Sons’ response.(Company)

• Mistry’s removal not illegal
• Mistry was acquainted with the affairs of Tata Sons
• Mistry was quite about the alleged mismanagement during his tenure as chairman
• Allegations against Ratan Tata misconceived
• Flawed business decisions do not tantamount to oppression

Allegations against Ratan Tata

• The chairman who never retired
• It was on the behest and influence of Ratan Tata that Tata Sons’ board removed Mistry
• Tata was seeking to control through abuse and misuse of the Articles of Association
• Was responsible for aviation misadventure, Nano project and flawed global acquisition strategy.

Click here : Tata-Mistry battle

N Chandrasekaran walks into Tata corner room

King-size headaches face new chairman, with no quick or easy solutions in sight

N

latest News | Chandrasekaran, new chairman of Tata Sons, walks into the corner room in Bombay House on Tuesday. Amid uncertainties at almost all group companies due to global challenges, litigation and legacy issues. 

Chandra, who will succeed the ousted Cyrus Mistry, will have to take an immediate call on loss-making Tata Teleservices. The company requires fresh fund infusion of Rs 10,000 crore by the financial year starting April 1. This is apart from Tata Tele facing the prospect of losing another $1.2 billion to NTT Docomo, which has sued Tata Sons in US, UK and Indian courts to force the latter to buy back its 26.5 per cent stake in Tata Teleservices. 

With the Reliance Jio launch and Idea-Vodafone merger, fringe players like Tata Tele would face more heat and Chandra will have to decide how much more of Tata Sons’ money should be poured into the company, said an analyst.

The legacy issues, noted by Mistry in several letters after his ouster to Tata Sons’ board members, would continue to dog the group in the coming years. There are no quick solutions for these, say analysts. 

One example is the decision Chandra will have to make on Tata Steel, losing substantial money in its British operations. The latter is in talks for a merger with Thyssenkrupp to cut the losses. A recent ballot by British worker unions has paved the way for pension reform that could lead to a merger with the German giant.

Tata Motors is another big hurdle, though the company is taking several steps to revive its passenger car business in India. A border tax promised by US President Donald Trump could upset the finances at its Jaguar Land Rover arm, as the company does not have any plant in the US, say analysts.

 

"Apart from managing the companies, how Chandra takes care of the Tata satraps and their friends would be a key challenge," said a former official. Mistry had complained on former chairman Ratan Tata's friends having signed profitable deals with Tata companies resulting in huge losses to, for instance, Tata Capital and Tata Power. The Tatas have denied the allegations. 

The good news for Chandra will be that Tata group numbers look good at the consolidated level. These are among the best financial ratios and one of the lowest leverage ratios in the country's top family-owned conglomerates. The bad news is that if Tata Consultancy Services (TCS) and Tata Motors’ JLR are excluded, the picture becomes hazy for group finances| READ MORE..

Tata will be back with startups this month, advocates open market in India

BREAKING NEWS| Ratan Tata, who will resume working with startups from February 23 after handing over the reins of Tata Sons to N Chandrasekaran, has called for India to remain an open market but with more with regulatory intervention to curb unfair competition.

"The regulators need to focus on areas where there is unfair competition, which is done to kill the newer startups but ensure that there is enough latitude and enough of a playing field that everyone has a chance," said Tata responding to a query on protectionism and capital dumping at a startup event organised by Kalaari Capital.

Tata, who is an advisor to Kalaari, has invested in over 20 startups including firms such as Urban Ladder, Ola, Madrat Games, Nestaway and Snapdeal. Since October, when the Tata Sons board sacked Cyrus Mistry as chairman, Tata had temporarily his involvement with startups and instead focused on finding a new head of the software to salt conglomerate.

Chandrasekaran, CEO of TCS will take over as the Tata Sons chairman on February 21.

Kalaari's founder Vani Kola, who was interviewing Tata on Tuesday, along with the founders of India's two most successful startups Flipkart and Ola have called for protection against so-called "capital dumping" by global rivals such as Amazon and Uber, who have committed to invest billions of dollars in India.

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Tata Sons shareholders vote to remove Mistry as director

Shareholders of Tata Sons voted to oust Cyrus Mistry, its former Chairman, as a director from the companies news in an extraordinary general meeting held today afternoon in Bombay House – the headquarters of the $103-billion revenue Tata group with requisite majority.

The meeting was attended by Tata Sons Interim Chairman, Ratan Tata, N Chadrasekaran, who will take over as Tata Sons chairman on February 21st and other Tata Sons directors including Ajay Piramal. Mistry did not attend the meeting.

“The shareholders of Tata Sons Limited, at the extraordinary general meeting held today, passed, with the requisite majority, a resolution to remove Cyrus P. Mistry as a Director of Tata Sons Ltd,” said a Tata Sons statement soon after the EGM was over.

The exit of Mistry from the board was a foregone conclusion as the Tata trusts hold 66% stake in the company while the Tata group companies hold another 14% stake. The Mistry family owns 18.5% stake in the company.| READ MORE ..

Lack of communication cost Cyrus Mistry his job?

Ratan Tata arrives at Tata group's head office Bombay House in Mumbai.

In keeping with the practice of promoting Tata group company CEOs to the board of Tata group holding company, Tata Sons, Jaguar-Land Rover CEO Ralf Speth and Tata Consultancy Services (TCS) CEO & Managing Director N Chandrasekaran were on Tuesday appointed additional directors on the TSL board.

ALSO READ: Chandra, Ralf Speth join Tata Sons board

Ratan Tata, interim chairman of Tata Sons, said: “This is in recognition of their exemplary leadership at their companies.” 

Earlier, during the tenure of Ratan Tata, RK Krishnakumar, MD of Tata Tea, and JJ irani, MD of Tata Steel, had been promoted to the Tata Sons board. Similarly, late JRD Tata had appointed late Sumant Moolgaokar and late Darbari Seth on the board TSL.

PM According to media reports, lack of of communication is the reason behind Cyrus Mistry's replacement. CNBC-TV18, quoting sources, said that Ratan Tata & Tata Sons were not informed about major business decisions. Ralf Speth, CEO of Jaguar Land Rover and N. Chandrasekaran, CEO & Managing Director of Tata Consultancy Services (TCS), have been appointed as Additional Directors on the Tata Sons Board.

Why was Cyrus Mistry sacked? Top possible reasons for his exit

Ratan Tata, patriarch of one of India's most influential families, will take over as interim chairman of Tata Sons after the salt-to-software conglomerate's board ousted Cyrus Mistry, who had sought to shake up the firm's management.

Tata, who had stepped down as chairman and was replaced by Mistry in late 2012, will head the group for four months while the company seeks a replacement.

Tata Sons is a large shareholder in a string of listed Tata Group companies - a business empire ranging from Jaguar Land Rover cars and steel mills to aviation and salt pans.

The board said in a statement on Monday it was decided "it may be appropriate to consider a change for the long-term interest of Tata Sons and Tata group."

While the board gave no detailed reason for the change, some media reports said there has been discontent with some of Mistry's actions, including asset sales.

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Cyrus Mistry's stint as chairman the shortest ever at Tata group

India's largest conglomerate, Tata Sons, saw a major overhaul on Monday, with incumbent Cyrus Pallonji Mistry being replaced as chairman. Former chairman Ratan Tata returned as interim chairman and a five-member selection committee was set up to bring on board a new chairman within four months.

Earlier, on December 28, 2012, Cyrus Mistry had succeeded Ratan Tata as the chief of India’s more than a century old multinational company, which had begun its operations in 1868.

Mistry’s stint at the helm of affairs at the Tata group was the shortest among the chairmen so far. Business Standard lists all the previous chairmen of the group and gives a timeline of their term at the top:

1868-1904: Jamsetji Nusserwanji Tata, who founded the group that would eventually become one of India’s biggest conglomerates, led the group for its first 36 years.

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Cyrus Mistry's removal: How the tables turned

In this file photo of Ratan Tata (Left) with Cyrus Mistry. Tata Sons on Monday removed Cyrus Mistry as its Chairman, nearly 4 years after he took over the reins of the group. Tata makes a comeback, taking over as the company's interim boss for 4 months.

It took less than half an hour at a full-strength board meeting on Monday afternoon in Mumbai to replace Cyrus Mistry as the chairman of the Tata Group, it is learnt.

The meeting was attended by all 11 board members, including Nitin Nohria, the dean of Harvard Business School, and top-ranked investment strategist Farida Khambata, both of whom are based in the US and who usually attend meetings through video-conferencing. This was no ordinary meeting, where even Ratan Tata was present as chairman emeritus, as a source pointed out. The 78-year-old Tata left the meeting as interim chairman of Tata Sons.

Several resolutions were put to vote, but there were three that would eventually decide the future of the salt-to-software conglomerate. The board members voted in favour of those resolutions — replacing Mistry as chairman, inducting Tata as interim chairman, and relaxing the age criterion for the chairman’s post. But sources told Business Standard two board members abstained when the resolution on Mistry was put to vote and one abstained in the case of the other two.

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