Home > Business > Business Headline > Report

Tatas to cut number of group firms to 30

Reeba Zachariah in Mumbai | July 25, 2003 08:37 IST

Ratan Tata is taking his Rs 40,000-crore (Rs 400 billion) group into the last leg of restructuring. He is giving the finishing touches to a five-year-old restructuring plan that will completely alter the structure of the group.

At the heart of Tata's plan is a move to reduce the number of group companies to around 30 from the 80-odd now through mergers, closures and sale.

At the Tata Steel annual general meeting yesterday, Tata said: "We are trying to reduce the number of companies from 80 in the group, as it is difficult to manage so many companies. We will merge some companies and divest stakes in those firms which are in non-core areas."

The plan also includes focusing on 8-12 group companies in seven business sectors -- materials, engineering, energy, chemicals, consumer products, services, communication and information systems -- which, in turn, will have about two-three subsidiaries each.

Clearly, the main group companies by 2007 will be Tata Steel, Tata Engineering (now Tata Motor), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels, Tata Teleservices and Tata Consultancy Services. What the holding pattern in companies like Voltas or Rallis will be is not yet clear.

A Tata group spokesperson said, "The group is looking at several ways to reduce the portfolio and the structure."

Several investment subsidiaries will be merged. Companies in similar lines of businesses will be brought together.

"We will consolidate our holdings and reduce cross-holdings in the group," Tata said.

Consequently, there will be changes in the holding pattern as well. For instance, group firms in the automobile business could be controlled by Tata Engineering and those in energy by Tata Power.

Tata Sons, which has hiked its stakes to 26-30 per cent in all the main group companies, would continue to shore up its holdings 'to more comfortable levels,' group sources said.


Article Tools

Email this Article

Printer-Friendly Format

Letter to the Editor



Related Stories


Rallis India MD Dubey quits



People Who Read This Also Read


FII stakes may be out of FDI cap

HCL Tech inks deal with AMD

India, LatAm to sign FTA





Powered by







Copyright © 2003 rediff.com India Limited. All Rights Reserved.