N Chandrasekaran has been reappointed by Tata Sons to continue as the Chairman for the second term of five years following Tata Group patriarch Ratan Tata expressing satisfaction on the progress and performance of the diversified conglomerate.
The board members commended the performance of Chandrasekaran, 58, and unanimously approved his reappointment. A TCS veteran, had taken the reins in 2017, less than four months after joining the Tata Sons board in 2016 and shortly after the unceremonious ouster Cyrus Mistry of the Shapoorji Pallonji family, which holds 18.5 per cent stake in Tata Sons.
Under him, the Tata Group saw several key developments, the most striking being the smooth return of India’s national carrier Air India, back to the Tata Group. Multiple other acquisitions and partnerships in steel, digital, IT, automotive, hospitality and consumer products sectors punctuated Chandrasekaran’s maiden tenure as the Chairman.
Tata Motors, one of the largest revenue generators for the group, not only formed a new company to house the electric vehicle business, but also managed to raise $1 billion against a valuation of $9.1 billion through investments from TPG and ADQ. The company now has a near monopoly in the EV four-wheeler market.
Tata Steel Long Products, a subsidiary of Tata Steel, acquired controlling stake in Neelachal Ispat Nigam for ₹12,100 crore, recently. Last year the Tata group made its entry into the fast-growing e-commerce segment through the buy-out of online grocery delivery platform BigBasket followed by the acquisition of e-pharmacy start-up 1MG.
Arvind Singhal - Chairman & Managing Director, Technopak said, “There were a lot of challenges before Chandra took over. It was in a messy situation with the Shapoorji Group. It was a sense of stability that was needed at that point of time. Secondly, it also needed a lot of accountability from group companies. It was only a handful of companies like Tata Consultancy Services that was providing all the gas to the company and the market capitalisation. Most companies in the Tata Group like Tata Steel and Tata Motors were loss making and then there were other companies which were neither here nor there.”
Graduating from Trichy’s Regional Engineering College, Chandrasekaran’s first job was at TCS, which he joined in early 1987. A close confidante of Ratan Tata, Chandrasekaran moved up the chain to become the first non-Parsi head of the Tata empire five years ago.
“He was an outsider, not from the group. Tata Sons has a lot of old hands and getting them to agree on a brand-new vision was not easy. He had to let go of businesses, processes and people. Institutionalising and bringing tech-oriented growth was difficult. Pace would look slow from the outside but he is crunching decades into months,” Sanchit Vir Gogia, Chief Analyst, Founder & CEO, Greyhound Research.
In the past five years, market capital of Tata Group’s listed companies had risen 100 per cent to nearly ₹8 lakh crore, according to Anuj Kapoor, Assistant Professor (Marketing), IIM-Ahmedabad.
“He was able to bring a stable leadership in turbulent times - especially after the turbulent times with Cyrus Mistry. Thrust on digital transformation is forward looking and a revolutionary step,” Kapoor said.
While Chandrasekaran’s strategic moves won the confidence of stakeholders in group companies, market watchers have given a thumbs up to his push towards digital transformation, which many say, can springboard the Tata group into the new world.
Renuka Kamath, Professor of Marketing, Associate Dean - Full Time Programmes, S.P. Jain Institute of Management & Research said, “Apart from the big takeovers like Air India, the biggest project that Chandrasekaran has kick-started is ‘TataNeu’ the super app. This one stop destination for Tata consumer purchases, will change the face of consumer onboarding and managing customer loyalty. Yet it is fraught with difficulties, especially operationally bringing all Tata companies together.”
( With inputs from Ayushi Kar)