Companies

Tata Sons shareholders approve proposal to raise ₹40,000 crore

Forum Gandhi Mumbai | Updated on September 15, 2021

To reappoint three directors, may not hire chief executive

The shareholders of Tata Sons have approved the proposal to raise up to ₹40,000 crore at the Annual General Meeting on Tuesday.

The reappointment of Saurabh Agarwal and Ralph Seth as directors, and Harish Manwani as an independent director on the company’s board, has also been given the green signal.

A source told BusinessLine that all resolutions were passed by the shareholders at the virtual AGM, including the annual standalone and consolidated results.

For the fiscal, Tata Sons generated a consolidated net profit of ₹19,397 crore, up from ₹10,916 crore in FY20. However, its revenue from operations plunged by over 60 per cent to ₹9,460.24 crore during the year, compared to ₹24,770.46 crore last year.

Approval for dividend

Tata Sons had also sought approval to give dividends to its shareholders. Based on the company’s performance, the Directors have recommended a final dividend of ₹10,000 (previous year, ₹10,000) per ordinary shares at the rate of 1,000 per cent (previous year, 1,000 per cent).

The final dividend, if approved by shareholders, will involve a cash outflow of ₹404.15 crore (previous year, ₹404.15 crore) on 4,04,146 ordinary shares. The company’s directors had also recommended dividends on the Cumulative Redeemable Preference Shares amounting to ₹20.83 crore (previous year, ₹21.24 crore) .

This, too, has been approved by the shareholders.

Sources said that during the AGM, the Shapoorji Pallonji Group representative appreciated the efforts taken by Tata Motors to revive its market share, but expressed concerns around Tata Sons’ super-app plan.

Leadership revamp

Meanwhile, a Bloomberg report said that Tata Sons was considering a historic revamp of its leadership structure by creating a chief executive officer’s role to help improve corporate governance.

While Tata Sons did not comment on the report, a source said that it was unlikely that the company will appoint a CEO.

“As per SEBI norms, only listed companies are mandated to have a separate CEO and Chairman. Since Tata Sons isn’t a listed company, this move is not on the cards,” said the source.

Published on September 14, 2021

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