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Tata Sons may merge realty and infrastructure entities

Mumbai | Updated on February 23, 2018 Published on February 23, 2018

As a part of its consolidation exercise, Tata Sons is understood to be merging its realty and infrastructure development entities.

The merger is being overlooked by Tata Son’s Chairman N Chandrasekaran who is keen to improve efficiency in existing business verticals.

Earlier this month, Tata Housing CEO and MD Brotin Banerjee had put in his papers citing personal reasons. Banerjee had transformed Tata Housing as a brand and was responsible for converting it into a profitable venture.

Tata Realty and Infrastructure (TRIL) is a decade-old company set up to pursue the group’s interest in infrastructure and real estate projects.

“The merger will unlock value from both the entities. Tatas may have created verticals to raise funds separately. Also Tata Housing was among the pioneers in affordable housing. However, due to the very nature of affordable housing, there were lot of unsold inventory, resulting in losses for Tata Housing,” says Pankaj Kapoor, MD, Liases Foras, a realty research company.

Tata Housing is mainly focussed on residential projects in cities such as Mumbai, Delhi-NCR, Goa and Maldives. While TRIL’s forte has been large-scale commercial projects, such as roads and highways.

Anuj Puri, Chairman, Anarock Property Consultants, said: “This merger is taking place to achieve improved economies of scale.

“These were two separate businesses run by separate management teams where one firm focussed on affordable housing and the other on mid-range and luxury.

“By merging the two, Tata will be able to achieve a sharper business focus and achieve a competitive advantage. It is a ‘everyone wins’ situation which has clear advantages to all stakeholders”.

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Published on February 23, 2018
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