Tata Group to invest $35 bn in 3 years; eyes top-25 list

Total FY14 revenue grows 18.5% to cross $100 billion mark.

By: ENS Economic Bureau | New Delhi | Published:July 30, 2014 1:09 am

By: PTI

The Tata Group will invest $35 billion over the next three years as part of its ‘Vision 2025’ by when it expects to achieve market capitalisation comparable to the world’s top 25 companies.

Addressing the Tata Group’s Annual Leadership Conference in Mumbai, Chairman of the company, Cyrus Mistry, laid out the road map for the diversified conglomerate, which saw its total revenue crossing the $100 billion mark in FY14.

When contacted, a Tata Group spokesperson confirmed three broad points outlined as part of this strategy. These include nurturing of group companies by leveraging the parenting advantage of the group centre; harnessing synergies to maximise the performance of companies and optimising its portfolio for sustained future performance.

“The Tata Group’s Vision 2025 is: 25 per cent of the world’s population will experience the Tata commitment to improving the quality of life of customers and communities. As a result, Tata will be amongst the 25 most admired corporate and employer brands globally, with a market capitalisation comparable to the 25 most valuable companies in the world,” the spokesperson said.

“Towards fulfilling this vision, the Tata Group will be investing about $35 billion in the next 3 years,” the spokesperson added. The plans include disinvestment in some non-core areas and increasing spend in defence and aerospace, retail sector, infrastructure and in the financial sector. The group was reported to be winding down Tata Teleservices at one point this year with Japanese partner NTT Docomo reported to be planning an exit. That has, however, been put on hold. Post the General Elections, India’s large industrial groups have begun chalking out long-term investment plans. Last month RIL announced a Rs 1,50,000 crore (approx $25 billion) investment plan for a three-year time frame.

As part of the strategy, the Tata Group will nurture its companies by “building the reputation of the Tata brand globally, attracting and developing leaders of tomorrow, and improving the Tata Business Excellence Model (TBEM) process to strengthen performance discipline within the group”. The group centre will also focus on companies which are world class and, where necessary, facilitate creation of new companies.

This strategy will also include support to companies, if required, to restructure their businesses which do not have the potential to meet performance and strategic criteria in the long term or benefit from parenting advantages.

Tata group’s total revenue grew by 18.5 per cent in FY14 at Rs 6,24,757 crore ($103.27 billion). The group that has over 100 operating companies in seven business sectors — communications and information technology, engineering, materials, services, energy, consumer products and chemicals — had posted total revenue of Rs 5,27,047 crore ($96.79 billion) in the previous fiscal.

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