Economy

Tata Group To Consider Buying Air India: N. Chandrasekaran

Chandrasekaran's statement is the first formal statement by the Tata Group on Air India.

Reacting to media reports, Tata Teleservices said it "continues to explore all options in respect of its business, given the challenging business environment in the telecom industry. There we need to see how to consolidate where we can, how to synergise where we cannot consolidate and how we scale". I would like to see ourselves as 5,6,7 groups as opposed to 110 companies.

The company has been allocated lucrative 800 MHz spectrum that many operators are keen to lay their hands on for expanding 4G services. During Ratan Tata's tenure from 1991 to 2012, Tata Sons reduced the number of group firms from around 250 to about 100, through mergers.

The Tata Group looks to focus on five segments: retail and consumer, financial services, infrastructure, tourism and defence, to achieve scale.

Tata Teleservices, the telecom unit of Tata Sons has informed the government that the company will soon shut down its services. A circle head's salary can be up to Rs 1 crore.

"In passenger cars, our cost structures are out of whack".

He was also confident that the company would make money at the price point at which it would sell electric cars to EESL - contrary to claims by rival Mahindra, which claimed it would lose money even on the higher price that it had bid. "It is unfair to saddle other Tata companies with employees of TTSL".

Earlier in May, Tata Teleservices had fired between 500 and 600 employees to tide over hard times in the hyper-competitive telecom market. The company will offer severance packages, voluntary retirement scheme (VRS) to most of its employees. In a latest development, Tata Group expressed its interest to buy India's national carrier. The Tata Group executives spent more than an hour and a half with DoT officials. Elaborating on the strategy of the three biggies - Tata Steel, Tata Motors and TCS, N Chandrasekaran told CNBC TV18, "There are three big companies - Tata Steel, Tata Motors and TCS - and they have scale".

However, Chandrasekaran said the company needs more details from the government on the process in order to finalise its position on the deal.

He said the group can't remain with a fleet of just over a dozen planes, referring to their new start-up Vistara in alliance with Singapore Airlines. Tata Sons also holds a 49 per cent stake in no-frills airline Air Asia.

N Chadrasekaran is trying to find ways and means to 'scale up, ' and consolidation of businesses is certainly one of the important ways, according to him.

Tata Sons Chairman began disentangling the cross holdings among Tata companies, starting with Tata Steel's stake in Tata Motors. Tata Finance, Tata Housing Finance and Tata Capital Finance, for instance, do much the same thing and could well benefit from being merged. Chandrasekaran has brought in a range of fresh talent at the top to equip the group better for tackling challenges.



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