New boss at Tatas

Tata group, the icon of India’s corporate world, landed in its biggest crisis in 148 years of its existence when Cyrus Mistry was ousted as Chairman of Tata Sons, the holding entity of the $100-billion diversified businesses, in the last week of October 2016. Cyrus is no outsider to Tata group.

He is the scion of Shapoorji Pallonji Mistry family, the largest individual shareholder in Tata Sons. His unceremonious sacking set off a messy boardroom battle that took a heavy toll on the Tata brand in India and abroad.

Mistry took over reins of the salt-to-software group in 2012 from his illustrious predecessor Ratan Tata who played a key role in his selection and subsequent grooming.

But differences seemed to have cropped up between the two over handling of Tata Steel’s Europe business and several other issues such as Mistry’s undue focus on cash cows, resulting in his sudden departure and the re-entry of Ratan Tata as interim Chairman.

Even as Mistry and his family knocked on the doors of National Company Law Tribunal (NCLT), raising corporate governance issues at Tata group, Tata Sons on Thursday announced anointment of Natarajan Chandrasekaran as its new Chairman.

Fondly called as Chandra by his peers, Chandrasekaran is also no stranger to Tata group as he spent all of his corporate life in TCS, the group’s money spinner that accounts for 80 per cent of its profits.

Joining as a trainee in the software giant, he went on to become its CEO and MD in 2009 – a rare feat in Indian corporate sector.

Under his stewardship, TCS market capitlisation trebled and net profit jumped four-fold. But managing Tata group, given its complex nature, is not going to be easy for a man who has, till now, steered a software company. A long list of challenges awaits him as he takes reins of the group.

Tata Motors, once a shining light of the group, is now in slow lane with not so encouraging sales in domestic market. Though its overseas subsidiary, Jaguar Land Rover, is doing well, Tata Motors lost much of its ground in India.

Small car Nano, once touted as a game-changer, lost its sheen and was the bone of contention between Ratan Tata, the brain behind it, and Mistry, with the latter preferring its phase-out. Tata Motors and Nano car will test the new chief’s mettle.

The other things that will require his immediate attention include loss-making Tata Steel and debt-ridden Tata Teleservices which is currently facing $1.2 billion arbitration case filed by its Japanese JV partner NTT Docomo.

Tata Sons openly expressed displeasure over the way Mistry handled this case. So, it’s going to be a tight-rope walk for the new incumbent.

The biggest challenge for Chandrasekaran, however, will be to bring the Tata brand back on the right track. There is no second opinion that the iconic brand has taken a beating post the boardroom battle. Will it shine again under Chandra?