Bloomberg News

Mistry Plans $35 Billion Push to Lead Tata Into New Businesses

July 30, 2014

Tata Group chairman Cyrus Mistry

Cyrus Mistry, chairman of Tata Group. Photographer: Dhiraj Singh/Bloomberg

Cyrus Mistry, chairman of Tata Sons Ltd., plans to spend $35 billion over the next three years to develop existing businesses and build new ones as he expands the $100 billion coffee-to-cars conglomerate.

At an internal meeting yesterday, Mistry told his executives that the country’s biggest business group will focus on building its retail, infrastructure, finance, defense and aerospace businesses, Tata Sons said in a statement today.

Mistry, who took over as the group’s chairman in December 2012, is seeking new avenues of growth as economic expansion near a decade low hampers recovery at Tata Motors Ltd. (TTMT), India’s No. 1 truck maker, and a demand slump in Europe hurt Tata Steel Ltd. (TATA), the nation’s biggest producer of the alloy. Ratan Tata, after two decades at the helm, handed over the group to Mistry with a vision of boosting its revenue fivefold to $500 billion over the next decade.

“The group will strongly champion companies which are world class and, where necessary, facilitate creation of new companies,” according to the Tata Sons statement. It will also lend “support to companies, if required, to restructure their businesses.”

Three unlisted infrastructure companies within the group are already spending $8 billion to garner orders amid a $25 billion pledge by Prime Minister Narendra Modi in his maiden budget to unclog India’s choking transport links. One of these firms, Tata Realty and Infrastructure Ltd., is already looking to buy distressed road assets.

Tata Global Beverages Ltd. (TGBL) has a joint venture with Starbucks Corp. (SBUX:US), while Tesco Plc, the U.K.’s largest supermarket company, announced an equal joint venture in December with Trent Hypermarket Ltd. (TRENT), a Tata unit that runs “Star Bazaar.”

The group has also forged two airline pacts, with AirAsia Bhd and Singapore Airlines Ltd. (SIA), to operate a budget and a full service carrier, since Mistry took over. AirAsia India, its low cost airline joint venture, started operations in June while the second airline is expected to fly by end of the year.

Tata isn’t the only group that has announced spending plans over the next few years. Billionaire Mukesh Ambani, chairman of Reliance Industries Ltd. (RIL), has said he will spend $30 billion to expand his energy, retail and telecommunication businesses.

To contact the reporter on this story: Bhuma Shrivastava in Mumbai at bshrivastav1@bloomberg.net

To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net Sam Nagarajan, Karthikeyan Sundaram


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