The Tata Group sees potential for significant growth in financial services without relying on acquisitions, as India’s largest conglomerate looks to sharpen its focus on about half a dozen businesses.
“Both our insurance business and non-banking finance company have got a huge opportunity to grow,” Natarajan Chandrasekaran, chairman of group holding company Tata Sons, said Monday in an interview with BloombergQuint at the World Economic Forum in Davos, Switzerland. “Just looking at the space, even organically there is a very big opportunity.”
The salt-to-software group is also focusing on the “core themes of simplification, synergy and scale” across six to seven major business segments, he said.
Chandrasekaran, popularly called Chandra, has been pushing for consolidation within the group — a collection of more than 100 companies — to streamline its focus, pare debt and exit businesses that don’t fit its priorities. Tata assembles buses in Africa, serves kebabs at London’s ritzy Bombay Brasserie, sells cheap bags of salt in Indian supermarkets, and makes Jaguar Land Rover luxury cars among much else.
Read excerpts of BloombergQuint’s Davos interview with Chandra here
During his 11-month tenure as head of the group, Chandra has sold Tata Teleservices Ltd.’s unprofitable wireless business and agreed to merge Tata Steel Ltd.’s European steel assets with those of Thyssenkrupp AG. Tata is also planning to merge its consumer and retail businesses, club its defense units together and combine its technology businesses, people familiar with the matter have said.
Tata Steel will have a “significant focus” on the domestic market and is eyeing distressed assets, Chandra told BloombergQuint. The company is a potential suitor for assets of firms including Essar Steel India Ltd. and Bhushan Steel Ltd., people familiar with the proceedings said in December.
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Chandra, who told in-house publication Tata Review in November that no other market is going to grow faster than India in the next 10 to 20 years, expects Asia’s third-largest economy to see a significant pick-up in growth in the latter part of 2018.
India forecast this month that its economy will expand at the slowest pace since Narendra Modi was elected Prime Minister in 2014. Activity in the nation has been disrupted by the government’s 2016 cash ban and last year’s disruptive roll out of a nationwide goods and services tax.
“We are already seeing a lot of green shoots whether it is commercial vehicles or consumer spaces, whether it is high-end consumers or those on the low end,” Chandra said.
BloombergQuint is a partnership between Bloomberg Media and Quintillion Media in India