Ratan Tata, chairman emeritus of Tata Group, made an unscheduled address to the shareholders of Tata Steel at the company’s annual general meeting on Wednesday, lauding the stellar performance of the company and also recognised the achievements of Natarajan Chandrasekaran and the ‘new team’ headed by him.
The short speech, which surprised many as few could recall if he ever spoke at an AGM after stepping down from the role of the chairman of Tata Group in 2012, appeared to be a ringing endorsement for Chandrasekaran.
“Today, I stand before you to recognise the achievements of Tata Steel and the new team headed by Chandrasekaran and others who are looking into the future to take the leadership of the Tata Group where it hopes to be in the years ahead,” Tata said at the start of the AGM which was held on a virtual platform.
Tata Steel is now one of the bright spots of the Tata empire, which had to face the brunt of the pandemic like many others. The company posted the highest EBIDTA (earnings before interest, depreciation, tax and amortisation) and also declared the highest ever dividend of Rs 25 a share (250 per cent).
Tata Sons will be the biggest beneficiary of the dividend bonanza and, in turn, it will benefit Tata Trusts, which collectively hold the largest stake in it. Tata is also the chairman of Tata Trusts, the controlling shareholders of Tata Sons, the holding company of the salt-to-software conglomerate.
Chandrasekaran was plucked out of TCS, the most profitable company of the group, and made the chairman of Tata Sons in February 2017 following the acrimonious exit of Cyrus Mistry from the leadership post.
Tata said ‘Chandra’ should be proud of what the new team has been able to achieve and hoped it would continue in the future.
“I am very very proud of what this Group has been able to do and I look forward to hearing of the continued success of Tata Group in the years ahead. Chandra, you ought to be exceedingly proud of what your team has achieved,” Tata said.
The endorsement for Chandrasekaran comes at a time the group is making big bets in the digital space, acquiring several businesses such as online grocer Bigbasket and online pharmacy 1mg. He also appears to be pushing the century-old group to digitise operations, bringing in knowledge of big data and analytics.
The octogenarian also fondly recalled his stint with Tata Steel where he began his career more than half a century ago. “Tata Steel has a special place in my heart. This is where I began my career in Tatas 57 years ago, where I had the opportunity of working on the shop floor for three years, watching the company grow, seeing and interacting with people like J.R.D. Tata, Russi Mody, and Nanavati,” he said.
Responding to shareholders later, Chandrasekaran said Tata Steel Europe is going to post solid results in terms of EBIDTA, profits and cash flow after years of losses.
Tata led the charge of taking the conglomerate to the global stage with audacious and big ticket acquisitions, such as TSE, formerly Corus Group Plc.
Chandra said the team is trying to make the TSE performance sustainable by taking a strong operational rigour.
The underperformance of TSE was touted to be a major conflict point between Tata and Mistry who questioned the acquisition at a high cost.
