TCS Share Sale May Have Kicked Off Mega Monetisation Of Assets By Tata Sons — NDTV Profit Exclusive

The salt-to-software group has now modified its policy to consider monetisation of assets as a strategy, a senior Tata Group executive told NDTV Profit on the condition of anonymity as details are not public yet. The recent sale of a 0.65% stake in the group's flagship TCS to raise Rs 9,300 crore was part of this major pivot, according to the executive.

Prior to that, only twice did Tata Sons sell shares in India's biggest software services provider: in November 2006 and February 2007 to cumulatively raise Rs 1,787 crore.

The one reason for not selling stakes in group companies were the dividends and buybacks from TCS. The IT major has repurchased shares five times since 2017, rewarding shareholders with Rs 83,000 crore. Tata Sons received close to Rs 60,000 crore from these buybacks.

That, however, may not be enough given its foray into new businesses from clean energy to semiconductors.

"Apart from our traditional sectors and the companies that we have been running for several years, recently we have pivoted towards electric vehicle mobility and new energy, like wind and solar, and announced our semiconductor fab, India's first, in Dholera," said Tata Sons Chairman N Chandrasekaran during his acceptance speech at NDTV IOTY 2024, where he was awarded 'Businessman of The Year'.

The group requires a change in strategy. But it is unlikely that Tata Sons will sell shares in any other listed company since, except TCS, it does not own more than 50% in most of the group's listed businesses. That suggests initial public offerings could be the potential route to monetise assets.

Tata Sons record of creating from investments has been phenomenal. The parent had invested Rs 61,453 crore in the group's listed companies as of March 2023. The combined of its listed companies stood at Rs 11.20 lakh crore at the time.

By comparison, its total investment in unlisted subsidiaries stood at Rs 56,646 crore. Bulk of these investments went into digital ventures (Rs 18,942 crore) and Tata Capital (Rs 7,497 crore). The group has also invested nearly Rs Rs 9,000 crore in the three airlines, Tata Advanced Systems, Tata Realty and Tata Housing.

Tata Sons also simplified structure over the past years, something that will aid its plan to monetise assets. It reorganised businesses into clusters to create synergies. The group merged defence businesses of various group entities into Tata Advanced Systems Ltd., while Tata Consumer Products Ltd. acquired the branded business Tata Chemicals Ltd. The group is merging all airlines into Air India Ltd.

Direct-to-home television services provider Tata Play has already made a confidential filing with the regulator for an IPO. In the next few years, Tata Sons could also look at listing new-age digital, financial services and infrastructure businesses.

• Financial Services: Unlisted insurance arms Tata AIG, TATA AIA and Tata Capital.

• Infrastructure: Tata Housing, Tata Realty and Tata Projects. Tata Project is 44.5% owned by Tata Sons and the remaining stake is held by Tata Power, Tata Chemicals, Voltas and Tata Capital & Tata Industries.

• Tata Digital: Tata Cliq, Tata 1mg, Big Basket and Croma.