One of India’s oldest and biggest corporate groups, Tata Sons, on Thursday gave its reins to N Chandrasekaran, the chief of Tata Consultancy Services (TCS) and one of its top-performing executives. He will take over as the Chairman on February 21.
“Chandrasekaran has demonstrated exemplary leadership as the CEO and Managing Director of TCS. We believe he will now inspire the entire Tata group to realise its potential,” Tata Sons said in a statement.
Known to be close to Ratan Tata, Chandra takes charge of the Tata group at a tumultuous time. On the one one hand, it faces headwinds in five of its key businesses, and on the other, it is facing serious allegations made by ousted Chairman Cyrus Mistry.
Chandra is aware of the daunting task ahead. “At the Tata group, we are at an inflection point. I am aware that this role comes with huge responsibilities. It will be my endeavour to help progress the group with the ethos, ethics and values that the Tata group has been built on,” he said. His coronation was expected from day one — Chandra, a Tata insider, has been able to establish himself as a successful leader not just within the group but also the IT industry.
‘Visionary leadership’ Even Anil Ambani, Chairman of Reliance Group, a Tata group rival, applauded Chandra’s elevation. “Chandra, as he is fondly referred to, brings to the table an unparalleled track record of value creation and visionary leadership at TCS, the Kohinoor in the Tata Crown,” he said. “Having run many marathons with him, I have the highest regard for Chandra’s spirit of endurance, grit, determination and focus.”
The accolades are not for nothing. A Tata group lifer, Chandrasekaran had joined TCS in 1987 and became its top boss in 2009. Under Chandra, TCS’ consolidated revenues more than tripled to ₹1,08,646 crore in 2015-16, from just over ₹30,000 crore in 2009-10.
But can the IT man work his magic to cure Tata Sons’ long-standing troubles? Former Chairman Mistry was sacked after failing to turn around loss-making companies and improve the financials of capital-guzzling businesses such as Tata Power, Tata Steel and Indian Hotels.
While the bulk of the group’s capital is employed in loss-making or financially struggling businesses such as steel, power, telecom and the domestic car business, the bulk of the profits are accounted for by TCS, Titan and Voltas. Those who know Chandra reckon that he will be the one to turn things around. S Mahalingam, former CFO of TCS and one of Chandra’s mentors, said: “A person of proven capability takes over as the leader of Tata Sons. He has steered TCS ably and one can confidently say that he will do the same with Tata Sons.”
‘Tremendous goodwill’ But the bigger problem would be to deal with corporate governance issues flagged by Mistry. Sources close to Mistry said that Chandra’s appointment is a clear indication that Ratan will continue to remain the boss. But Tata insiders say Chandra will be given a free hand.
“The one thing that will work in Chandra’s favour will be that he has tremendous goodwill within the group. It was clear that everyone wanted an internal candidate and no one is better than Chandra,” said a Tata veteran.