An over-sprawl across markets was identified as a major Tata weakness, and while a sort-out has gained pace and clarity, with “simplify, synergize and scale" as the mantra of a structural rejig, the less diversified but more capital-plied Adani has taken away pole position as India’s most valuable group by market capitalization. To stay in this race, you have so much to do so fast that you must proceed carefully, lest a Tata merger spree ends up as an account-book job more than a strategic makeover to orient skills towards markets at optimal cost. As reported, 29 listed firms will be whittled down to half, with scores of unlisted firms and subsidiaries folded in. Synergies and cost savings are expected to unlock value all across. A simpler dashboard may also help superior allocations of capital extract higher returns. To achieve its fitness goal, Tata Steel, for example, will roll in six business units and an associate firm to complete a snap-in or snuff-out drive that began in 2019 and snuffed out 116 small entities. Earlier this year, you made another move to consolidate consumer-facing businesses. Whatever the numbers say, your stakeholders would hope that famed ‘Tata values’ will keep all group mergers organic and free of upheavals set off by any shifts in autonomy across the empire. Every power rebalance is an experiment in its own right. And once your e-com ‘super-app’ starts reaching out to customers online, your will to devour your own would only be tested further.
Remember, your success as a business group will also be judged by the ‘aerodynamism’ you show in aviation, where Tata air carriers willy-nilly bear your group prestige (if not logo). Proposals of a two-stage merger, with a prospective Air India union with Vistara seen as best placed to purchase a combine of AirAsia India and Air India Express, have been in the air for you and your partner Singapore Airlines. Here too, a blend of inputs could enrich your decisions.
Sincerely, just another stakeholder.
