Chandrasekaran wants to build growth-oriented businesses to ensure that his contribution helped cement the future of the 152-year-old conglomerate, a top executive said.
The plans on medical devices and component business were conceived during the lockdown. The company sees an opportunity in these segments that are witnessing a wide demand-supply gap within the country and markets outside India, officials said.
Tata Electronics, which is led by Banmali Agrawala, plans to launch work on setting up a factory at Hosur in Tamil Nadu by April. The Tatas are bringing in a former General Electric hand to be part of its medical devices company.Chandrasekaran, according to executives close to him, is in a hurry to tap scalable opportunities in a post-Covid world, similar to what Reliance Jio has done by building an ecosystem of multiple partnerships led by acquisitions and strategic tie-ups with both startups and companies that offer scale. Tata Digital, which is building a consumer-focused super app, is in talks to acquire a majority stake in BigBasket, India’s largest online grocery retailer, and online pharmacy 1Mg as part of this strategy, ET reported in November. The super app will bring in all consumer businesses of the group on one platform.
He has handpicked loyalists such as Agrawala, who was GE’s India head, as well as former Tata Consultancy Services executives Pratik Pal and Girish Krishnamurthy and group chief economist Roopa Purushotaman to execute the plan.
Tata Sons did not comment.
“The idea to build scalable medical devices and electronic components is good and there is clearly potential in these areas. How well Tata Sons implements and executes these plans by ensuring what it takes to build a competitive business has to be seen. These are businesses that require precision and need the skillsets and deep pockets to build scale,” a group director said, seeking anonymity.
Since taking over in January 2017 as the top boss at Tata Sons, Chandrasekaran had focused on business restructuring and capital allocation between write-offs and chasing growth, and the group has been investing heavily in its flagship businesses like steel, vehicles and power, though the benefits of these investments are still work in progress. The new plans have also led to people shuffling and additions on the boards of new businesses.
Tata Sons’ fully owned subsidiaries — Tata Digital, Tata Medical & Diagnostics and Tata Electronics — will be the future bets, executives said. Consumer-focused businesses such as ecommerce platform Tata Cliq and online medical health company Tata Health will merge into Tata Medical, to offer a seamless experience to consumers through the super app.
Former TCS executive Krishnamurthy is leading Tata Medical as its CEO. The company has launched a paper-based Covid-19 test that it developed along with the Institute of Genomics and Integrative Biology, a unit of the Council of Scientific and Industrial Research.