Tata Group courts potential investors for new digital platform: Report

 India’s Tata Group is in talks with potential investors about taking stakes in a new digital platform, people familiar with the matter said, seeking to modernize its consumer businesses as retail giants like Amazon.com Inc. and billionaire Mukesh Ambani pile into the country’s fledgling e-commerce market.

Tata Sons Pvt., the holding company of the $113 billion coffee-to-cars conglomerate, is working with advisers to explore bringing in financial or strategic investors, including global technology companies, the people said, asking not to be identified as they aren’t authorized to speak to the media. The group plans to bring together digital assets across various Tata businesses to create the new entity, according to the people.

A Tata Sons representative declined to comment on the stake sale discussions.

Tata’s platform -- an e-commerce gateway for its consumer products and services ranging from beverages to jewelry and resorts -- may seek to compete with the ambitious plans of Ambani, Amazon.com and Walmart Inc.’s Indian venture Flipkart to tap the nascent market of more than 1 billion consumers. Ambani, chairman of Reliance Industries Ltd., is looking to forge a digital empire, raising more than $20 billion from big-name partners including Facebook Inc. and Google for his newly formed technology venture, Jio Platforms Ltd.

Discussions with potential investors are at a very early stage and there’s no certainty they will result in a deal, the people said.

Adding Heft

While bringing in outside investors would lend credence to Tata’s digital ambitions, it may also help the group pare debt after the coronavirus pandemic hammered its flagship businesses. Tata Steel Ltd.’s group net debt was at $14 billion as of June 30, while the net automotive debt of Tata Motors Ltd., which owns Jaguar Land Rover, was around 480 billion rupees ($6.5 billion).

Tata Group already has a bunch of entrenched consumer businesses, many of which also have an online presence. These include Tanishq’s jewelry stores, Titan watch showrooms, Star Bazaar supermarkets, chain of Taj hotels and a joint venture with Starbucks in India. The intention is to consolidate these currently fragmented web operations.

As part of that drive, the conglomerate is building an all-in-one e-commerce app for its swathe of consumer products and services, Bloomberg News reported last month. It is expected to be launched by end-2020 or early next year.

Natarajan Chandrasekaran, Tata Sons’ chairman and a long time chief executive officer of Tata Consultancy Services Ltd. before that, is championing the group’s digitization drive and Tata Digital’s head Pratik Pal is in charge of building this all-in-one app, a person said last month.

Pal has three decades of experience at TCS, where he was global head of retail, and helped with the digital transformation of some of the world’s largest retail chains including Walmart, Tesco Plc, Aldi Inc., Target Corp., Best Buy Co. and Marks & Spencer Group Plc.

SP slaps notice on Tata Sons board, seeks damages for blocking fund raise

The Shapoorji Pallonji group, which is fighting a legal battle with Tata group, has slapped a notice for damages against the board members of Tata Sons, asking their complicity in the decision to block them from raising funds against the security of Tata Sons shares.

The notice sought an explanation from TSL board members, particularly the independent directors, whether they gave their consent to the oppressive action that caused prejudice to a minority shareholder.

The notice from the SP group was slapped after Tata Sons moved the Supreme Court early this month blocking SP group from pledging part of its 18.5 per cent stake in Tata Sons to Brookfield to raise Rs 3,750 crore in debt. The fund raising was important to the SP group which is facing a cash crunch and has defaulted on loans taken from Sterling and Wilson, a listed entity of the group.

ALSO READ: Shapoorji Pallonji group faces biggest challenge as fund flow dries up

In a statement, a SP group spokesperson said Tata’s move was solely intended to inflict irreparable harm on the SP Group and the Tatas kept their application on hold, purportedly for curing defects, despite moving a plea for urgency before the Supreme Court.

The Mistrys said under the Companies Act, the independent directors on the Tata Sons board were duty bound to protect the interests of minority shareholders.

Setback for Tata, Adani, Essar: Gujarat scraps order to pay more for power

In a setback to Tata Power Mundra, Adani Power and Essar Power, the Gujarat government has gone back on its earlier decision to revise power purchase agreements (PPA), totalling 7,180 megawatt (Mw).
According to state government sources, the earlier resolution allowing these developers to charge higher tariffs, “now stands cancelled”. It will now sign supplemental PPAs with these units on a “case-by-case basis” over and above the existing PPAs.

The earlier resolution was issued in November 2018 after a high-powered committee (HPC) formed by the state government suggested new terms of PPA with cost escalation to be shared by consumers, lenders, and the project developer.
State government sources said with the situation changing in conventional power in terms of reduced coal prices and keeping supplementary PPAs in mind, the increased tariffs were becoming unviable for the government.
The notice by the state said it would sign a supplemental PPA with Essar Power. The one with Tata Power is awaiting nod from the state government. In the case of Adani Power, the matter of a supplemental PPA is pending with the Central Electricity Regulatory Commission (CERC).
The decision by the Gujarat government comes a week after the Maharashtra government agreed to allow revised tariffs for Coastal Gujarat Power.
ALSO READ: Covid-19 weighs on TCS numbers in Q1; net profit falls 13.8% to Rs 7,008 cr
The Maharashtra State Electricity Distribution Company recently received the go-ahead from the state government to revise tariffs for CGPL.
Tata Power in its latest annual report had mentioned that CGPL could sign a supplementary PPA over and above the existing one, at a higher tariff with states. CGPL is the ultra mega power project of Tata Power in Gujarat’s Mundra. The notice by the Gujarat government said the tariff at which CGPL signs the supplemental PPA would be lower than what it signs with other states.
The annual report said, “According to the legal opinion received, even if Mundra supplies power as per the tariff discovered through the competitive bidding process to five states under a single PPA, in order to implement the HPC recommendations, CGPL can enter into separate supplemental PPAs with each procurer.”
The report added CGPL is following up with Gujarat and Maharashtra to sign separate supplemental PPAs.
Adani Mundra (1,980 Mw) was commissioned in 2008 at a tariff of Rs 2.35 per unit and CGPL in 2012 at a tariff of Rs 2.26 per unit. While Adani had a PPA with Gujarat and Haryana, CGPL had signed a PPA with Gujarat, Rajasthan, Maharashtra, Punjab, and Haryana.
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In 2010, following an order by the Indonesian government increasing its coal benchmark price, the landing cost of coal in India increased. Adani and Tata, which were importing from Indonesia, asked the CERC to grant them “compensatory tariff” for increased fuel cost.
This would have been passed through on the final power rates. The two developers were given relief by the CERC in 2014, then denied by the Appellate Tribunal for Electricity (APTEL), and again awarded by the same in 2016. In 2017, after states contested APTEL’s decision, the Supreme Court quashed any compensation to these units. It also directed the CERC “to compute a relief, according to the respective PPA”.
Meanwhile, the Gujarat government formed the HPC to formulate a relief plan for imported coal-based plants on its territory. The HPC recommended capacity charge or the fixed cost of the unit to be reduced by 20 paise per unit (kilowatt-hour), following the lender taking a cut on some portion of the debt repayment. The energy/variable charge would be revised monthly and was capped at $110 per tonne for 6,322 kilocalorie/kilogram grade of coal.
Any price escalation beyond it would be borne by the developer. Power developers repay debt through capacity charge, while variable charge is the return on investment for the developer. The supplemental PPA would follow a similar formula, except the energy charge has now been reduced to $90 per tonne, from $110 per tonne earlier.
It was, however, only Adani which received relief as Tata Power was asked to get approval from its four procuring states.

Tata Steel expecting capital expenditure to touch Rs 9,000 cr mark in FY20

TataSteel Ltd is expecting its capex during the current fiscal to touch the Rs 9,000-crore mark, company sources said.
The steel major, however, will take a cautious approach at the capital allocation for the next financial year, they said.

The steel maker had, earlier, said that it would revise the planned capital expenditure for the 2019-20 to Rs 8,000 crore from Rs 12,000 crore for the group.
In the third quarter, company had spent about Rs 2,777 crore, taking the total capital expenditure to Rs 7,762 crore during the first nine months of the current fiscal, sources said.
The company had invested around Rs 1,367 crore for its India operation, including about Rs 935 crore expenditure for its Kalinganagar plant in Odisha, they said.
"A part of the capex is committed to Tata Steel Europe. Thus, the actual spending will be higher. By the year-end, the capex will be around Rs 9,000 crore.
"But (we are) looking at the capital allocation very sharply for the next year and it would depend on how the markets play out over the next few months," sources said.
They said the company has prioritised the pellet plant and the cold-rolling mill.
"The pellet plant will help us to bring down costs while the cold-rolling mill to add value to the product mix...We maintain our target to commission the same in about a year from now," the company had informed the analysts.
For other projects, the steel maker will phase it out depending on the market conditions, soures added.

Tata Sons to take Rs 74,000 cr hit on group's foray into telecom biz

The Tatagroup’s holding company, Tata Sons has already made arrangements to pay the adjusted gross revenues (AGR) dues worth Rs 14,000 crore of Tata Teleservices Ltd by raising funds from banks. At the same time, both Tata Teleservices and its listed subsidiary, Tata Teleservices (Maharashtra) Ltd have made full provisions for the AGR dues in the September and December 2019 quarters.
Tata Teleservices, as per a banking souce, has only Rs 200 crore as liquid surplus in its kitty and will have to take help from its promoter to pay the government's AGR dues. With this, Tata ...

Tata Steel slips into red; reports Rs 1,228 cr net loss in October-December

TataSteel on Friday reported a consolidated net loss of Rs 1,228.53 crore for the quarter ended on December 31, 2019, mainly due to lower sales and impairment provisions for its European operations.
Tata Steel had posted a consolidated net profit of Rs 1,753.07 crore during the same quarter a year ago, the company said in a BSE filing.

Its gross sales fell to Rs 34,774 crore in October-December 2019 from Rs 38,086 crore in the year-ago period.
The company's total expenses were at Rs 35,849 crore as compared to Rs 35,930 crore in the preceding fiscal.
The company also said the consolidated financial results includes provision for impairment in respect of non-current assets within the European operations.

Tata Motors posts Q3 net at Rs 1756 cr on strong JLR performance; sales dip

TataMotors on Thursday posted a consolidated net profit of Rs 1,755.88 crore for the third quarter ended December 31, 2019.
The auto major had reported a net loss of Rs 26,960.8 crore during the October -December period of 2018-19. Total revenue from operations stood at Rs 71,676.07 crore as compared with Rs 76,915.94 crore in the year-ago period, Tata Motors said in a regulatory filing. On a standalone basis, the company posted a net loss of Rs 1,039.51 crore as against a profit of Rs 617.62 crore in the year-ago quarter.
Standalone total revenue stood at Rs 10,842.91 crore as compared with Rs 16,207.67 crore in the same period a year-ago. During the third quarter, the company's standalone wholesales, including exports, declined 24.6 per cent to 1,29,185 units.
Revenues of British arm Jaguar Land Rover increased to 6.4 billion pounds, up 2.8 per cent as compared to same period last fiscal. The brand's total retail sales fell 2.3 per cent during the period under review as against the same period of previous fiscal.
ALSO READ: Tata Motors launches EV variant of SUV Nexon, price starts at Rs 13.99 lakh
While Jaguar Land Rover has continued its turnaround, market decline and BS-VI stock reduction in domestic market has affected company's performance, Tata Motors said.
Jaguar Land Rover continued its turnaround and transformation journey with another quarter of strong delivery. China continues to improve gradually while Project Charge is well ahead of plans having already delivered 2.9 billion pounds so far, it said.
In India, the auto industry continues to be impacted by the general economic slowdown. The profitability was impacted by adverse mix where despite increasing market shares, M&HCV volumes declined, the company said.
"This coupled with proactive system stock reduction of Rs 3,800 crore resulted in loss of operating leverage," it said.
It further said, "Though the near-term market situation is fluid, we are optimistic on the medium term as we launch our exciting BS-VI range of products with our system inventory at a multi-year low. We remain focused on driving our turnaround strategy and transitioning seamlessly to BS-VI."

Shares of Tata Motors on Thursday ended 0.98 per cent lower at Rs 186.20 apiece on the BSE.

Protecting rights of Tata Sons' minority shareholders: Cyrus Mistry

Former chairman of TataGroup, Cyrus Mistry on Sunday said he was pursuing all options to protect the Shapoorji Pallonji group's rights as a minority shareholder, including the right to a seat in Tata Sons board. But he said he was not interested in going back to Bombay House as Chairman of Tata group.
The SP Group owns 18.5 per cent stake in Tata Sons and is fighting the Tata Sons, the holding company of Tata group, since Mistry was ousted as Chairman in October 2016.

"In the last three years, both in conduct and in their statements to the world at large, the Tata Group’s leadership has shown scant respect for the rights of minority shareholders. It is time the Group's management introspects and reflects on its conduct as it embarks on future actions," Mistry said on Sunday, breaking his silence for the first time after the NCLAT order which restored him as Chairman of Tata Sons.
Mistry said he was not pursuing the top post at Tata Sons but wanted the Tata Sons to follow the highest standards of corporate governance and transparency.
The Tata group is expected to mention its petition before the Chief Justice of India in Supreme Court on Monday 'appealing to squash a NCLAT order which restored Mistry as the Chairman on December 18 last year.
"The recent media reports attributed to Ratan Tata and others questioning the NCLAT judgment ahead of an important hearing in the Supreme Court, profess an interpretation of corporate democracy as being one of brute majoritarianism with no rights for minority stakeholders. The question in these legal proceedings is whether the oppressive actions of a majority that stifles minority shareholders is beyond reproach and outside judicial oversight," Mistry said.
Globally, and including in India, company law has evolved to protect the rights of minority shareholders and strengthen corporate governance. The Companies Act 2013, has considerably strengthened the statutory protections accorded to minority shareholders from oppressive conduct of the majority shareholders. Indeed, for corporate democracy to be strengthened, all stakeholders must operate within the ambit of law and statutorily enshrined protections, Mistry said.
"The founding fathers of the Tata Group had laid a strong ethical foundation that cared for all stakeholders. The relationship between the Tata Group and the Shapoorji Pallonji Group is one spanning multiple decades that was built on common agreement and mutual faith," the Mistry statement said. "The former Tata leaders worked together with the minority partner to create value for all stakeholders," he said.
"I am humbled by the NCLAT order, which after review of the enormous material on record, recognized the illegal manner in which I was removed and the oppressive and prejudicial conduct of Tata and other Trustees," he said.
"As an 18.37% shareholder, it is in our own interest to ensure the Group’s long-term success. My family, although a minority partner, has been a guardian of the Tata Group for over five decades. This legal fight has never been about me. It has always been and will always be about protecting the rights of minority shareholders and upholding their right to demand a higher standard of corporate governance from controlling shareholders," Mistry said.

Ratan Tata's legacy as brand custodian challenged as he fights Mistry

In a shock to former TataGroup chairman Ratan Tata, the National Company Law Appellate Tribunal (NCLAT) said he was determined to remove Cyrus Mistry prior to the board meeting and asked him to back down.
“Ratan Tata and the nominee of Tata Trusts shall desist from taking any decision in advance which requires majority decision of the board of directors or in the annual general meeting,” said the NCLAT about one of India’s most high-profile corporate leaders.
The ruling directed Tata Sons to reinstate Mistry as chairman and it said the appointment of present chairman N Chandrasekaran was illegal, portending wide-reaching implications for the business group. For one it puts Rata Tata on the backfoot and in the cross-hairs of his third and possibly last big career battle. Tata's first major tussle with the satraps in the Tata Group is well-documented.
ALSO READ: Tata vs Mistry: NCLAT restores Cyrus Mistry as chairman of Tata Sons
Four leaders spearheaded Tata group companies for decades: Russi Mody at Tata Steel, Darbari Seth at Tata Chemicals, Ajit Kerkar at Indian Hotels, and Nani Palkhivala at ACC. Ratan Tata won against them to convert a sprawling, monolithic empire into a cohesive unit that he kept together, and it is one of his biggest contributions to the Tata group.
Round 2 to Tata but no endgame
His second major and very public battle came when he ousted Mistry in 2016 on the basis of his performance and replaced him and his associates in a public corporate spat that took corporate India by surprise.
The Mistry family's appeal in NCLAT alleged that Tata and his associates interfered in the affairs of Tata Sons, demonstrating their insecurity about their legacy being undermined instead of considering the best interests of the group. The appeal said that over a period of time this turned to insisting that it was the will of the majority shareholder--Tata Group--that should prevail.
This became more pronounced when it came to certain “legacy hotspots” that included problem companies, namely Tata Steel Europe, Tata Teleservices/Docomo and Tata Motors Nano, on which there was disagreement between the two leaders. Mistry wanted to halt losses by divesting or shutting down businesses.
According to Anil Singhvi, chairman of Ican Investment Advisers, the manner in which Mistry was removed by the largest Indian corporate was unbecoming as well as illegal. “Thereafter to have followed up by his removal as director and changing the complete character of Tata Sons just to deprive him of his rights as shareholder was adding insult to injury and a pre-mediated murder of corporate governance,” Singhvi said.

ALSO READ: $110 bn question: Who runs Tata Sons if SC backs tribunal on Cyrus Mistry?
J N Gupta the founder of proxy advisory Stakeholders Empowerment Services sees it differently. “As far as the removal of Mistry goes, (the) process may have been rushed and the manner not the most appropriate but most of us don’t know what the circumstances at that very moment were involving and why they required such quick action,” he said.
Beyond the financials, one retired senior Tata executive said that it’s ironic that after years of having painstakingly built the Tata brand, its very architect is now risking tearing it down because of his actions. “The Tata brand is in deep trouble, and stands tarnished,” he said.
When he resigned, Ratan Tata was on the cusp of transitioning to India’s statesman designate, as many industrial leaders have done in the past. It was a position in which he may have wanted to spend time funding start-ups, playing enlightened venture capitalist and pursuing hobbies like flying but instead has been saddled with an ongoing battle and no visible end in sight.
“It’s still not too late for the both the groups to come together and sort out issues in the larger interest of the group and Indian corporate sector as a whole,” Singhvi said. “I am sure post this, boards of large corporates will take due care in maintaining governance befitting such large and iconic corporate houses.”
The key issue is that the two of the largest shareholders of a corporate house are in a scuffle. On one side, it's the Mistry family, which is represented by the actual family members and serve their own interest, and on the other side it’s Tata who is represented through third parties that include nominee directors, and who in turn serve a charity. “That is the fact,” Gupta said.

$110 bn question: Who runs Tata Sons if SC backs tribunal on Cyrus Mistry?

How do you unscramble an egg called TataSons? The second law of thermodynamics says orderly things gradually turn more chaotic, and there’s no going back, no separating yokes from whites.
But the appeals judge of India’s corporate law arbiter thinks he can reverse time. Or so it would appear from his order declaring that Cyrus Mistry, deposed three years ago as executive chairman of the holding company of India’s leading conglomerate, must be reinstated because ousting him was illegal.

Here’s the messy business in a nutshell: The closely held Tata Sons, which sits in control of the $111 billion global empire spread across more than 100 firms, is 66 per cent owned by Tata Trusts, charities run by Ratan Tata, the group patriarch. Mistry’s family owns an 18 per cent-plus stake in Tata Sons. That equity has its origin in an unpaid $200 million loan the Tata family took in 1925 to save its then-fledgling steel business. The core dispute is whether the holding company is a quasi-partnership between the Tata Group and the 154-year-old Shapoorji Pallonji, or SP Group, which is now run by Shapoor Mistry, the elder brother of Cyrus.
If it’s a partnership, then Mistry gets to argue that his minority rights were suppressed. If it isn’t, and he was just a professional CEO in a Tata enterprise, then the board was perhaps within its rights to fire him for nonperformance.
Justice Sudhansu Jyoti Mukhopadhyaya of India’s National Company Law Appellate Tribunal isn’t new to controversies. He’s the same judge who a few months back threatened to derail India’s bankruptcy law by giving unsecured operational creditors the same rights to recovery as secured financial lenders. The Supreme Court struck down that order. In Wednesday’s 172-page Tata-Mistry order, Mukhopadhyaya and Justice Bansi Lal Bhat decided that Tata Sons is indeed a partnership:
“We are of the view that for better protection of interest of all stakeholders as also safeguarding the interest of minority group, in future at the time of appointment of the Executive Chairman, Independent Director and Directors, the ‘Tata Group’ which is the majority group should consult the minority group i.e., ‘Shapoorji Pallonji Group’ and any person on whom both the groups have trust, be appointed as Executive Chairman or Director as the case may be...”
Crucial parts of the judgment have been put on hold pending appeals within a month. At this stage, it’s reasonable to expect that until India’s Supreme Court gives a final verdict, Chairman Emeritus Ratan Tata will retain control of the group, which is now administered by Natarajan Chandrasekaran, a non-controversial technocrat who replaced Mistry as chairman. However, none of the operating companies, such as Tata Motors Ltd., which owns Jaguar Land Rover, or Tata Steel Ltd., which acquired the former British Steel assets in 2007, will be able to make any strategic decisions. For at least four weeks, they’ll be frozen.
It will be a repeat of the uncertainty following the October 2016 boardroom coup against Mistry. Shortly after he was terminated, Mistry hit out at the group for allegedly compromising its finances to burnish the legacy of Ratan Tata, whom he had accused of backseat driving and oppressive interference. Mistry said he was given his walking papers for calling attention to the “legacy hot spots,” including the world’s cheapest car, which had flopped despite Ratan Tata’s strong backing for the project. The Tata Group, for its part, said it was disappointed with Mistry’s vision of the future. Even now, the finances are far from strong. The group has gross debts of 2.91 trillion rupees ($41 billion). If it weren’t for the cash-spewing software exports business of Tata Consultancy Services Ltd., the empire could come under strong pressure to deleverage quickly.
Given that the relations between the two men are probably beyond repair, would Mistry even want to return to work at Bombay House, as the headquarters are known? Perhaps not. However, he might want to retake his board seat, and the Mistry family would definitely want a reversal of what came after his dismissal: a change in the constitution of Tata Sons. The firm went from being a public limited company, albeit closely held, to an opaque private limited one. The appellate tribunal’s judgment has struck down that conversion, and also scrapped a never-used nuclear option in the charter that allows for Tata Sons’ board to transfer anyone’s shares by passing a special resolution.
To the extent that the Mistry family manages to get its chunky holding in Tata Sons to carry rights normally available to public shareholders, the value of that stake — at least in the eyes of creditors advancing money against it — gets closer to the $14 billion figure that Cyrus Mistry has used in the past as an estimate. His family’s main business is construction, building the Reserve Bank of India’s Mumbai headquarters as well as the Sultan of Oman’s palace. But India’s shadow banking crisis has left SP Group parched for liquidity. At this juncture, the ability to realize the full value of its stored wealth would help the Mistrys greatly.
At the end of the day, this dispute is all about time. Cyrus Mistry is 51 years old; in less than 10 days, Ratan Tata, who never married and has no children, will celebrate his 82nd birthday. If the final court verdict holds the core holding company to be a quasi-partnership with Mistry, the Tata name on the door may not survive him. That’s how high the stakes are.

NCLAT order a victory of good governance & vindication of my stand: Mistry

Former Chairman of Tatagroup, Cyrus Mistry on Wednesday hailed the NCLAT order as the victory of good governance and minority shareholders rights.
In a statement, Mistry said the judgment is not a personal victory for him, but is a victory for the principles of good governance and minority shareholder rights. "For over fifty years, the Mistry family, as the significant minority shareholder of Tata Sons, has always endeavoured to play the role of a responsible guardian of an institution that the entire nation is proud of," he said.

“The outcome of the appeal is a vindication of my stand taken when the then board of Tata Sons, without warning or reason removed me, first as the executive chairman, and subsequently as a director of Tata Sons,” he said.
“My endeavor as Executive Chairman had always been to establish a culture and processes that promote effective board governance to create long term stakeholder value, sustainable profits and growth,” he added.
"For the Tata Group to prosper as an institution, it is important that the management of individual companies, their Boards, the management of Tata Sons, the Board of Tata Sons and the shareholders of Tata Sons, all work harmoniously within a robust governance framework, that in substance and form, protects the rights of all stakeholders, including shareholders, investors and the Tata Groups employees, who represent the strongest asset of the Group. I believe it is now time that all of us work together for sustainable growth and development of the Tata Group, an institution that we all cherish,” he added.
CLICK HERE TO READ FULL TEXT OF THE NCLAT JUDGMENTFormer Chairman of Tatagroup, Cyrus Mistry on Wednesday hailed the NCLAT order as the victory of good governance and minority shareholders rights.
In a statement, Mistry said the judgment is not a personal victory for him, but is a victory for the principles of good governance and minority shareholder rights. "For over fifty years, the Mistry family, as the significant minority shareholder of Tata Sons, has always endeavoured to play the role of a responsible guardian of an institution that the entire nation is proud of," he said.

“The outcome of the appeal is a vindication of my stand taken when the then board of Tata Sons, without warning or reason removed me, first as the executive chairman, and subsequently as a director of Tata Sons,” he said.
“My endeavor as Executive Chairman had always been to establish a culture and processes that promote effective board governance to create long term stakeholder value, sustainable profits and growth,” he added.
"For the Tata Group to prosper as an institution, it is important that the management of individual companies, their Boards, the management of Tata Sons, the Board of Tata Sons and the shareholders of Tata Sons, all work harmoniously within a robust governance framework, that in substance and form, protects the rights of all stakeholders, including shareholders, investors and the Tata Groups employees, who represent the strongest asset of the Group. I believe it is now time that all of us work together for sustainable growth and development of the Tata Group, an institution that we all cherish,” he added.
CLICK HERE TO READ FULL TEXT OF THE NCLAT JUDGMENT

CG Hospitality joins IHCL to open Taj Jumeirah Lakes Towers in Dubai

Nepal-based CG Hospitality said it has signed a pact with TataGroup's Indian Hotels Company Ltd (IHCL), under which its property in Dubai will be managed by the Indian firm as Taj Jumeirah Lakes Towers.
The soon-to-be-launched property will be the company's first hotel property in the region, CG Hospitality said in a statement.

"This venture marks the strengthening of our bond and global partnership with IHCL. Together, we are partners with IHCL in ten of their iconic Taj properties across different regions in the world, which have set new hospitality and luxury standards," CG Hospitality MD Rahul Chaudhary said.
Taj Jumeirah Lakes Towers Dubai will help the company make deep inroads into an important Middle East market, he added.
As per the agreement, IHCL will manage and operate the property, CG Hospitality said.
The company however did not share the financial details of the agreement.
CG Hospitality owns and operates 130 hotels and resorts with 6,507 keys in 11 countries and 87 destinations. It is the hospitality arm of Nepal-based Diversified group CG Corp Global, a conglomerate of 174 companies and 76 brands.

Steelmakers face debt challenges amid falling prices, slowing consumption

India's biggest steelmakers may be suffering from buyer's remorse as assets they bought from bankrupt rivals stretch their bottom lines while market conditions have worsened.
Less than 18 months after scooping up these distressed assets in the hopes of extracting value and boosting market share, the steelmakers are struggling to meet sales and production targets because of a slowdown in the key construction and auto sectors.

Tata Steel Ltd, JSW Steel Ltd and others are also wrestling with falling revenues amid high debt loads.
"The operating environment has changed from when they bid for these plants," said Amit Dixit, senior steel analyst with brokerage firm Edelweiss Financial Services. "So their payback period obviously gets elongated now."
Steel prices were high and demand was booming then. Now, confronted with falling prices and slower consumption, steelmakers are facing the risk of credit downgrades, job losses and cuts in capital expenditure.
Arnab Kumar Hazra, assistant secretary general at the Indian Steel Association, an industry group that also represents major steel producers, noted companies would take a longer time to turn their assets around in the current environment.
A deepening credit crunch in India's shadow banking industry following the collapse of a major infrastructure lender in 2018 has sharply dented spending on cars and real estate in India.
Domestic steel consumption in September was at its lowest since the start of the fiscal year 2019/20, according to official data.
A synchronised global economic slowdown amid the US-China trade war has compounded the problem, quashing global steel consumption and intensifying competition among exporters.
JSW Steel Ltd, which bought Monnet Ispat & Energy Ltd in September last year, had promised to turn it around within a year but now says it will take another year.
The company will also miss its sales and production target for 2019/20 by 3% and has had to cut its capital expenditure by a third, said Seshagiri Rao, JSW's joint managing director and group chief financial officer.
"There is a credit squeeze, there is prolonged monsoon, a weaker government expenditure and fall in consumer demand," Rao said.
Tata Steel, which bought specialty steel firm Usha Martin Ltd in April, told Reuters the turnaround of the company would be delayed.
Tata Steel and JSW are not alone.
The world's biggest steelmaker ArcelorMittal and partner Nippon Steel and Sumitomo Metal Corp, which committed $6 billion to acquire a 10 million tonne steel plant in India, will face similar issues, analysts have said.
Pressure Building
The problems afflicting the steel majors, which together control over half the country's total steel production, have already surfaced among mid-sized firms.
"Inventory is high, debtor days have extended, and most mid-level steel companies are now contemplating job cuts," said R.K. Goyal, managing director of Kalyani Steels Ltd which relies heavily on the automotive sector for steel orders.
The credit crunch and slowdown in autos and real estate pushed India's GDP growth to a six-year low of 5% in the April-June quarter, in a troubling sign for the steel sector whose fortunes are closely tied to the broader economy.
The extent of the slowdown is prompting companies to revise capital expenditure plans and others to question the ability of companies to achieve debt reduction goals.
Despite Tata Steel's move to partially defer expenditure on expansions, IIFL analyst Anupam Gupta said its plans to cut debt by $1 billion this fiscal year look ambitious, given weakening profitability across India and Europe.
Brokerage firm Edelweiss expects both JSW Steel and Tata Steel to see increases this year in their debt to EBIDTA ratios - a metric that reflects the cash available to companies to pay debts.
And the downward pressure on steelmakers does not look set to reverse soon.
"We are just sitting idle and waiting for the tide to turn," Kalyani Steels' Goyal said.

Tata Motors to raise Rs 6,500-cr equity via preferential shares allotment

Tata Motors is to raise equity through a preferential allotment of shares to holding company Tata Sons. The board of directors has approved the raising of Rs 6,500 crore through preferential allotment of ordinary shares and warrants to the promoter.
This will deleverage the balance sheet, paring debt of the standalone entity and allowing the business to focus on long-term strategy, besides rating support, said Tata Motors. At the end of September, net debt of the standalone entity was Rs 20,000 crore.

The warrants will be convertible into ordinary shares after 18 months, with a fourth of the consideration to be brought in at the time of allotment. The issue price will be Rs 150, a premium of 11 per cent to the average closing price of the past five days.

Indians are entrepreneurs at heart: Tata Sons Chairman Emeritus Ratan Tata

In a fireside chat at an annual event organised by venture capital firm Chiratae Ventures, Tata Sons Chairman Emeritus Ratan Tata talked about the importance of start-ups in India, their positive rub on bigger companies, and the levers that he looks for when investing in start-ups.
Referring to the growth of the ecosystem of smaller companies, Tata — in a conversation led by Sudhir Sethi, founder of Chiratae Ventures – said: “We are looking at the India of tomorrow and the day after, and the start-up industry is entering the global field in a manner where competition is open.” Himself an investor in a clutch of mostly early online ventures that include Ola, Paytm, Lenskart, and Urban Ladder, Tata began actively investing after he stepped down from Tata Group in December 2012.

So, what made him pursue that route and what did he specifically look for in the companies and the entrepreneurs that he bet on? “It was partly by accident and partly by happenstance but always in my years at Tata Group, I had looked at the sector with excitement. But there was also conflict with the group (businesses) and so when I was free, I made token investments with my own money in what I considered exciting,” Tata said, adding that “contrary to popular belief my pockets aren’t that deep”.
He went on to add that the exercise became a learning process for a few years because of the highly dynamic nature of the sector. “I found in my case that company selection was more by intuition rather than numbers, and by judging on the intent of founders and their seriousness more than any other factor to make (my) decisions, good or bad as the case may have been.”
Does Tata have a formula for what makes the best entrepreneurs? “I would say what drives entrepreneurs is a fire in the belly to do business better than has ever been done before, and an opportunity to make a difference to benefit society, with the tenacity and courage to see it through,” Tata said.
When asked if start-ups that were burning cash over extended periods were sustainable, Tata declined to comment but said the right time to go global for any start-up was ultimately not defined by anything but by the founder. “... a highly successful entrepreneur will find opportunities are greater in markets outside of India, so that is a judgment call the entrepreneur makes,” he said.
Equally, most entrepreneurs end up failing. So does Tata, who was privy to an arena of new contestants, have a checklist of indicators of failure for new companies? “It’s an insight on the founders and I don’t think there is a single answer, but the issue is of the clarity of the founder, the seriousness committed to building an enterprise with someone else’s money and the reality that not every enterprise will have glory all the way through.”
So is there any particular sector that has his attention? “Health care, medical treatment opportunities, online, and manufacturing,” Tata said. “There is always a better way to do something and the opportunities are great for start-ups because the legacy costs that big companies have when they transition are not there.” He emphasised it required a lot of tenacity as well as imagination to break through in those areas, but the opportunities did exist. “Start-ups are great for India, as we are entrepreneurs at heart and all that we need is the opportunity to flourish,” he added.

144 stocks trade at over five-year low; Nomura lowers Nifty target

A slew of negative news flow over the past few weeks amid an economic slowdown has dented the market sentiment with heavyweights such as Tata Motors, Oil and Natural Gas Corporation (ONGC), Coal India, Tata Coffee and Steel Authority of India (SAIL) trading at over five-year low levels.
There are 144 stocks in all, including the ones above, from the S&P BSE Allcap index that have slipped to their lowest level in five years. That apart, stocks such as DLF, Tata Steel, ITC, India Cements, NBCC, GIC Housing Finance and Raymond comprise the 273 counters that are trading at a two-year low.

The fall, analysts say, comes on the back of the overall sell-off the market is witnessing post the Budget presentation on July 5. Negative company-specific news, in some cases, and sub-par corporate earnings for the June 2019 quarter (Q1FY20), they add, also dampened sentiment.
“While we acknowledge a challenging growth environment, the consensus narrative has turned pessimistic in a dramatic fashion since FY20 budget day. Negative feedback loop from sharp correction in stock prices has a role to play and is impacting the fundamental view (reflexivity), which has not changed materially over the past one month,” wrote Vinod Karki of ICICI Securities in a co-authored report with Ravin Kurwa.
Given the economic slowdown, analysts see more downward revisions in corporate earnings over the next few quarters. In this backdrop, some have even started to slash target levels for the frontline indices. Nomura, for instance, has cut its March 2020 target for the Nifty50 by around 8.5 per cent to 11,800 (12,900 earlier).
“Overall, the results season disappointed the Street, with earnings missing estimates on already muted expectations. There has been acceleration in consensus earnings cuts after the current results season. Consensus now projects NIFTY earnings growth at 14 per cent/19 per cent for FY20/21. We do not rule out the possibility of a further 3 – 4 per cent cut to FY20/21 consensus estimates on account of the ongoing slowdown,” wrote Saion Mukherjee, managing director and head of India equity research at Nomura in a recent co-authored report with Neelotpal Sahu.
Banks worst hit
State-owned companies, including banks, have been the worst hit given the fall since July 5, with as many as 33 stocks from the PSU basket trading multi-year low. Among the private sector, six companies each from the Tata Group and the Anil Ambani-led Reliance Group, five from KK Birla and three from Vedanta hit an over-two year low recently.
Sector-wise, a total of 26 stocks from the financial segment, including banks, are trading at multi-year lows on liquidity and lower credit growth concerns. That apart, a total of 21 stocks from the real estate and construction sector, 17 from the auto and auto ancillaries and 15 from capital goods segment are at multi-year low.
Liquidity-related developments have made most analysts cautious on the BFSI segment for now and they suggest investors tread with caution.
“We recommend to exercise caution given the emergence of fresh asset-quality risk in the corporate book (mainly NBFC/Real estate) and continued asset-quality pain from the agri/SME book. Overall, we maintain our positive bias toward banks versus non-bank finance companies (NBFCs), but recommend to stay put with high quality players,” says Anand Dama, vice-president for equity research at Emkay Global.

Best of BS Opinion: Reality in J&K, breaking down companies, and more

Some 15,000 workers, mostly under the casual category, are out of work as auto-majors, from Tata Motors to Ashok Leyland and Hero Motocorp cut production in response to slowing demand. But Finance Minister Nirmala Sitharaman declined to provide a timeline for a policy response. Meanwhile, defence minister Rajnath Singh suggested that India could jettison the long-standing ‘No First Use’ pledge on nuclear weapons depending on “circumstances”. With Pakistan clearly restive over the constitutional readjustments to Jammu & Kashmir’s status, a loosening of that commitment could have serious consequences. Meanwhile, columnists on the opinion pages focus on the economy, J&K, Brexit and the extension of state power into the corporate sphere. Kanika Datta sums up the views
Services exports have almost caught up with merchandise exports, presaging a tipping point in the economy but the focus on Make in India and poor negotiating strategy in global trade talks suggests that India may not be prepared for this, says T N Ninan. Read it here

Modi has broken the post-Simla status quo on Kashmir, says Shekhar Gupta, and the new reality has to be accepted to move on from its complex and complicated past. Read it here
T C A Srinivasa Raghavan argues that disagreements over Jammu & Kashmir’s status are polarised between the fundamentalism of the religious and constitutional “nutcases”. Read it here
From CSR to Brexit to the controversy over protesting employees in Cathay Pacific, state power in the corporate sector is on the rise, says Mihir Sharma here
Brexit has thrown Britain in limbo for three years and most MPs don't really want it. Why can’t the Queen use her royal prerogative to salvage matters? Sunanda K Datta-Ray explains the constitutional nuances. Read it here
It is not the right time to talk about any roadmap or stimulus package because discussions are still on in the (finance) ministry and PMO. When we are ready to reveal anything we will do so’
Finance Minister Nirmala Sitharaman

Slowdown pain spreads: Tata Motors, Ashok Leyland, Hero halt production

With no reprieve from the slowdown in the auto industry, many more companies have decided to halt production temporarily. These include Tata Motors, Hero MotoCorp, TVS Group companies Sundaram-Clayton Limited (SCL) and Lucas TVs, among others. They join Mahindra and Mahindra, Suzuki, Toyota and Ashok Leyland, who have already announced production cuts due to the massive slump in demand.
Tata Motors has decided to halt production at its commercial vehicle facility in Jamshedpur, which will remain closed on August 16 and 17. Tata Motors had earlier shut the unit for a day on August 1 in the first of three block closures. The second block closure was August 8-10 and third block will be from August 16.
“The external environment remains challenging, leading to demand contraction. We have aligned our production to actual demand and adjusted the number of shifts and contractual manpower,” a company spokesperson said .
Ashok Leyland, which closed some of its facilities for nine days the past few months, has issued a notice to its employees that it is declaring August 17 and 19 as non-working day and sixth day non-working day respectively. The measure is in line with the continuing sluggishness in the commercial vehicle market and the need to continue corrective actions to safeguard the interest of the company, it said in the notice.
ALSO READ: Sundaram-Clayton to shut Padi factory for 2 days due to slowdown
The company did not respond to a Business Standard query on the matter.
India's largest two-wheeler maker, Hero MotoCorp, is closing its manufacturing units for four days.

ALSO READ: Four reasons why this auto slowdown is different and the road ahead
"In line with this trend, our manufacturing facilities will be closed from August 15 to 18. While this has been part of the annual holiday calendar on account of Independence Day, Raksha Bandhan and the weekend, and also partly reflects the prevailing market demand scenario," said the company.
ALSO READ: From auto to banking, grumble of slowdown is getting louder for India Inc
Hero MotoCorp has five plants in India. The construction of its sixth at Sricity in Andhra Pradesh's Chittoor district, is at an advanced stage. Its total installed capacity to 11 million units a year.
Sundaram-Clayton Limited (SCL), the holding company of two-wheeler and three-wheeler maker TVS Motor, has declared August 16 and 17, as non-working days at its Padi factory near Chennai. "This is due to business slowdown across sectors," said the company. Part of the $8.5 billion TVS Group, SCL is the leading Indian manufacturer and supplier of aluminium die-cast products to domestic and global automotive OEMS.
Auto component manufacturer Lucas-TVS, part of TVS Group declared non-working days for its employees owing to overall industry slowdown. According to the notification posted by the company's office here, Lucas TVS had already announced non-working days last month.
ALSO READ: Auto sector may start seeing growth between Jan and Apr 2020: TVS Motor CMD
"As the lull in the industry is continuing, a situation has come to reduce the number of working days," the notification shared with the employees aid. Following the development, the company said it has declared non-working days for August 16 and 17, 2019 to its employees.
"A decision will be taken on how to offset the job losses on the non-working days. Employees are requested to extend their cooperation," said the notification.
Mahindra & Mahindra (M&M) has already announced the closure of its plants for 8-14 days in July-September. Similarly, Tata Motors has announced closure for eight days, Maruti Suzuki for three days, Toyota Kirloskar for eight days, Bosch for 10, Jamna Auto for 20, and Wabco for 19, according to reports.
During April to July total production dropped by 10.65 per cent to 9,724,373 units from 10,883,730 units, a year ago. During thus period domestic sales shed 13.90 per cent to 7,910,554 units from 9,187,965 units.
Among the worst hit was M&HCV production, which dropped by 22.35 pre cent to 110,224 units from 141,958 units, a year ago, while passenger vehicles were down 13.18 per cent to 12,13,281 units from 13,97,404 a year ago. Two-wheeler production by 9.96 per cent to 7,84,5675 units from 8,713,476 units, a year ago.
As per auto industry body Society of Indian Automobile Manufacturers, almost 15,000 workers, mostly temporary and casual, have lost jobs in automobile companies over the last two to three months. Dealers association FADA said some 200,000 jobs have been cut across auto dealerships in the last three months.

No Tata Nano production since Jan; only 1 unit sold in last 6 months

Tata Motors has not produced its small car Nano since January this year, and not sold a single unit since February this year, according to regulatory filings by the company.
The company, however, said it has not taken a formal decision on stopping production of the entry-level car, which was once dubbed as the 'people's car' saying it continues to sell the car as per demand.

As per the filings by Tata Motors, the last time it produced Nano was in December 2018 when it rolled out 82 units from Sanand plant.
Since then, from January to June there was no production of Nano.
In terms of sales it was only in February, during January-June period, this year that Tata Motors sold one unit of the small car.
When asked if the company has finally decided to discontinue Nano, a Tata Motors spokesperson said no such decision has been taken yet.
"We are selling as per demand," the spokesperson said.
There were no exports of Nano in January-June period too.
In the past, Tata Motors has hinted that Nano production would be stopped from April 2020 as it has no plans to invest further on Ratan Tata's dream car to meet strict emission norm under BS-VI and upcoming new safety regulations.
In June last year, the company produced just one unit of the Nano and sold three units in domestic market.
After that, the company continued to produce Nano at Sanand plant based on market demand and has insisted that it hasn't taken a decision on the future of Nano.
Nano, which was unveiled in January 2008 at the Auto Expo with much expectations of being the people's car, could not live up to the billing. The car was launched in the market in March 2009 with an initial price of close to Rs 1 lakh for the basic model despite cost escalations, with Ratan Tata insisting that "a promise is a promise".