Why Tatas Chandrasekaran choice is a safe bet (COMMENT)

The group clearly wants someone who will restore a reputation for good governance and probity that has taken a severe beating over the three months since Cyrus Mistry was summarily dismissed.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney IThe Winning Leap Tech Control

Budget 2017

Presented By:

DAYS hours minutes
Presented by :

Co-Presenting Sponsor :

Associate Sponsors :

Co-Presenting Sponsor :

Associate Sponsors :

Home » News » Business

Jan 13, 2017, 11.26 AM | Source: Moneycontrol.com

Why Tata's Chandrasekaran choice is a safe bet (COMMENT)

The group clearly wants someone who will restore a reputation for good governance and probity that has taken a severe beating over the three months since Cyrus Mistry was summarily dismissed.

Like this story, share it with millions of investors on M3

Why Tatas Chandrasekaran choice is a safe bet (COMMENT)

The group clearly wants someone who will restore a reputation for good governance and probity that has taken a severe beating over the three months since Cyrus Mistry was summarily dismissed.

Post Your Comments

Share Cancel

Shishir Asthana
Moneycontrol Research

On the face of it, the Tata group’s choice of Natarajan Chandrasekaran as Chairman to replace the ousted Cyrus Mistry appears a case of safety first, but look a little closer and the logic becomes clear.

The group clearly wants someone who will restore a reputation for good governance and probity that has taken a severe beating over the three months since Mistry was summarily dismissed.

The Tatas had three options: Parachute in a chief executive from a multinational based in the West;  choose someone from within the Tata family already employed in the group; or pick a professional Indian CEO from within or outside the group who had experience across sectors.

Option one would have been the boldest. But it would have come with the risk of more confrontations as the choice would have probably have been a free thinker with little problem in walking away if the going got unpleasant. The last thing the group would have wanted after the Mistry mess was a high-profile global CEO walking out on it.

Option two was hobbled by the lack of obvious talent and experience across sectors. Noel Tata had been rejected in the selection process that landed Mistry the top job.

Option three was the only way to go. The group has clearly got over its Parsi fixation, having appointed several non-Parsis to senior positions in recent years.

Of the candidates in India, the group would have wanted someone who understood its culture and had a track record across sectors. Chandra, as he is known, qualified in both respects. He is a TCS lifer and his company has carried out projects for every sector under the sun.

Since Tata Sons gets most of its dividends from TCS, it would have been difficult to look past Chandra and at another Indian candidate. Unlike Mistry, Chandra does not own a chunk of Tata Sons and to that extent will never be a problem.

Under Chandra, TCS overtook Infosys in market capitalization and became the industry bellwether. He filled the large shoes of his predecessor S Ramadorai admirably and TCS moved beyond the body-shopping that had limited the industry for years.

So Chandra is not just a safe choice but a logical one for Tata, though he will need to show that he can oversee manufacturing companies.

The flip side of his move to the top of the group is that it leaves a large hole in TCS, and the stock may react negatively, especially as the results announced just a couple of hours before Chandra’s elevation held no positive surprise.

Buy, Hold, Sell ? Hear it first on M3
Why Tatas Chandrasekaran choice is a safe bet (COMMENT)

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login