The man who is filling the big shoes of Ratan Tata, Cyrus Mistry's first year as chairman of the Tata Group has been an eventful one.
While former chairman Ratan Tata's influence is hard to miss, especially as the Tata Group forayed into sectors such as aviation, Mistry's touch could also be seen in the group's decision to give up on chasing big dreams which could potentially weigh the group down. While it is too premature to judge the new young chief, CNBC-TV18’s Sajeet Manghat says Mistry may be teaching the Tata's the benefits of sacrifice.
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The mystery around Cyrus Mistry gradually unravelled in 2013. The media shy chairman of the USD 100 billion Tata Group began his stint with a promise that the group would invest nearly Rs 45,000 crore in the next two year. To help him steer the group, Mistry replaced the two advisory committees set up under Ratan Tata with the group executive council or GEC and the absence of Tata veterans didn’t go unnoticed.
Mistry made it clear the group needs to respond swiftly to changing market conditions and the proof of that was seen with the Tata's rushing into erstwhile closed sectors such as aviation and retail.
Some would argue that the group's entry into aviation has little to do with Mistry and the decision to ink JV's with low-cost carrier AirAsia and full service provider Singapore Airlines have Ratan Tata's stamp on it. The same may be said about Tata Group's decision to extend its current JV with British retail giant Tesco to foray into multi-brand retail.
But Mistry's touch can perhaps be seen in the groups efforts to make further inroads into real estate and infrastructure sectors. After all this is a sector that he perhaps understands the most given his previous experience at Shapoorji Pallonji.
Mistry is also being seen as a man who understands the need to sacrifice some opportunities to capitalise on others. Proof is the Tata Group's decision to exit the race for a bank licence which was a priority under Ratan Tata. Four months after submitting an application to the RBI, the Tata's pulled out. The withdrawal was attributed to the complex reorganisation a bank licencse would have forced on the group and its impact on global operations.
Mistry also finally put an end to the Tata's quest to woo hotel major Orient Express, a one-sided love affair that saw the Tata's being snubbed atleast thrice. Shareholders gave the move a thumbs up as it meant giving up on a proposed a USD 1.2 billion tender offer.
It will be interesting to see if Mistry has the courage to take bolder decisions like giving up Ratan Tata's pet project the Nano which has seen no improvement in sales despite several marketing makeovers. Tata himself has acknowledged they made a mistake with positioning the Nano as a cheap car.
Next year promises to be a key year for the Tatas as some of its major investments are expected to be operationalised. It will also be a key year for its telecom plans as the tie up between Tata Teleservices and NTT Docomo comes up for review.
Mistry will be tested not just for his ability to anticipate new growth drivers, but also for his courage to give up on dreams that may not be relevant any longer.
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