N Chandra gets extension as Tata Sons boss: Why are Deepak Parekh and Harsh Goenka bullish?

N Chandrasekaran took over the reins of the Tata group during tumultuous times. (Image: Reuters)

On February 21, Natarajan Chandrasekaran or ‘Chandra’ as he’s fondly known in corporate circles, completed a five-year stint at the corner office of the salt-to-software conglomerate Tata Group. Earlier in the month, the board of the holding company, Tata Sons, extended Chandra’s term as chairman for a second term of five years. The move had the blessings of group patriarch Ratan Tata, a special invitee to the board meeting.

The move didn’t come as a surprise as Chandra’s tenure has seen several highs, notably, the legal victory against the ousted former chairman Cyrus Mistry, winning the bidding process for Air India and getting the ‘Maharaja’ back to the Tata hangar, resolution of debt in group firms and the aggressive digital push reflected in the acquisitions of Big Basket and e-pharmacy 1mg. There were a few misses though on the M&A front when it came to Tata Steel and Tata Power and there is no clarity yet on the sale of the 18 percent stake held by the Mistry family in Tata Sons.

Moneycontrol caught up for a quick chat with India Inc veterans, Deepak Parekh, Chairman, HDFC Ltd, and Harsh Goenka, Chairman, RPG Enterprises on Chandra’s journey so far as the Tata Sons head honcho.

Both were bullish on the Padma Bhushan awardee, who rose to bag the top job after beginning his career as an intern at TCS.

“He has had an excellent five-year innings and he is young and he can do many more five-year terms,” quipped Parekh, a veteran banker.

The 58-year-old Chandra took over the reins of the Tata group during tumultuous times when corporate governance allegations were levelled during courtroom proceedings by the Cyrus Mistry camp and group companies were under strain.  So how successful has he been in steadying the ship so far at Bombay House?

According to Goenka, who oversees a business group present in segments ranging from tyres to information technology to lifesciences, “Chandrasekaran’s first task was to restore the group’s image after the events of past few years. This he has achieved with great success and that has enhanced his credibility significantly. Having done that, he brought in stability and focus on critical issues of the group. I would also credit him for adding speed to scale."

Goenka adds, “He (Chandra) was quick to address the burning crisis in Tata Teleservices and bring to fruition Ratan Tata’s dream of getting Air India back to the Tata fold. All of this and the agility that the group is showing in investing for the future has put the glitter back on the group’s name.”

During the Chandra era, the Tata group's combined market cap has risen by more than 170 percent and the market value of several group firms has doubled. So what has impressed the stock markets and investors?

Goenka feels the Tata Group under Chandra’s stewardship has displayed the kind of legendary business leadership that the Tatas have been known for.

He elaborates, “The acquisition of Bhushan Steel and a string of investments in emerging ventures in the retail and digital space have affirmed to the investors that the group is heading in the right direction with strong intent. The boldness with which the group is moving forward was reflected in the Air India acquisition. No other group in the country could have taken on this arduous challenge and instil confidence in the public at the same time."

“Markets are responding to the fact that the crucial mix of corporate governance, strategic vision and growth prospects are all robust at the Tata group under Chandra,” Goenka signs off.