Tata funds splash to double earning

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By The Telegraph Online
  • Published 18.04.11

New Delhi, April 17 (PTI): The Tata group will invest up to Rs 1.2 lakh crore across sectors in the domestic market over the next five years as it looks to more than double its revenues to $150 billion (about Rs 6.64 lakh crore) by then.

The Tata group, which has over 90 operating companies, will put in half of the planned investment in power, while the other significant portions will be in steel and automobile.

“We have become a significant player globally in each of the sectors that we are present in. In the next five years, the pace of growth of the group will continue. The current investment assessment for the next five years is around Rs 1.1-1.2 lakh crore,” Tata Industries managing director Kishor A. Chaukar said.

Tata Industries is one of the investment arms of the Tata group.

This investment has been planned essentially for the Indian market and it will be pumped in across various sectors such as power, steel, automobiles, telecommunication and chemicals, Chaukar said while announcing the ambitious road map for doubling the group turnover in less than five years.

Chaukar said the Mumbai-based conglomerate had invested about Rs 70,000 crore in the last few years and the Rs 1.2 lakh crore would be in addition to this.

On the expected revenue of the group after the investment, Chaukar said: “It will be more than double in less than five years. I think it’ll be around $140-150 billion.” The group has expanded to nearly $68 billion from about $8 billion 10 years ago and it will maintain such growth, he added.

On the mode of funding this investment, he said it would be a mix of internal accruals and debt. “We are generating a considerable amount of internal accruals and at the same time also reducing current debt, which will enable us to raise debt. For this investment, the debt and equity ratio will be around 2:1,” Chaukar said.

The Tata companies clocked an overall revenue of $67.4 billion (around Rs 3.19 lakh crore) in 2009-10. Of this, about 57 per cent was contributed by the domestic businesses.

Elaborating on the investment plans, Chaukar said: “The major sector will probably be power as we are constructing a mega project in Gujarat and it requires quite a substantial amount. About half of the planned investment, that is Rs 50,000 crore-Rs 60,000 crore will be by Tata Power in the next five years.”

The other significant investment will be in steel, for which the group has earmarked an investment of Rs 35,000 crore, over and above Rs 15,000 crore to Rs 16,000 crore that has already been invested, he said.

“Besides, Rs 12,000 crore will be invested by Tata Motors and Rs 8,000-10,000 crore will be in telecommunications,” he added.

The rest will be in other verticals such as chemicals and Tata Sons that puts in capital in areas such as retail, Chaukar said.

Asked whether Tata Group is looking for further acquisition, Chaukar said as and when opportunities came they would look at it.

The group has operations in over 80 countries across six continents and its companies export products and services to 85 countries.

The group, which employs around 3.95 lakh people across the world, is present in seven sectors - communications and information technology, engineering, materials, services, energy, consumer products and chemicals.

The major Tata group entities include Tata Steel, Tata Motors, Tata Consultancy Services, Tata Power, Tata Chemicals, Tata Global Beverages, Indian Hotels and Tata Communications.