Organic growth: The new mantra for the Tata Group
There is some good news for India Inc. as our home grown company Tata Group under the chairmanship of Cyrus Mistry, saw a record capital expenditure of Rs 95,634 crore on organic growth. This is the data for 2013-14 which is the first full year for Mistry as a chairman for the group and the amount of expenditure was done by the 10 most valued listed companies of the group.
In the past three years the Tata Group has stepped up the activity on the organic growth front too after a decade of inorganic growth. This was largely on the back of Tata Steel’s expansion at the Kalinganagar plant in Odisha, as well as expansion related to the Jaguar Land Rover (JLR) brand in China and Brazil.
The former group chairman Ratan Tata concentrated on acquisitions and his tenure was marked by $16-billion acquisitions. This included those of Corus ($12.8 billion), JLR ($2.3 billion) and Tetley ($450 million).
During that period, the top 10 group companies recorded their highest capital expenditure of Rs 1, 08,367 crore (2007-08), following the acquisition of Corus. This was followed by capital expenditure of Rs 63,909 crore on the acquisition of JLR (2008-09).
Before the acquisition of Corus, spending on organic growth was as low as Rs 18,268 crore (2006-07). Tata really knows how to balance between organic and inorganic growth and the steps taken in the last few years clearly state where the company is heading.
Source- Business Standard
