Tata Sons listing will change way of working, Trusts will engage with regulators: Noel

New Delhi: Tata Trusts Chairman Noel Tata on Saturday said that listing Tata Sons will "fundamentally change" the over 150-year-old group's way of working and stressed that its largest owner will play a "constructive role" in engaging with the regulators to retain the conglomerate's unlisted character.

Speaking at the Hindustan Times Leadership Summit here, Noel said while "some people" are proposing a listing for the group's holding company, he fears that enlarging the number of shareholders after a listing will shift its focus to profits from philanthropy.

"My worry is that listing, which is what some people are proposing, will change the Tata way. And one day, if we have 30,000-40,000 shareholders, profit may take precedence over philanthropy. And I think that will fundamentally change the Tata way of working," Noel, who turned 70 on Friday, was quoted as saying.

"Tata Trusts will play a constructive role with regulators and others to try and find a solution which keeps the Tata way the way it is," he added.

The 'Tata way' represents continuity, the half-brother of Ratan Tata who took over the reins of Tata Trusts after the death of the group's more charismatic leader, said, adding that an owner cannot die, retire or be bought in the model.

The comments come at a time when ruptures at the top echelons of the country's largest conglomerate are out in the open, with Noel-led Tata Trusts, which owns two-thirds stake in the holding company Tata Sons, opposed to a listing, while the management of Tata Sons led by chairman N Chandrasekaran says it will have to follow the law of the land and list as per the RBI's instructions.

It can be recalled that Noel also dissented against Chandrasekaran's reappointment as Tata Sons chairman at a board meet on September 17 this year.

Noel, who is reported to have expressed concerns over capital allocation and returns made in bets like Air India, digital and semiconductors businesses under Chandrasekaran, also said that he is "pleased" with the firsts that the group has achieved and included the semi-conductor project, battery and electric vehicle battery that it is putting up in the list.

Speaking at the HTLS, Noel said that there has not been any change in the strategic direction of the group in terms of governance and added that discipline is needed to execute very large projects.

"Philanthropy on one hand. Nation building on other. This is independence of leadership and personalities and this will continue. I do not question the direction of what we have done. I question, sometimes, the delivery of what we are doing," Noel said.

He said the Westside business was the country's first direct to consumer business by opting for private labels, where it owns the entire chain right from the fabric to the store in which the finished product is sold.

Consumption has skyrocketed in the country over the past decade, he said, adding that Westside now boasts of 320 stores and is looking to see when it can touch 500.

"'While we the team (at Westside) has done a fantastic job in addressing the opportunity, I think full credit has to go to the economy, to India, the way consumption is growing is incredible," he said.

He also recalled starting of Trent, and claimed that Tatas were the "pioneers of retail" in the country.

The brand 'Zudio' was launched to cater to the bottom of the pyramid, he said, stressing that the price points of products remain the same even a decade later.

(This story has not been edited by Mathrubhumi and is published from a syndicated feed.)