Tata group prepares for three new stars

Readying succession plan for Tata Motors, Tata Steel and TCS.

They have been among the most important faces in the Tata group for quite some time. But just seven months from now, all of them will make way for successors at the group’s top three companies — Tata Motors, Tata Consultancy Services (TCS) and Tata Steel — which account for 80 per cent of the group’s total turnover.

The first to pass on the baton will be Tata Motors Managing Director (MD) Ravi Kant. He retires in June, according to the group’s policy that all executive directors must retire at the age of 65 years. The other two are the MD of Tata Steel, B Muthuraman, and his long-time counterpart at TCS, S Ramadorai. They retire in September and October, respectively.

The emergence of three new stars, being identified in tune with the succession plan that is directly overseen by Group Chairman Ratan Tata, does not mean these three veterans will walk into the sunset. Since the retirement age of non-executive directors has been fixed at 75 years (it was upped from 70 a couple of years ago, and allowed Ratan Tata to continue as chairman), all three can continue to be in the group in various important capacities.

It is being widely speculated that Ramadorai is tipped to take over as vice-chairman of TCS. The two others are also likely to remain within the group, just like Muthuraman’s predecessor, JJ Irani, continues as a director of Tata Sons.

Tata Steel and TCS might announce successors to their MDs at the annual general meetings (AGMs) likely to be held in July or August, a group executive familiar with the process said.

Since Ravi Kant will retire before the AGM date, Tata Motors may call a special board meeting to decide on his successor.

Though the group hasn’t named anybody officially, several names are doing the rounds. PM Telang, 61, executive director at India’s largest commercial vehicle maker, is seen as a heir for the top slot at Tata Motors. Ravi Kant was also the executive director of the company’s commercial vehicles business before he was elevated as MD. Under his leadership, the company has shed its primary image of a commercial vehicle maker.

This means that Rajiv Dube, 48, president, passenger car business, may have to wait till Telang retires.

The process to groom the next CEO at TCS and Tata Steel has already started, with the creation of chief operating officer’s (COO’s) post. “The final decision will be taken at the right time, but these two COOs are certainly strong contenders for the top job,” said a Tata executive.

TCS appointed N Chandrasekaran, 45, as the COO about a year and a half ago. He is considered a strong contender for the top job. Similarly, Tata Steel’s COO, HM Nerurkar, 59, is widely seen as the man who will take over from Muthuraman.