A questionable strategy

Selling TCS stake to salvage strugglers isn't a good move

Tata Consultancy Services (TCS) was not one of the group companies ousted chairman Cyrus Mistry mentioned in his bitter letter to the Tata Sons board on October 25. But it is no surprise that this jewel in the crown has been, from some accounts, the source of serious disagreement between him and Ratan Tata. It is perhaps also not surprising that the divergence reflects a key proclivity of promoter-owned groups in India — of leveraging high performers to salvage the strugglers. Mr Mistry had reportedly ignored advice from the Tata Trusts, the Ratan Tata-led entities that exercise majority control over Tata Sons, to sell a five per cent stake out of its 74 per cent shareholding in TCS to recapitalise some of the floundering group companies.

TO READ THE FULL STORY, SUBSCRIBE NOW NOW AT JUST RS 249 A MONTH.

MONTHLY

₹ 249

Select

ANNUAL

₹ 1799

Select

Best Offer

SMART ANNUAL

₹ 1499

₹ 1799

Opt for auto renewal and save Rs 300

Select

What you get on Business Standard Premium?

Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
Pick your 5 favourite companies, get a daily email with all news updates on them.
26 years of website archives.
Preferential invites to Business Standard events.