After Chandra Exit, What Happens To Tata’s $120 Bn Investment Plan?

N Chandrasekaran’s decision to step down as Tata Sons chairman has put the Tata Group’s planned $120 billion investment programme under fresh scrutiny, according to a Bloomberg report. Chandrasekaran’s departure comes as the conglomerate pursues a major expansion across semiconductors, electric vehicle batteries, aviation and consumer technology.

Some of Tata Group’s current and planned projects could slow down, be scaled back or take longer as the group awaits new leadership, the people told the publication. The leadership change also gives Noel Tata, chairman of Tata Trusts, a greater role in managing the transition at Tata Sons.

Tata Board Seeks Greater Capital Discipline

Noel Tata has in recent months pushed back against the pace of spending under Chandrasekaran, favouring more measured capital allocation and projects with quicker payout horizons, according to the report. Tata Trusts collectively hold about two-thirds of Tata Sons.

Tata Sons’ board had already started pushing for a strategic reassessment before Chandrasekaran announced his departure, Bloomberg reported. Directors led by Noel have asked senior management to reassess or slow several capital-intensive projects, particularly the group’s chip fab, airline business and consumer technology operations.

The board wants clearer evidence of potential returns before approving more spending, according to people familiar with the matter cited by the news agency. This comes as Tata’s recent expansion has involved large investments in businesses where returns may take years to materialise.

Semiconductors And Batteries Face Fresh Focus

Tata’s semiconductor business is among the projects under scrutiny. Tata Electronics’ Assam chip packaging plant remains on track to open next year, according to the report. However, operational and technology-access delays have led the group to initially pursue less sophisticated technology for its chip venture.

Agratas, Tata’s battery business, has also adopted a more cautious approach. The company has stepped back from plans to quickly move towards commercial-scale battery-cell production amid a widening cost gap with Chinese manufacturers and difficulties in securing technology partnerships.

Air India is another major investment challenge. Bloomberg reported that the airline suffered record losses in the year ended March 31, while Tata has already reduced some of its ambitions for the carrier. The airline is also set to get a new chief executive.

Tata Digital is facing pressure to improve its performance as well. Directors pushed back when management sought about $1 billion in additional funding and asked for a clearer plan to reduce losses and improve execution. The business has since begun a restructuring involving management and staffing changes.