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paragdesai
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Quote paragdesai Replybullet Topic: TATA SONS
    Posted: 26/Aug/2008 at 9:04pm

India's best kept secret: Tata Sons
Arun Giri, UTVi
Published on Aug 26, 2008
 
MUMBAI: They are some of the biggest companies - by revenues or profitability but they are all unlisted and in the private domain.
 
UTVi has dug out all the information about these companies that you may be interested in. Here is uncovering India's Best Kept Secrets.

The first company in this series, which we will uncover and discover, is from the Tata stable. Not only is this company possibly the most profitable unlisted company in India, but its EPS is higher than any company listed on BSE.

It has a total Income of over Rs 3,800 crore, and net profit of Rs 3,300crore, which translates into an earnings per share of Rs 82,000. To top it - reserves to the tune of Rs 12,000 crore.
 
Name of the company? None other than Tata Sons - the holding company for all Tata Group 's investments. The market value of its investments is over a Rs 1 lakh crore, but with some of its biggest subsidiaries yet to be listed, there is a great potential for value unlocking.

Almost the whole of its billion dollar income is from dividend declared by its listed subsidiaries and profit from sale of shares in these companies. Dividend from subsidiary TCS is the single biggest contributor to Tata Sons' income with Tata Motors and Tata Steel, too, chipping in with decent amounts.

Tata Sons has investments in 100+ companies of which only a dozen-odd companies are listed. It has 82 subsidiaries of which 80 are unlisted. Some of the prominent ones are its DTH venture - Tata Sky and its insurance JV with AIG, both loss-making as of now.

Unlike Bharti and RCom, which report quarterly profits in excess of Rs 1,500 crore, Tata's telecom subsidiary, Tata Teleservices, is bleeding with losses close to Rs 1,000 crores for FY07. Its retail chain, Croma, which commenced operations during FY07, also reported a marginal loss of Rs 18 crore in its first year.

Not surprisingly, Tata Sons is also a major source of funds for its group companies. It stands guarantor for thousands of crores of loans given to its subsidiary companies.

So, while Tata Sons has cash reserves of around Rs 2,500 crore, it still has Rs 4,000 crore debt in its balance sheet.

As for the company management, apart from a couple of names that may not sound familiar, most of the 10 directors on the board of Tata Sons are trusted lieutenants of chairman Ratan Tata. 

The shareholding pattern of Tata Sons does not seem to have changed much over the last few years. 51% stake in Tata Sons is held by two trusts, Sir Dorabji Tata and Sir Ratan Tata Trust.

According to the Tata group website, these trusts were created by sons of families of Jamsetji Tata, the founder of the Tata Group.  Ratan Tata is believed to be a trustee in both trusts. Shapoorji Pallonji Group, one of the oldest construction companies in India, holds 18% stake in Tata Sons.  Ratan Tata holds just 3,368 shares in his personal capacity, which is less than 1%.

An interesting note in the Director's Report that suggests Tata Sons' worry about a potential hostile takeover attempt of some of its listed subsidiaries, where its stake is less than 50%.

The directors' report says: "During the year, significant investments were made to increase the shareholding in several listed operating Tata companies."

While Tata Sons may be one of the most profitable unlisted companies, it also has one of the biggest balance sheets of any Indian company. Especially if one were to consider the market value of its investments in group companies. No wonder then that many Tata group shareholders want Tata Sons too to be listed.

Tata Sons: Shareholding Pattern

Total equity shares:  4,04,146 of Rs 1,000 each

Name of holder No. of shares
1.Shapoor Mistry  108
2.Sterling Investment Corp.
(Shapoorji Pallonji group)
40,319
3. Cyrus Investments 
(Shapoorji Pallonji group)
33,925
4. Ratan Tata 3,368
 
5. Sir Dorabji Tata Trust 1,13,067
6. Sir Ratan Tata Trust 95,211
7. Tata Investment Corp 326
8. Sarvajanik Seva Trust 396
9. RD Tata Trust   8,838
10. Tata Social Welfare Trust 15,076
11. Tata Education Trust  15,075
12. JRD Tata Trust  16,200
13. Tata Power  5,673
14. Tata Tea  1,755
15. Indian Hotels  4,500
16. Tata Industries 2,295
17. Tata Chemicals 10,237
18. Kalimati Investment Company  12,375
19. Tata International Ltd  155
20. Tata Motors 12,375
21.  Piloo Tata 487
22. Jimmy Tata  157
23. Farhad Choksey  157
24. Simone Tata 2,011
25. Noel Tata 2,055
26. Virendra Singh Chauhan (Chhota Udaipur) 1
27. MK Tata Trust   2,421

Cash Reserves - Rs 2,400 crore

Dividend to Shareholders - Rs 280 crore

Remuneration  to Directors - Rs 25 crore  

TATA SONS - FINANCIALS FY07

 

Total Income Rs 3,852 crore
Net Profit  Rs 3,335 crore
EPS Rs 82,322
Reserves & Surplus Rs 12,123 crore
Dividend Income Rs 1,300 crore
Profit on sale of shares Rs 2,300 crore

Income From

TCS - Rs 755 crore
Tata Steel - Rs 145 crore
Tata Motors - Rs 109 crore
        
Tata Sky FY07

Revenue - Rs 260 crore
Net Loss - Rs 650 crore
    
Tata AIG Life FY07

Revenue - Rs 1,131 crore
Net Loss - Rs 10 crore

Tata Teleservices FY07

Net Loss - Rs 900 crore

Tata Sons:  Directors

Ratan Tata
Ishaat Hussain
Arun Gandhi
N Soonawala
J J Irani
Krishna Kumar
Syamal Gupta
R Gopalakrishnan
R A Rosling
F K Kavarana
Cyrus Mistry



Edited by paragdesai - 26/Aug/2008 at 9:15pm
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kanagala
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Quote kanagala Replybullet Posted: 26/Aug/2008 at 9:12pm
Hi Parag,
That link is not working.
While one person hesitates because he feels inferior, the other is busy making mistakes and becoming superior.
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paragdesai
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Quote paragdesai Replybullet Posted: 26/Aug/2008 at 9:18pm
Originally posted by kanagala

Hi Parag,
That link is not working.
 
Just edited. Now you can go through it.
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kstreet
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Quote kstreet Replybullet Posted: 30/Aug/2008 at 4:55pm
If Tata sons is listed now, what could it be worth(MCap)?
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chaudhuris
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Quote chaudhuris Replybullet Posted: 18/Apr/2009 at 12:54pm
A little late in the day. The info above is only for common stock. There are several crores of convertible warrants that are owned by the Tata companies and others.

That is why IMO Tata companies are safe investments. Ratan Tata's worst scenario plan in case the group is deep in trouble will be to do an IPO of Tata Sons to raise money. Or maybe perhaps just a private placement as they did for Tata Industries with Jardine Matheson.

Who will turn that down?
Only when the last tree has been cut down
Only when the last river has been poisoned
Only when the last fish has been caught
Only then will you find that money cannot be eaten. ~ Cree Philosophy
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Quote serana Replybullet Posted: 02/Dec/2009 at 4:50pm
Well, it's group companies are largely owned by Tata Sons which itself are held by many non-profit and charitable trusts. Most group companies are publicly listed, so there are millions of owners :).

Ratan Tata and family are themselves minority share holders in Tata Sons. Shapoorji Pallonji alone has more shares than them.



Edited by basant - 02/Dec/2009 at 7:57pm
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purna
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Quote purna Replybullet Posted: 13/Dec/2009 at 8:35am

Tata Advanced Systems Ltd (TASL), a wholly owned subsidiary of Tata Sons, on Thursday said that it has signed an agreement with Sikorsky Aircraft Corp, a subsidiary of United Technologies Corp, to form a joint venture to manufacture aerospace components for Sikorsky in India, including those for S-92 helicopter cabins.

In June 2009, TASL entered into a long-term contract with Sikorsky to assemble S-92 helicopter cabins. Both the joint venture agreement and the cabin assembly contract stem from a memorandum of understanding signed in February 2007 by the companies to explore possibilities in the aerospace sector in India.

The joint venture will manufacture components for other aerospace original equipment manufacturers (OEMs) as well as detailed parts for Sikorsky S-92 helicopter cabin. The JV operations are expected to be housed in a second greenfield facility adjacent to the cabin assembly plant, which is under construction in Hyderabad. The cabin assembly plant will be ready by 2010, while the JV will commence production in late 2012.

Mick Maurer, senior vice-president of operations for Sikorsky, said: "Sikorsky's affiliation with Tata strengthens our supply chain and extends our globalisation efforts to establish significant operations in regions where the need for rotorcraft and support is great. India is certainly a key aerospace region, and we are thrilled to team with Tata and help serve and grow the business there."

Davinder Kumar, chief executive officer, Tata Advanced Systems, said: "This is part of our strategy to participate meaningfully in this space, and to enhance India's capacities in this sector."






Edited by basant - 13/Dec/2009 at 9:27am
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