Tata Group to invest Rs 1200b in five years

NEW DELHI, April 17 (The Economic Times): Diversified business house Tata Group will invest up to Rs 1200 billion across sectors in the domestic market in the next five years as it looks to more than double its revenues to $150 billion by then. The Tata Group, which has over 90 operating companies, will put in half of the planned investment in power sector, while the other significant portions will be in steel and automobile sectors. "We have become a significant player globally in each of the sectors that we are present in. In the next five years, the pace of growth of the group will continue... The current investment assessment for the next five years is around Rs 1100 billion to Rs 1200 billion," Tata Industries Managing Director Kishor A Chaukar said. Tata Industries is one of the investment arms of Tata Group. This investment has been planned essentially for the Indian market and it will be pumped in across various sectors like power, steel, automobiles, telecommunications and chemicals, he said while announcing the ambitious roadmap for doubling the turnover of the group in less than five years from now. Chaukar said the Mumbai-based conglomerate has already invested about Rs 700 billion in the last three years and Rs 1200 billion would be in addition to this. When asked about the expected revenue of the group after the investment will be made, Chaukar said: "It will be more than double in less than five years. I think it'll be around $140 billion to $150 billion." The group has expanded to nearly $68 billion at present from about $8 billion 10 years ago and it will maintain such growth, he added. Asked about the mode of funding this investment, he said it will be a mix of internal accruals and debt. "We are generating a considerable amount of internal accruals and at the same time also reducing current debt, which will enable us to raise debt. For this investment, the debt and equity ratio will be around 2:1," Chaukar said. The Tata companies clocked an overall revenue of $67.4 billion in 2009-10. Out of this, about 57 per cent was contributed by the domestic businesses. Elaborating on its investment plans, Chaukar said: "The major sector will probably be the power as we are constructing an Ultra Mega Power Project in Gujarat and it requires quite a substantial amount. About half of the planned investment, that is Rs 500 billion-Rs 600 billion will be by Tata Power in the next five years."