Tatas have zeroed in on the right choice, say veterans

Nov 24 2011, 13:53 IST
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SummaryHowever, people who know him agree with the decision.

Transformation may hold key for the 43 year old Cyrus P Mistry as he prepares to take up the top job at the Tata Group the largest business conglomerate in the country in a years time.

From heading companies at the Shapoorji Pallonji (SP) Group ($2.5 billion) that has only one listed company and relatively less public interface, he will take full responsibility of Tata Group which has several large listed entities, post Ratan Tatas retirement in December 2012.

However, people who know him agree with the decision.

He is capable, young and has familiarity of the group. I have seen him grow over the last 10-15 years, said Deepak Parekh, chairman, HDFC Group. He still has around a year under Ratan Tata to understand the complexities of the business. There are others who agree to this.

He is a good choice, said Jamshyd N Godrej, chairman, Godrej & Boyce.

The move to appoint Cyrus may also be a technically sound as Mistry, being the single largest shareholder and also the chairman of the group, going forward, will be central to the decisions of raising equity for the groups growth and expansion.

The promoter should have some skin in the game, said Parekh. If Tata Group wants to expand further and acquire companies, it will need capital and let the largest shareholder also decide whether he wants to dilute and put money.

The managing director at Shapoorji Pallonji Group and younger son of Pallonji Shapoorji Mistry has a wide experience of running businesses and has been a director at Tata Sons since August 2006.

He was very much a part of the overseas growth plans of the Tata Group and overseas growth has really happened in the last six years, said Parekh, underlying his ability and his understanding.

While there may be questions that may come up on his ability to take up this large responsibility at a group that has large listed entities and has huge public interface, people who know him say that it is not a limitation.

I think that Ratan Tata will be there to guide him and transformation wont be a big issue, said Godrej.

Cyrus was handling the infrastructure projects in Shapoorji Pallonji Group and the group has some listed companies and he was working on roads, power projects and Cyrus has had experience in running public limited companies so he is aware of regulatory hassles, regulatory provisions, said

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