Tata mulls streamlining of technology operations

Bloomberg

Tata Group, the Indian conglomerate that manages more than 100 operating companies, is weighing a plan to streamline its technology and infrastructure businesses, people with knowledge of the matter said.
The conglomerate is considering a restructuring that would see several of its technology businesses moved under publicly traded Tata Consultancy Services Ltd., according to the people.
TCS, Asia’s largest software maker, is the most valuable of the group companies with a market value of about $74 billion. Tata Group, which wants to reduce the number of companies it oversees, may sell some smaller units that don’t fit with its strategy, the people said, asking not to be identified because the information is private.
Tata Group hasn’t made a final decision about which companies would be folded under TCS, the people said. It controls Mumbai-listed Tata Elxsi Ltd., a product engineering firm with a market value of about $826 million. The group also owns Tata Interactive Systems, which sells computer-assisted learning products, as well as closely held outsourcing provider Tata Business Support Services Ltd.
“This is a good and focused move by the conglomerate to promote synergy of the talent and resources which are spread out thin currently,” said Nirmal Gangwal, founder of Brescon Corporate Advisors Pvt. “This will bring lot of rationalization and will weed out several units that are irrelevant and unviable.”
Shares of Tata Elxsi rose as much as 3.5 percent trading, the biggest intraday gain in more than two weeks. The benchmark S&P Sensex Index fell 0.2 percent at 12:51 p.m. in Mumbai. Deliberations are at an early stage, and there’s no certainty they will result in a transaction, the people said. A representative for Tata Group declined to comment.