)
The Tata group's holding company, Tata Sons, has made a record profit of Rs 9,060 crore in 2014-15, providing ammunition for aggressive investments in the infrastructure and aviation sectors and, if needed, to buy back NTT Docomo's stake in Tata Teleservices.
The company also recorded its highest revenue of Rs 13,210 crore on a record dividend income from software major TCS. In 2013-14, Tata Sons had made a profit after tax of Rs 3,050 crore on a revenue of Rs 5,430 crore.
Tata Sons' fortunes are dependent on TCS, in which it holds close to a 74 per cent stake and from which it received a dividend of Rs 11,402 crore. Other big companies in the group such as Tata Motors skipped paying dividends and Tata Steel's contribution fell to Rs 231 crore (see chart).
Only nine listed companies in India have made more net profit than Tata Sons in 2014-15. Apart from dividend income, Tata Sons earns a significant amount from the group companies for using the Tata brand name. The brand fees have been capped at Rs 75 crore since 2012-13.
Since Cyrus Mistry took over as group chairman in December 2012, Tata Sons has launched two airlines, Air Vistara and AirAsia, apart from investing in real estate and infrastructure projects.
Tata Sons will also need money to buy back NTT Docomo's stake in Tata Teleservices. The Tatas have offered Rs 23 a share, valuing NTT Docomo's stake at Rs 2,900 crore. NTT Docomo is seeking more.
Tata Sons is the promoter of the unlisted financial services arm of the group and of Tata Realty, which is setting up housing projects across India.
During 2014-15, Tata Sons' cash and cash equivalents more than doubled to Rs 13,171 crore from Rs 5,980 crore. The higher cash balance was partly on account of a special dividend of Rs 5,800 crore received from TCS, said an analyst.
Tata Sons bought cash-starved Tata Steel's stake in Titan Company for Rs 680 crore early this month, taking its stake in the jewellery company to 19.59 per cent.
One of the group firms recently made a $100 million investment in US-based taxi aggregator services provider Uber, revealing the group's ambitions to expand its horizon to new economy businesses.
Almost 67 per cent of Tata Sons is owned by the Tata trusts and another 18 per cent stake is owned by Mistry's family. The rest of the stake is held by small investors and extended Tata family members. The Tata trusts, Chaired by Ratan Tata, uses dividend received from Tata Sons for philanthropic activities. When contacted, a Tata Sons spokesperson said, "We do not comment on Tata Sons' revenues and profits."
