Ratan Tata, chairman of Tata Group and Tata Motors, India’s largest automotive company, has indicated that the company may hive off some of its well performing divisions into separate subsidiaries in future to leverage the synergies of an independent subsidiary.

Speaking at the annual general meeting held in Mumbai, the chairman also stated that it might go in for an initial public offer (IPO) in future to unlock the shareholders value in its current as well as newly formed subsidiaries.

Tata Motors has 30 subsidiaries. Some of the key subsidiaries of Tata Motors include Tata Construction in which it holds 60 per cent, Tata Technologies (95 per cent) and Tata Daewoo (100 per cent) etc.

For instance, Tata has realised the potential of its automotive technology and R&D division, and hived off the division into Tata Technologies, which today services engineering and design requirement of not only the automobile industry but also aerospace and other industries.

Tata said the Rs one lakh car is on schedule and it will hit the markets by mid-2008. The company also has a series of new launches coming up in two years time. The company is launching new generation of Indica and Indigo — but not a face-lift — Rs one lakh car, cross-over vehicle (Tata Xover), pick-up trucks (manufactured in Thailand) and reincarnation of Sumo and whole new generation of trucks.

Tata reassured shareholders and said, “The company’s fortune will be very good in years to come. There will always be challenges, but we are in no way a precarious situation. Await for good times ahead.”

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