Shareholders slam TaMo for investor wealth crash – Times of India

Reeba.Zachariah@timesgroup.com
Mumbai: Shareholders of Tata Motors lashed out at the company’s leadership at the annual general meeting on Tuesday for denying them dividends and questioned the deterioration in investors’ wealth. “When will the company be back on the dividend paying list?” asked a shareholder.
Tata Motors last paid a dividend of 20 paise in July 2016. Another shareholder, while also raising concerns over the erosion in investors’ wealth, said, “The company’s market cap today stands at pre-Jaguar Land Rover (JLR) level. Shareholder value has been deteriorating.”
One equity investor questioned the high compensation package of the management — CEO Guenter Butschek (Rs 16.44 crore) and CFO P B Balaji (Rs 10.23 crore) — when the company is making losses. A member suggested that Tata Motors should look at selling stake in JLR to private equity to reward shareholders, while another submitted sale of parent Tata Sons shares to unlock value. “I fail to understand the company’s vision, how do you plan to be profitable?” queried an investor.
On a standalone basis, Tata Motors made losses in four of the last five fiscals.
Responding to the shareholders, Tata Motors chairman N Chandrasekaran said that it pained the management that they haven’t been able to pay dividend for the last four years. Unfortunately, there wasn’t any room for this on a standalone basis. Dividend payout and value creation are the top most priority for the company, he said.
The chairman pointed out that they are working towards improving the overall financials of the company. Plans include unlocking non-core assets and bringing the Rs 61,900-crore automotive debt to “near zero levels in three years”.
The company is expected to generate free cash flows from fiscal 2022 onwards, said Chandrasekaran. “Overall investments of Tata Motors have reduced by 50% in fiscal 2020, and we will continue to manage this tightly.” The company has cut capex programmes of JLR and of the India business to 2.5 billion pounds (from 4 billion pounds) and Rs 1,599 crore (from Rs 4,500 crore) for this fiscal.
The chairman confirmed that Tata Motors “is not in discussions” with the Boris Johnson-led UK government to get “any funding for JLR”. The statement comes after British media reported that the UK government had rejected the company’s request for a rescue package for JLR.
The management expects the India passenger vehicle business to turn positive by fiscal 2023 even as they are in the midst of transferring the unit to a separate subsidiary for Rs 9,417 crore. The subsidiarisation proposal has been filed with the company law tribunal and the entire process is expected to be completed this fiscal, Chandrasekaran informed shareholders.

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