Journey of Tata Investment

Tata Investment Corporation Limited (TICL) is a non-banking financial company, previously commonly referred to as The Investment Corporation of India. Established by Tata Sons Pvt Ltd. in 1937, it initially aimed to support small and medium-sized entrepreneurs in India. In 1959, it became one of the few publicly traded investment companies on the Mumbai Stock Exchange. Over the years, TICL evolved from aiding new ventures to becoming an investment firm with a diverse portfolio. The company played a crucial role in nurturing long-term investments, promoting projects with Indian and foreign collaborators, and holding minority equity stakes in these ventures. Some of the companies it helped create, like SKF Bearings (India) Ltd., Ceat Ltd., National Rayon Corporation, and others. In its early years, TICL had a subsidiary called Investor Machine Tools Ltd., whose plant near Pune was later gained complete control of by Tata Motors Ltd. In addition to organic growth, TICL expanded by merging with Investa Ltd. and Varuna Investments Ltd. TICL is distinguished by an impressive dividend record. In February 2008, the company became a subsidiary of Tata Sons Pvt Ltd., with Tata Sons and other Tata companies collectively holding around 73.38% of its paid-up capital. TICL is led by a well-qualified Board of Directors, chaired by Mr. Noel Tata and Vice-Chaired by Mr. F. N. Subedar, with expertise in finance, investment, administration, and management. It is supported by an experienced team of professional managers. In 2012, TICL gained complete control of a 95.57% stake in Simto Investment Co. Ltd., making it a subsidiary. TICL, alongside Tata Sons, was among the first companies to receive in-principle approval to incorporate and sponsor the Tata Mutual Fund. TICL also co-promoted Tata Asset Management Private Company Ltd. with Tata Sons Pvt Ltd. in 1994, holding a 32% stake while Tata Sons owns 68%. Tata Asset Management (TAM) is one of the pioneers in fund management in the Indian private sector. TAM serves as the investment manager for the Tata Mutual Funds, catering to over 1 million clients. As of March 31, 2022, TATA AMC managed assets worth approximately ₹89,500 crore in the domestic market. CRISIL has consistently rated TICL with an 'AAA' rating, indicating the highest safety in interest and principal payment. This rating has been reaffirmed annually and remains valid. Tata Asset Management offers a range of innovative investment solutions across the risk-return spectrum, including equity funds, balanced funds, and debt funds.

Business Segments

Tata Investment is a non-banking financial entity (NBFC) sanctioned by the Reserve Bank of India within the realm of Investment Company.

1. Investments and Investment related activities:

• The core activities of the firm predominantly encompass the allocation of resources into extended-term investments, spanning equity shares, debt instruments (both listed and unlisted), and equity-linked assets across a broad spectrum of industries.

• The primary revenue streams for the organization entail earnings derived from dividends, interest, and gains arising from the disposition of investments. Over the passage of time, through a gradual and prudent management of their investment portfolio, Tata Investment has constructed a substantial investment portfolio.

• This portfolio, as of March 31, 2022, boasted a recorded value of over ₹3,000 crore with an approximate market valuation of ₹20,700 crore, dispersed across 87 enterprises spanning diverse sectors.

Subsidiaries of Tata Investment: 

• Simto Investment Company Ltd.

Simto Investment Company Limited is a wholly-owned subsidiary of Tata Investment Corporation Limited (TICL). It is a non-banking financial company (NBFC) that invests in a variety of financial assets, including equity and debt securities, mutual funds, and real estate.

• Tata Trustee Company Ltd

Tata Trustee Company Ltd (TTCL) is a wholly-owned subsidiary of Tata Investment Corporation Limited (TICL). It is a trust company that supplies a range of trust services, including trustee services for mutual funds, pension funds, and other financial institutions. TTCL is one of the largest and most experienced trust companies in India. It has a strong track record of providing high-quality trustee services to its clients. TTCL is also known for its ethical and transparent business practices.

Key Personnel

• Amit N Dalal, Executive Director and CEO

Amit N Dalal, having an extensive 35-year tenure in the finance, investment, administration, and management realm, serves as the Executive Director at Tata Investment Corporation. His adept implementation of portfolio strategies has yielded substantial enhancements in the company's operational performance consistently over the past decade. Furthermore, he assumes a Directorial role in several corporate entities and maintains affiliations with charitable organizations.

Financial Performance

1. The Standalone Operating Income of the organization includes various sources such as dividends, interest income, derivative gains, and other earnings.
2. The profit from the sale of long-term equity investments after tax for the year ending March 31, 2023, amounted to ₹362.21 crore, a decrease from ₹430.61 crore in the fiscal year 2021-22. These investments were carried at Fair Value through Other Comprehensive Income.
3. Standalone profit before tax for FY 2022-23 is ₹258.55 crore, up from ₹228.09 crore in FY 2021-22. The profit after tax for FY 2022-23 stands at ₹240.90 crore, an increase from ₹201.36 crore in the previous fiscal year. On a consolidated basis, the profit after tax for the year FY 2022-23 was ₹251.75 crore compared to ₹214.46 crore in FY 2021-22.
4. As of March 31, 2023, the organization has investments in a total of 85 companies, out of which 62 are quoted on the market and 23 are unquoted.
5. The organization has demonstrated a compounded annual growth rate (CAGR) of 13.76%, surpassing the BSE 200's 9.35% between March 31, 2008, and March 31, 2023, on its investments. This impressive performance was made possible through prudent investments in unlisted equity and fixed-income securities, effectively mitigating portfolio volatility.
6. Furthermore, the organization has generously rewarded its shareholders over the 15-year period, distributing a total of ₹1,721.12 crore in dividends. In the 2019 financial year, the organization executed a buyback amounting to ₹450 crore, returning capital to its stakeholders. When the sum of distributed dividends and the buyback value is factored into the overall Value Created, the resultant CAGR would be approximately elevated to 14.54%.