Tata Sons appoints Birla’s Saurabh Agrawal (30th Batch/1993-1995) as group CFO

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Saurabh Agrawal, 48, head of corporate strategy at the Aditya Birla group, has been named group chief financial officer (CFO) of Tata Sons Ltd, the company said on Monday. He will join the holding company of the salt-to-software conglomerate from July, the statement said.

Agrawal, who has been with the Aditya Birla group since April 2016, will bring to the $103-billion group the experience of having steered the biggest merger and acquisition transaction in the country—the merger of Idea Cellular Ltd with Vodafone Group Plc, a deal worth $23 billion. He has also been instrumental in pushing through UltraTech Cement Ltd’s acquisition of Jaiprakash Associate Ltd’s cement assets and also the restructuring of Grasim Ltd and Aditya Birla Nuvo Ltd.

Experts said the appointment of someone with his background and experience will help the group plan capital allocation better.

“Getting adequate returns from the investments made in group firms has been one of the biggest worries for Tata Sons. Someone with a corporate strategy background will help and will be able to drive the much needed financial discipline at the group level,” said Kavil Ramachandran, executive director, Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business.

In his first letter to the group after taking charge as chairman, N. Chandrasekaran had talked about bringing greater rigour to capital allocation and delivering superior returns to shareholders. “Since the Tata group is widely diversified, capital allocation has had to balance legacy and future priorities. The move to appoint a group CFO, especially from outside, sends a strong positive signal to stake holders that the Tata leadership will have a professional, unbiased and objective view of resource allocation and business returns,” said Vijay Sampath, head-centre for family managed business at SP Jain Institute for Management Research.

Agrawal is the second investment banker to join Chandrasekaran’s team after Ankur Verma from Bank of America Merrill Lynch.

Others see the hiring of dealmakers as a sign that the group’s focus on strategic divestments and restructuring will continue under the new chairman.

“In the Tata group, individual business CFOs do a lot of heavy lifting themselves. Saurabh can lead more strategically into newer areas like M&As (mergers and acquisitions) and opportunistic buys,” said Ajay Garg, managing director and founder of Equirus Capital Pvt. Ltd and a former colleague of Agrawal at DSP Merrill Lynch.

Under former chairman Cyrus Mistry, the Tata group had embarked on a major divestment plan, spanning various businesses, including telecom, steel and chemicals. The divestments of Mistry’s tenure were in stark contrast to his predecessor Ratan Tata’s regime, which saw the group expand its wings across the globe aggressively.

In February, Tata Steel Ltd signed an agreement to sell its UK-based specialty steels business to Liberty House Group for £100 million (Rs838 crore). Tata group is also exploring a merger of its European business with Thyssenkrupp AG.

Agrawal “brings deep capital markets knowledge and valuable cross-industry experience to this critical leadership role at the Tata group”, Chandrasekharan said in the emailed statement. “His expertise will help us in driving rigour and synergy in capital allocation decisions, investment management as well as consolidation and optimization of the group’s business portfolio. We look forward to his contribution in driving financial performance of the group.”

An investment banker for nearly two decades, Agrawal was previously regional head of corporate finance (South Asia) for Standard Chartered Bank. He was also head of investment banking at DSP Merrill Lynch.

“He has a phenomenal sense of equity markets and has excellent equities markets relationships. He has very strong relationships with corporates and the fact that he has got a job with Tatas after Birlas is just a huge validation of that,” said Garg of Equirus.

Agrawal is a chemical engineering graduate of the Indian Institute of Technology, Roorkee, and has a post-graduate management degree from the Indian Institute of Management, Calcutta.

“He is a smart deal- maker and a decisive person, can quickly take a call in complex situations without losing connect with either side. With the experience of series of transactions with a group like Birlas in a quick span, I am sure Tata’s would also stand to gain from Saurabh’s entrepreneurial/ commercial mindset and his ability to take decisive position quickly, “ said Mahesh Singhi, a veteran investment banker.