Minority investors may seek higher dividend as Tata Sons posts huge profit

Firm reports Rs 19,638 crore liability towards AGR dues of Tata Teleservices, makes provisions of Rs 1,148 crore for AGR and is expected to make additional provisions in the years ahead

With Tata Sons having announced a record high profit in the 2022 fiscal, the firm's minority shareholders, such as the Mistry family, plan to seek a higher dividend from Tata Sons Private.

The dividend, when approved by its shareholders on August 30, will lead to a total outflow of Rs 404 crore for the fiscal year ended March 2022.

The Mistry family will earn Rs 75 crore as dividend income on its 18.5 per cent stake in the company.

The AGM will be chaired by Executive Chairman N Chandrasekaran on Tuesday and is not open to the public.  

Additional liabilities 

Tata Sons has reported a massive Rs 19,638 crore liability towards adjusted gross revenue (AGR) dues of Tata Teleservices, an unlisted subsidiary of the company.

Tata Sons has made provisions of Rs 1,148 crore for AGR and is expected to make additional provisions in the years to come.

Tata Tele has earlier infused Rs 46,595 crore in Tata Teleservices to repay the loans of the loss-making firm and bought back 50 per cent stake from NTT Docomo for $1.2 billion in November 2017.

Tata Sons will also have to make provisions for the accumulated losses of AirAsia India worth Rs 2,600 crore

Rising Salaries

The shareholders are also expected to vote on the remuneration of directors of the Tata group holding company.

As per the annual report, Ajay Piramal, Chairman of Piramal group, earned a commission of Rs 2.25 crore for the fiscal 2021 while Bhaskar Bhat, former Titan head, earned a similar amount as commission on profits.

Venu Srinivasan, who is also the Vice Chairman of Tata Trusts, did not receive any compensation from Tata Sons as he abstained from receiving compensation from the company.

Independent director Harish Mawani received a commission on profit of Rs 2.6 crore while non-executive director Ralf Speth took home a commission of a similar amount. The commission will be paid after the shareholders' meeting scheduled for August 30.

N Chandrasekaran, Executive Chairman of the company, received a compensation of Rs 109 crore for the fiscal 2022.