Months after Ratan Tata's death, Tata Group changes THIS years old tradition, company will now...

The Tata Group, one of India’s largest industrial conglomerates, has made a significant shift in its business approach, marking the end of a decades-old tradition. Months after the passing of former chairman Ratan Tata, the group has decided to overhaul its financial management practices.

According to a report by The Economic Times, Tata Sons has directed its companies, including newer ventures like Tata Digital, Tata Electronics, and Air India, to independently manage their debts and liabilities. The group has also stopped providing “comfort letters” and cross-default clauses to lenders, which were earlier used to secure loans for its companies.

This change signals a move towards greater financial autonomy for Tata Group’s subsidiaries. Tata Sons has informed banks that future capital for new businesses will come primarily from equity investments and internal resources. The group clarified that the leading company in each business segment will act as the holding entity.

According to reports, the impact on most listed Tata companies like Tata Steel, Tata Motors, Tata Power, and Tata Consumer Products is expected to be minimal, as they already manage their finances independently.

However, holding companies with significant Tata stakes may face adjustments, as banks will now evaluate their financial stability without relying on traditional guarantees from Tata Sons.