Ratan Tata, Chairman of Tata Sons, on Tuesday expressed the view that Tata Sons should increase its holdings in the Tata Group companies and also untangle the cross-holding among the several outfits.

Responding to a shareholder query at the 43rd annual general meeting of Tata Tea, he agreed that the promoters' stake in the company was low and that it should be increased. The Tata Group companies currently hold 28.95 per cent in Tata Tea.

Options

In his reply, he further stated that to increase the holding there were two options. One is the creeping acquisition route, but restricted to only five per cent each year.

The second is an open offer, but that was ruled out.

Responding to Tata's statement, R.K. Krishna Kumar, Director of Tata Sons, said that the Tatas have increased their stake in the companies substantially in the last two decades.

In Pix: For a "Healthy" marriage

"Ideally it should be 51 per cent, but let me clarify that neither any particular step was being taken nor any war-chest being created for this purpose", he told reporters.

Remove cross-holding

Tata also said that the Tata Sons management has taken an in-principle decision to remove all cross-holding among the different group companies.

Moreover, in future, no cross-holding exercise would be initiated.

Krishna Kumar said that some of these cross-holdings were actually enhancing shareholders' value and would continue to remain.