Under outgoing Chairman N Chandrasekaran's tenure since 2016-17 (FY17), Tata Sons earned cumulative dividend income of nearly ₹2.71 trillion, including proceeds from shares surrendered under share buyback. According to reports from Business Standard, this performance significantly outpaced previous leadership, with Cyrus Mistry's tenure generating around ₹27,800 crore during FY13-FY16 at a rate of ₹6,950 crore per year, and Ratan Tata's period earning ₹27,700 crore cumulatively during FY00-FY12 at ₹2,130 crore annually. The substantial increase was primarily driven by TCS dividends and share buybacks, which accounted for 91.7% of Tata Sons' total dividend income during the FY17-FY26 period. Chandra's tenure also saw a significant jump in Tata Sons' other income, including brand fees from group companies, treasury gains, and other non-recurring income.
The majority of Tata Sons' dividend income during Chandra's tenure came from TCS, with the holding company earning nearly ₹2.48 trillion from the IT major through dividends and share buyback between FY17 and FY26. As reported by Business Standard, this amount represented 91.7% of Tata Sons' total dividend income during the period. In contrast, TCS accounted for 91.6% of Tata Sons' dividend income during Cyrus Mistry's tenure. The annual dividend payout by TCS rose sharply under Chandra's leadership, reaching a record high of ₹47,467 crore in FY24 including share buyback, as the company began distributing nearly 100% of its annual net profit as equity dividend. The dividend payout by TCS was up 193% in FY18 to ₹27,107 crore, demonstrating the company's strong profitability and consistent dividend distribution policy.
Chandra used the substantial dividend income to make cumulative equity investments worth nearly ₹1 trillion in group unlisted ventures during FY17-FY26, net of the writeoff of its entire equity investment in Tata Teleservices during FY17-FY18. According to Business Standard, this includes investments in ventures such as Tata Digital, Tata Electronics, and Air India, among others. The holding company also made fresh equity investments of around ₹35,000 crore in group listed companies including Tata Motors, Tata Power, Tata Chemicals, Tata Consumer, and Tata Steel during the same period. In comparison, under Cyrus Mistry, Tata Sons made equity investments of around ₹8,000 crore in group listed companies and approximately ₹2,600 crore in unlisted companies during FY13-FY16. Unlike his predecessors, Chandra expanded the group aggressively into new sectors and industries, leveraging the cashflows from TCS.
The performance under Chandra's leadership significantly exceeded previous tenures, with Tata Sons under Ratan Tata earning cumulative dividend income worth around ₹27,700 crore during FY00-FY12 at ₹2,130 crore annually. As reported by Business Standard, nearly 40% of Tata Sons' revenues during Ratan Tata's tenure came from stake sale in TCS, including during its initial public offering in August 2004. The holding company progressively reduced its stake in TCS from 80.64% immediately after its IPO to 71.74% currently, with TCS accounting for nearly 93% of Tata Sons' total revenues during FY00-FY04 before its demerger as a separate corporate entity in April 2004. Unlike his predecessors, Chandra's successors didn't have to reduce their stake in group companies to raise capital, thanks to rapid growth in TCS' profit and dividend payout in the last 15 years.
