(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)
By Jeff Glekin
MUMBAI, April 4 (Reuters Breakingviews) - Cyrus Mistry's
first major appointment at Tata is a young charismatic head of
business development. Madhu Kannan will leave his role as the
Bombay Stock Exchange's chief executive to join India's largest
corporate house next month. With the younger pair of Mistry and
Kannan leading the charge, Tata may be one of the few groups
with the political and economic clout needed to breathe life
into India's retail and financial services markets.
In Nehru's India, conglomerates played an almost exclusive
role in incubating new businesses. That's no longer the case,
but Tata remains an important driver of change in the Indian
It may be too early to jump to conclusions about how Mistry
will run the group once he succeeds the current Chairman, Ratan
Tata, next year. He will no doubt himself focus on the three
largest Tata businesses: Tata Steel, Tata Motors
and Tata Consultancy Services. But Kannan's
appointment suggests he also wants to make a mark in developing
Retail and financial services are two areas where Tata has
been trying to build its presence, and where Kannan could play
an important role.
The old state monopolies in banking and insurance have been
lifted. But India continues to miss an opportunity to access
large pools of domestic savings. Though 81 percent of rural
households have savings, only half keep them in a bank account.
Only 2 percent of households opt for any kind of insurance
according to research by India's National Council of Applied
Retail remains hugely fragmented, bound by restrictions
which protect vested interests and which pander to the fears of
the three million small shop owners. It is groups like Tata,
rather than foreigners such as Wal-Mart or Tesco, that can push
the Indian government to make space for new business models and
develop an environment that's conducive to business development.
For better or worse, it is still the top business houses in
India that can prise open these markets.
- Madhu Kannan is leaving his role as CEO of the Bombay
Stock Exchange to join Tata Sons as group head of business
development, the company said on April 3.
- Kannan will report to Cyrus Mistry, who is now deputy
chairman and is due to replace Ratan Tata as chairman when he
retires at the end of this year. Kannan, who is 38, joined the
Bombay Stock Exchange in 2009 after stints at Merrill Lynch and
the New York Stock Exchange.
- Reuters: Bombay Stock Exchange CEO leaving to join Tata
- For previous columns by the author, Reuters customers can
(Editing by Hugo Dixon and David Evans)