Kishore Chaukar, MD, Tata Industries, told ET, "We are looking at businesses that show promise." The logic behind the diversification is to expand the group’s presence in the service sector, which is growing faster than manufacturing.

Logistics has a huge potential and could include not just warehousing and deliveries, but also data mining and data management services like post-production inventory management. Internationally, logistics is a big business with companies like NYK Logistics and Maersk Logistics listed on stock exchanges.

"With several companies increasingly resorting to outsourcing activities that are not part of their core business, it is possible that companies outsource logistics too," explained Mr Chaukar. The potential for the business can be gauged from the fact that the cost of transporting the cars produced by Telco works out to about Rs 6,000-13,000 per car. Even if the proposed logistics company handles just 10% of the requirement of Tata group companies, it should result in business worth Rs 5,000 crore.

Alternate medicine is another area that shows promise and it is being actively looked at by the Tatas. Here, the group is looking not so much at curatives, but at prophylactics (preventive or protective medicine based on traditional knowledge) that will increasingly be used by an ageing population with a longer life span. The Tatas plan to use the large agricultural land with Tata Tea and its expertise in tissue culture to grow medicinal herbs.

While bio-technology offers hope, there are several ethical, legal and other issues that complicate the matters. Hence, the Tatas are a bit wary of entering this area. Yet they are examining the options.

The Tata group portfolio includes steel, trucks, chemicals, power plants, construction business, tea and coffee, retail stores, hotels, telecom networks, insurance companies, software, pigments, wristwatches, water coolers, bathroom tiles as also movies. The group has shed some businesses in the recent past. It had earlier stated that the focus was now on knowledge driven, branded sectors, where margins are typically higher.