Tata Chemicals said today its share was 'undervalued' at the current market price and that it wants to double the current market capitalisation of Rs 700 crore through a mix of cost rationalisation and improved performance.

While the corporate restructuring has already been initiated with the help of management consultants McKinsey & Company, the company has also decided to buy back up to 10 per cent of its total paid-up capital from the market in an attempt to enhance shareholder value, managing director Prasad Menon said. "Our market capitalisation is about Rs 700crore at present. We plan to double it within 4 years by improving performance. Also, the board of directors has approved a buy back proposal which could be launched soon," he said.

Menon said a final decision on the buyback would be taken once the board decides on use of surplus funds available with Tata Chemicals, which currently amount to about Rs 260crore. On the ongoing restructuring, he said the target set during the process, called Manthan, was to achieve up to 25 per cent reduction in costs "but within the first six months alone we have achieved 16 to 20 per cent cost reductions. This is very encouraging".

In line with the restructuring plans, the company may go in for a further cut in workforce by offering yet another voluntary retirement scheme (VRS), Menon said. "We have already reduced staff strength by about 1,100 people after two separate VRS schemes were launched. We may look at another VRS and opt to reduce workforce by another 10 per cent," he said.