New Delhi: Ratan Naval Tata, who passed away at the age of 86 Wednesday, is credited not only with driving the growth and globalisation of the Tata Group of companies, but also putting Indian industry on the global map.
He joined the Tata Group in 1962, starting on the shop floor, and gradually transformed it into a global powerhouse—headquartered in India, comprising 30 companies across verticals ranging from steel to salt to cars and software, with operations in more than 100 countries across six continents. He took over the reins of Tata Sons from J.R.D. Tata in 1991 and transformed the conglomerate, expanding its global footprint and diversifying into various industries, including steel, automobiles, information technology, and hospitality.
Under his leadership, the Tata Group’s globalisation drive gathered pace and the 2000s saw a string of high-profile acquisitions that put not just the Tatas but Indian industry on the global map. The group’s first big international acquisition came in 2000, when it bought British tea company Tetley for $431.3 million, followed by the acquisition of the truck manufacturing operations of South Korean automaker Daewoo Motors for $102 million.
However, it was Tata Steel’s acquisition of Anglo-Dutch steelmaker Corus for $12 billion that catapulted it into the ranks of the world’s largest steel producers. With the acquisition, Tata Steel became the world’s fifth largest steel producer, employing 84,000 people across four continents.
The acquisition, on the eve of the 2008 financial crisis, was criticised as an overpaid one. “From my point of view, the price for Corus, which will be paid by Tata, is absolutely ridiculous,” Michael Broeker, a steel analyst at German brokerage Steubing, had said then. However, Tata firmly believed the market would come around. “Quite frankly, I do feel it is both taking a short-term and harsh view… In future, somebody will look back and say we did the right thing,” Reuters quoted him as saying to reporters in Mumbai.
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Going global
Tata Steel’s Jamshedpur plant had a capacity of 2 MT when Ratan Tata took over as chairman. It now boasts a capacity of over 10 MT. It was he who took Tata Steel out of Jamshedpur and put the company on the global map. Today, Tata Steel is among the biggest producers of steel in India, Europe and Southeast Asia.
Another major acquisition that grabbed headlines was in 2008, when Tata Motors bought the British luxury car brands Jaguar and Land Rover (JLR) from Ford Motor Company for $2.3 billion.
The acquisition of Corus and JLR set the stage for Indian manufacturers to compete on a global scale.
“In doing this and more, Mr Tata buried forever talk of not being the right person for the chairmanship—a post he was never groomed for, had never solicited, or even thought himself fit to occupy. The Tata Group was not, after all, part of the future Ratan Tata had set out to touch as a teenager,” an article on the Tata Group website says.
Under Tata’s leadership as the chairman of Tata Sons, the group’s IT firm, Tata Consultancy Services (TCS), was listed on the Indian stock exchanges. It is now the biggest IT firm with a market cap of about Rs 15.865 trillion in September
Tata joined TCS for a short stint in 1970s when it was a software fledgling. It is now the biggest cash cow for Tata Sons, the holding company of not just TCS but a number of other Tata companies like Tata Power, Tata Steel, Titan, Tata Motors, Tata Chemicals and Tata Consumer Products. Tata Sons received nearly Rs 24,000 crore in dividends from 13 of its listed companies in FY24, according to an Economic Times report. And of this, nearly 80 percent or Rs 19,000 crore was contributed by TCS.
In a statement announcing Tata’s death, Tata Group chairman N. Chandrasekaran said, “For the Tata Group, Mr Tata was more than a chairperson. To me, he was a mentor, guide and friend. He inspired by example. With an unwavering commitment to excellence, integrity, and innovation, the Tata Group under his stewardship expanded its global footprint while always remaining true to its moral compass.”
From ‘accidental chieftain’ to titan
Ratan Tata was forced to return to India from the US, where he had gone to study, in 1962, after his grandmother’s (Lady Navajbai’s) health deteriorated. At that time, he had a job offer from IBM. However, his uncle and the then chairman of Tata Group, J.R.D. Tata, wasn’t happy with the idea of him being in India and working for IBM, and asked for his resumé.
He was then offered a job with Tata Industries, the promoter company of the group, where he joined as an assistant. He then went on to spend six months training at the Jamshedpur plant of the Tata Engineering and Locomotive Company (now called Tata Motors), and at the Jamshedpur facility of Tata Iron and Steel Company, or Tisco (now called Tata Steel). He was appointed the chairman of Tata Industries in 1981, and a decade later in 1991, took over from J.R.D. Tata as chairman of Tata Sons and of the Tata trusts.
His taking charge of the Tata Group coincided with the economic liberalisation that changed the shape of India’s industrial landscape. “Mr Tata seized the day. He welcomed the opportunities that came with the death of the ‘Licence Raj’. He fortified the Tata embankments to guard against the threats that arrived in equal profusion. He embraced the prospect of taking the group to foreign shores,” the Tata Group article says.
“It is likely an understatement to say that Ratan Tata, who took over as chairman in March 1991, was stepping into big shoes. And he was stepping into a minefield,” adds the article.
“Less than a decade from the new millennium, the Tata Group was a bloated, unevenly managed and excessively bureaucratic behemoth operating in an India that had only begun jettisoning the jargon of socialism and the shibboleths of policy-making that had promised plenty but delivered little,” it says, addingthat Tata was seen by many as an interloper, with none of the charisma or the capability of the legend who had preceded him. “…An accidental chieftain who had ascended to the top mainly by virtue of his surname and lineage,” it said.
Ratan Tata served as the chairman of the major Tata companies, including Tata Motors, Tata Steel, Tata Consultancy Services, Tata Power, Tata Global Beverages, Tata Chemicals, Indian Hotels and Tata Teleservices and during his tenure, the group’s revenues grew manifold. In 2023-24, the revenue of Tata companies, taken together, was more than $165 billion and these companies collectively employed over 1 million people.
“Decades later, it can be argued without favour or prejudice that Mr Tata changed the group for the better in more substantial a manner than any of the luminaries under whose care the organisation evolved since its inception in 1868. That he did this while staying true to the traditions and tenets of the group—in an environment where so many have succumbed to the allure of the soft buck—have made his accomplishments exemplary,” says the Tata Group article.
(Edited by Rohan Manoj)
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