Already 79 when India became independent, Tata's story since has had several twists and turns
Mumbai: In the year that India won independence from British rule, the Tata group was already 79 years old and in its first phase of consolidation.
Founded as a trading company in 1868 by Jamsetji Tata, who died 36 years later, the group had diversified into businesses including insurance, making products ranging from cooking oil, soaps and detergents to steel and producing power by 1932, when then chairman and Jamsetji’s son Dorabji passed away.
Nowroji Saklatwala, a close associate of Dorabji who became the group’s third chairman, was leading the consolidation drive when he died of a heart attack in 1938. Jehangir Ratanji Dadabhoy Tata, fondly known as JRD, became the new chairman at age 34.
JRD, who was to steer the group for half-a-century, had earlier spearheaded the group’s entry into aviation. In 1929, he became the first Indian to be granted a commercial pilot’s licence, and three years later, he formed Tata Aviation Service or Tata Airlines, which was eventually named Air India and nationalized.
The maiden flight in the history of Indian aviation took off from Drigh Road in Karachi, now in Pakistan, with JRD at the controls of a Puss Moth.
JRD added three other key industries to the group’s portfolio in his early years at the helm. He set up Tata Chemicals Ltd, now the largest producer of soda ash in the country, in 1939.
In 1945, he started Tata Engineering and Locomotive Co. Ltd (now known as Tata Motors Ltd, India’s largest auto maker by revenue), to manufacture locomotives and engineering products.
Also in 1945, he created Tata Industries Ltd for the promotion and development of hi-tech industries. Tata Industries initiated group ventures in sectors including information technology, financial services, auto components, advanced materials, telecom hardware and services.
After independence, the group’s story took several twists and turns; it involved diversification, growth, competition, productivity, efficiency gains, globalization and innovation.
The next wave of expansion was to be led by Ratan Tata, who was a surprise choice to head the group after his uncle JRD stepped down in 1991.
Ratan Tata spent the first years establishing his authority over the satraps JRD had fostered under a decentralized structure. He then embarked on a journey to make the group’s companies more efficient, and then turned his sights on globalization.
In 2000, Tata group bought British tea brand Tetley for $450 million, then the largest overseas acquisition by an Indian company. The purchase only whetted its appetite. Seven years later, the group bought Anglo-Dutch steel maker Corus Group Plc for $11.9 billion: the following year, it paid $2.3 billion to acquire iconic British auto brands Jaguar and Land Rover from Ford Motor Co.
A file photo of the Empress Mill. Photo courtesy: Tata Central Archives
By the time Ratan Tata retired on his 75th birthday on 28 December 2012, he had been at the helm of Tata group for 21 years. During Tata’s tenure, the group’s revenue grew to around ₹ 4.76 trillion in 2011-12 from ₹ 14,000 crore in 1991.
When his successor Cyrus Mistry, only the second group chairman without Tata in his name, took over the helm, it was time for another round of consolidation in the aftermath of a downturn in the Indian economy and the crises in the US and Europe.
Less than two years into his term, Mistry is already looking to expand, with plans to invest $35 billion in the next three years even as the group looks at possible divestments and restructuring. The group is exploring potential acquisitions for expansion. It is focusing on strengthening synergies in clusters such as defence and aerospace, retail, infrastructure and finance.
Today, Tata group comprises more than 100 operating companies in seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. Tata companies have operations in more than 100 countries across six continents, and export products and services to upwards of 150 countries.
The group, with 581,470 employees worldwide, earned revenue of $103.27 billion in the year ended 31 March, with 67.2% of it coming from businesses outside India.