THE LEGACY OF RATAN TATA

AFTER SUCCEEDING J.R.D. TATA IN 1991, THE RETICENT AND HUMBLE RATAN TATA TRANSFORMED THE CONGLOMERATE INTO A GLOBAL FORCE THROUGH SOME BOLD ACQUISITIONS

- KRISHNA GOPALAN

In 2004, the board of Tata Steel convened at the group’s iconic Bombay House headquarters for what seemed like a regular meeting. It was soon after the buyout of Singapore’s NatSteel and was viewed as an important step in the company’s journey of going global. But one person did not seem too pleased: Ratan Naval Tata (RNT), Chairman of Tata Sons. “Why are we making these small acquisitions?” The asked about a deal worth a sizeable $285 million. It was a clear indication that RNT desired to make the company a global force to reckon with. “Let’s do something bigger,” he said then. Three years later, it became clear just what RNT meant. Tata Steel acquired Corus, which was four times its size, for a whopping $12 billion after an intense bidding battle. With that one stroke, it became the largest outbound buyout by an Indian company. That and other foreign acquisitions made clear that RNT’s vision stretched much beyond India’s borders.

But it was not always so. By the late 1980s, there was speculation about the successor of the legendary J.R.D. Tata, who had headed the group for half a century. Many names did the rounds, including that of Nusli Wadia, the promoter of Bombay Dyeing, apart from several professionals. At that point, RNT was heading Tata Industries. It had not been a remarkable career—before Tata Industries he had helmed NELCO, which manufactured electronics—but he was J.R.D.’s preferred choice.

When RNT entered the corner office at Bombay House in March 1991, he could not have known that gaining acceptance within the group would be difficult. He had to weather many a storm, from a showdown with unions to bringing powerful ‘satraps’—who headed some group firms—to heel. He also consolidated his hold over the group, which operated like disparate companies glued together only by the personal charisma of J.R.D. Tata.