Ratan, who used to go to school in Rolls-Royce, later dreamed up Nano

Ratan Tata, who died late on Wednesday, left behind a legacy that far exceeds his immensely successful business empire.

In the early 1990s, with a newly liberalised Indian economy, Tata Group chairman Ratan Tata, who took the helm in 1991, steered the conglomerate on a course of business acquisitions. 

Ratan Tata joined the family firm after acquiring a degree in architecture from Cornell University, US,  in 1962. He initially worked on the shop floor, gaining experience in several Tata Group businesses before being named director in charge of one of them, the National Radio and Electronics Co, in 1971.

Ratan Tata assumed leadership of the group in 1991 after his uncle, JRD Tata, who had been in charge for more than half a century, passed away in Switzerland. 

His taking over the Tata Group coincided with the opening up of India’s economy in 1990. The resulting economic reforms brought liberalisation and global investment into the country. Ratan Tata soon turned the group, which began as a small textile and trading firm in 1868, into a global conglomerate, with operations stretching from salt to steel, cars to software, power plants, and airlines.

He rapidly expanded the business house. It now has operations in more than 100 countries and clocked $165 billion in revenue for the year ended March 2024.

Ratan's acquisitions abroad

Known as “unpretentious” and “down-to-earth,” Ratan Tata controlled over 30 companies in 100 countries on six continents yet lived an unpretentious life. As chairman of Tata Sons for 21 years, he led the salt-to-steel conglomerate's aggressive expansion.

A big flavour of the expansion was the “turn-the-tables” on several British businesses, which garnered much national pride among the common Indian public after 200 long years of colonisation and hard-won independence.

--In 2000, Tata Group acquired London-based Tetley Tea for $431.3 million.
--In 2004, the company bought the truck-manufacturing operations of South Korean automaker Daewoo Motors for $102 million.
--In 2007, Tata expanded its reach by buying Anglo-Dutch steel manufacturer Corus Group for a hefty $11.3 billion.
--the conglomerate bought elite British car brands Jaguar and Land Rover (JLR) in 2008 for $2.3 billion from the Ford Motor Company.

Air India returns home to Tata Group

But perhaps the final business battle Tata fought was his most gratifying. In 2021, Tata Sons regained control of Air India, the nation’s flagship carrier, almost 90 years after it was taken over by the state.
Today, Tata Group spans coffee and cars, salt and software, airlines, and e-commerce businesses, with plans in place for a $11 billion chip fabrication plant (with Taiwan's Powerchip Semiconductor Manufacturing Corp) and an iPhone assembly unit.

“Ratan Tata imagined big and took the empire beyond India,” said Kavil Ramachandran, executive director of the Thomas Schmidheiny Center for Family Enterprise at the Indian School of Business in Hyderabad. The biggest among Tata's gambles was Tata Consultancy Services (TCS). The software maker would become a cash cow years later.

Another major venture was Mr Tata's decision to enter the auto space. In 1998, Mr Tata made its vehicle debut with the Indica, the first locally built passenger vehicle that he called “my baby.”

But not everything was successful. “While he thought globally, these turned out to be hasty initiatives,” said Mr Ramachandran.

During the 2008 financial crisis, Tata's Corus buy was criticised as an “overpaid” acquisition. Tata Steel has pared its European operations in recent years in the face of slumping demand and high-cost structures and slashed thousands of jobs on the continent.

JLR in troubled waters 

The JLR also hit a rough patch soon after Tata acquired it, as the financial crisis pummeled demand for luxury cars and the company’s ability to access credit. While the Tata Group managed to turn around the marquee car brand within a couple of years, it soon faced other headwinds, from slumping Chinese demand to Brexit. The pandemic and chip shortage have affected JLR in recent years.

Mr Tata also faced another auto-related setback, the failure of the Nano, which he launched in 2008. While his dream envisioned all Indian families in a vehicle instead of motorbikes and scooters, the ₹1 lakh Nano shut production only 10 years later, in 2018, amid a lack of demand and due to early quality and safety concerns.

Within six years of his arrival at the Tata headquarters, Ratan Tata reorganised the Tata Group, which had $5.9 billion in revenue. This process involved sacking leaders, including Russi Modi of Tata Steel, Darbari Seth at Tata Chemicals, and Ajit Kelkar of Indian Hotels Co.

A rising India at the start of the century again saw Tata’s most ambitious bet: to push his group to seek business from overseas. This resulted in the Tata Group spending $15 billion to buy Tetley Tea, Jaguar Land Rover, and Corus Group, the Anglo-Dutch steelmaker.

By the time he decided to retire in 2012, when he had turned 74, Tata Group’s revenue totaled $100 billion.

To school, in a Rolls-Royce

Ratan Tata was the son of Naval Tata, who was adopted by Ratanji Tata, son of Jamsetji Tata, who founded the Tata group in 1868. While growing up in what was then Bombay, life was luxurious for the young Ratan: He was driven to school in a Rolls-Royce.

One of the country’s most revered business leaders, Tata was a pioneer in business who did not shy away from taking bold bets. Cementing the Tata brand among Indian households and making the country’s largest conglomerate a name outside India will be among his most significant legacy. This culminated when Tata regained control of Air India, the flagship carrier, in January 2022.

The crowning moment for the Tata group since the start of the century was the public offering of Tata Consultancy Services (TCS) in 2004. Today, TCS is the country’s largest information technology services company. It accounts for 90% of Tata Sons’ total profits and returns over $4 billion in dividends every year.

Back in 2005, the Ministry of Corporate Affairs selected TCS to complete the e-governance project that allowed corporate filings to be completed over the web. This saw all directors of companies in India getting a unique eight-digit number. Ratan Tata was the first businessman to get the unique number: Mr Tata’s Director Identification Number is 00000001.

In his interactions with journalists and investors, Tata always came across as soft-spoken, sophisticated, very courteous, and forever conscious of his identity.

Nano's demise

Not all business decisions were successful. Tata’s cherished project, Tata Nano, the cheapest and smallest car, launched in 2008, was mired in controversies from the start, and Tata Motors manufactured the last Nano in 2018. The Tata Group’s planned entry into telecom services never took off.

Tata was a teetotaler and a non-smoker. He loved pets, especially dogs, and Bombay House, the headquarters of the Tata Group, provided a kennel and food for the street dogs in the vicinity.

In an interview, R. Venkataramanan, the then CEO of Tata Trusts, quipped when asked about his proximity to RNT, that only two persons are close to the chairman—Tito and Tango, the German Shepherds who occupied centre-stage at his home. They died of old age later.

In 2008, Tata was given the country’s second-highest civilian award, the Padma Vibhushan.

Mr Tata, who remained a bachelor, is survived by a brother, Jimmy Tata, and two half-sisters from his mother’s side. He also has a half-brother, Noel Tata, who is the chair of Trent.

Ratan's boardroom battles

Tata found himself at the centre of intense battles for control of the conglomerate not once but twice in his career. He won both. 

The first battle, when he took over as chairman in 1991, pitted him against long-time executives who had been running "fiefdoms" under his predecessor. Thus, within six years of taking over, Tata reorganised the then $5.9 billion revenue group, including sacking maverick leaders including Russi Modi of Tata Steel, Darbari Seth at Tata Chemicals, and Ajit Kelkar of Indian Hotels Co.

The second, in 2016 — four years after his retirement — was about preserving his legacy as Cyrus Mistry, former Chair of Tata Sons, sought to reduce debt. Tata had helmed the group for 21 years and named Mistry to be his successor in 2012, but the latter was sacked on October 24, 2016 in an acrimonious boardroom coup.

The battle led to a public spat with the Shapoorji Pallonji family, which owns 18 percent of Tata Sons and has had a 70-year partnership with the Tatas. In 2020, Mistry’s family signalled its intent to sell an 18% stake in Tata Sons.

Tata then returned as interim chairman of the conglomerate before handing over the baton to Natarajan Chandrasekaran in January 2017 and moving to his role of chairman emeritus of Tata Sons. N Chandrasekaran remains at the helm of Tata Sons, to date.