Ratan Tata’s legacy: Making Tata a global brand

Triumphs, challenges and lasting impact

One of India’s most celebrated figures in business and philanthropy, Ratan Naval Tata, former Chairman of Tata Group, who passed away last night in Mumbai at the age of 86, has left a rich legacy behind him, most notably for making Tata a truly global brand name. But besides his numerous successes, he also encountered several challenges. Here is a reflection on his remarkable legacy as a leader of the Tata Group.

Born on December 28, 1937 in Mumbai, Ratan Naval Tata joined the Tata Group as an assistant at Tata Industries and served as its chairman until his passing on October 9. Celebrated for his keen business insights and philanthropic efforts, Tata made numerous crucial decisions and valuable investments throughout his distinguished career. While many of these initiatives proved highly successful, others faced challenges.

Here is a look at his illustrious career, which elevated the Tata Group to an international standing and contributed to the conglomerate’s market capitalisation of almost USD 3.6 trillion today.

As his first managerial position in the Tata Industries, Ratan Tata took charge of the company’s subsidiary National Radio and Electronics (NELCO) in 1971. Despite achieving initial success, the struggling subsidiary, that made radios, could not survive the economic slowdown of the 70s and collapsed. Tata continued to move across the extensive conglomerate that Tata Group was already at that stage, gaining hands-on experience in several verticals.

It primed him for the role of Tata Group Chairman, which he took over in 1991, when his uncle, legendary Jehangir Ratanji Dadabhoy (JRD) Tata, who had led the conglomerate for over 50 years, passed away and Ratan Tata stepped into the position.

Tata began his tenure as the Chairman of Tata Group at a crucial period as the Indian economy had begun to be liberalised and while many established business houses felt threatened by the risk of higher competition, Tata took the battle for markets overseas, making several astounding and audacious acquisitions on the home ground of foreign companies that were planning to conquer the Indian market.

One of his first moves overseas came in 2000, when Tata made one of its most profitable decisions and bought a 33 pc stake for USD 298 million in the global tea brand Tetley Group which was three times the size of the entire Tata group at the time of this merger. Today, Tata Consumer Products, the owner of Tetley and numerous other bands including Tata Salt and Himalayan commands a market capitalisation of about USD 13.2 billion.

Following the success of acquisition of Tetley, the Tata Group pursued a series of international deals, acquiring major names across various industries, including the Corus Steel, automotive giant Jaguar Land Rover, Daewoo, and General Chemical Industrial Products. While some of these ventures withstood the test of time and became highly profitable, others fell short and led to significant losses for the company.

When in April 2007, Tata Steel acquired the Anglo-Dutch manufacturer Corus Steel for about USD 12.9 billion, it not only created one of the largest steel companies in the world, but was also the biggest and boldest overseas investment by an Indian company and it retains the crown of being the largest Indian investment overseas even today.

However, the acquisition did not work out as per Tata’s plans. Just a year later, the 2008 recession led to a drastic decline in global steel demand and prices, prompting Tata to restructure its operations. After navigating several obstacles over the years, Tata Steel Europe ultimately split into Tata Steel UK and Tata Steel Netherlands in 2021.

But just the next year after Tata Steel, Tata made another bold bet, again equally audacious, when he acquired Ford-owned British brands Jaguar and Land Rover for an estimated USD 2.3 billion in 2008.

The deal turned heads in the automotive world globally and marked a significant moment for India. The story had begun a few years earlier when Ratan Tata, after facing losses with Tata Motors’ first passenger car, Indica, approached Bill Ford, then Chairman of Ford, to sell the British factory to Tata Motors. Ford’s dismissal of Tata was a stark moment of insult.

But soon enough Ratan Tata had the last laugh as in 2008, facing bankruptcy, Ford was forced to sell the brands Jaguar and Rover to Tata Motors. Soon enough, Tata’s acquisition became a lifeline for the struggling brands. Tata ensured that the automotive community recognised the importance of this move, highlighting that an Indian company had come to the rescue. The decision proved to be a remarkable business success, with sales for Land Rover and Jaguar soaring from USD 12.38 billion in 2011 to over USD 31.4 billion by 2018. For FY24, the company reported sales of over 400,000 vehicles.

Tata also expanded business locally in India, in new industries like aviation and retail.

Tata Group made its entry into retail with the launch of Trent’s Westside in 1998, which has since evolved into India’s fastest-growing retail chain. Over the years, the conglomerate has significantly expanded its presence in the sector, introducing Zudio, an affordable apparel brand in 2017, and Croma, India’s premier electronics retail chain. Tata has also ventured into the jewellery market with renowned brands like Tanishq, Mia, and CaratLane, as well as fragrances through Skinn, among other offerings.

Himself a pilot, aviation was one of Tata’s passions. After two decades of unsuccessful attempts to establish its foothold in the aviation industry, Tata Group’s Air India was nationalised and its joint venture with Singapore Airlines was derailed amid intense opposition.

However, in 2013, Tata Group announced its joint venture with AirAsia to launch a low-cost domestic airline and partnered with Singapore Airlines to launch Vistara, a premium full-service airline. Finally in 2021, Tata Group acquired Air India from the Indian government for a substantial USD 2.2 billion, marking its homecoming. And currently, the entire aviation businesses of the Tata Group are being consolidated under Air India and Air India Express brands.

A significant chapter in Tata’s life occurred when Cyrus Mistry, from the Shapoorji Pallonji Group, was appointed chairman in 2012, replacing Ratan Tata. Mistry aimed to revitalise the Tata Group, which was struggling in its steel and automotive sectors. However, he was dismissed in 2016 amid claims of a growing “trust deficit.”

Mistry subsequently filed a lawsuit for oppression and mismanagement against the Tata Group. The legal battle was long and complex, culminating in a notable victory for Mistry when the National Company Law Appellate Tribunal ruled his dismissal illegal and ordered his reinstatement as executive chairman in 2019. The Tata Group responded by appealing to the Supreme Court. After further proceedings, in 2021, the Supreme Court set aside the NCLAT’s ruling, upheld the Tata Group’s petitions, and dismissed Mistry’s claims of oppression.

Another equally high profile setback in Tata’s career was the launch of the Nano, which was initially envisioned as an affordable, lightweight vehicle for the Indian middle class. Unfortunately, the car was perceived as cheap and unsafe, failing to resonate with consumers. As a result, Tata Motors discontinued the Nano in 2020, following a year of no production or sales in 2019.

Over the years, Tata has spearheaded several successful ventures, including the highly profitable Tata Consultancy Services, which is also the biggest IT player in India.

He was also known to be India’s most generous philanthropist and had donated over USD 102.4 billion till 2021 for charitable causes.

Despite facing setbacks, Ratan Tata enjoyed an illustrious life marked by significant achievements. His story would serve as an enduring source of inspiration for young Indians and future generations alike.