Ratan Tata, the chairman emeritus of Tata Sons, the principal investment holding company and promoter of Tata Companies, has passed away in Mumbai, India. Tata, who was 86, has left behind a lasting legacy and helped the group become a global behemoth. The Tata Group was founded in 1868 as a trading company by Jamsetji Nusserwanji Tata and has since ventured into various industries, including textile manufacturing, steel production, consumer products, and software services, with Tata Consultancy Services (TCS) being the bedrock of the group.
🌎《Now you can now start trading at TNNS PROX》📈
🔥Start trading today, click "sign up" from the link above.
Tata Group's History
Founded in 1868 by Jamsetji Nusserwanji Tata as a trading company, the Tata Group quickly expanded into textile manufacturing and launched the iconic Taj Mahal Hotel in Mumbai in 1903. After Jamsetji's death the following year, his son, Sir Dorabji Tata, assumed leadership as chairman.
In 1907, the group established Tata Iron and Steel Company, setting up India's first steel plant, and opened an office in London, marking its global expansion. By 1917, Tata had entered the consumer products market. In 1932, it founded Tata Airlines, India's first commercial airline, which was later nationalized as Air India. Tata reacquired the airline in January 2022.
The group's diversification continued with the founding of Tata Chemicals in 1939, followed by Tata Engineering and Locomotive Company in 1945, which evolved into Tata Motors, eventually producing India's first indigenous passenger car, the Indica. In 1962, Tata launched a beverage company, Tata Finlay, which became Tata Tea and later Tata Global Beverages.
In 1968, Tata formed Tata Consultancy Services (TCS), which has grown into the group's largest company, contributing significantly to its profits. TCS remains a cornerstone of the group and is the second-largest publicly traded company in India.
Between 1968 and 1991, under the leadership of Ratan Tata, the group further diversified into sectors such as salt and watches.
Ratan Tata Became the Chairman in 1991
Ratan Tata, born to Soonoo and Naval Tata in 1937, joined the Tata Group in 1962 after graduating from Cornell University in the US. He held various positions within the group and drafted its strategic plan in 1983. In March 1991, he succeeded JRD Tata as group chairman during a pivotal time when India was embarking on economic liberalization, eventually becoming the world's fifth-largest economy. During his 21-year tenure until 2012, the group's profits increased 51 times, and its market capitalization grew 33 times.
Upon assuming the role of chairman, Ratan Tata began restructuring the conglomerate, which comprised nearly 100 companies. According to a paper by K.S. Manikandan, K. Rajyalakshmi, and J. Ramachandran from the Indian Institute of Management Bangalore, the Tata Group was previously a "slow, bureaucratic, domestic market-focused, loosely connected agglomerate of businesses." Ratan Tata transformed it into an "ambitious, integrated business house." He expanded Tata's operations into new sectors and international markets while streamlining its complex and fragmented structure. Under his leadership, Tata launched the Tanishq jewelry brand, which has since become India's largest jewelry chain.
Ratan Tata Took the Group Global
Under Ratan Tata's leadership, Tata Group became a truly global enterprise, with a significant portion of its revenues now coming from international markets. The group made several strategic acquisitions, including Tetley, Jaguar and Land Rover, and Corus Steel, which helped establish Tata as a major player in the global tea, luxury automotive, and steel industries. While the Nano project, Tata's attempt to create the world's cheapest car, was a rare failure, the group has continued to grow, with 26 publicly listed companies and a combined market capitalization exceeding $365 billion as of March 31, 2024. Ratan Tata also made personal investments in various startups.
What Does Ratan Tata’s Death Means for Tata Group?
Ratan Tata briefly returned as the interim chairman of Tata Group in October 2016, but in early 2017 he relinquished the post with Natarajan Chandrasekaran stepping into his shoes. Ratan Tata has been holding the position of chairman emeritus.
Tata Group shares spiked today as Indian investors piled into the shares as a mark of tribute to the visionary leader who is widely respected and has mostly stayed away from politics and controversies.
While Ratan Tata aggressively expanded the Tata empire globally, he did so without compromising on the group values and the conglomerate is the most respected big business group in India known for its commitment to all stakeholders – including employees, shareholders, suppliers, and customers.
Since Ratan Tata had relinquished the leadership role and the group companies are professionally run, his demise should not have much impact on Tata Group shares. However, since he did not have a successor, markets are now debating who would succeed him. His half-brother Noel Tata and his children Leah, Maya, and Neville are being touted as potential successors.
With Ratan Tata's demise, India has lost a great visionary and philanthropist, and it would be difficult for any other business leader to earn the same respect as he did for years.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Comments