The new Mr. 21st century India

IIPM, GURGAON

Sutanu Guru on the indomitable man and his group

It is 1992 and India is in turmoil. The year will end with demolition of Babri Masjid. The Indian stock markets have gone into a tailspin after the unveiling of the Harshad Mehta scandal. Dhirubhai Ambani is unveiling the momentous blueprint of a backward integration strategy that will catapult Reliance into one of the largest companies of the world. Dr. Parvinder Singh of Ranbaxy and Aditya Birla are crafting strategies that will catapult their corporate empires into truly global entities.

Amidst the bedlam, a reticent, shy and soft spoken inheritor is fighting his demons of legacy and satrapy. In the heartland of the empire that he inherited, at Tata Steel, company Chairman Russy Modi has declared war on Group Chairman Ratan Tata. The colourful and loquacious Modi invokes the legendary legacy of the still alive J. R. D. Tata and pleads with the patriarch to not let Ratan destroy the Tata Empire. Other satraps like Chairman Darbari Seth of Tata Chemicals are planning their own insurgencies. And corporate pundits by the end of 1992 start publicly wondering and outspokenly ponder if the Tata edifice will also not come crashing down, a la Babri Masjid.

Fifteen years down the line, on January 10, 2007, in a hall packed with photographers, journalists and frenzied visitors jostling each other for a view, the six feet tall Ratan Tata gracefully limbers out of the 624 wonder to resounding applause, the demons have finally been laid to rest. Pausing for deep breaths and visibly emotional, the sarcastically combative Ratan Tata says, “R. K. Pachauri (Nobel laureate) will not have nightmares and Sunita Narain (Green activist) can sleep at night.” Both Pachauri and Narain had expressed concerns that Tata’s dream Rs.1 lakh car will cause severe pollution and congestion problems on Indian roads.

As the world raved and rivals looked on grudging admiration, the man and the group that were once written off by pundits had unmistakably arrived as the undisputed number one multi-national conglomerate to emerge from India. Gushing it may sound, but some new fans are already comparing Ratan Tata to Henry Ford, the man who created the first auto revolution in the world and his car Nano to Model T, the first car in the world to be accessible to workers and the middle class. Says renowned management thinker who has written the powerful book, The Fortune at the Bottom of the Pyramid, “There is great excitement because Tata Motors has introduced the global auto industry to a whole new consumer segment.”


Just look at the corporate stars who shone in 1992 when Ratan Tata and his group were battling for survival to see how far the man and his group have gone in the global sweepstakes. Harshad Mehta is dead. Nobody talks about Russy Modi and Darbari Seth anymore. Most home grown business families that dominated India Inc. till the 1990s have disappeared from the benchmark Sensex, if not entirely from India Inc.. After a great headstart, the late Dr. Parvinder Singh’s global legacy at Ranbaxy is floundering of late. The late Aditya Birla has left a stronger legacy as his son Kumarmangalam has taken decisive steps to emerge as a global metals player. Even Mukesh Ambani has now publicly admitted that future growth will come from global acquisitions and global markets.

Yet, none match the tenacity, panache and strategic vision with which the Tata group has been systematically going global. In 2000, when acquiring global companies and brands was perhaps not even a gleam in the eye for Indian entrepreneurs, Tata Tea pulled off an audacious gamble by acquiring the British company and brand Tetley for a then whopping 271 million British Pounds. In 2004, Tata Motors quietly acquired the commercial vehicles division of Daewoo. Around the same time, Tata Steel had acquired a majority stake in Singapore based Natwest Steel. In 2007, the Tata group made a killing ($523 million) when it sold its 30% stake in US based Energy Brands Inc. to Coca Cola for $1.2 billion. In 2004, group company VSNL Ltd. emerged as the biggest carrier of telephone traffic in the world by paying $130 million to acquire Tyco International’s undersea telecom cables.

And then came the killer deal in 2007 when Tata Steel acquired the controlling stake in UK based steel giant Corus for a whopping $13 billion. The strategic move catapulted Tata Steel to the fifth position in the global steel sweepstakes with another Indian L. N. Mittal as the top dog. The year 2008 promises to be yet another blockbuster year for Ratan Tata and his group. And not just because of frenzy generated by the small car Nano. Tata Motors is clearly the frontrunner in the race to acquire two powerful global auto brands, Jaguar and Rover from Ford Motors. And who can forget the blistering pace at which Tata’s Taj group of hotels is acquiring prime properties in overseas markets?

Just imagine: this is the man and this is the group whose epitaphs were being written breathlessly by pundits back in the 1990s. Says a lot about pundits, doesn’t it?

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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