The Tata family of rich, high-minded Parsee textile entrepreneurs based in Mumbai started the industrialisation of India 100 years ago, notably with the building of the first steel mill and a model new town for workers at Jamshedpur, 150 miles north of Calcutta. A generation later, it also founded Tata Air, which was later nationalised as Air India. Today, the group is bidding (with Singapore Airlines) to buy back Air India as it is partially privatised.
Tata is now a sprawling empire of some 80 companies ranging from steel, power generation and cars to tea, hotels and software. It has annual sales of over $8.5 billion and it prospered hugely behind the high tariff walls and barriers to inward investment that existed during India’s days of post-imperial autarky. But as the country slowly deregulates and allows in foreign companies, the Tata behemoth is having to shape up and face entirely new competitors.
Many Tata companies have been failing to pull their weight of late. Ratan Tata, nephew of the legendary J.R.D. Tata who led the family group for nearly 50 years, points out that 11 of the 80 companies account for 85% of revenues and 90% of profits. So he has been getting out of some sectors, such as cement, a sluggish low-margin business, and others, such as toiletries, where Tata’s market share had melted as competitors grew stronger. Now he wants to shape the group around seven businesses: metals and minerals, automotive and engineering, chemicals, agro-business, hotels, IT and power.
But reshaping Tata is not as simple as it might be for an American or European conglomerate. The group’s structure was a labyrinth of cross-shareholdings among operating companies and tiny stakes held by the private holding company, Tata Sons Limited (TSL). The main task Mr Tata faced when he succeeded his uncle in the early 1990s was to re-establish some sort of control over the companies that bore the Tata name.But he has complemented a great role in the growth of the tata industries. Besides now he has diversified the the tata industries in many fields , such as tata finance, tatanova, tata magazines.
And in this sluggish indian economy it has standed with his head high, only the Tata industries.
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