The Ratan Tata I Knew: 'So where do you keep the washing machine?'

Brotin Banerjee   : January 28, 2013  | 12:04 IST


Tata Housing Development Company CEO Brotin Banerjee. PHOTO: Nishikant Gamre

In my limited interactions with Mr Ratan Tata, I have seen an amazing ability to foresee things and trends before they happen. And then there is his ability to motivate people to take the plunge. 


I have also seen an ability to look at the big picture and at the same time go into the details of a proposal. For instance, when we would present him our project plans or even floor plans, he would ask questions on the distance between two buildings and how are we were addressing privacy concerns of the residents. He would also ponder over how to make the residences more usable at night. 

When we were working on low-cost housing, Mr Tata would ask about how we could make flats more liveable and maximise space - he would ask questions like where would one keep a study table or where the washing machine would go. 

Along with such details he was able to bring expertise from other industries into our business. He spoke about how we could replicate the robotic car assembly to build houses fast, with contour crafting technology that uses a robotic arm - an overhead crane that moves the concrete mixture. His ability to grasp complex issues very fast is also amazing.

At the same time, he remains a very down-to-earth person and what comes across in personal interactions is his humility and his ability to be respectful to even a stranger.


(As told to Suman Layak)Brotin Banerjee is the Chief Executive Officer of Tata Housing Development Company Ltd and is among the youngest CEOs in the group today. In the past, he also led Barista till the time the Tatas were investors in the group.

Ratan Tata would never thump the table'

BT : Jan 20,2013 Edition

Former Tata Steel MD J.J. Irani on Ratan Tata's leadership style

I hardly knew Ratan Tata when he did an early stint in Jamshedpur. He left within a few months of my reaching Jamshedpur in early 1968. In the 1970s, we interacted while he was in charge of Nelco. His first love was the automobile industry and it is in Tata Motors that he has contributed in great detail - from design to manufacture to acquisitions.

But our interactions grew in the late 1970s, when he started taking an interest in TISCO (then known as Tata Iron and Steel Company, now Tata Steel Ltd). Becoming chairman of the company did not change his attitude - he was deputy chairman before the board appointed him chairman of TISCO in 1993.

The qualities that I like most about him are his sincerity and total devotion. He is a workaholic. He is also totally devoted to the canines he has had as pets for long years. Even at Bombay House stray dogs are cared for. My best personal memories of him are the after-dinner discussions on a one-on-one basis (or sometimes in a small group), when all those present could open up and freely express their views on all subjects under the sun. He is normally quite reserved and these moments of free expression were out of the ordinary.

The chairmanship did not change him or his manner of arriving at the most appropriate course of action. He evoked support from his team and he still does.

 Ratan Tata is not the type of boss who is given to thumping the table. He softly mandates, and those to whom the message is addressed get the point very clearly. He thinks big and encourages others to do likewise. He does not discourage those who occasionally fail to deliver.

When dealing with a difference of opinion, he will convincingly present his views but at the same time listen attentively to other points of views and arrive at a consensus. He has always listened to all points of view before evolving a decision in his own quiet but firm way.

The last decade - when I had retired from Tata Steel but still served on different boards of Tata companies as well as Tata Sons - was aimed at growing outside India, thinking big and not changing track when faced with difficulties. 

If we were convinced about our goals, we were urged not to give up. Also, another theme was not to give up on our principles of doing business ethically. Ratan Tata had clearly enunciated targets for turnover and profits. All the CEOs accepted these and by and large achieved them.

I may also recall the period prior to my becoming CEO and managing director of TISCO. That was a very turbulent period. I was on very good terms with Russi Mody for 20 years, but he was advised poorly in his final two years at TISCO.

 He smudged the line between professional management and ownership. The Tatas (both J.R.D. Tata and Ratan Tata) handled the situation with firmness and decorum and the board was with them. But that brief period was awkward for both Ratan Tata and myself. I must thank Ratan Tata for his guidance.


Jamshed J. Irani
The author is a former managing director of Tata Steel and has also been a director on the board of several Tata Group companies

Tata's global score: 50-50

Joydeep Ghosh & Abhineet Kumar / Mumbai December 28, 2012, 0:32 IST

It took Ratan Tata a full decade to take the group global. But it was the proverbial lull before the storm as what followed was some of the most audacious deals that corporate India had seen till they happened.

The group became bolder as well – Tetley was acquired for $450 million; JLR for $2.3 billion and Corus for $12.1 billion.

“I would put Tata in the larger group of ‘globalising’companies, that is, ones that have an international presence but still have not made their presence felt everywhere in the world. Tata is strong in Britain, the US and South Africa, but less high-profile elsewhere,” says Morgen Witzel, author of Tata: the Evolution of a Corporate Brand.

In terms of sheer numbers, its global operations contributed as much as 58 per cent of the $100 billion (Rs 4.75 lakh crore) group’s consolidated revenues in 2011-12. For Tata Steel, the share of global operations is as much as 74 per cent; for Tata Global, it is 70 per cent; for Tata Motors, it is 67 per cent and for Indian Hotels, it is 25.77 per cent.

A snapshot of the companies, which have gone global, reflect a mixed picture. The return on networth (RoNW or return on equity) for Tata Global at 8 per cent is more or less same at the time of acquiring Tetley and now. In case of JLR, it has shot up from negative to a whopping 52 per cent.

 For Indian Hotels, however, it has declined from 14 per cent to less than a percentage point. And Tata Steel’s RoNW has declined from 37 per cent to 7 per cent. (See Mixed results)
In fact, Tata Steel Europe is hurting the group badly.

 Even Ishat Hussain, non-executive director of Tata Sons, in response to a story in the Economist, recognised Tata Steel’s problems: “The Return on capital employed (RoCE) since 2010 has been highly distorted by the performance of one business: Tata Steel. The RoCE for Tata companies, excluding Tata Steel Europe and the capital work-in-progress of Tata Steel in India, is 14 per cent.”

Clearly, a 4 per cent drag on the overall group’s RoCE cannot be taken lightly.

Though the financial sector crisis since 2008 has led to slowing down of demand from automobile and construction companies – the key customers of Corus — many say that the deal was expensive. 

Here’s why. Lakshmi Mittal’s $34 billion acquisition of Arcelor in June 2006 was cheaper at EBITDA (earnings before interest, tax, depreciation and amortisation) multiple of 4.3 vis-à-vis 9 for Tata Steel’s acquisition of Corus.

COMPARISON OF KEY NUMBERS: FROM ACQUISITION YEAR TO 2011-12
Company	Marquee acquisition	Net sales	Net profit	Market cap	Debt- equity ratio	Return on net worth %
Tata Global	Tetley (2000-01)*	3,015.19	103.48	952.65	1.53	8.02
	2011-12	6,631.16	431.91	6,929.17	0.18	8.14
Tata Steel	Corus (2007-08)	131,498.03	12,321.76	50,640.15	1.57	32.76
	2011-12	132,899.70	4,948.52	45,685.72	1.49	6.85
Tata Motors	JLR (2008-09)	70,880.95	-2,465.00	9,268.32	3.03	0.00
	2011-2012	165,654.48	13,573.91	87,494.77	1.52	51.57
Indian Hotels	Pierre (2005-06)	1,837.31	263.17	7,689.55	0.96	14.16
	2011-12	3,432.71	25.82	4,849.41	1.17	0.73
Consolidated figures in Rs Crore; *While Tetley was acquired in 2000, the consolidated data is available only from 2001; Source Capitaline; Compiled by BS Research Bureau

That is reflected in the performance of the share price. When the deal was announced on June 30, 2006, Tata Steel’s share price stood at Rs 473 and market cap at Rs 29,516 crore. In November 2012, the respective figures are Rs 377 and Rs 37,431 crore.

 The equity base, however, has increased substantially. To fund the deal, the group issued 390 million shares, increasing the equity base from 580 million to 970 million. During the same period, the Sensex went up 82 per cent whereas the company’s stock price is down 20 per cent.

The value of the acquisition has eroded considerably. If one considers peers like Arcelor Mittal, which operate in a similar environment, their market cap stands at $26 billion. Tata Steel, Europe which has one-fifth of Arcelor Mittal’s capacity should be valued at $5 billion. In other words, the market value of Tata Steel is lesser than the debt ($6 billion) it raised, and half the total price paid at $12.1 billion. Even capacity utilisation has fallen to 14 million tonne in FY 11-12 from 23.1 million tonne in FY 07-08.

JLR, on the other hand, is a completely different story, though there were initial hiccups which forced Tata Motors to post a loss of Rs 2,465 crore in 2008-09. But now, the marquee car company is the crown jewel of the group. In fact, if JLR had not paid a dividend of Rs 1,312 crore to Tata Motors in the second quarter of the current financial year, the parent company would have declared a loss.

Within these two giant deals, there is Tetley which has done quite well. Witzel says, “The Tetley acquisition seems to have gone very well, partly because Tata Beverages has taken a soft approach to managing it. Most people in the UK still don't know that it is owned by Tata Beverages.” And the numbers continue to be stable.

Indian Hotels has suffered the brunt of a lacklustre world economy. “The international acquisitions done by Indian hotels have not been earnings per share accretive due to economic slowdown leading to lower passenger traffic,” said Rashesh Shah, analyst with ICICI Securities

. With the company willing to go aggressive with the Orient Express deal, the results will only show in 10-20 years, say analysts. The numbers, as a result, are not very flattering.

While the jury is still out on how Tata has done in his global ventures, the fact is they have been bold, but not necessarily beautiful.

Life begins at 75

He may no longer be steering India's largest conglomerate, but make no mistake -  Ratan Tata will have his hands full in his second innings, too

B S :Shyamal Majumdar / Mumbai Dec 28, 2012, 00:55 IST

Titoo and Tango must be eagerly looking forward to tomorrow morning. Reason: their master, who works 16 hours a day and often flies between four countries in a week, would finally be able to spend more time with them after he retires from Tata Sons this evening.

But the two German Shepherds may be in for disappointment.

While he would surely stick to his words of not allowing his “shadow to hang over Bombay House like a ghost walking the corridors,” it’s also equally certain that Ratan Tata, 75, would not slow down his pace and be happy watching the seagulls on the Arabian Sea, which is just 40 meters away from his apartment in Colaba.

Unlike his predecessor, JRD Tata, who in 1991 handed over to him the chairmanship of Tata Sons as well as control of the trusts, Ratan will continue to retain control of the latter. Significantly, there is no retirement age at the trusts, which together control around 66 per cent of the shares of Tata Sons. As a custodian, he will have to anyway keep a close watch on the proceedings in the group.

But what will keep Tata really busy in his new office at Elphinstone Building (a new elevator has just been installed in the building, which is just a few blocks away from Bombay House), are his mega plans for the trusts, which were so far attracting only half his attention. The first indication of that came in his acceptance speech for a Lifetime Achievement Award instituted by the Rockefeller Foundation when he said his “life’s work isn’t done yet” as he hasn’t been able to touch as many people at the bottom of the pyramid.

Tata clearly believes “patchwork philanthropy” — giving a bit of cloth here and food there — would not go far. So he had moved away quite early from a benefactor-dependent model from a partnership model. The second part of that drive would come now as Tata doesn’t share the common belief that charitable institutions have to operate on a shoestring budget and does not need to create a professionally-run corporate body.

In a recent interview to American television journalist Charlie Rose, Tata laid out at least a part of his action plan. He said he would focus on rural development, conservation of water and his most visible goal is to do something in nutrition in children and pregnant mothers because that would change the mental and physical health of India’s population in years to come.

That’s a long enough list. But does it mean he would cut himself off completely from all that is remotely considered commercial in nature? The answer is a big No. Just like JRD, he would remain Chairman Emeritus of Tata Sons and several group companies – an ornamental position — but one which gives him the moral authority to give advice if asked for by the new Chairman. Tata himself has made it clear that he would be available to anyone seeking his advice but would refrain from taking any active role in the running of the group’s businesses.

Going by the extraordinary closeness he shares with Cyrus Mistry, the latter wouldn’t be miser in seeking his counsel.

The advice would certainly be much more frequent in matters relating to Tata Motors. The company, which is clearly closest to Tata’s heart, is suddenly feeling the pressure from newer competitors like Mahindra & Mahindra because of an indifferent performance in domestic markets. Tata has also made no secret of his desire to remain involved with the Nano – the world’s most affordable car which has never really lived up to the hype around it.

Going by his public statements, Tata would obviously try to reverse that even after he retires as he has himself said he would love to be “involved” rather than think this is the level that Nano sales can be.

And then there is the buzz about Tata planning to set up an international centre with state-of-the-art facilities to design a wide range of products. Though there is no confirmation on this, the initiative is not a surprise considering that the man actually joined the family business by accident – he initially wanted be an architect and live in the US. The design centre would be quite close to his heart as Tata has said quite a few times that the one benefit of studying in the School of Architecture was that it taught him to doodle when bored. He said board meetings were one place he would get bored – that compulsion, thankfully, has just got over.

All this is quite a handful for people much younger in age and in the prime of their working life. But Tata would do more. For example, he has already said he would like to attend the annual general meetings of Tata group companies as a shareholder and ask questions.

Besides, Tata will continue to be on the board of directors of Alcoa, apart from being on the international advisory boards of Mitsubishi, the American International Group, JP Morgan Chase, Rolls Royce, Temasek Holdings and the Monetary Authority of Singapore. He is also on the board of trustees of Cornell University and the University of Southern California.

And then he has to do more justice to his fleet of cars (his pet grouse has been that he just didn’t get enough time to drive them himself), and flying — he has expressed his desire to flying helicopters more often as he loves the engineering in them.

Clearly, his two canine friends would continue to have a difficult time in getting Ratan Tata’s attention.

Ratan Tata to retire today, Cyrus Mistry to succeed him

Money Control :Fri, Dec 28, 2012 at 08:50

Force behind TATA

Ratan Tata, who led the transformation of the Tata group from a conventional corporate house into a USD 100 billion global conglomerate with high-profile acquisitions abroad, will retire on Friday ending 50-year run in one of India's oldest business empires.

Ratan Tata, who led the transformation of the Tata group from a conventional corporate house into a USD 100 billion global conglomerate with high-profile acquisitions abroad, will retire on Friday ending 50-year run in one of India's oldest business empires.

Marking a generational change, Tata, who turns 75 on Friday, will hand over the reins of the group to 44 year-old Cyrus Mistry, who was chosen his successor in 2011 and formally appointed Chairman earlier in December.

Tata is hanging up his boots after steering the group for 21 years as its Chairman, when he succeeded the legendary JRD Tata. While JRD made Tata the Chairman out of the blue in 1991 RPT 1991, Mistry of the Shapoorji Pallonji group and whose family owns 18 percent stake in Tata Sons, was chosen by a five-member selection committee.

When he took over in 1991 the group just had a revenue of about 14,000 crore, today its revenue is over 4,75,000 crore. Ratan Tata was born as Ratan Naval Tata in December 1937 and is the adopted great-grandson of Tata group founder Jamshedji Tata.

He was the force behind the acquisition of global brands like Tetly, the Anglo-Dutch steel maker Corus and Jaguar-Rover.

His vision to transform the group into a multinational giant resulted in high profile acquisitions such as Tata Tea's takeover of UK brand Tetley for USD  450 million in 2000.

NDTV :Press Trust of India | Updated On: December 28, 2012 11:30 (IST)

"Be your own man and be yourself,"

Ratan Tata, who led the transformation of the Tata group from a conventional corporate house into a $100 billion global conglomerate with high-profile acquisitions abroad, will retire today, ending a 50-year run in one of India's oldest business empires. (Watch: Ratan Tata - The end of an era)

Mr Tata, who turns 75 today, will hand over the reins of the group to 44-year-old Cyrus Mistry, who was chosen his successor last year and formally appointed chairman earlier this month. (Watch: Who is Cyrus Mistry)

Mr Tata is hanging up his boots after steering the group for 21 years as its chairman, when he succeeded the legendary J.R.D. Tata. While JRD made Mr Tata the chairman out of the blue in 1971, Mr Mistry of the Shapoorji Pallonji Group and whose family owns 18 per cent stake in Tata Sons, was chosen by a five-member selection committee. (Watch: How Ratan Tata turned passion into success)

On his post-retirement plans, Mr Tata, a bachelor, has said he will spend time on technology, about which he is quite passionate. He will brush up on his piano, which he learnt as a school boy and pursue flying, apart from his focus on philanthropic activities.

During Mr Tata's tenure, the group's revenues grew manifold, totalling $100.09 billion (around Rs. 475,721 crore) in 2011-12 from a turnover of a mere Rs. 10,000 crore in 1971. ( Watch: What makes Ratan Tata a legendary entrepreneur)

His vision to transform the group into a multinational giant resulted in high-profile acquisitions such as Tata Tea's takeover of UK brand Tetley for $450 million in 2000. (Read: How Ratan Tata took the group global)

But Ratan Tata set new standards for the Indian corporates in the current era of globalisation when Tata Steel acquired Anglo-Dutch rival Corus for 6.2 billion pounds beating CSN of Brazil in 2007.

A year later, the group's automotive firm Tata Motors lapped up British luxury vehicle maker Jaguar Land Rover for $2.3 billion from Ford Motor Co.

Even as Mr Tata was concentrating on activities abroad, he came up with the idea of producing the world's cheapest car when he conceived the 'Rs. 1 lakh' small car Nano. The Tata group underwent moments of high tension in executing the Nano project when it got into problems on acquisition of land in Singur in West Bengal.

Ironically, the group had to shift the project from Singur, where he was invited by former chief minister Buddhadeb Bhattacharya, to Sanand in Gujarat at the invitation of Narendra Modi.

Although Nano could not live up to the expectations after its initial worldwide acclaim, the small car will still be remembered as Tata's desire to provide a "safer" option to many Indian lower-middle class families riding two-wheelers.

In a recent interview to PTI, he said Singur was a "great disappointment" for him because he went there "in a leap of faith" thinking that part of the country was being ignored industrially. Tatas will still go to West Bengal someday, he said.

Under Mr Tata, the group also made great strides when it capitalised on the sunrise industry of information technology in the 90s. With revenues of over $10 billion in 2011-12, Tata Consultancy Services (TCS) is today India's largest IT company.

For TCS to lead the pack of entirely new IT ventures in the country is significant, given the background of Tatas, a leading member of what is derisively called the 'Bombay Club'. For all his achievements, Mr Tata describes his half-a-century with the group modestly as "a journey of great learning".

"It was a period of learning, a period of frustrations also from time to time...I tried to uphold the values and the ethical standards that there were.  "I feel satisfied that I have done my best to do what I considered to be the right thing and that has been there throughout."

It will be big shoes to step in for Mr Mistry, who joined the Tata group in 2006 as a director. Earlier, he was leading the then over $2.5 billion construction giant Shapoorji Pallonji Group as managing director.

"Be your own man and be yourself," is the mantra Mr Tata has passed on to Mistry. This is the same counsel he told himself when he took over from JRD. Prior to the selection of him as Mr Tata's successor in November 2011, he held non-executive position on boards of several other Tata companies.

Born on July 4, 1968, Cyrus Pallonji Mistry completed his graduation in civil engineering from the Imperial College of Science, Technology and Medicine, London. He also holds a Master’s degree in management from the London Business School and is a Fellow at the Institution of Civil Engineers.

He had joined the Shapoorji Pallonji Group in 1991 as a director. Thereafter, he has been credited with taking the group that employs over 23,000 employees and has strong presence in India, besides Middle East and Africa, to newer heights.

Besides Tata Sons and Shapoorji Pallonji Group, Mr Mistry has also served as a director on board of several other firms, including Forbes Gokak and United Motors (India). He is a Fellow of the Institute of Civil Engineers, UK, and a Trustee of the NICMAR.

Farewell, Mr Tata

Ratan Tata retires today Cyrus to take over

Business Standard / Dec 28, 2012, 00:51 IST When he took over as chairman of the Tata Group in 1991, the majority perception was that the untested nephew of J R D Tata would be a pushover.  Twenty-one years later, as he hands over the baton to 44-year-old Cyrus Mistry today, all that is a distant memory. Tata, 75, has led the transformation of the group to a $100-billion-plus global conglomerate. Mistry inherits a global conglomerate that is 51 times bigger than in 1991 and the group has grown at a compound annual rate of 21.7 per cent. But Tata has set a challenging task for his successor:  He wants the group to increase annual sales to more than $500 billion over next decade.  True to his style, his departure from his workplace of 50 years will be low-key; in fact, Tata is on a holiday in Pune, and there will be no formal farewell.

Ratan Tata honoured with Global Indian award

  Chairman of the Tata Group, Ratan Tata. 

   Source: May 16,2010.The Hindu-Toronto,File Photo: Rajeev Bhatt 

India’s top industrialist and Chairman of the Tata Group, Ratan Tata has received the 2010 CIF Chanchlani Global Indian Award for his outstanding global leadership, vision and professional excellence.

The award which carries USD 225,000 (Rs One Crore) and citation was presented at the Annual Award Gala of Canada India Foundation, held in Vancouver Barj Dhahan, Gala Chair and Co—Chair of Canada India Foundation said.

Mr. Ratan Tata joined India’s largest business conglomerate in 1962 and in 1991 replaced his predecessor JRD Tata, as Chairman of Tata Sons.

Since then, the Group’s revenues have increased 12—fold.

Recent acquisitions under Tata’s guidance include Jaguar and Land Rover from Ford Motor Company and Corus Group, an Anglo—Dutch steel producer.

Mr. Tata was honoured with the Padma Vibhushan, India’s second—highest civilian award in 2008.

His dream of manufacturing a low—cost and environmentally friendly car that more people in India could afford to drive was realised when the Tata Nano, also known as ‘the People’s Car’, with an end—user cost of only USD 2,500, went into production last year and has since received world—wide acclaim.

Canada India Foundation created the CIF Chanchlani Global Indian Award to recognise individuals who have demonstrated global leadership, vision and professional excellence, which has made people of Indian origin around the globe proud of their heritage.