Ratan Tata, the patriarch of India’s largest conglomerate, has died at the age of 86

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Ratan Tata, the patriarch of India’s largest conglomerate, has died at the age of 86

Ratan Tata, the businessman who inherited one of India’s oldest conglomerates and turned it through a string of eye-catching deals into a global empire, has died. He was 86 years old.

His death was announced in a statement by Tata Group chairman Natarajan Chandrasekaran, who called Tata “a truly extraordinary leader whose immeasurable contributions have shaped not only the Tata Group but also the fabric of our nation”.

As chairman for over two decades, starting in 1991, Tata rapidly expanded the 156-year-old business house. It now has operations in more than 100 countries and posted revenues of $165 billion for the year ending March 2024.

Through more than two dozen listed firms, the conglomerate makes products ranging from coffee and cars to salt and software, runs airlines and introduced India’s first superapp. It also partnered with Powerchip Semiconductor Manufacturing Corp. of Taiwan for an $11 billion chip manufacturing plant in India and is said to be planning an iPhone assembly plant.

Under Tata’s leadership, the conglomerate embarked on an expansion drive that turned the tables on India’s colonial past. It acquired iconic British assets, including steelmaker Corus Group Plc. in 2007 and luxury carmaker Jaguar Land Rover in 2008. But the financial crisis rocked global markets soon after, dampening car sales in developed economies.

“Ratan Tata imagined big and took the empire beyond India,” said Kavil Ramachandran, executive director of the Thomas Schmidheiny Center for Family Business at the Indian School of Business in Hyderabad. “Although he thought globally, these turned out to be hasty initiatives.”

Tata led the group for 21 years in his first stint and retired in 2012. He returned as interim chief for a few months in 2016 after the acrimonious ouster of his successor, Cyrus Mistry.

Dad also found himself at the center of intense battles for control of the conglomerate not once, but twice in his career.

The first battle, when he took over as chairman in 1991, pitted him against longtime executives who ruled fiefdoms within the conglomerate under his predecessor. The second, in 2016, four years after his retirement, was about preserving his legacy as Mistry sought to reduce debt.

Dad won them both. In 2016, Mistry was ousted as chairman of Tata Sons, the group’s main holding company, in a boardroom coup. The move sparked a bitter court battle that threatened to end a 70-year partnership with Mistry’s family and marked Tata’s hold on the conglomerate. In 2020, Mistry’s family signaled their intention to sell an 18% stake in Tata Sons.

Terrorist attack

The conglomerate faced another crisis in late 2008 when terrorists targeted the group’s flagship hotel, the Taj Mahal Palace, overlooking Mumbai’s India Gate, part of a wider attack on the city. About 31 people, including 11 employees, died during the four-day siege. Guests staying at the hotel today are greeted by a memorial with the names of the victims, whose families Tata personally visited.

Dad never married and had no children. His death leaves a void at the helm of the powerful Tata Trusts, a collective of charities. These philanthropic trusts own about 66% of Tata Sons, which in turn controls all major listed Tata firms. The Tata Trusts have traditionally been headed by a member of the Tata family and controls the conglomerate through its stake in Tata Sons.

In his later years, Tata became an avid supporter of startups, including Ola Electric Mobility Ltd., which had an exceptional listing in 2024, and Goodfellows, a platform aimed at intergenerational friendships.

The origins of the Tata group date back to 1868 when Jamsetji Nusserwanji Tata established a trading company that later diversified into cotton mills, steel mills and hotels. The Tatas belong to the Zoroastrian Parsi community, which fled religious persecution in Persia centuries ago before finding refuge in western India.

Divorced parents

Born in Mumbai on 28 December 1937, Ratan Naval Tata was raised by his grandmother after his parents, Naval and Sooni Tata, divorced when he was 10 years old. His father had been adopted into the main Tata family at 13 by the daughter-in-law of Jamsetji Tata, the founder of the Tata Group.

Usually chauffeured in a Rolls-Royce, Tata attended school in India’s business capital, Mumbai. As a young student, he learned the piano and played cricket, but was afraid of public speaking. His younger brother, Jimmy Tata, has stayed out of public life and little is known about him.

“We faced some personal raggedness and discomfort due to our parents’ divorce, which in those days was not as common as it is today,” Ratan Tata wrote in a Facebook post in 2020. “But our grandmother us- it taught me to maintain dignity at all costs, a value that has stayed with me to this day. It involved walking away from these situations, which we would otherwise have fought against.”

Dad went to college in the US at Cornell University with plans to study mechanical engineering as his father had wanted, but found his calling elsewhere.

“I always wanted to be an architect, and at the end of my sophomore year at Cornell, I switched—much to my father’s dismay and chagrin,” Tata recalled in a 2009 Cornell interview. He graduated in 1962 with a degree in architecture.

The IBM offering

Dad wanted to settle in California, but Grandma’s poor health prompted him to return to India, where he had a job offer from International Business Machines Corp.

The then chairman of Tata Sons, Jehangir Ratanji Dadabhoy Tata, known as JRD, persuaded him to work for the group instead. The two men were distant relatives, parts of different branches of the Tata family tree. Groomed by JRD, young Tata began his career at the conglomerate in 1962, undertaking several stints at various units before joining management in the 1970s.

In 1991, when Tata was handpicked for the top job at Tata Sons, the group focused primarily on India. Tata Consultancy Services Ltd., the software maker that would later become a cash cow, was still in its infancy. The car business had not yet started producing passenger cars.

The 1990s were also the decade when India began to cut back on its notorious bureaucracy, shedding parts of a failed Soviet-style planned economy. This meant that private sector companies could compete more effectively in sectors dominated by state-owned enterprises, paving the way for faster economic growth and triggering consumption.

As India has allowed foreign automakers from Ford Motor Co. at (hotlink)Hyundai Motor(/hotlink) Co. to set up factories and tap into growing consumer demand, Tata decided to manufacture cars as well. Dad called the first locally built passenger vehicle – launched in 1998 and called the Indica – “my baby”.

As India’s economy began to grow in the 2000s, Tata became more adventurous. In 2007, he assumed debt to pay about $13 billion for Corus, the British steelmaker. The following year, he purchased Jaguar Land Rover, or JLR, from Ford for $2.3 billion. It also bought Tetley Group Plc and the heavy vehicle unit of Daewoo Group in South Korea.

New challenges

While the wave of acquisitions helped bring the conglomerate’s geographic footprint to a whole new level, it also created a number of challenges.

The 2008 financial crisis triggered a broad drop in raw material prices, while a glut of steel fueled by a surge in Chinese exports depressed prices, sparking criticism that Tata overpaid to acquire Corus. Tata Steel Ltd. has scaled back its European operations in recent years in the face of falling demand and high cost structures and cut thousands of jobs on the continent.

JLR also faced a difficult time soon after it was acquired by Tata, as the financial crisis hit demand for luxury cars as well as the company’s ability to access credit. While the Tata Group managed to turn around the storied car brand in a few years, it soon faced other headwinds, from falling Chinese demand to Brexit. The pandemic and chip shortage have affected JLR in recent years.

Dad oversaw another automotive failure with the breakdown of the Nano microcar. He wanted to build an inexpensive automobile that would retail for 100,000 rupees ($1,190.9), aimed at the millions of Indians who usually used motorcycles to get around and transport their families. Production of the Nano ended in 2018, around 10 years after its introduction, amid a lack of demand due to early quality and safety concerns.

Perhaps Dad’s last business battle was his most gratifying.

In 2021, Tata Sons regained control of Air India Ltd., the nation’s flagship carrier, nearly 90 years after it was taken over by the state. Heavily indebted and a shadow of its former glory – Salvador Dali once designed ashtrays as gifts for airline guests – the deal meant that Tata was able to welcome home to the group, an airline originally founded by his mentor JRD.