Tata gets new boss
By Salil Panchal
Indian industrialist Ratan Tata retires on his 75th birthday this
week, handing over the reins of his sprawling business empire after
decades at the top of the country's turbulent corporate world.
|
Cyrus Mistry |
Ratan Tata has been credited with transforming the Tata group into a
streamlined conglomerate of more than 100 companies and earning a global
reputation for eye-catching purchases of Western firms.
With a portfolio ranging from salt and software to tea and telecoms,
Tata is India's largest group, and new boss Cyrus Mistry faces a
challenge as the first chief appointed from outside the immediate Tata
family in its 144-year history.
“I have devoted my life, as best I could, to the welfare of the
group,” Tata said ahead of his retirement on Friday.
The highly-respected, media-shy mogul, who spent 50 years with the
company, is likely to mark his last day at the helm in the unassuming
manner in which he took over from his uncle J.R.D. Tata in 1991.
The same year saw India unleash radical free-market reforms that
transformed the country's economy, and Tata took full advantage.
“Ratan Tata came with zilch expectations and in an environment where
the group was headed by people who thought they could perhaps 'manage'
him,” said financial consultant R. Balakrishnan.
“The transition today is amazing,” Balakrishnan told AFP.
Tata companies include India's largest IT firm, the biggest vehicle
maker and a ritzy hotel chain.
In one of the group's most successful moves, Tata Motors turned
around fortunes of loss-making British luxury brands Jaguar and Land
Rover just a year after buying them out from Ford Motors for $2.3
billion in 2008.
Jaguar Land Rover now contributes nearly 80 percent of Tata Motors'
earnings and the deal has vaulted the Tata firm from a commercial
vehicle and small-car maker into a global player.
Tata Consultancy Services (TCS), went public in 1994 under Ratan
Tata's leadership, when investors were unsure about the future of
technology stocks. It is currently growing faster than rivals Infosys
and Wipro.
Tata is exiting with the group's total combined sales at $100 billion
in 2011-12, nearly 60 percent of which come from business outside India,
mainly the United States and Britain.
But Tata could not escape some controversy: he was one of the
business leaders questioned in 2011 by a parliamentary watchdog probing
a multi-billion-dollar telecom licensing scam that rocked the
government.
India's federal police agency later cleared the Tata group of any
wrongdoing.
Mistry, the current vice-chairman, was announced as heir more than a
year ago, and Tata has said the group will be “in the hands of somebody
who understands the business environment better” than he did.
The pair, both from India's tight-knit Zoroastrian community of
Parsis, do have a family connection: Mistry's sister is married to
Tata's younger half-brother Noel, who was initially tipped to be the
group successor.
Mistry, who has not spoken to the media since being appointed, is the
son of Pallonji Mistry, whose construction firm Shapoorji Pallonji is
the biggest shareholder of Tata Sons.
Educated at London's Imperial College and the London Business School,
the new chief takes charge when some of Tata's senior management are
also heading into retirement.
“The challenge for Mistry will be to find the next growth sector for
the group,” said Sonam Udasi, head of research with IDBI Capital. “How
long can it ride on the success of Tata Motors and TCS?” Tata has tried
hard to expand the global footprint of the group's Indian Hotels, which
runs the landmark Taj Hotels Resorts and Palaces and has posted losses
in the past four quarters.
Tata Steel's daring $13.7 billion purchase of Anglo-Dutch firm Corus
in 2007, then India's largest overseas acquisition, now appears
ill-timed, as business conditions continue to look downbeat in Europe.
But Mistry has time and Ratan Tata on his side.
After retirement, Tata plans to remain head of the charitable trusts
that own two-thirds of main holding company Tata Sons and distribute
millions.
He also wants to work towards 'relaunching' the Nano, his pet project
billed the world's cheapest car, which has been struggling in a
competitive market.
A bachelor, Tata is set to continue to pursue his passions for fast
cars, flying, books and his dogs.
“I will not disappear. You will continue to see my face whether you
like it or not,” Tata told emotional shareholders earlier this year.
AFP
|