Ratan Tata adical Chieftain

Ratan Tata's history is a big chunk of India's corporate history. In a way, many identify it as the Indian dream, almost an ideal.

From the day we launched, even if only six months ago, we have covered the group, the man and have watched and waited for a successor to be named. And he was named, yesterday. And it was a surprise. But we set to work to put together as much material as we could.

As always our production team brings you curations, slideshows, videos and news and our writer/editors a variety of strong views.

In part 1, we present Tata's legacy -- from his actions, his values and his place in his-tory. In part 2, we continue exploring that legacy when we flesh out the mammoth task that is in front of 43-year-old Cyrus Mistry.

There will be more updates to this work in progress, for the Tata story cannot be told in one sitting.

Happy reading.Durga Raghunath

Introduction

Contents

1-2

The Ratan Tata LegacyThe radical chieftain: How Ratan Tata broke the Tata mould 05The cult of corporate personality: Hero-worshipping Ratan, Mukesh et al 08

Chapter: 1

Leadership PhilosophiesWhy Mukesh Ambani’s swanky home makes Ratan Tata sad 12Like Jobs, a true leader is one who makes a difference: Tata 14

Chapter: 2

Ratan Tata: The hard nosed businessman Partnership with Fiat needs to be critically examined: Tata 16

Chapter: 3

The NanoBig is beautiful: Jaguar, not Nano, is Tata trump card 18Why a gold-plated Nano will do little for Tata’s failing car 20Nano upgrade: more at same price but where are the buyers? 22After Nano car, now there’s ‘nano’ bike 24Now, Nano in Brazil too? 25

Chapter: 4

Radia-gate and the 2G scam2G case: HC dismisses plea against Anil Ambani, Ratan Tata 27CBI says Ratan Tata clean, Tata Teleservices shares jump 28Ratan Tata is losing patience 29

The most awaited decision in Indian corporate historyThe wait is over: Cyrus Mistry to takeover from Ratan Tata 32Mistry solved: Tata successor brings best of two worlds 34Tata to Mistry: ‘A major generational change’ 36100 cos, 7 sectors, 80 nations, 1 yr to learn: Good luck, Mr Mistry 37

Chapter: 1

The wait for a successor After Tata, who? An insider could keep the flag flying high 41Is Ratan Tata’s succession plan focused on the right thing? 43Tata top job: Others who didn’t make it 45

Chapter: 2

The mysterious Cyrus MistryA Mistry at Bombay House 47

2-2

Piecing together a resume for the Tata group’s Cyrus Mistry 49Four things you need to know about Ratan Tata’s successor, Cyrus Mistry 51Cyrus Mistry and the $5 bn brand consumers cannot avoid 53

Chapter: 3

ReactionsMarket: Tata stocks open on strong note but unable to sustain gains in weak market 56Media: Newspapers go Tata-centric 58Industry: Industry’s verdict on Cyrus Mistry: Inexperienced but capable 59

Cover page illustration credit: Chaitanya Dinesh Surpur

Part: 1

The Ratan Tata Legacy

The radical chieftain: How Ratan Tata broke the Tata mould

Venky Vembu 24 Nov 2011

In recent years, whenever Ratan Tata sat down for media interviews, he would be subjected to de rigueur questions about his

likely successor: who would it be, would he have to be a Tata, could he perhaps be not an Indian, what qualities would he have to possess…

That monkey is now well and truly off Tata’s back with the announcement that Cyrus Mistry will take over from him in December 2012 as head of the Tata group. With that generational change, Tata will hand over stewardship of the business empire that he’s commanded since 1991 and over which he implanted his forceful personality.

Tata’s tenure at the helm of India’s most recog-nised industrial group is almost congruent with the period in India’s economic evolution when it opened up to the world, and unleashed an out-bound entrepreneurial force that has, despite its many failings, dramatically altered the country’s business landscape.

In that sense, Ratan Tata, who restructured the Tata group in ways that his rather more con-servative forbears could – and would – never have done, is a tycoon of the times. And al-though he is not given to flamboyance, he has come to embody the quiet, can-do confidence – and perhaps even understated audacity – of an outward-looking generation of entrepreneurs who aren’t constrained by the shadowlines of geography and for whom, therefore, the world is truly their oyster.

Anyone who reckons that Cyrus Mistry is step-ping into a giant’s shoes is perhaps less than considerate to the fact that this leadership tran-sition is a walk in the park compared to what Ratan Tata himself experienced in 1991, when he took over from JRD Tata.

As a former director of IIM-Kozhikode has ob-served, Rata Tata’s ascent was a bit like Sachin Tendulkar taking over the mantle from Sunil Gavaskar. It was also a time when India – and the rules of the game – were in the throes of big

change, when the dour defence and classic strokeplay of an earlier generation would no longer be enough, and only inventive batsmanship would succeed.

Indicatively, India Inc’s protectionist walls, from which the Tatas of earlier generations benefited, began to crumble the same year that Ratan Tata took over as chieftain. The Tata group itself re-sembled nothing so much as a conglomerate comprised of fiefdoms, each headed by forceful per-sonalities, some of whom were given to public (and high-decibel) disagreements with Ratan Tata, whose grip on the group leadership was far from firm.

In 2005, asked by McKinsey Quarterly about the changes he had ushered in at the group, Ratan Tata recalled:

“We used to live in a world of just raising our top line. I would hope people will say that I’ve helped make the Tata companies more competi-tive and more conscious about costs and the bottom line. I would hope they remember me for bringing the group together, because we were often referred to as a loose federa-tion of companies that competed and fought with each other. By creating a common brand and a codified frame-work for how we operate, I think we have brought the group much closer together. I would feel sad to be remembered for not being able to change the structure of the company more radically.”

Ratan Tata perhaps calculated that the old ways of doing business would no longer work in a liber-alising India. And the economic reforms that were initiated, even if somewhat haltingly, gave him the elbow room to “play like Sachin”.

The mega acquisitions that the Tata group companies undertook, beginning with the purchase of Tetley in 2000 (the spadework for which had actually begun in 1995), all bear Ratan Tata’s signa-ture.

And Tata Steel’s acquisition of the Anglo-Dutch steelmaker Corus, which was in its time the larg-est ever takeover of a foreign firm by an Indian company, was audacious in the extreme. Tata Steel was effectively bidding for a company that was four times its own size, and, in the opinion of many analysts, ended up overpaying and would eventually go bankrupt.

There were many who wondered if emotion was interfering with Ratan Tata’s investment deci-sions. Was he, perhaps, getting carried away by India’s growing influence, and therefore overbid-ding?

In 2007, Ratan Tata told Der Spiegel that the Corus deal was “primarily a strategic acquisition” – and although he himself did not see the deal as symbolic of anything, “maybe it shows that an In-dian company now not only wants to play an important role in India, but also seeks to be a global player.”

That same global ambition characterised the acquisition of Jaguar Land Rover.

But although Ratan Tata’s demolition of the Tata mould of business conservatism has proved enormously successful – under his watch, the group has grown some 12-fold – it has also ended up dragging the group into the shadowy world where politics and business meet. This was starkly highlighted in the Niira Radia taped conversations: the corporate lobbyist, who counted on the Tatas as one of her clients, was doing her damnedest to ensure A Raja secured the telecom minis-try, and acknowledged in one revealing conversation that “Mere client Tatas bhi bahut beneficiary thhe (in the 2G spectrum allocation).”

As Siddharth Varadarajan noted in The Hindu, “If the allocation of spectrum by the Manmohan Singh government in 2008 and 2009 is one of the biggest scams in independent India, then the in-volvement of businessmen like Ratan Tata, Sunil Mittal and Mukesh Ambani in lobbying for their choice of telecom minister when the UPA government returned to power in May 2009 is surely a very important part of the back-story.”

In subsequent interactions, Ratan Tata claimed that he could say, “with my hand to my heart, that we have not, in fact, partaken in any clandestine activity.” Yet, the widespread perception, based on the extensive recordings and circumstantial evidence, that the Tatas had, like a lot of other industrial groups, “outsourced” the dirty job of corporate lobbying – and everything that it entailed – in order to maintain deniability lingers.

Perhaps in the Age of Innocence, when the conservatism of the Tatas extended to every aspect of doing business untainted by guilt-by-association considerations, this may have been seen as sym-bolic of a corporate titan that had fallen off its pedestal.

Today, however, it’s merely seen as the inevitable and acceptable price of doing business. In that sense too, Ratan Tata may have broken the Tata mould and shown himself to be a tycoon of the times.

The cult of corporate personality: Hero-worshipping Ratan, Mukesh et al

Lakshmi Chaudhry Nov 24, 2011

The news is plastered right across the top of my morning newspaper, in enormous type usually reserved for natural disasters

or election results. The Tatas have finally picked a successor. This is important business news, but is it a matter of urgent national import? Why do we care quite so much?

Ratan Tata has not passed away a la Steve Jobs — whose own retirement didn’t spur this kind of media frenzy. Neither did that of Bill Gates or even Narayana Murthy. Perhaps it’s something about the Tatas, the grande old dames of Indian business, their name tied inextricably to In-dia’s tryst of destiny from that fateful midnight hour in 1947. Or may be it’s a measure of our emotional investment in our business leaders who have emerged as the glittering icons of new India.

Take, for instance, this comment from a Ratan

Tata fan on the search for his successor:

Since Tata is not any other business owner in India, each Indian looks at him with a lot of hope of his better future. We trust him because he has proved himself with course of time and so has the bonding strengthened. We purchase his car, we invest in his ventures, we applaud his work, reason we see our blot-free and uncor-rupted future in him… I wonder who can take his position plus the responsibility to face tril-lions with confidence!

The excess of personal sentiment is remark-able. Ratan Tata, for all his achievements, does not have a direct impact on the lives of most Indians – unless you happen to work for the Tatas or own their stock. Nor is he a movie star whose success is predicated on building a direct, intimate relationship with a mass fan base. It’s easier to pretend that you “know” Aamir Khan

than Tata. Yet he is no less of a personal hero to the multitude of his middle class fans.

Tatas are the blue-bloods of Indian entrepreneurship, their ranks forever closed to outsiders. Getty Images.

It’s not just the Tatas or select readers of English-language magazines. In his book India Calling, Anand Giridhardas profiles small-town success, Ravindra, son of farm labourers, who now owns his own English language academy and a roller skating rink. What impresses Ravindra most is that Giridhardas met and interviewed Mukesh Ambani. He wants to see every photograph Giridhardas has of Ambani on his laptop.

A great part of this adulation is explained our unrestrained worship of material success. As a recent Outlook magazine survey reveals, we unabashedly equate money with happiness, and overwhelm-ingly believe that successful businessmen and industrialists are the happiest of us all. These are our new role models. As Akash Kapur notes,

The success of these companies has been firmly ensconced in an emerging national mythology. Schoolchildren are brought up on tales of Infosys, India’s best-known software business, found-ed in 1981 with 10,000 rupees of capital — just $224 at current rates — and worth billions of dol-lars today. Indian entrepreneurs have entered the pantheon of national heroes.

Not everyone can aspire to be-come a Bollywood star, but in New India, anyone can dream of being the next Mukesh Ambani, N Narayana Murthy or Nandan Nilekani.

Not, however, a Tata. And that’s where not just Ratan, but all Tatas fall short. They are our capital-ist gods, but of the lesser kind. We may admire Ratan’s principles and business acumen, revel in his international clout, but we don’t love him quite as well as his more arriviste peers.

For all the efforts of Ratan Tata to reinvent his empire for the new Indian age of capitalism, his family remains emblematic of an old imperial guard. Even their long record of philanthropy carries to the outsider a hint of aristocratic noblesse oblige. Tatas are the blue-bloods of Indian entrepre-neurship, their ranks forever closed to outsiders.

It’s why the Ravindras of this world look not to Tata but to Ambani for inspiration. We will shrug aside Ambani’s crass display of wealth because he is one of us — because it reveals his forgivably nouveau riche roots. But when — in Giridhardas’ colourful words — “Ratan Tata cruises down Marine Drive on Sundays in fast cars and favours Hermès ties with matching handkerchiefs” it’s a reminder instead of that country club we will never be invited to join.

This ambivalence was evident today on a number of comment boards, where Mistry’s ascension was greeted with widespread complaints about Parsi parochialism and elitism. Forbes online edi-

tor Deepak Ajwani, summed it up in his tweet: “It’s all in the family. The Parsi reign at the Tatas continues.” Yet no one complained when Ambani senior treated his business as a personal legacy to his kids.

We may laud the Tatas for their old-world integrity, but we identify with the Ambanis — and for-give them far more. Or to put it differently, Bollywood will never ever make a biopic about Ratan Tata.

Given the current outrage at crony capitalism and corruption, however, the time of the Ambanis too may have passed. There are early signs of another seismic shift, away from the mindless con-sumerism and toward a more mindful capitalism. We are no longer content to bask in the reflected glory of the fabulous wealth of our mega-tycoons. We care less about obscene wealth than its social cost — whether to our environment or to democracy. The corporate heroes of this new age are unlikely to be the Ambanis or even the Mistrys, but public-minded businessmen like Azim Premji, Sam Pitrodia, and Narayana Murthy. Or more likely, the many young, dynamic social entrepre-neurs who are trying to change our world, one start-up at a time.

The future belongs not to the acquisitive ‘I’ but to the collective ‘We’.

Chapter: 1

Leadership Philosophies

Why Mukesh Ambani’s swanky home makes Ratan Tata sad

FP Editors May 22, 2011

Ratan Tata, in uncharacteristically candid comments about fellow tycoon Mukesh Ambani’s lifestyle , has pointed to the latter’s luxurious 27-storey mansion in Mumbai as a glaring sign of income disparity in India – and the stuff that “revolutions are made of”.

“It makes me wonder why someone would do that. That’s what revolutions are made of,” Tata told Damian Whitworth of The Times of London in an interview (subscription required) published on Saturday.

The money quote is certain to echo in the business circles for a long while:

“The person who lives in there should be concerned about what he sees around him and [asking] can he make a difference. If he is not, then it’s sad because this country needs peo-ple to allocate some of their enormous wealth to finding ways of miti-gating the hardship that people have.”

Ambani’s luxurious residence – the world’s first billion-dollar home – has of course drawn reams of (mostly gush-ing) media attention. Criticism of its over-the-top opulence has so far come only from commentators like Ramachandra Guha and filmmakers like Prakash Jha. For someone of Tata’s stature to point to the lifestyle of one of India’s richest industrialists as reflecting the larger social inequity is striking.

In the interview to Whitworth, Tata also hints that Noel Tata, his half-brother, may not have what it takes to take over the reins as the head of the Tata empire next year. “I think if he is to run this he should have greater exposure than he has had. Partly his not having it has been his own choice,” Tata noted.

Asked if he regretted he had no children to whom he could pass on the baton, Tata says that if he had had a family, he would probably not have been able to devote as much of his time to the or-ganisation as he had. But he says it would have “bothered” him to think that if he’d had a son, he would automatically have been considered as a natural successor.

“I would have probably done something not to have that happen, and my son would have felt I was prejudiced against him. I wouldn’t have wanted it to be automatic,” Tata said.

Some of the other points that Tata made in the interview:

The UK and the US have a “work ethics” problem among senior management, which is dragging them down.

“It’s a work ethic issue,” he says. “In my experience, in both Corus and (Jaguar), nobody is willing to go the extra mile, nobody. I feel if you have come from Bombay to have a meeting and the meet-ing goes till 6 pm, I would expect that you won’t, at 5 o’clock, say, ‘Sorry, I have my train to catch. I have to go home.’ Friday, from 3.30pm, you can’t find anybody in their office.”

He contrasts that with the situation in India, where “if you are in a crisis, if it means working to midnight, you would do it. The worker (at Jaguar) seems to be willing to do that; the management is not.”

Like Jobs, a true leader is one who makes a difference: Tata

FP Editors Oct 17, 2011

Ratan Tata, who has been at helm of Tata Group for two decades, has said the legacy of a true leader is to have made a difference and improved the quality of the life of people whom the person served.

His comments come at a time when the Tata Group is looking for his successor, both from within and outside the group.

“A true leader would like to leave behind a legacy of that he made a dif-ference that he improved the quality of life of the people whom he served and that there was nothing that he did which was in a manner speaking for himself,” Tata said on Sunday af-ter receiving the Swiss Ambassador’s Award for Exceptional Leadership.

According to Tata, whatever he has been able to do at Tata Group has not been done alone, but with help of people around him.

“I owe it to my colleagues, CEOs of companies, people, who made what-ever happened at Tata Group hap-

pen… But it is they who have made the group what it is. I have travelled the same journey as my ancestors did and did what I thought was the right thing at the right moment whenever it hap-pened,” he said.

Striking a philosophical note, Tata said the world and businesses are striving for short-term goals and recognitions. “But life is made up of long-term issues… We are unfortunately being also driven by analysts and financial community to short-term performance, which I think is at the cost of long-term issues,” he noted.

Tata stressed that he has a great desire for India to be a country of equal opportunity, where citi-zends do not differentiate on the basis of cast and creed.

“Are we there today? We are not, (we are) miles away from it. What do we need to do to get there. We need to have commitment and we need to have time…,” Tata pointed out.

“… So, I do believe that life has an aggregate of long-term views and we often don’t bother with that. We are driven by short-term achievements,” he said.

Praising Apple Co-Founder Steve Jobs, who passed away earlier this month, Tata said that Jobs changed the lives of millions of people by doing what he believed was right.

Chapter: 2

Ratan Tata: The hard nosed businessman

New Delhi: Admitting that the joint venture between Tata Motors and Fiat has not been as active as planned, Tata Group Chief Ratan Tata has said the association needs to be criti-cally examined to optimise its potential.

In an interview in market research firm JD Power’s report on the Indian automobile industry, Tata said his good personal rapport with Fiat Chief Executive Officer Sergio Marchionne has not been translated at the working level of the two firms. ”… I have to admit that so far, the venture with Fiat has not been as active as we had thought,” Tata said at ‘India Automotive 2020: The Next Giant from Asia’.

With Fiat yet to make its mark in the Indian car market, Tata said the Italian company needed to bring in more new models to India. ”… I think that Fiat has to launch more models into the market to keep dealers interested. It also has to look at its cost structure in terms of parts and components. So the joint venture needs to be looked at quite critically and until that happens, it’s not going to be optimised,” he said.

As part of a 50:50 joint venture agreement signed in 2007, the two companies had agreed to a joint distribution network and back-end support, besides co-manufacturing

of products at the Ranjangaon facility near Pune. Subsequently, Fiat cars are being sold at Tata Fiat branded showrooms, but it has not been able to clock volumes.

Recently, the partners decided to redraw distribution plans. Fiat proposed to have its own inde-pendent brand showroom, although it will continue to sell cars through Tata outlets.

In 2010-11, Fiat sold 21,066 units, as against 24,727 units in the previous fiscal, down 14.81%.

Tata also pointed out the need to have close coordination at the working level of the two compa-nies to take forward the partnership. ”As far as what else we can do with Fiat, I think Sergio Mar-chionne and I can really talk to each other. However, at the working level, it hasn’t quite been that way. We have looked at Latin America to do something together, but things haven’t moved as they should have done,” he said.

He, however, ruled out giving up on the partnership, saying “… I think there’s nothing wrong with the concept of the deal — it is a very healthy concept.”

Partnership with Fiat needs to be critically examined: Tata

PTI Jun 14, 2011

Chapter: 3

The Nano

Big is beautiful: Jaguar, not Nano, is Tata trump card

R Jagannathan May 26, 2011

When Ratan Tata launched the Nano in January 2008, the world applauded. A few months down the line that same year, when Tata bought the iconic, but bleeding, Jaguar-Land Rover brands from Ford for $2.3 billion, the world was underwhelmed.

Worldwide, the expectation was that the $2,500 car would revolutionise the car industry (the poor man’s Model T), and the $65,000 luxury brand would be a millstone around the Tata neck.

Actually, it’s the other way round.

JLR is paying back in spades. The Nano has barely made an impact in the cheap car market, though it is unfair to write it off as another dream car that failed to deliver.

One look at the 2010-11 results for Tata Motors tells you why. Out of the consolidated net profit of Rs 9,274 crore, just about Rs 1,812 crore came from the Indian operations of the company. The rest came from JLR and other associate com-panies.

Shares of Tata Motors, which is valued at about $14.8 billion, ended up 2.5% at Rs 1,162.40 ahead of the results, while the main index rose 1.1%, Reuters reports. The shares have fallen more than 13% so far this year, in line with the broader market.

JLR alone gave Tata Motors a net profit of GBP 1.043 billion (Rs 7,668 crore at current exchange rates), saving Tata the blushes of actually reporting a 20% drop in Indian profits from Rs 2,240 crore to Rs 1,811 crore.

The raw numbers of sales volumes tell the same story. Sales of the UK subsidiary (JLR) grew 26% while Tata Motors’ car volumes in India grew slower at 23%. The Jaguar, a car that costs 25-30 times more than the Nano even at the base price, sold nearly 53,000 cars against the Nano’s 70,000.

Even within Tata Motors, the best-selling cars were the mid-size sedans, with Tatas beating the industry average growth of 30% by a wide margin. Led by the Manza, the Tata midsize cars took off vertically at 55% over the previous year.

But despite the Nano’s tepid show so far, there’s life in it yet. Reason: the company realised early on that pitching it as a cheap car did not do the brand any good. It was never a Rs 1 lakh car to start

with, given the taxes and other costs.

But the Tatas are now trying a different tack, and making it an affordable car in terms of monthly EMIs. They are not selling it as a cheap car, but one that is easy to acquire. That’s where even the volumes of 70,000 came from after sales in the second half of calendar 2010 showed a steep drop.

Quite clearly, selling a car is not about price, but value.

Click here to see the Tata Motors presentation

Why a gold-plated Nano will do little for Tata’s failing car

R Jagannathan Sep 20, 2011

It was the Rs 1 lakh car that was supposed to set the domestic auto markets on fire. But it was probably damned by being called that: a Rs 1 lakh car that aroused concern that maybe some-thing was sacrificed in producing a car on the “cheap”. No one likes being accused of owning a

“cheap” car.

On Monday, aided by group company Titan Industries’ plan to celebrate 5,000 years of Indian jew-ellery, the Nano – one Nano – was suddenly transformed into the world’s most expensive car with a possible price tag of $4.5 million.

The reason for the price tag: the car is covered with 22-carat gold, silver and pre-cious stones. At one stroke, bedecked with 80kg of 22 carat gold, 15kg of silver, and 10,000 semi-precious gems, a Rs 1 lakh runabout has been turned from cheap bauble to expensive billionaire bling.

The makeover of the Nano is, however, the sideshow, for the real purpose of the shine-and-polish is to take it on a tour of Titan’s jewellery showrooms, presumably with Z category security in tow.

It does not address’ the Nano’s own problems – of which there are aplenty. With sales of an abysmal 1,202 cars in August, down 85 percent from the previous month, Ratan Tata’s dream car is facing a nightmare on the sales front. The August figure is perilously close to the 509 cars Tata sold in November 2010, set-ting off alarms all over. April this year was the best ever month for the Nano – when 10,000 cars were sold – but that was a flash in the pan.

So what went wrong with the Nano? And can its problems be fixed?

The first problem, of course, is its positioning. A Rs 1 lakh car that wasn’t a Rs 1 lakh car meant that the product prima facie didn’t live up to its name. In hindsight, it is quite clear that Ratan Tata was a victim of his own utterances – he made the promise of a Rs 1 lakh car in an unguarded mo-ment, but costs couldn’t be held that low by the time the car came to market. But then, successful marketers know that the gap between promise and delivery can make all the difference to its suc-cess. Tata flunked the test.

The second problem related to fears about performance – which were not helped by early reports of unexplained fires in some of the Nanos. The consumer who buys a car because he can afford

only Rs 1 lakh will be more careful about his money than someone who buys a Maybach for his daughter’s birthday. Needless to say, the Nano did not get great reports in its initial months – and this cost Tata.

The third problem was how Tata dealt with low sales. Instead of dealing with the car’s image and performance issues, the company compounded the problem by making it a down-payment and EMI-driven selling strategy. For just Rs 15,000 and sub-Rs 3,000 monthly installments, you could buy a Nano. EMI, unfortunately, is a game every carmaker can play. You can buy even a Merc for an EMI of less than Rs 30,000 today. Any small car – depending on the loan tenure – can be brought to the Nano’s monthly level. By choosing easy payments as its new USP, Tata neatly land-ed in somebody else’s turf. It didn’t help.

The fourth problem lay in its conception. Ratan Tata saw it as a car that people previously using two-wheelers would upgrade to. But that is not the kind of people who are buying the Nano – at least not in sufficient numbers. It seems many of its buyers are people seeking a second car for fun and local, short-distance use. And there aren’t enough of them to soak up Nano’s huge assembly line at Sanand.

So is it a failure?

Not by a long chalk. As Matthew Eyring, president of Innosight, a global consulting firm, notes, the real problem with the car was its initial hype. “A cheap car that’s not really cheap. A safe car whose safety has been questioned. A poor people’s car that poor people aren’t buying. That sounds like a failure, certainly. But really it’s not. It’s par for the course for almost every breakthrough innova-tion.”

According to Eyring, Tata would have been better off launching and testing the car quietly before unleashing it before the world with great fanfare. “It might not have been easy, but had Tata pilot-ed the Nano quietly, on a small scale, perhaps through a limited production run in a small city like Durgapur in West Bengal or Ranchi in Jharkand, its engineering, pricing, financing, and marketing might have been adjusted far from the limelight to suit the needs of an optimal target customer. Then…the Nano might have made its debut to the wider world with less hype and greater effect. It might not have been a Rs 1 lakh car or even an alternative to motorscooters. But when it first ap-peared in the mainstream, it would have been right product for the right price in the right market.”

But, it’s not too late to change course. Gold-plating the Nano and studding it with gems may get it noticed, but ultimately its what’s under the hood that counts. The shine is an optional extra.

Nano upgrade: more at same price but where are the buyers?

FP Staff Nov 21, 2011

Tata Nano—the small wonder was supposed to be the big solution to our crowded streets, escalating population, traffic chaos and the never decreasing fuel rates. The Rs 1 lakh car that was launched in the blaze of publicity to fit within the Indian budget promised to be the

“Khushiyon ki chaabi”. But it failed miserably. And was unable to achieve all that it promised— largely because people just did not want it.

With sales of an abysmal 1,202 cars in August, down 85 percent from the previous month, and a total of 1,30,000 Nanos being sold since the car was launched in April 2009, Ratan Tata’s dream car faced a nightmare on the sales front.

“The world’s cheapest car” was damned by being called that: a Rs 1 lakh car that aroused concern that maybe something was sacrificed in producing a car on the “cheap”. And no one likes being ac-cused of owning a “cheap” car, said a Firstpost article.

But Nano did not call it quits. After the launch of the gold plated Nano, Tata Motors has now released an upgraded Nano promising better fuel efficiency, a power-ful engine and new inte-riors—at the same price. “Making the Tata Nano even more desirable, the car’s 624 cc engine has been made even more powerful delivering an impressive 38PS of power(earlier 35PS) and 51 Nm of torque (earlier 48 Nm)” the company said in their release today.

What will the new Nano give?

With fuel efficiency at 25.4 kmpl(Automotive Research Association of India- ARAI certified) as compared to the earlier 23.6 kmpl, Rushlane says the Nano will now have new premium interiors and come in vibrant colors such as White, Rouge Red, Aqua Blue, Neon Rush, Serene White, Me-teor Silver, Mojito Green, Papaya Orange, Sunshine Yellow, and Champagne Gold.

The new Nano with its 624cc engine is more powerful and records a 38PS of power as compared to the earlier 35 PS, and 51Nm of torque as compared to the earlier 48 Nm.

Not just that,it also boasts of being eco-friendly without compromising on the air conditioning. A

low kerb weight of 600 kg, allows the new Tata Nano record lowest CO2 emission among cars in India at 92.7 gm / km.

Fitted with an anti-roll bar at the front and an easier steering mechanism, the Nano’s exhaust sound too has been spruced up to add to its road presence.

While the Nano CX and LX have tip-tap mirrors in the front, for the standard, the passenger side mirror could be installed as an accessory, reviews India Infoline.

The price range is at Rs. 1.40 lakhs for the Nano Standard, Rs 1.70 lakhs for the Nano CX and Rs.1.96 lakhs for the Nano LX (ex-showroom, Delhi).

Tata Motors shares were down 5.14 percent at Rs161.55 per share today.

With Tata Nano converting itself from ‘auto-rickshaw’ to a fancy car, will Tata be able to improve its well below-estimate sales with the new launch?

After Nano car, now there’s ‘nano’ bike

PTI Nov 23, 2011

Nagapattinam, Tamil Nadu: A group of final year mechanical engineering students of a pri-vate university in Tamil Nadu claimed to have designed a 25-kg single-seater ‘nano’ mo-torcycle that could give a mileage of 97 km per litre of petrol.

The students of PRIST Uni-versity, Thanjavur, have de-signed the motorcycle under the guidance of their profes-sors and in collaboration with Hi-Tech Project Industries, a private engineering services company at Porayar in the district.

Demonstrating the motor-cycle, named ‘Nano Bike’ at the Hi-Tech Project Indus-tries campus yesterday in the presence of the company’s research wing staff, the stu-dents claimed the vehicle can touch a maximum speed of 45 kmph and carry one person.

The main frame of the motorbike is made of steel while the wheels are made of aluminium alloy and the petrol tank is made of plastic. To reduce noise, belt drive has been used instead of the tra-ditional chain drive mechanism, the students said.

The students claimed that commercial production of the motorcycle was viable and would cost only about Rs 8,000 per unit.

Now, Nano in Brazil too?PTI Oct 14, 2011

New Delhi: Brazil today expressed interest in taking the world’s cheapest car, Tata Nano to the South American nation.

Governor of Minas Gerais, the second most populous state of Brazil, Antonio Augusto Anastasia, who is here on 8 day visit to India, said he recently met Ratan Tata in Mumbai.

“We would very much like to take Tata Nano to Brazil,” he said at a CII event.

Tata Motors started exports of completely built units (CBU) of Nano to Sri Lanka and Nepal earlier this year, and is consider-ing the option of assembling the car abroad, through the completely knocked down units (CKD) route.

Anastasia also sought Indian in-vestments in sectors like energy, automobiles, aeronautics and IT to strengthen the bilateral commerce between the two countries.

“Brazil and India already have good relationships. We want to strengthen them lot more. We invite big corporates to invest there,” he said at a function.

He also said that Indian corporates such as Infosys must expand their presence in Brazil.

The bilateral trade between the countries stood at USD 7.51 billion in 2010-11.

Chapter: 4

Radia-gate and the 2G scam

2G case: HC dismisses plea against Anil Ambani, Ratan Tata

PTI Nov 23, 2011

The Delhi High Court today dismissed a plea seeking a direction to CBI to probe alleged roles of Reliance ADAG chairman Anil Ambani, Tata Group chief Ratan Tata in 2G spectrum al-location scam case, saying the apex court was “seized of the matter”.

“Without going into the merits of the case, we re-fused to entertain the pe-tition on the ground that the apex court is seized of the matter. The petition is dismissed,” a bench headed by Acting Chief Justice AK Sikri said.

The bench, also comprising Justice Rajiv Sahai Endlaw, refused to comment on the maintainability of the plea of Delhi-based scribe M. Furquan saying “it is a mat-ter of common knowledge that the case is being heard by the special CBI judge on the direction of the Su-preme Court.”

The counsel for CBI opposed the scribe’s plea saying the charge sheets have been filed and the trial has already commenced after framing of charges against 17 accused. The journalist, in his plea, al-leged the agency was “deliberately” suppressing “facts” against Ambani, Ratan Tata and corporate lobbyist Niira Radia in the case.

Earlier, a single judge-bench of Justice Ajit Bharihoke had termed the petition of the scribe as “rubbish” and forced him to withdraw it.

Furquan had also sought to implead as accused DMK chief M Karunanidhi’s wife Dayalu Ammal alleging she held 60 per cent stakes in Kalaingnar TV, an alleged recipient of Rs 200 bribe from beneficiary telecom firm, Swan Telecom. Earlier, the trial court had also rejected the plea and slapped a fine of Rs 10,000 on Furquan for filing the “frivolous” petition.

CBI says Ratan Tata clean, Tata Teleservices shares jump

Reuters Jun 2, 2011

New Delhi: The Ratan Tata-led Tata Teleservices was today given a clean chit by the Central Bureau of Investigation in the ongoing probe of the 2G spectrum allocation scam as the agency informed a special court that there was no irregularity in granting telecom licences

to the firm, televison channels reported.

The news, which was a big relief for the salt-to-steel conglomerate, gave immediate boost to the company shares as stocks climbed 10.2 percent rapidly.

The CBI was replying to a petition that Tata Group’s chairman Ratan Tata and his lobbyist Niira Radia be made par-ties to a telecom case over rigging of grant of telecoms licences in 2007/08, Times Now and NDTV reported.

The Comptroller and Auditor General has estimated that the exchequer lost $39 billion in potential revenue due to irregularities in the grant process.

Ratan Tata is losing patienceIndrajit Gupta May 22, 2011

Ping! The clarification from Vaishnavi Communications, the Tata group’s communications agency, hit my inbox at 9:25 p.m. on a Saturday evening. Obviously, someone had swung into damage control mode inside Bombay House at that late hour. And I guess they had

reason to get a bit rattled by their chairman’s sudden, sharp attack on the declining British work ethic in evidence at Corus and JLR in a candid interview to The Times of London. (Subscription required)

The timing of the interview obviously couldn’t be worse. According to The Telegraph in the UK, Tata Steel proposes to close or mothball part of its Scunthorpe plant, putting at risk 1,200 jobs. The plans would also see 300 jobs lost at its Teesside site.

Yet it isn’t often that Indian business leaders publicly at-tack their own employees—and that too in a foreign country. In 2005, I had done an interview with L&T supremo AM Naik for The Times of India, where he had railed against the engi-neers inside his own company. “Around 95% of the students passing out of engineering col-leges head either to the US or Europe or any other part of the world. The leftovers of the lefto-vers of the leftover come to join us, only to leave after gaining the platinum touch. So who will build India’s ports, bridges and airports?” he had questioned.

The next day, there was a huge uproar inside L&T as Naik had to placate his engineers and assure them that they weren’t exactly third class citizens as he had described them! Tata may have to do something similar in UK, as is evident from the hurried clarification. (See the clarification.)

Click here to see Tata Statement

To my mind, there’s a clear upshot from this no-holds barred interview: Ratan Tata is finally losing his patience, when it comes to securing the full benefits from his global M&A binge in the last dec-ade. To that extent, this outburst, though somewhat belated, may not have come a day too soon. Let me explain why.

Ever since the Tatas made their big move to buy Corus in 2007 and followed it up with the JLR acquisition in 2008, their post merger integration model had a clear defining theme: it was re-ferred to as light touch. Management consultants McKinsey & Co called it a quintessential Asian approach to M&A. Here’s how they describe it in a 2010 article in the McKinsey Quarterly: When it comes to acquisitions, some Asian companies are forging a novel path through the thicket of post-merger integration: they aren’t doing it. Among Western companies, the process can vary consid-

erably from deal to deal, yet it’s an article of faith that acquirers must integrate quickly. Otherwise, the logic goes, they may lose the momentum of a deal before they can capture the synergies that justified it.

The Tatas epitomized this so-called Asian approach. From the time they made their big move, Ratan Tata chose to leave his crown jewels—Corus and JLR—strictly alone. There were no 100 day integration plans. There were no large armies of senior managers sent from India to indoctrinate their European employees.

A very senior manager from Tata Steel who was sent to push things along in UK returned home completely frustrated by the bureaucracy. None of the British managers would listen to any kind of advice; he confided to a senior executive I knew on a flight way back from UK. And Bombay House was in no hurry to enforce its writ.

The word was out that Corus was perhaps the most bureaucratic organization in Europe, a spa-ghetti of different cultures slapped together from the erstwhile British Steel and Dutch maker Koninklijke Hoogovens merger in 1999. No one had attempted to fuse the two organisations, and the plants across Euorpe continued to operate as decentralised entities, with enormous operating freedom for its managers. And this created large, bloated bureaucracies that no one had any con-trol over. There was a joke about Corus’ antiquated IT systems—that may have well been true—no one in the central office knew exactly how many workers were employed in each plant. A senior executive at the Tatas once told me that the managers at Corus would do everything possible to thwart any kind of change effort. And the Tatas did nothing to attack this bureaucracy in the initial years, despite the fact that they may have overpaid for the two acquisitions, buying, as they did, at the top of the cycle.

When they bought Corus in 2007, the Tatas allowed the local management to set the agenda. The massive downturn following the September 2008 collapse of Lehman Brothers and the resultant downturn did force the Tatas though to make massive job cuts in the UK and elsewhere. But it wasn’t until September 2010, that Corus became Tata Steel Europe.

Obviously, there may have been valid grounds for the Tatas not to meddle too much at Corus. The Anglo-Dutch steel maker was four times bigger than Tata Steel. Besides, the Tatas themselves did not have a cadre of international managers who were trained to handle such complex post merger integration. So they consciously left it to the existing European managers to lead the charge. It wasn’t until the combative American steel expert Kirby Adams arrived as the new CEO did the process of restructuring and culture change at Corus begin in right earnest. His plan to mothball the Teeside plant made him hugely unpopular with local politicians in the area. In the 14 months that he was there, Adams cut 6,000 jobs across Europe and thereby helped stop some of the bleed-ing at Corus. Not surprisingly, Adams stepped down in October 2010 and was replaced by his COO Karl-Ulrich Köhler, who had come in from German steelmaker ThyssenKrupp.

While he was at the helm, Adams made no efforts to integrate the European operations with the Indian ops. The two entities continued to perform without too much integration. Perhaps Adams was apprehensive that it could destabilise his own power base in Europe. Köhler, on the other hand, has no such compunctions. In the past few months, apparently he has himself realised the inherent fallacy of having two independent entities in India and Europe. He is said to have taken up the challenge of merging the two organisations and deriving greater synergies. And he is also said to have taken on the tough task of dismantling the infamous bureaucracy that Mr Tata ranted about in the interview to The Times.

So, after nearly four years after the Tatas acquired Corus, the gloves may finally be coming off. And it’s about time someone had the courage to call a spade a spade.

Part: 2

The most awaited decision in Indian corporate history

The wait is over: Cyrus Mistry to takeover from Ratan Tata

FP Staff Nov 23, 2011

Tata Sons, the holding company of over USD 80 billion conglomerate Tata Group, today announced that Cyrus P Mistry, the 43-year-old Managing Director of Shapoorji Pallonji Group, will succeed Ratan Tata when he retires in 2012. A graduate in civil engineering from

Imperial College, London, Mistry has been a director of Tata Sons since August 2006.

The board of directors at Tata Sons, the apex holding company of the Tata group, met on Wednes-day, November 22, and the choice of a successor to group chairman Ratan Tata was made last evening.

Last year a five-member committee was formed to pick the new leader for the group. The committee made up of former Tata Sons vice-chairman Noshir A Soona-wala; Tata Sons director RK Krishna Kumar; Cyrus Mis-try, younger son of Pallonji Mistry, the largest single shareholder in the Tata group’s holding company; Lord Bhattacharya, founder of UK-based Warwick Manu-facturing; and Tata group lawyer Shirin Bharucha.

Ratan Tata is expected to step down at the end of 2012, when he turns 75.

For over two years, it has been speculated that three Tata group bigwigs — Ravi Kant of Tata Mo-tors, S Ramadorai of Tata Consultancy Services and B. Muthuraman of Tata Steel (all of whom have relinquished their positions as CEOs and become vice-chairmen of the operating companies after turning 65) — are in the running for board positions at Tata Sons.

Tata Sons in a press statement released today said:

The board of directors of Tata Sons at its meeting today appointed Cyrus P Mistry as Deputy Chairman. He will work with Ratan N Tata over the next year and take over from him when Mr Tata retires in December 2012. This is as per the unanimous recommendation of the selection committee.

Endorsing the appointment, Mr Tata, Chairman of Tata Sons, said: “The appointment of Mr Cyrus P Mistry as Deputy Chairman of Tata Sons is a good and far-sighted choice.

He has been on the board of Tata Sons since August 2006 and I have been impressed with the quality and calibre of his participation, his astute observations and his humility. He is intelligent

and qualified to take on the responsibility being offered and I will be committed to working with him over the next year to give him the exposure, the involvement and the operating experience to equip him to undertake the full responsibility of the group on my retirement.”

Mr Mistry, currently managing director, Shapoorji Pallonji Group, has been a director of Tata Sons since August 2006. He is a graduate of civil engineering from Imperial College, London, and has a master of science in management from the London Business School.

As we wrote this, Mistry’s profile in Bloomberg Businessweek reads with the following description:

“Mr. Mistry serves as Senior Vice President of Business Development and Technology at DQ Entertainment (International) Limited. He serves as Chairman of the Board of Shapoorji Pallonji Group and Afcons Infrastructure Limited. He has over 22 years of experience in the Indian enter-tainment industry in the fields of filmmaking and animation, technical and production pipeline management. Mr. Mistry serves as a Director Tata Sons Limited.”

Commenting on the announcement, Ratan Tata said that he was committed to working with Mis-try over the next year.

Endorsing the appointment, Mr Tata, Chairman of Tata Sons, said: “The appointment of Mr Cyrus P Mistry as Deputy Chairman of Tata Sons is a good and far-sighted choice.

He has been on the board of Tata Sons since August 2006 and I have been impressed with the quality and calibre of his participation, his astute observations and his humility. He is intelligent and qualified to take on the responsibility being offered and I will be committed to working with him over the next year to give him the exposure, the involvement and the operating experience to equip him to undertake the full responsibility of the group on my retirement.”

Responding to the appointment Mistry said, “I feel deeply honoured by this appointment. I am aware that an enormous responsibility, with a great legacy, has been entrusted to me. I look for-ward to Mr Tata’s guidance in the year ahead in meeting the expectations of the Group. I take this responsibility very seriously and in keeping with the values and ethics of the Tata Group I will undertake to legally dissociate myself from the management of my family businesses to avoid any issue of conflict of interest.”

Mistry solved: Tata successor brings best of two worlds

R Jagannathan Nov 23, 2011

The appointment of Cyrus Mistry as Deputy Chairman of Tata Sons and successor to Ratan Tata as head of the Tata group sends two interesting signals.

One, leadership of the Tatas will now pass to the group which actually has the largest holdings in Tata Sons. This can be a source of great strength in the future since it could potentially combine the shareholding strengths of the Pallonji Mistry Group with that of the Tatas in the group. In the globalised nature of business, shareholding is key to control.

Two, the surprise move will also send the signal that the Tata group does not need to be headed by a Tata to uphold the values it espouses. Ra-tan Tata’s half-brother Noel Tata, who many thought was a shoo-in for the job, is now only one of the key managers of the group.

When JRD Tata went around looking for a successor, he had several satraps to choose from: Russi Mody of Tata Steel and Darbari Seth of Tata Chemicals, among them. But he probably saw that a Tata group could easily disinte-grate into independent fief-doms in a regime where Tata Sons and Tata Industries did

not control the group through shareholding power. In the end JRD plumped for Ratan Tata as he probably felt that a Tata needed to be at the helm to hold it together.

Under Ratan Tata, the group has gone out of its way to raise group holdings in core companies, and through crossholdings.

This is where the induction of Cyrus Mistry, who is son of Pallonji Mistry and already a member of Tata Sons board, makes good and strategic sense. With group shareholdings now fairly insulated from takeover threats, Ratan Tata probably felt that he could afford to look beyond a Tata to man-age the group. But the group is not that safe from takeovers altogether, and this is where a share-holder with significant holdings in Tata Sons makes strategic sense as well.

The group is also more global now after the purchase of Corus Steel and JLR a few years back. This led some observers to speculate that maybe it should have an expat with global exposure to head the group. That, of course, was never going to happen. At the end of it all, the house of Tata is Indian to the core, with a Indian heart and Indian DNA and culture. It would have been next to

impossible for an expat to understand the Tata culture so soon.

In Cyrus Mistry, the second son of Pallonji Mistry, Ratan Tata may have chosen the best of both worlds — a good businessman who understands the Tata ethos and one who brings the financial clout and commitment of the Mistrys of Shapoorji Pallonji as well.

Noel Tata, who many talked of as a potential successor, may appear to have lost out in the race — but who knows, it may also be a good idea to have another Tata waiting in the wings. Even Noel has a Pallonji Mistry connection, for he is married to his daughter Aloo.

For Ratan Tata, Noel, who manages the Trent retail chain among other businesses, is like a second string to his bow. It makes no sense for India’s biggest business house to have a short succession line. A Noel waiting in the wings is insurance for the future.

Tata to Mistry: ‘A major generational change’

FP Staff Nov 24, 2011

The country’s largest corporate house had mounted a global search that lasted more than a year for a successor to Chairman Ratan Tata, but ended up tapping an insider— Cyrus Mis-try, whose father, Pallonji S Mistry, is the biggest shareholder of Tata Sons with an 18 per-

cent stake.

Indrajit Dasgupta, editor Forbes India, feels the appointment of Cyrus Mistry as chairman of Tata Sons is a major generational change in the Tata Group. “Taking over the chairmanship at the age of 43 is an incredible responsibility.. and this is someone who is untested,” he told CNN IBN.

Ratan Tata took over Tata Group at a young age too, but the business was far less complex back then. The Tata group was founded as a textile business in 1868 by Ratan’s great-grandfather, Jamsetji Tata, a member of the close-knit Parsi community — Persian Zoro-astrians who fled to India around the 10th century. His older son expanded into steel, insurance and the produc-tion of soaps and cooking oil.

But the selection panel has chosen someone who has at least two decades before him to take the global conglom-erate to another level. The only ques-tion mark could be that he is a large

shareholder and hence the selection could have been biased.

But Indrajit Dasgupta disagrees. ”Since Cyrus Mistry is very much an insider he would have a bet-ter understanding of the Tata ethos, he says. The governance of Tata Group is very unique as 40 percent of the company is owned by three philanthropists. Tata Group is not family owned even though Tata Sons holds the bulk of shares in key companies. In an environment where philan-thropic trusts endowed by the Tata family own 66 percent of Tata Sons, values and ethics become critical, and no outsider could ever understand the Tata culture.”

Moreover, Mistry represents the single largest shareholder— his father,Pallonji S. Mistry, who owns 18 percent stake in Tata Sons. Therefore his interests are naturally alligned with the group.

However, Gupta also thought that in such a complex organisation, it is a challenging position to step into. And Mistry, he said, will have to earn that power and respect as he takes the company forward in the next ten to twenty years.

But with this announcement, will Ratan Tata completely fade away by December 2012 or continue to hand-hold Mistry till he is ready to take over the reigns?

100 cos, 7 sectors, 80 nations, 1 yr to learn: Good luck, Mr Mistry

FP Editors Nov 24, 2011

One year to understand more than 100 companies operating across seven business sectors in more than 80 countries.

That’s the immediate challenge on hand for 43-year-old Cyrus Mistry, the man who was named successor to Ratan Tata as chairman of the Tata group, India’s largest business conglomerate.

It will be an incredibly demanding task, but Ratan Tata has full faith in his man. Describing the appointment, Tata said his decision was a “good and far-sighted choice” and that he had been “im-pressed with the quality and calibre of his (Mistry’s) participation, his astute observations and his humility.”

Several company observers agreed. Forbes India editor Indrajit Gupta called Ratan Tata’s decision “a generational change”. “This is a huge generational change. I think taking over the chairmanship of Tata’s at this age is great responsibility. Ratan Tata when he took over was also young but it was far less complex then,” he told CNN-IBN.

You can say that again. Today, the $83 billion Tata group straddles operations across business ranging from salt to software and employs a massive 425,000 people. Close to 60 percent of the group’s revenues comes from overseas. The group is also the largest industrial employer in the UK, accounting for nearly 50,000 UK jobs directly, with countless indirectly.

It’s a phenomenal transformation for a group that started as a textile business in 1868 by Ratan’s great-grandfather, Jamsetji Tata. Under Ratan Tata, the group transformed from a $5 billion group into a global giant, largely through acquisitions both at home and abroad.

The first overseas acquisition was made in 2000 when Ratan Tata paid $407 million for the UK-based Tetley group – the biggest by an Indian company at the time. According to a Bloomberg report, that was followed by another 65 mergers in India and abroad, totalling more than $20 bil-lion, the most by any Indian group.

The group now owns the Jaguar and Land Rover brands, as well as European steel-maker Corus and Tetley Tea.

For Mistry, the task is two-fold.

One, he will have to work at consolidating the various businesses at a time of huge uncertainty in the global economy. It’s no secret that several of the top listed companies under the group are struggling financially.

Tata Steel, for instance, re-ported a 90 percent drop in profit for the quarter end-ing September over cooling demand and declining steel prices. The problem is exacer-bated by the fact that a bulk of its revenues come from Euro-pean operations (it acquired Corus, Europe’s second-larg-est steel-maker for $13 billion in 2007).

Then there is Tata Motors, whose biggest disappointment is the Nano, once touted as the world’s cheapest small car. In telecoms, Tata Teleservices and Tata Communications are struggling to cope with reduc-ing profitability in an industry plagued by regulatory problems and the aftermath of the 2G scam. Another group company TCS, India’s largest IT services company, is also feeling the heat of the growing economic turmoil in Europe.

In addition, there is the fallout from the Niira Radia scam. While there are no financial implica-tions, the image of the Tata group received a battering. No doubt, Mistry has a lot of fixing to do. It helps that Mistry, a civil engineer by training, has strong expertise in the formation of business plans, risk evaluation, business investment strategy and property and infrastructure development.

Two, because he is an unknown entity, he will have to work hard at earning the respect of fellow Tata officials. “I think he’ll have to earn respect. I don’t think any of the Tata managers will accept someone who they don’t respect,” said Forbes’ Gupta to CNN-IBN.

While Ratan Tata is already convinced, he’ll have to prove to other company officials and outsiders that Mistry has what it takes to make the leap from running a construction business to a variety of businesses.

More importantly, Mistry will need to erase the lurking suspicion that he got the top job simply because his father is the biggest shareholder of the Tata group.

Of course, Mistry is not a complete stranger to handling business empires: he has been heading his family’s Shapoorji Pallonji group since 2003, where he oversaw revenues of more than $2 bil-lion. A 147-year old firm, Shapoorji boasts the tall-est residential building in Indian and the largest cement clinker plant in India.

According to a Reuters report, Pallonji is dubbed the “Phantom of Bombay House” for the quiet but assured way he commands power around the south Mumbai headquarters of the Tata empire. That should somewhat reassure investors who still have to see what exactly his management style will be.

“It’s such a complex organisation, it’s a challeng-ing position to step into. It’s very important that the new person has a vision for taking the group forward for the next 20-30 years,” Taina Erajuuri,

a fund manager at FIM Asset Management in Helsinki, which owns stock in Tata firms, told Reu-ters.

Good luck, Mr Mistry.

Chapter: 1

The wait for a successor

After Tata, who? An insider could keep the flag flying high

FP Editors Aug 29, 2011

Ratan Tata’s succession road map continues to toggle between an internal and an external candidate. The committee looking for the successor to fill in his big shoes appears to be ze-roing in on an internal hand, according to a report in The Business Standard. In May 2011,

the committee for the first time interviewed some candidates from outside.

It seems now that after so much of deliberations, the committee is veering round to an agree-ment on a list of candidates that includes Tata’s half-brother Noel. The other contenders whose names are doing the rounds could be those from the Tata Sons executive office, including R Gopalakrishnan (65), Ishaat Hussain (63), Kishore Chaukar (64) and Arunkumar Gandhi (68).

Time is also a key factor in this succession issue. There are two elements here. One is the age of some of these senior executives. It’s worth mentioning that the list includes candidates well into their 60s. The other is the time taken to sim-ply pick up the succes-sor. This can frustrate all stakeholders in the process.

At least three of them have been with the Tata Group for the past 10-15 years. If it was going to be someone among them, Tata had enough time to choose one and

groom that person. Perhaps, he was mindful of the risk of losing others if he chose one among equals.

Firstpost has argued in the past about the method used for deciding the succession issue at GE, a professionally-managed US conglomerate. If a successor was going to be an internal professional, it is now too late to engage someone for the purpose.

Noel Tata

It surely matters what Tata thinks of Noel. He has publicly voiced concerns about him being ready to take over the mantle. However, Noel Tata has age on his side. Besides this and more important-ly, he could have the backing of Shapoorji Pallonji Mistry, the single largest shareholder in Tata Sons.

If you had invested two years ago in Trent, the Tata Group’s retail company, your money would have more than doubled by now. Compare this to the performance of the largest peer group com-pany, Pantaloon Retail. Shares have stayed flat over two years.

Yes, the responsibility of the group is substantially larger than just managing one business. After all, a conglomerate like the Tata Group is a unique proposition.

Time is important too. It has been far too long that the group has looked for a successor. It appears for now that it could perhaps be a good idea to hand over the mantle to Noel and move on.

Having said that, there is a need for a stronger and institutional mechanism to decide on any future succession plan. It is also the time to reform the holding company structure, have an in-dependent board and a professional executive CEO. A move that could perhaps kick off reforms across Corproate India.

Is Ratan Tata’s succession plan focused on the right thing?

Rajas Kelkar May 27, 2011

It is not easy to give up power, particularly if you have been the object of so much adulation, said NR Narayana Murthy in his last letter to shareholders as Infosys chairman.

The statement could apply equally to Ratan Tata, who has taken the group from strength to strength during his 20 years as chairman and is now looking for someone to step into his shoes.

Ratan Tata has taken the group he inherited from his uncle JRD from $5 billion to $70 bil-lion. However, it has been a difficult search to find a successor to carry forward his vision. The group, for the first time, is looking for someone outside the Tata family to head the group even though it has not stopped looking within.

However, there is an underlying unease.

A conglomerate, which has global operations, has dwelt far too long

on finding a successor to Tata, and the very fact that the committee he set up to do the job is still working on some 11 names (according to a report in Business Standard) suggests that the search began too late, or is not making headway.

Jack Welch, former chairman and CEO of General Electric, began searching for a successor six years before he handed over the reins to Jeffery Immelt in 2000. There were three aspirants for the top job. It is known that Immelt was the youngest among the three when he was chosen by the company’s board. The other two went on to become CEOs of other Fortune 500 companies.

But is the search committee looking in the right direction? Reuters reported that people like Indra Nooyi, currently heading American beverage company Pepsico, and Arun Sarin, former CEO of Vodafone, were considered for the job.

The search committee has now gone beyond the brief of merely searching for a leader and recom-mended a restructuring of the Tata Sons board by bringing in independent directors and younger executives from group companies, the agency said.

Nothing wrong with this, but the crucial question is this: Is the committee looking for someone to run Tata Sons (which is a holding company) or someone to head the whole group, which is what

Ratan Tata is doing now?

If it’s the former, has the committee asked itself why a professional CEO with the experience of running multinational companies should join a group’s privately-owned holding company? In Ra-tan Tata’s case, the jobs of Tata Sons’ chairman and group executive head were combined. And he was a Tata. The same symbolised the unity of the two objectives — being head of the holding com-pany and boss of the group.

Can a non-Tata manage to do both?

Business leaders like Nooyi or Sarin drew their authority from reporting to shareholders who ex-pected specific operations results from them. But who are the shareholders of Tata Sons, and what would Nooyi and Sarin be expected to achieve?

To answer this, we need to understand the business of Tata Sons. It is a holding company, and its main business is to get its shareholdings to deliver returns. In short, its business is portfolio man-agement.

For the year ended March 2010, Tata Sons reported revenues of Rs 2,958 crore and a net profit of Rs 1,629 crore. The real assets in the books of Tata Sons are the listed and unlisted investments in Tata group companies. The current market value of the listed holdings of Tata Sons in various group companies is Rs 2,16,195 crore. (It has barely moved in the past 14 months).

The purpose of hiring a professional CEO is to maximise shareholder value. The single-largest shareholder with an 18 percent stake in Tata Sons is Shapoorji Pallonji Mistry who runs his own construction business. The Tata family-owned trusts control the rest. Neither are involved in find-ing a successor to Ratan Tata.

A holding company needs a fund manager and not just a professional CEO. Is it any surprise Indra Nooyi and Arun Sarin have not expressed any great enthusiasm for a fund management job.

The job content at Tata Sons cannot change unless Ratan Tata wills it. Or it is listed. GE is a con-glomerate like the Tatas (but not so diversified), and the key difference is that it is listed. It is strange that a listing of Tata Sons was never considered in the past.

An early listing of the holding company would have facilitated the creation of a professionally-managed board. The pulls and pressures of public scrutiny would have allowed the group’s holding company to make a smooth transition and plan for a leadership change.

The other advantage of listing Tata Sons would be to allow the family trusts, Shapoorji Mistry and the Tata family to unlock value.

“Shareholder activism makes a lot of difference in succession issues in US,” Richard Rekhy, head of advisory at KPMG, a consulting firm, said. “There is still some time before India witnesses similar level of maturity,” he added.

KPMG actively consults with firms in India on management and business-related issues. Rekhy says that there is a need to work towards separating management from ownership. It is not possi-ble to impose such rules where the onus would be on the owner to give up power.

This is exactly why Narayana Murthy made that statement on giving up power. There is a message in it somewhere for Ratan Tata.

Tata top job: Others who didn’t make it

FP Staff Nov 24, 2011

The wait for successor to Chairman Ratan Tata, ended Wednesday after Tata Sons, the hold-ing company of over $80 billion conglomerate Tata Group, announced that Cyrus Pallonji Mistry, the 43-year-old Managing Director of Shapoorji Pallonji Group, would succeed him.

Mistry will have a year to understand and take over from Ratan Tata, who retires in December 2012.

To many, Mistry’s selection was a sur-prise — considering that it was almost expected that Tata’s half brother Noel Naval Tata would take over from him.

Mistry, a graduate in civil engineer-ing from London’s Imperial College, has been a director of Tata Sons since August 2006 and is also the brother-in-law of Noel Naval Tata (married to his sister Aloo).

And, while Noel Tata was touted to have been the favourite, there were others in contention to take up from Ratan Tata — among them being MD & CEO of The Indian Hotels Company Limited Ray-mond Bickson, CEO and MD of TCS Natarajan Chandrasekaran and even chief of PepsiCo Indra Nooyi.

Watch a slideshow of some of the other contenders:

Chapter: 2

The mysterious Cyrus Mistry

A Mistry at Bombay HouseSourav Majumdar Nov 24, 2011

His is a name that’s crying out to be punned on. And rightly so. For those following the unfolding story of who will eventually succeed the mighty Ratan Tata as the boss of Bom-bay House, the mystery has finally been solved. Cyrus Pallonji Mistry, 43, will be the next

chairman of the $83 billion Tata Group. But the appointment of this lesser-known member of the Pallonji Mistry family will clearly be a mystery that will still take time to unravel, as he steps into his new role, first as vice chairman of the Group, and then, in December 2012, as the next boss of Bombay House.

To many, the name Cyrus Mistry, will evoke little or no reaction. And his choice as the person best suited to fill in Ratan Tata’s giant shoes will doubtless evoke gasps of disbelief in some circles, no matter how well those several corporate leaders who are being quoted in the media try to couch it. The reason is simple: while the initial speculation was that someone of a global stature would be best suited to lead the Tata Group – labeled a salt-to-swanky cars conglomerate by sections of the media – the guesses then were about Noel Tata, Ratan Tata’s half brother and Cyrus Mistry’s brother-in-law, being the ideal candidate since he carried the Tata name. That possibility faded away somewhat from the middle of this year.

Cyrus Mistry, in most ways, is a choice hard-boiled Tata insiders may not really be surprised with. Mistry has not just the right pedigree, he also comes with enough experience of how the Tata Group – now transformed rather dramatically over the years by Ratan Tata – actu-ally functions. Being already a member of the Tata Sons board and also, ironically, of the selection committee set up to search for Ratan Tata’s successor, his curriculum vitae is in sync with the basic requirements of being a Tata man. And being a part of the family which controls 18% in Tata Sons does help.

The best thing about this transition, perhaps, is that Cyrus Mistry will have the benefit of being mentored personally by Ratan Tata over the next year. Tata has promised to give him the exposure and guidance required before he finally takes over at the corner room in Bombay House in what is arguably the most-watched corporate appointment in years. Tata’s style of management, his ability to take decisions and his way of dealing with challenges will, of course, be a huge learning for the young engineer who has been described by those who know him as quiet and intuitive.

Ratan Tata has, particularly over the past decade, transformed the Tata Group from a stodgy, old-world empire into a giant of international size and scale, and with a massive global footprint. One of the biggest attributes which Ratan Tata has given to the group is a silent aggression, perhaps

most demonstrated in the manner in which Tata Motors has transformed itself. Not only in the manner in which Tata pursued its passenger car plans in the wake of severe odds, but also in the way in which it gobbled up Jaguar Land Rover in a jaw-dropping acquisition some years ago. Ditto for the manner in which the group pursued with its plans of becoming a global player in steel, with the nail-biting acquisition of Corus, widely believed at the time as being the most ambitious move by the group yet.

Clearly, the greatest challenge for Cyrus Mistry will be to milk these acquisitions better over time, and face the challenges of a fast-changing global economy where Europe and US are facing major crises of confidence. Despite the size and scale, a number of Tata companies will face their own significant challenges in India and across the world as the economic situation comes up with new problems. The bigger the size, the greater the challenge. Mistry will soon have to grapple with that, whether it is the challenges of the automotive sector or in steel or retail.

The other challenge, as Marico boss and Ficci president Harsh Mariwala pointed out in a television programme, is that his people management skills will also be tested to the hilt because a number of his direct reportees across companies and businesses will be far older than he is. Most of them are Tata veterans in their own right, and bring enormous experience with them. His style will therefore have to be inclusive and subtle if he is to extract the best results. No rocket science, this, but a chal-lenge nonetheless.

Cyrus Mistry will also have to shoulder a massive burden of expectations – not just from the Tata Group, but also the extended stakeholder family of investors, customers, dealers and even policy-makers. Tata is much, much more than a corporate house. It is an ethos, a culture, a set of proven values. Ratan Tata has added global ambition and aggression to that list. Being Cyrus, therefore, will be far from easy when filling the shoes of a Tata.

Piecing together a resume for the Tata group’s Cyrus Mistry

FP Staff Nov 24, 2011

So little is known about Cyrus Mistry, the successor to Rata Tata of the Tata group, India’s largest business conglomerate.

Firstpost decided to collate publicly available information about him and create a personal-cum-career ‘resume’ for him. Here’s how it goes:

Name: Cyrus Pallonji Mistry

DOB: 4 July 1968

Age: 43

Career

Current designation: Deputy chairman of the Tata group. Will be appointed chairman in December 2012, when current chairman Ratan Tata retires.

According to The Times of India• He was managing direc-tor of Shapoorji Pallonji & Company, a part of Rs 15,000-crore Shapoorji Pallonji Group (SP Group).

• In 2005, he joined Tata Sons’ board.

• He is on the board of Tata Elxsi.

• He is a trustee of the Breach Candy Hospital Trust.

• Also serves as Senior Vice President of Production of DQ Entertainment Plc, according to NDTV.

• Credited with creating several firsts for the Pallonji group — the tallest residential towers, the longest rail bridge, largest dry dock and the largest affordable housing project — according to Asian Age.

• In 1995, he also started a 106-megawatt power project in 1995 in Tamil Nadu, according to a Wall Street Journal blog.

Education

• Graduate in civil engineering from London’s Imperial College.

• Master of Science in Management from the London Business School.

• Bachelor’s Degree in Commerce from Mumbai University.

• Fellow of the UK-based Institute of Civil Engineers and a founder member of the Construction Federation of India.

Strengths

Expertise includes formation of business plans, risk evaluation, business investment strategy and property and infrastructure development.

• Soft-spoken, candid and down to earth.

• Conservative in approach, has an eye for detail.

Hobbies and interests

• Loves golf.

• Is an avid reader of business books.

• Loves cars, especially sports utility vehicles, according to the Times of India.

• Steers clear of the cocktail party circuit as well, according to the newspaper.

Family

• The youngest son of construction baron Pallonji Shapoorji Mistry.

• Brother-in-law of Ratan Tata’s step-brother, Noel Tata.

• Married to Rohika Chagla, the daughter of lawyer Iqbal Chagla, reports NDTV.. The couple has two sons.

Additional information:

His family is the single largest shareholder in Tata Sons with a stake of 18 percent.

Owns houses in Mumbai, London and Pune.

Has Irish citizenship, as does his father.

Four things you need to know about Ratan Tata’s successor, Cyrus Mistry

FP Editors Nov 24, 2011

The Wall Street Journal said it “ended the suspense over the most keenly awaited appoint-ment in corporate India”.

It certainly did. On Wednesday, Cyrus Pallonji Mistry was named the successor to Tata Group Chairman Ratan Tata, which was greeted by a mixture of surprise and cautious optimism by com-pany observers.

The 43-year-old Mistry was ap-pointed as the group’s deputy chairman with immediate effect and will take over as chairman once Tata retires in December 2012, after turning 75. Mistry will become the sixth chairman of the group and only the sec-ond to not have a Tata surname.

The Tata group is India’s big-gest business conglomerate. Tata Sons is the group’s holding company. The group has opera-tions in more than 80 countries and generates about 58 percent of its annual revenues of more than $80 billion from overseas.

Here are four things you need to know about Cyrus Mistry’s appointment.

First, a short background about the man whose appointment caught several observers by surprise. Cyrus Mistry is the younger son of Pallonji Mistry, whose construction company Shapoorji Pallonji & Co is the biggest shareholder of Tata Sons, with a stake of about 18 percent.

Mistry is also the managing director of Shapoorji Pallonji, a position he is expected to relinquish soon to avoid any conflict of interest in his new role as deputy chairman of the Tata group.

At 43, Mistry will be younger than Ratan Tata when he took charge of the Tata group in 1991. Mint noted that “his appointment will be part of a larger generational shift in the Tata group, after lead-ership changes in many of the operating companies”.

According to a Forbes blog, “Cyrus Mistry’s ascension to the top job will provide his family its first opportunity to exercise management control since his grandfather acquired shares in Tata Sons in the 1930s”. His father Pallonji has so far been a passive investor although he sat on the board of Tata Sons until 2006 when he retired and ceded the spot to Cyrus, it added.

Second, reactions to his appointment have ranged from a wholehearted thumbs-up to caution. That’s not surprising, given that he Mistry will soon lead a globalised, multi-billion-dollar con-glomerate. After all, he will step into the shoes of a man who practically transformed the Tata group from an Indian company to a globally respected conglomerate. Does he have what it takes to carry on the legacy? The verdict is still not out on that.

“He has phenomenally big shoes to fill,” U R Bhat, managing director of Dalton Capital Advisors India, told Bloomberg. “He’s sort of an enigma. We don’t know whether he has the right creden-tials.”

In contrast, other experts like Samir Arora welcomed the news. “The markets will like the deci-sion,” the founder of Singapore-based hedge fund Helios Capital Management told the news agen-cy. “It’s great to have an insider who know the group and has tracked it for some years. It will put to rest the uncertainty.”

Third, very, very little is known about Mistry. The Times of India said that until yesterday evening, there was no Wikipedia entry on Cyrus Pallonji Mistry. But as soon as news started filter-ing through about his appointment, a page was suddenly created about him. In two hours, there were more than 35 additions, with users adding different bits of information, the newspaper said. Indeed, soon after the news broke, Ratan Tata and Cyrus Mistry both started trending on Twitter as well.

In a phone interview to Bloomberg, Parmeshwar Godrej, a board member of Godrej Properties and wife of Adi Godrej, gave her approval of the decision, adding that she had known Mistry since he was a baby. “The whole family is very shy and reserved. I’m sure he will do a great job,” she said.

Fourth, Mistry’s appointment comes at a time when some of the group’s main companies are fac-ing tough operating environments. According to H P Ranina, a corporate tax lawyer who spoke to The Wall Street Journal, Mistry’s key target will be to turn around the group’s international steel business and consolidate all the other businesses.

There will also be questions about his management style. As a quick edit in Mint asks, will it be a loose federation in the JRD Tata style or more centralised in the Ratan Tata style? Guess we’ll just have to wait and watch.

Cyrus Mistry and the $5 bn brand consumers cannot avoid

Anant Rangaswami Nov 24, 2011

Can you remember the last time you watched a programme on TV for a couple of hours and did not see a commercial for any Tata brand?

Today, it’s difficult for an average consumer to avoid a Tata brand in his or her normal consump-tion pattern. For air-conditioners, water coolers, water dispensers and water purifiers, there’s Voltas. In cars, you have the Indica, Indigo, Manza, Sumo and, of course, the Nano. In beverages, you have Tata Café, Tata Tea, Tetley Tea and Himalaya water. In entertainment, you have Tata Sky services. In the hotel business, you have the Taj, Vivanta and Ginger. In jewellery, there’s Tanishq. In watches, you have Titan and the brand extension, Titan Eye, for spectacles. In retail, there’s Westside, Landmark, Croma and Tashi. In telecom, Tata Indicom and Tata DoCoMo are major players.

That’s a long list of brands – and promises.

“I think the world over re-alisation has dawned that as economies develop and consumers have more spend-ing power, people don’t buy products, they buy a prom-ise. A brand is nothing but a way of expressing a promise. The future will undoubtedly belong to the brand — and the Tatas will not be left far be-hind,” said R Gopalakrishnan, director of Tata Sons, chair-man of Rallis India and Ad-vinus Therapeutics, and vice chairman of Tata Chemicals, in an interview with tata.com in July 2000.

“Today, the Tatas represent assurance, reliability, a sense of nationalism, value for money, and such other attributes that have been built over several decades. Irrespective of the product you are making, those are the at-tributes you would like to be known for, whether it is through a wrist watch, a piece of software or a car. It is for this reason that the Tata name goes well with a diversity of products — from tea and salt to an Indica car, software development and steel,” Gopalakrishnan had said in the same inter-view.

What does all this mean for Cyrus Mistry? “He (Gopalakrishnan) also spoke about how the Tata brand has evolved over the years. From $300 million in 1998 it has gone and become a $.5 billion brand. They are also expecting this number to double by the end of 2011-12 when they do the next assessment of the brand valuation,” moneycontrol reported.

The adjectives that one didn’t see before Ratan Tata took charge as chairman in 1981 are adjec-tives that very easily come to mind now — aggressive, vibrant, exciting, multinational, risk-taking.

It’s in the businesses and geographies that Ratan Tata has led the group into in the past decade that makes us think differently about what the Tata brand represents. In the acquisition of Jag-uar Land Rover, for example, the ‘value-for-money’ tag that the Tata brand name has stood for is pushed into the background, but world-class and multinational come to the fore.

“Tata Motors on Wednesday announced its entry into the international luxury car market with some style as the company snapped up two of Britain’s most famous names in automobile manu-facturing, Jaguar and Land Rover, in a $2.3 billion deal with Ford, their American owners. “Ford says Tata to Jaguar” declared a front-page headline in a British newspaper as the country woke up to the loss of a bit of its motoring history in a classic case of the empire striking back,” The Hindu had gushed.

The Corus buy instantly made Tata a risk-taker — and a global player.

“The Tata Group is celebrating its acquisition of the Anglo-Dutch steel firm Corus, and the cata-pulting of Tata Steel into world steel’s big-five status (by revenue). It should. The $11 billion deal is a marker in the ground….But Tata-Corus is the largest out of India, and is done by a private sec-tor entity of its own volition, away from the shadow of state influence. For these reasons, it bears noticing,” said Harvard Business School’s Working Knowledge.

When this commercial — We also make steel — was made, there weren’t many products in the Tata stable which were consumer-facing and exciting, save for Titan watches. What else did Tata make? They made salt, soap (Tata OK, for example), airconditioners (under Voltas), tea, trucks, and they ran hotels under the Taj umbrella. Except for the Taj, which had a few properties abroad, most of their consumer-facing brands were India focused, and, with the exception of Titan, and, to an extent, Voltas, hardly exciting.

Now, there’s a launch or an acquisition every few months. And every brand that is launched or bought has to pay royalty to Tata Sons for the use of ‘the group mark and logo’ thanks to the Brand Equity and Business Promotion Agreement, which is signed by Tata Sons and individual group companies.

That’s an addition to the bottom-line of Tata Sons even as there’s appreciation in the brand valua-tion.

The brand has become so much more than it was when Ratan Tata ‘inherited’ it. In addition to Tata standing for assurance, reliability, a sense of nationalism, value for money and similar at-tributes before Ratan Tata took over, attributes like exciting, vibrant, diversified, international, aggressive and risk-taking have been added —together handing Cyrus Mistry a $5.5 billion (and growing) brand to manage.

Thankfully, there’s one attribute that Mistry has which should be of immense help to him as Ratan Tata hands over the baton. It’s an adjective that none associates with the Tatas – young.

“My only regret is that I am not 20 years younger because I think India’s going through a very ex-citing period in its history,” Ratan Tata had said earlier this year in an interview with CNN.

Well, Cyrus Mistry is 30 years younger…and he’ll steer the Tata empire through this ‘very exciting period’ in India’s – and Tata’s – history.

Chapter: 3

Reactions

Market: Tata stocks open on strong note but unable to sustain gains in weak market

PTI Nov 24, 2011

Mumbai: A number of Tata stocks opened on a strong note today — a day after Cyrus Mis-try was named as successor to Ratan Tata as the group head — but could not sustain the gains in a weak market.

However, a few like Tata Power, Tata Coffee and Trent were holding onto gains in early morning trade.

The most valued Tata company, IT giant TCS saw its share price rising sharply in the opening trade to Rs 1069.75, but soon slipped into the red with a loss of about one per cent to Rs 1050.60.

Similarly, companies like Rallis, Indian Hotels, Tata Chemicals, Tata Elxi, Tata Global Beverages and Tata Investment Corp also opened higher, but could not sustain their opening gains and were trading with modest losses in the early morning trade.

The broader market trend was also week and the benchmark Sensex was 139.78 per cent down at 15,560.19 points.

Some other stocks like Tata Steel, Tata Tele, Voltas, Tata Communications and Tata Sponge opened on a flat note and were seen trading with mar-

ginal losses in early morning.

A few like Tata Motors opened on a weak note, but some value buying was seen at lower levels. The stock was down 1.3 per cent at Rs 166.35 at 1000 hours at the BSE.

Tata Steel was down 3.5 per cent at Rs 369, Tata Power was flat at Rs 91.30 after erasing its early gains, Tata Communications was down 2.3 per cent at Rs 176.60 and Tata Coffee was trading 0.4 per cent higher at Rs 777.40.

There are about 30 listed firms in the Tata group, which comprises of close to 100 operating com-panies.

Together, these listed companies commanded a market value of about Rs 3,50,000 crore ($ 77.44 billion) as on November 17, 2011, as per the information available on the Tata group website.

After the market closed yesterday, Tata group announced that Cyrus Mistry would become Chair-man of the group’s holding company Tata Sons in December 2012, after Ratan Tata retires from the position.

Mistry, Managing Director of the construction and infrastructure major Shapoorji Pallonji group that holds over 18 percent stake in Tata Sons as its single largest shareholder, would disassociate himself from his family businesses.

Media: Newspapers go Tata-centric

Sanjeev Srivastava Nov 24, 2011

It’s Tata all the way in the national newspa-pers. The announcement that Cyrus Pal-lonji Mistry would take over the reins of the

business empire was possibly the most awaited announcement in Indian corporate history and the newspapers have treated it with the promi-nence that electronic and web media gave it all of yesterday. The papers are running profiles

of Mistry, profiles of Ratan Tata, and analyses of the Tata group. There are also Tata-centred analyses and opinions. We look at some of the most interesting headlines, opinions and Tata pieces:

Industry: Industry’s verdict on Cyrus Mistry: Inexperienced but capable

FP Staff Nov 23, 2011

While some may be surprised, most have received the announcement of Rata Tata’s succes-sor, Cyrus P Mistry (43), well and welcomed it.

Tata Sons, the holding company of the over $80 billion conglomerate the Tata Group, today an-nounced that Cyrus P Mistry, the 43-year-old managing director of Shapoorji Pallonji Group, will succeed Ratan Tata when he retires in 2012.

While many wondered if his role as managing director with his family business Shapoorji Pallonji Group of Companies would be a conflict of interest, he dispelled any doubt by an-nouncing that he was sever-ing relations with it.

After the announcement, Mistry in a statement said, “I take this responsibility very seriously and in keep-ing with the values and ethics of the Tata group I will undertake to legally disassociate myself from the management of my family businesses to avoid any is-sue of conflict of interest.”

Supreme court advocate, HP Ranina said that Mistry stepping down from his positions at his family business would allay any whispers of a conflict of interest and that he had made a good decision on the same.

“Cyrus would not have been able to spare enough time if he was going to manage his family busi-ness and get involved with such a large group like Tata Sons,” Ranina told CNBC-TV18. And while he said Mistry’s disadvantage was his inexperience with larger public companies, he was confident of him taking on the mantle well.

“Even when Cyrus Mistry‘s experience is very limited, Ratan Tata’s 12 months grooming will help Mistry fit into Tata’s shoes,” Ranina said.

Market analyst, SP Tulsian, was surprised. “I am a bit surprised…it was speculated that probably an insider will come as a successor to Ratan tata — with the finger pointing more to Noel Tata,” he said.

But, DN Mukherjea, Editor of Fortune India, said that Ratan Tata always wanted a young succes-sor to take the company forward.

“He (Ratan Tata) has always kept on saying that he would love to have someone young to take over,” Mukherjea said, adding, “I think its great news that they are betting on somebody so young to take the group over the next 30 years….it’s great to have a young person with an open mind ”

Indrajit Gupta, Editor of Forbes India couldn’t agree more. “If you ask me, I think it’s a great choice because he understands the work, he understands the group, he also represents the larg-est shareholder base and understands the value of the Tata Group,” Gupta told CNBC-TV18. “All in all it’s a good choice. For people who know Cyrus and the Pallonji Mistry Group, say he is very thoughtful and fairly pragmatic.”

Even AM Naik, chairman and managing director of L&T, welcomed his appointment saying that Cyrus Mistry’s appointment would bring in long-term stability for Tata Group.

“Having got 12 more months to be mentored by Ratan Tata, I’m sure he will come up to the point where not only the Tata growth momentum continues, but he will weather through all the difficul-ties of the present times and take the group to the next level,” he told CNBC-TV18.

He said he had heard good things about Mistry’s leadership and that people should not dismiss him as being inexperienced.

“I think one has to throw a person in the sea to swim. While I don’t know him well enough, L&T has worked closely with Shapoorji Pallonji and all that I’ve heard is good about his leadership,” Naik said. “He is young and I think the Tata Group will have a long term stability,” he told CNBC-TV18.

The industry too was positive about Mistry’s appointment as Ratan tata’s successor. Chandrajit Banerjee, director general of the CII, in a statement sais, “CII commends the leadership in the Tata Group for setting standards which would be benchmark for large global corporations.”

“In the choice of Mr Mistry, there is a clear message in the trust of the captains of Indian Industry in the capabilities of young leaders in the country. This is also in keeping with the emerging de-mographics in Indian Industry. CII looks forward to working closely with Mr Mistry and the Tata group in the future,” the statement said.

The board of directors at Tata Sons, the apex holding company of the Tata group, met on Wednes-day, November 22, and the choice of a successor to group chairman Ratan Tata was made last evening.

Mistry, one of the youngest directors of Tata Sons, joined the board at the age of 38.

A graduate in civil engineering from Imperial College, London, Mistry has been a director of Tata Sons since August 2006.

After the announcement, in a statement, Mistry said he was looking forward to being mentored by Ratan Tata.

“I feel deeply honoured by this appointment. I am aware that an enormous responsibility, with a great legacy, has been entrusted to me. I look forward to Mr Tata’s guidance in the year ahead in meeting the expectations of the group,” the release stated.

Watch CNN-IBN report on Cyrus Mistry’s appointment:

Copyright © 2011 Firstpost — All rights reserved Copyright Network18. All rights reserved.

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