Ratan Tata, toast of India Inc, bids adieu

Mangalore Today/ PTI

Mumbai, Dec 28 : Ratan Tata, an iconic corporate leader, retired as Chairman of Tata Group after a 50-year run today but kept away from office on his last day at the helm of one of country’s oldest business empires.

Tata, who turned 75 today, is in Pune for his birthday, sources at Bombay House, headquarters of the salt-to-software conglomerate, told PTI, adding there was no clarity on whether he would visit his office later in the day.

Chairman-designate Cyrus Mistry, who made a visit to Bombay House today, will tomorrow take charge of the new assignment, sources in Tata Sons said.
Mistry was groomed for the assignment by Tata for a year.

 

The group had earlier announced that he has been appointed chairman with effect from tomorrow.

Mistry chose the group company Tata Motors entry-level sedan Indigo Manza to travel to work on the important day, marking an end to an era.

The narrow lane leading to Bombay House, one of the oldest buildings in the heritage Fort area of south Mumbai, has heavy media presence since this morning in anticipation of Tata visiting Bombay House.

Ratan Tata, who helmed the group for 21 years after being chosen successor by his uncle, the iconic JRD Tata, in 1991, is credited with transforming the group through bold decisions including large global acquisitions, even as some of its peers struggled to stay relevant post economic liberalisation.

Mistry, who has been with the group since 2006 in various capacities hails from the Shapoorji Pallonji family, the largest private share holder of the group’s holding company Tata Sons.

Born on July 4, 1968, Cyrus Mistry completed his graduation in Civil Engineering from London’s Imperial College of Science, Technology and Medicine and followed it up with a masters in Management from the London Business School.

He was chosen by a 5-member panel last year to succeed Ratan Tata.
During Ratan Tata’s tenure, the group’s revenues grew manifold, totalling USD 100.09 billion (around Rs 475,721 crore) in 2011-12 from a turnover of a mere Rs 10,000 crore in 1991.

Tata led the group into some notable acquisitions, starting from Tetley by Tata Tea for USD 450 million in 2000, to steelmaker Corus by Tata Steel in 2007 for GBP 6.2 billion and the landmark Jaguar LandRover in 2008 for USD 2.3 billion by Tata Motors.

Courtesy the acquisitions, over half of the salt-to-software group’s revenues are derived from outside the country.

Not limiting himself to big-ticket acquisitions, Tata also displayed sensitivity to the needs of the burgeoning middle class with the launch of the Rs one lakh Nano battling the odds in West Bengal.

The group was forced to shift the project from Singur, where he was invited by Marxist Chief Minister Buddhadeb Bhattacharya, to Sanand in Gujarat at the invitation of Narendra Modi.

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

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

Under Tata, the group also made great strides when it capitalised on the sunrise industry of information technology in the 90’s. With revenues of over USD 10 billion in 2011-12, Tata Consultancy Services (TCS) is today India’s largest IT company, ahead of giants in the field like Infosys and Wipro.

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

 

Mr. Tata handed over the reins of the $100 billion conglomerate to 44-year-old Cyrus Mistry today.

Here is the full text of the letter:

Dear Colleague,

As 2012 comes to an end, let me wish you and your family all the best for the New Year. I hope that 2013 and the future years bring you good health, peace of mind and great happiness.

This is also the last time that I write to you prior to my retirement as the Chairman of the Tata Group and I want to convey to you how privileged I have been to have had the opportunity of leading this great Group over the last two decades through good times and bad.

Whatever has been achieved has only been possible because of the amazing spirit, the dedication of each one of you and the enormous support and faith reposed in me, for which I am deeply grateful and appreciative. I feel immensely proud of the manner in which the employees and the companies have come together in facing crises from time to time. These have included adverse market conditions, natural calamities like earthquakes and tsunamis and gruesome acts of terrorism.

The memories of personal sacrifices, loyalty and individual acts of heroism will always remain in my memory, to reinforce the great sense of pride I have in having been a member of this team. We today are a $100 billion Group in revenues. Over the past 20 years our revenues have grown about 20 times and today 58% come from overseas operations. Our brand has emerged as the 45th global and the number one Indian brand. Our products and services are present in 85 countries. We therefore have every reason to feel proud and feel confident in facing the challenges ahead.The difficult economic environment that we face in the current year will most likely continue through most of the next year.

We will probably see continued constraints in consumer demand, over-capacity and increased competition from imports. There will therefore be great pressure on our companies to reinvent themselves in terms of business processes and to dramatically reduce costs, to be more aggressive in the market place and to widen our product range to better address consumer needs. We will also need to contain our borrowings and work hard to retain our margins. This environment would once again call on you for your support, your commitment and your dedication to achieve success in these somewhat difficult times.This seemingly gloomy picture however will be a passing phase.

I feel confident that the robust growth that India has shown over the past several years will be re-established and the strong fundamentals in the country will result in India once again taking its place as one of the economic success stories of the region. The Tata Group will undoubtedly play an important role in the continued development of our country, providing leadership in various industrial segments in which they operate and living by the value systems and ethical standards on which our Group was founded. The future growth of the Group will be led in the coming years by Cyrus Mistry.

I am sure that he will receive from you the same support, the same commitment and the same understanding that I have enjoyed over the years. Tatas are a Group where I feel proud to have belonged and proud to have been associated through the years. I wish the Group, Cyrus Mistry and each of you great success in the years ahead. I hope the Group grows and shines in the coming years.

Yours sincerely,

Ratan N. Tata, chairman, Tata Sons