Jamsetji, JRD, Ratan -The Trio who built Tata Group of Companies
Created on 27 Nov 2021
Wraps up in 8 Min
Read by 6.3k people
Updated on 10 Sep 2022
150 years. Five generations. Seven chairpersons. And a net worth of US $32,500 crore.
Jamsetji N Tata built the first heritage, five-star hotel when he was denied entry to a British hotel because he was an Indian. JRD started India’s first commercial airline because he had a license but no aeroplane. Ratan Tata bought Ford’s Land Rover and Jaguar when Bill Ford insulted him.
Things rich people can pull off. 🤷🏻♀️
When I was a little girl, I would often hear my father say, “Chappal Bata ki. Aur naukari Tata ki”. And I would think to myself, why would he suggest working for a salt company? Because that’s all I knew about Tata, Tata namak- Desh ka namak.
And today, when I write this, I truly know what the Tatas are. The stories of big fancy companies and their successive generations running it to the gutter are numerous.
Look at what Videocon was, and look at what it is now. In just 40 years, Videocon turned from an 800 Crore profit company to a whopping 88,000 Crore bankruptcy case, making it the largest bankruptcy case ever. As for the Tatas, in 153 years (and counting), an initial amount of ₹21,000 is $325 billion today.
See the contrast? The natural question is, how did the Tatas not only survive for a century and a half in the business but also managed to grow it multifold?
Before you even start reading the article, let’s lay a bit of a foundation for you. While constructing the house of Tata Group, Jamsetji Tata installed the main concrete floor slab. JRD Tata did the wall-roof structure with the roofing. And Ratan Tata decorated the interior. Obviously, there were other (VERY SIGNIFICANT) members, but these three made Tata what it is today.
Chaliye shuru karte hai.
Once upon a time, in the 1800s.
Born on March 3, 1839, in a priest’s family, Jamsetji Nusserwanji Tata was not so much of a priest. He soon realized, ‘pooja-path humare bas ki baat nahi bhaya’ and found his life’s true calling: business.
Jamsetji Tata, an industrialist and visionary, is the founder of the giant conglomerate in India, the Tata Group Of Companies. He loved to study and tour the world. At the age of 29, he started a trading company with a capital of Rs 21,000. Soon, in an expedition to England, he learned about the textile business. He came back to India and was like, ‘Bruh, let’s beat’em (The British) at their own game.’
In Chinchpokli, he bought a bleeding oil mill and turned it into a cotton textile mill in the 1870s. Jamsetji later sold the mill for a significant (significant being a subtle word for HUGE) profit to a local trader.
And after that, there was no stopping him. From about 1880 to his death in 1904, Jamsetji had three (or four) major life goals - Setting up an iron and steel company, a hydroelectric plant, and creating a world-class educational institution and setting up a hotel. None of which his weary old eyes could watch materializing, except for the hotel, the Taj Mahal Hotel.
The Taj Mahal Hotel, Wah Taj!
The seed of this luxurious hotel was planted when Jamsetji Tata, along with a British friend, went to one of the then-finest hotels in Bombay, Watson’s hotel. A board in front of the hotel apparently read, “Dogs and Indians not allowed.” That kindled a josh inside of him.
In 1903, the Taj Mahal hotel, a 4-crore project (in those times), opened its doors to guests. It became the first-ever building in Bombay to have electricity. It had American fans, a German escalator, Turkish bathrooms, and English butlers. You name it! And later, India’s first licensed bar and discotheque were made in this hotel.
Fast forward to 2008, the 26/11 Mumbai terror attacks. How could anyone ever erase those images off the black book of Indian history? Not many people know this, but Ratan Tata announced back then that the Tata Group would fund the expenses of all injured in the 26/11 attacks, not just the ones wounded inside of the Taj hotel.
Do you see? We talked about successive generations ruining the family name and business, and here are the Tatas, setting a paradigm for the whole world to add stars to the family name.
The next Tata in line of the Tata-hall-of-fame is JRD Tata, nephew of Jamsetji Tata.
I am just going to steer a bit and state that Jamsetji died in May 1904, and JRD was born in July 1904. And I am a person who believes in the afterlife and rebirth. Spooky, but could this really be what I think it is? Guess I’ll never know.
Coming back to the point, JRD led the Tata Group of Companies successfully for over half a century. But would you believe it if I told you that he never went to a university? He wanted to, just couldn’t.
JRD was born in Paris. He loved France and spoke French. His French was better than English and better than any Indian language. It is mind-boggling how a person, born and brought up in a foreign country (and that too Paris, for god’s sake!) was connected to the Indian roots so deep so well.
JRD was an avid aviator. Naturally, after he became the chairman, his priority agenda for the business was to start a new airline. He already had a license, and an aeroplane was all he needed to let his dreams literally fly high.
But before that, can I interest you in a short love story? Why the hell not!
The lover boy no one knew nothin’ about
When JRD was back in India, he got a brand new Ducati. He would drive it on the roads of Mumbai and would get into trouble with the police. He would get a lot of challans for which he had to visit his lawyer, Mr Vicaji. And there she was, Vicaji’s sister, Thelma, the love of his life. After some romance in the City of Lights and Love, Paris, he married her in 1930.
The first high, the first flight
In 1932, he founded Tata Airlines, later to be renamed Air India in 1946. So India already had its airline before it even got independence. The first commercial flight in the history of Indian aviation took off from Drigh Road in Karachi, now in Pakistan, to Bombay, with JRD at the controls.
How could anything of such national importance be privately owned? How could the government not interfere? How?
Although JRD never supported this idea, but in 1953, Air India was nationalized. In 1978, the Morarji-Desai government removed JRD from the board of directors of Air India. And he didn’t want to give up his love for the airline just yet.
Apparently, JRD wasn’t even informed about being fired and was disheartened when he found out 10 days later from the one who was to replace him. How sad is that? Even Indira Gandhi sent him a letter, saying, "We are proud of you and the airline."
JRD was later reinstated as the chairman. And he found numerous other businesses, I’ll lose the context if I start listing. 😁 Under his leadership, the Tata's assets climbed from Rs 62 crore in 1939 to over Rs 10,000 crore in 1990. But he was never in it for the money. Do you know what it is that he wanted? He just wanted India to be a happy country.
It’s strange how people could be so selfless and so humble. So, humble that, when he was awarded the Bharat Ratna, he said, “Why me? I don’t deserve it.” You do, sir, you do.
Samay ka Khel Dekho Doston, after almost 7 decades, which includes 2 decades of the government trying to sell off Air India; in 2021, Tata Sons won the bid for Air India and marked their territory with a 100% stake.
The next hero of our story is Ratan Naval Tata. Ratan was very close to JRD, apparently closer than he was to his father.
Ratan did his schooling in Mumbai and went to Cornell for engineering in 1962. Then to Harvard in 1975 for Management studies. That’s the gist of it; this is not his CV, okay?
NELCO was the first loss-making company that Ratan Tata took over. It needed new technological changes, and the old administration could not identify this pain point. In a period of 10 years, he turned it into a profit-generating machine. And since then, as Ratan Tata puts it, he would only get loss-making companies for their complete makeover.
The New Epoch
In 1991, JRD saw Ratan as the best fit to replace him and appointed him as the chairman. He was someone who understood the Tata sentiments as well as what the future needs from them.
In 1998, Tata’s Indica wasn’t very profitable, Ratan Tata paid a visit to the head of Ford company, Bill Ford. Ratan Tata suggested that they buy out their car business. Bill, in response, very insultingly said, ‘You do not know anything; why did you start the passenger car division at all?’
He said he would be doing Tata a ‘favour’ by buying it. Ratan Tata was like, ‘No Sir, thank you' and walked out of the meeting. He swore that day that he would never sell any of his businesses to anyone.
Samay ka khel dekho doston part 2, nine years after the incident, Ford was reeling in bankruptcy, and Ratan Tata came to turn the tables around. He acquired its famous Jaguar and Land Rover. The smug learned his lesson and said, ‘you are doing us a big favour.’
“Take the stone people to throw at you. And use them to build a monument.” A sentence Ratan Tata once said has stuck with me forever.
Next, in 2003, Tata Consultancy Services became the first Indian software company to reach a 1 billion dollars in revenue milestone. Not Infosys. Not Wipro.
Excellent idea, poorly executed.
Tata Nano is, a classic example of an ‘excellent idea, poorly executed.’
On a gloomy day in 2003, it was raining cats and dogs. A family of 4 on a scooter was somehow just managing and holding on to each other to reach their destination. Ratan Tata saw this. And he was so deeply moved that he took it on his shoulders to come up with an alternative.
I still find it hard to believe that if you walked into a Tata showroom with just One Lakh in your pockets, you leave with a car. The ‘cheapest car’ tag took the best out of it. People started to view it as a status symbol, owning, which meant you are poor. I mean, c’mon?
Nevermind. The Nano-fail did put a dent, just not big enough to harm the Tata image. If anything, it sent out a message that they really cared for the people. For having spent so much in RnD of a car whose ulterior motive was people’s comfort, not profit.
The Bottom Line
During the 21 years that Ratan Tata led the group, revenues grew over 40 times and profit 50 times. 😯
And as of 2020, the number of companies owned by the Tata Group of Companies is roughly 100. Around 71 of them are privately owned, and 29 are public companies. They are the ‘desh ka namak’ and one of the world's largest IT service provider companies, and (almost) everything in between. It could have been the richest in the world!
But they are not. Because they donate more than 60% of their wealth for philanthropic causes, for people’s welfare, and for our country’s welfare. To make India a happy country. Wasn’t that the ulterior motive?
Ta-ta for now. Haha, you get it, right?
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