Ratan Naval Tata – mostly addressed as RNT by his familiars – was expected to fail by many when he took over the reins of the Tata group from his uncle, the legendary Jehangir Ratanji Dadabhoy 'JRD' Tata. He would surprise all his detractors by taking the conglomerate he inherited to new heights and turning it into a global player, not just a domestic giant. In the process, he had to fight several pitched battles but proved victorious in each.

Taking on giants

RNT who had been inducted into the Tata group in 1962 had stints with several major firms – Telco (now Tata Motors) and TISCO (Tata Steel) – and the then-fledgling Tata Consultancy Services (TCS) before he became director of National Radio and Electronics (NALCO), a struggling company in the huge Tata conglomerate. His stint in NALCO would be fairly undistinguished. But JRD made it clear by 1981 that he viewed Ratan Tata as his successor to head the group by making him chairman of Tata Industries, and then in 1991, by formally passing on the baton by anointing RNT as chairman of Tata Sons, the holding company of the mammoth group.

The reason few expected RNT to succeed initially because there seemed, on paper at least, far better contenders to the throne. The late Russi Mody had built up TISCO and ran it with an iron hand. The late Sumant Moolgaonkar was still heading Telco in the early 1980s. RNT had worked under both Mody and Moolgaonkar during his stints in their companies after being inducted into the group. Darbari Seth controlled Tata Chemicals, another of the big companies in the group. Ajit Kerkar was czar of Indian Hotels (the Taj group of hotels). All four men had made huge contributions in building up the Tata group during JRD’s era and each had serious claims to the fame.

As it turned out, Moolgaonkar was perhaps not very interested in throwing his hat into the ring. The others though made it clear that they did not see RNT as their boss. It was a grave error on their part. Ratan Tata showed that he had the ability to fight a hard battle and soon Darbari Seth, Russi Mody and Ajit Kerkar would be out of the group. The battles against Russi Mody and Ajit Kerkar were particularly nasty with plenty of dirty linen washed in public.

Tightening the Tata grip

While JRD ran the Tata group as a loose federation with independent satraps like Mody, Seth and Kerkar reporting to him and no one questioned his moral authority, RNT realised that those days were over. The Tata group holding company Tata Sons did not have majority shareholding of many of the big Tata companies. Once he had firmly established his control, RNT would take steps to change that status. He instituted a brand royalty scheme that companies using the Tata name would pay Tata Sons, which in turn used this to shore up its shares and control over the group companies.

This was particularly important because Ratan Tata had become the chairman of Tata Sons in 1991 – the year the Indian economic reforms and liberalisation were initiated. While there were no Indian companies that could mount a takeover bid of the bigger Tata companies till 1991, despite the low shareholding of Tata Sons in those companies, that was not something he could count on once global giants came rushing in.

Creating a global footprint

Over the next decade, RNT would change the character of the group. He got out of many businesses and sold several companies – both profitable and unprofitable. TOMCO and ACC would both be sold as they were not seen to fit in with his future vision.

He would also expand aggressively overseas – picking up Tetley, Corus Steel and Jaguar LandRover among others. TCS, till then a private company, would go public and become the main engine of the group’s profits for years.

The last battle

RNT finally stepped down as Tata Sons chairman in 2012, handing over the baton after a widely publicised successor search to Cyrus Mistry, whose family held 18 percent of Tata Sons and who had been a part of the search committee. And yet, unlike his uncle JRD, Ratan Tata could not hand over full control to Mistry (or later to current chairman N Chandrasekaran). JRD had handed over the reins of Tata Trusts, which has 66 percent shareholding in Tata Sons to Ratan Tata when the latter was made chairman of Tata Sons in 1991. But RNT chose to keep Tata Trusts with himself – thus effectively having an outsized say in the affairs of the group even though Cyrus Mistry was ostensibly the chairman of Tata Sons and its head.

The relationship between Cyrus Mistry and Ratan Tata would soon deteriorate and Tata would get the board members of Tata Sons to sack Mistry in a messy boardroom battle. It would also divide Mumbai’s Parsi community into those backing RNT and those who supported Mistry. Tata would win the legal battle against Mistry but his legacy was tarnished to an extent. He also became bitter foes with Nusli Wadia, who was once RNT’s close friend but firmly backed Mistry during his fight.

RNT’s business legacy is mixed. His grand vision saw Tata group expand dramatically and become a truly global conglomerate with half its business generated abroad. At the same time, only a few companies were highly profitable. Some of the businesses he entered turned failures – like the telecom business. His acquisitions did not always work out – the Corus buy-in particularly took a heavy toll on the group. And how the Tata group’s big bet on aviation will play out will be known many years later. (It is rumoured that one of the reasons Tata and Mistry fell out was because the latter was against the aviation foray). His ambitious Tata Nano created a splash for its vision but was not a huge hit commercially.

Ratan Tata’s younger brother Jimmy was never associated with the group, though the latter has a few shares. His half-brother Noel Tata, who runs a part of the retail empire, and is married to late Cyrus Mistry’s sister Aloo – was not considered RNT’s confidante though they probably had a cordial relationship.

Who will control Tata Trusts after RNT’s passing will eventually also have a huge influence on the way Tata Sons and the Tata group performs in the future. And that bit is still unclear as of now.

Prosenjit Datta is former editor of Business Today and BusinessWorld magazines.