R

atan Tata
adical Chieftain

Introduction

atan 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 history. 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

Contents
The Ratan Tata Legacy
Chapter: 1

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

05 08

Leadership Philosophies

Why Mukesh Ambanis swanky home makes Ratan Tata sad Like Jobs, a true leader is one who makes a difference: Tata
Chapter: 2

12 14

Ratan Tata: The hard nosed businessman

Chapter: 3

Partnership with Fiat needs to be critically examined: Tata

16

The Nano

Big is beautiful: Jaguar, not Nano, is Tata trump card Why a gold-plated Nano will do little for Tatas failing car Nano upgrade: more at same price but where are the buyers? After Nano car, now theres nano bike Now, Nano in Brazil too?
Chapter: 4

18 20 22 24 25

Radia-gate and the 2G scam

2G case: HC dismisses plea against Anil Ambani, Ratan Tata CBI says Ratan Tata clean, Tata Teleservices shares jump Ratan Tata is losing patience

27 28 29

The most awaited decision in Indian corporate history

The wait is over: Cyrus Mistry to takeover from Ratan Tata Mistry solved: Tata successor brings best of two worlds Tata to Mistry: A major generational change 100 cos, 7 sectors, 80 nations, 1 yr to learn: Good luck, Mr Mistry
Chapter: 1

32 34 36 37

The wait for a successor

After Tata, who? An insider could keep the flag flying high Is Ratan Tatas succession plan focused on the right thing? Tata top job: Others who didnt make it
Chapter: 2

41 43 45

The mysterious Cyrus Mistry

A Mistry at Bombay House
1-2

47

Piecing together a resume for the Tata groups Cyrus Mistry Four things you need to know about Ratan Tatas successor, Cyrus Mistry Cyrus Mistry and the $5 bn brand consumers cannot avoid
Chapter: 3

49 51 53

Reactions

Market: Tata stocks open on strong note but unable to sustain gains in weak market Media: Newspapers go Tata-centric Industry: Industrys verdict on Cyrus Mistry: Inexperienced but capable
Cover page illustration credit: Chaitanya Dinesh Surpur

56 58 59

2-2

The Ratan Tata Legacy

Part: 1

The radical chieftain: How Ratan Tata broke the Tata mould
Venky Vembu 24 Nov 2011

n 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 Tatas 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 hes commanded since 1991 and over which he implanted his forceful personality.

In that sense, Ratan Tata, who restructured the Tata group in ways that his rather more conservative forbears could and would never have done, is a tycoon of the times. And although 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 arent constrained by the shadowlines of geography and for whom, therefore, the world is truly their oyster. Anyone who reckons that Cyrus Mistry is stepping into a giants shoes is perhaps less than considerate to the fact that this leadership transition 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 observed, Rata Tatas 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

Tatas tenure at the helm of Indias most recognised industrial group is almost congruent with the period in Indias economic evolution when it opened up to the world, and unleashed an outbound entrepreneurial force that has, despite its many failings, dramatically altered the countrys business landscape.

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 Incs 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 resembled nothing so much as a conglomerate comprised of fiefdoms, each headed by forceful personalities, 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 Ive helped make the Tata companies more competitive 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 federation of companies that competed and fought with each other. By creating a common brand and a codified framework 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 liberalising 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 Tatas signature. And Tata Steels acquisition of the Anglo-Dutch steelmaker Corus, which was in its time the largest 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 Tatas investment decisions. Was he, perhaps, getting carried away by Indias growing influence, and therefore overbidding? 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 Indian 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 Tatas 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 ministry, 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 involvement 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 symbolic of a corporate titan that had fallen off its pedestal. Today, however, its 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

he 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 didnt spur this kind of media frenzy. Neither did that of Bill Gates or even Narayana Murthy. Perhaps its something about the Tatas, the grande old dames of Indian business, their name tied inextricably to Indias tryst of destiny from that fateful midnight hour in 1947. Or may be its 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 uncorrupted future in him I wonder who can take his position plus the responsibility to face trillions with confidence! The excess of personal sentiment is remarkable. 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. Its 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. Its 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 overwhelmingly 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, Indias bestknown software business, founded in 1981 with 10,000 rupees of capital just $224 at current rates and worth billions of dollars today. Indian entrepreneurs have entered the pantheon of national heroes. Not everyone can aspire to become 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 thats where not just Ratan, but all Tatas fall short. They are our capitalist gods, but of the lesser kind. We may admire Ratans principles and business acumen, revel in his international clout, but we dont 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 entrepreneurship, their ranks forever closed to outsiders. Its why the Ravindras of this world look not to Tata but to Ambani for inspiration. We will shrug aside Ambanis 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 Herms ties with matching handkerchiefs its 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 Mistrys ascension was greeted with widespread complaints about Parsi parochialism and elitism. Forbes online edi-

tor Deepak Ajwani, summed it up in his tweet: Its 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 forgive 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 consumerism 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 entrepreneurs 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 Ambanis swanky home makes Ratan Tata sad

FP Editors May 22, 2011

atan Tata, in uncharacteristically candid comments about fellow tycoon Mukesh Ambanis lifestyle , has pointed to the latters 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. Thats 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 its sad because this country needs people to allocate some of their enormous wealth to finding ways of mitigating the hardship that people have. Ambanis luxurious residence the worlds first billion-dollar home has of course drawn reams of (mostly gushing) media attention. Criticism of its overthe-top opulence has so far come only from commentators like Ramachandra Guha and filmmakers like Prakash Jha. For someone of Tatas stature to point to the lifestyle of one of Indias 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 organisation as he had. But he says it would have bothered him to think that if hed 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 wouldnt 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. Its 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 meeting goes till 6 pm, I would expect that you wont, at 5 oclock, say, Sorry, I have my train to catch. I have to go home. Friday, from 3.30pm, you cant 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

atan 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 difference 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 after receiving the Swiss Ambassadors 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 whatever happened at Tata Group happen 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 happened, 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 citizends 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 dont 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

Partnership with Fiat needs to be critically examined: Tata

PTI Jun 14, 2011

ew 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 critically examined to optimise its potential.

In an interview in market research firm JD Powers 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, its 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 independent 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 companies to take forward the partnership. As far as what else we can do with Fiat, I think Sergio Marchionne and I can really talk to each other. However, at the working level, it hasnt quite been that way. We have looked at Latin America to do something together, but things havent moved as they should have done, he said. He, however, ruled out giving up on the partnership, saying I think theres nothing wrong with the concept of the deal it is a very healthy concept.

Chapter: 3

The Nano

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

R Jagannathan May 26, 2011

hen 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 mans Model T), and the $65,000 luxury brand would be a millstone around the Tata neck. Actually, its 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 companies. 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 Nanos 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 Nanos tepid show so far, theres 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. Thats 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 Tatas failing car

R Jagannathan Sep 20, 2011

t 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 something 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 jewellery, the Nano one Nano was suddenly transformed into the worlds 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 precious 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 Titans jewellery showrooms, presumably with Z category security in tow. It does not address the Nanos 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 Tatas 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, setting 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 wasnt a Rs 1 lakh car meant that the product prima facie didnt 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 moment, but costs couldnt 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 success. 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 daughters 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 cars 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 Nanos monthly level. By choosing easy payments as its new USP, Tata neatly landed in somebody elses turf. It didnt 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 arent enough of them to soak up Nanos 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 thats not really cheap. A safe car whose safety has been questioned. A poor peoples car that poor people arent buying. That sounds like a failure, certainly. But really its not. Its par for the course for almost every breakthrough innovation. 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 piloted 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. Thenthe 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 appeared in the mainstream, it would have been right product for the right price in the right market. But, its not too late to change course. Gold-plating the Nano and studding it with gems may get it noticed, but ultimately its whats under the hood that counts. The shine is an optional extra.

Nano upgrade: more at same price but where are the buyers?
ata Nanothe 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 Tatas dream car faced a nightmare on the sales front. The worlds 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 accused 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 powerful engine and new interiorsat the same price. Making the Tata Nano even more desirable, the cars 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, Meteor 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

FP Staff Nov 21, 2011

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 Nanos 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 theres nano bike

PTI Nov 23, 2011

agapattinam, Tamil Nadu: A group of final year mechanical engineering students of a private university in Tamil Nadu claimed to have designed a 25-kg single-seater nano motorcycle that could give a mileage of 97 km per litre of petrol. The students of PRIST University, Thanjavur, have designed the motorcycle under the guidance of their professors and in collaboration with Hi-Tech Project Industries, a private engineering services company at Porayar in the district. Demonstrating the motorcycle, named Nano Bike at the Hi-Tech Project Industries campus yesterday in the presence of the companys research wing staff, the students 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 traditional 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

ew Delhi: Brazil today expressed interest in taking the worlds 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 considering the option of assembling the car abroad, through the completely knocked down units (CKD) route. Anastasia also sought Indian investments 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

he 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 allocation scam case, saying the apex court was seized of the matter.

Without going into the merits of the case, we refused to entertain the petition 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 matter of common knowledge that the case is being heard by the special CBI judge on the direction of the Supreme Court. The counsel for CBI opposed the scribes 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, alleged 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 Karunanidhis 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

ew 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 Groups chairman Ratan Tata and his lobbyist Niira Radia be made parties 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 patience

Indrajit Gupta May 22, 2011

ing! The clarification from Vaishnavi Communications, the Tata groups 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 chairmans 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 couldnt 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 isnt often that Indian business leaders publicly attack their own employeesand 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 engineers inside his own company. Around 95% of the students passing out of engineering colleges head either to the US or Europe or any other part of the world. The leftovers of the leftovers of the leftover come to join us, only to leave after gaining the platinum touch. So who will build Indias 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 werent 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, theres 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 decade. 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 referred to as light touch. Management consultants McKinsey & Co called it a quintessential Asian approach to M&A. Heres 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 postmerger integration: they arent doing it. Among Western companies, the process can vary consid-

erably from deal to deal, yet its 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 jewelsCorus and JLRstrictly 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 spaghetti 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 control over. There was a joke about Corus antiquated IT systemsthat may have well been trueno 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 wasnt 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 wasnt 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 bleeding at Corus. Not surprisingly, Adams stepped down in October 2010 and was replaced by his COO Karl-Ulrich Khler, 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. Khler, 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 its about time someone had the courage to call a spade a spade.

The most awaited decision in Indian corporate history

Part: 2

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

ata 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 Wednesday, 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 vicechairman Noshir A Soonawala; Tata Sons director RK Krishna Kumar; Cyrus Mistry, younger son of Pallonji Mistry, the largest single shareholder in the Tata groups holding company; Lord Bhattacharya, founder of UK-based Warwick Manufacturing; and Tata group lawyer Shirin Bharucha. step down at the end of 2012, when he turns 75. Ratan Tata is expected to

FP Staff Nov 23, 2011

For over two years, it has been speculated that three Tata group bigwigs Ravi Kant of Tata Motors, 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, Mistrys 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 entertainment 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 Mistry 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 forward to Mr Tatas 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
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. Ratan Tatas 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 disintegrate into independent fiefdoms 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 manage the group. But the group is not that safe from takeovers altogether, and this is where a shareholder 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

he 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.

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 Indias 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

he countrys 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 Mistry, whose father, Pallonji S Mistry, is the biggest shareholder of Tata Sons with an 18 percent 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 Ratans great-grandfather, Jamsetji Tata, a member of the closeknit Parsi community Persian Zoroastrians who fled to India around the 10th century. His older son expanded into steel, insurance and the production of soaps and cooking oil. But the selection panel has chosen someone who has at least two decades before him to take the global conglomerate to another level. The only question 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 better 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 philanthropic 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

Thats 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, Indias 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 impressed with the quality and calibre of his (Mistrys) participation, his astute observations and his humility. Several company observers agreed. Forbes India editor Indrajit Gupta called Ratan Tatas decision a generational change. This is a huge generational change. I think taking over the chairmanship of Tatas 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 groups 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. Its a phenomenal transformation for a group that started as a textile business in 1868 by Ratans 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.

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

The first overseas acquisition was made in 2000 when Ratan Tata paid $407 million for the UKbased 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 billion, 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. Its no secret that several of the top listed companies under the group are struggling financially. Tata Steel, for instance, reported a 90 percent drop in profit for the quarter ending September over cooling demand and declining steel prices. The problem is exacerbated by the fact that a bulk of its revenues come from European operations (it acquired Corus, Europes second-largest steel-maker for $13 billion in 2007). Then there is Tata Motors, whose biggest disappointment is the Nano, once touted as the worlds cheapest small car. In telecoms, Tata Teleservices and Tata Communications are struggling to cope with reducing profitability in an industry plagued by regulatory problems and the aftermath of the 2G scam. Another group company TCS, Indias 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 implications, 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 hell have to earn respect. I dont think any of the Tata managers will accept someone who they dont respect, said Forbes Gupta to CNN-IBN. While Ratan Tata is already convinced, hell 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 familys Shapoorji Pallonji group since 2003, where he oversaw revenues of more than $2 billion. A 147-year old firm, Shapoorji boasts the tallest 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. Its such a complex organisation, its a challenging position to step into. Its 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 Reuters. 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

atan Tatas 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 zeroing 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 agreement on a list of candidates that includes Tatas 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. Its worth mentioning that the list includes candidates well into their 60s. The other is the time taken to simply pick up the successor. 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 importantly, 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 Groups retail company, your money would have more than doubled by now. Compare this to the performance of the largest peer group company, 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 independent board and a professional executive CEO. A move that could perhaps kick off reforms across Corproate India.

Is Ratan Tatas succession plan focused on the right thing?

Rajas Kelkar May 27, 2011

t 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 billion. 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 companys 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 recommended 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 its the former, has the committee asked itself why a professional CEO with the experience of running multinational companies should join a groups privately-owned holding company? In Ratan Tatas 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 company 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 expected 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 management. 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 finding 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 conglomerate 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 professionallymanaged board. The pulls and pressures of public scrutiny would have allowed the groups 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 possible 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 didnt make it

FP Staff Nov 24, 2011

he wait for successor to Chairman Ratan Tata, ended Wednesday after Tata Sons, the holding 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, Mistrys selection was a surprise considering that it was almost expected that Tatas half brother Noel Naval Tata would take over from him. Mistry, a graduate in civil engineering from Londons Imperial College, has been a director of Tata Sons since August 2006 and is also the brotherin-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 Raymond 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 House

is is a name thats 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 Bombay 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 Tatas 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 Tatas half brother and Cyrus Mistrys 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 actually functions. Being already a member of the Tata Sons board and also, ironically, of the selection committee set up to search for Ratan Tatas 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. Tatas 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, oldworld 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

Sourav Majumdar Nov 24, 2011

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 challenge 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 policymakers. 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 groups Cyrus Mistry

FP Staff Nov 24, 2011

o little is known about Cyrus Mistry, the successor to Rata Tata of the Tata group, Indias largest business conglomerate.

Firstpost decided to collate publicly available information about him and create a personal-cumcareer resume for him. Heres 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 director 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 Londons Imperial College.

 Master of Science in Management from the London Business School. Bachelors 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 Tatas 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 Tatas successor, Cyrus Mistry
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 company observers. The 43-year-old Mistry was appointed as the groups 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 second to not have a Tata surname. The Tata group is Indias biggest business conglomerate. Tata Sons is the groups holding company. The group has operations 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 Mistrys 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 leadership changes in many of the operating companies. According to a Forbes blog, Cyrus Mistrys 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.

FP Editors Nov 24, 2011

he Wall Street Journal said it ended the suspense over the most keenly awaited appointment in corporate India.

Second, reactions to his appointment have ranged from a wholehearted thumbs-up to caution. Thats not surprising, given that he Mistry will soon lead a globalised, multi-billion-dollar conglomerate. 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. Hes sort of an enigma. We dont know whether he has the right credentials. In contrast, other experts like Samir Arora welcomed the news. The markets will like the decision, the founder of Singapore-based hedge fund Helios Capital Management told the news agency. Its 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 filtering 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. Im sure he will do a great job, she said. Fourth, Mistrys appointment comes at a time when some of the groups main companies are facing tough operating environments. According to H P Ranina, a corporate tax lawyer who spoke to The Wall Street Journal, Mistrys key target will be to turn around the groups 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 well just have to wait and watch.

Cyrus Mistry and the $5 bn brand consumers cannot avoid

Anant Rangaswami Nov 24, 2011

an 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, its difficult for an average consumer to avoid a Tata brand in his or her normal consumption pattern. For air-conditioners, water coolers, water dispensers and water purifiers, theres Voltas. In cars, you have the Indica, Indigo, Manza, Sumo and, of course, the Nano. In beverages, you have Tata Caf, 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, theres Tanishq. In watches, you have Titan and the brand extension, Titan Eye, for spectacles. In retail, theres Westside, Landmark, Croma and Tashi. In telecom, Tata Indicom and Tata DoCoMo are major players. Thats a long list of brands and promises. I think the world over realisation has dawned that as economies develop and consumers have more spending power, people dont buy products, they buy a promise. 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 behind, said R Gopalakrishnan, director of Tata Sons, chairman of Rallis India and Advinus 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 attributes 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 interview. 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 didnt see before Ratan Tata took charge as chairman in 1981 are adjectives that very easily come to mind now aggressive, vibrant, exciting, multinational, risk-taking. Its 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 Jaguar 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 Britains most famous names in automobile manufacturing, 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 catapulting of Tata Steel into world steels 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 sector entity of its own volition, away from the shadow of state influence. For these reasons, it bears noticing, said Harvard Business Schools Working Knowledge. When this commercial We also make steel was made, there werent 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, theres 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. Thats an addition to the bottom-line of Tata Sons even as theres appreciation in the brand valuation. 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 attributes 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, theres one attribute that Mistry has which should be of immense help to him as Ratan Tata hands over the baton. Its an adjective that none associates with the Tatas young. My only regret is that I am not 20 years younger because I think Indias going through a very exciting period in its history, Ratan Tata had said earlier this year in an interview with CNN. Well, Cyrus Mistry is 30 years youngerand hell steer the Tata empire through this very exciting period in Indias and Tatas history.

Chapter: 3

Reactions

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

PTI Nov 24, 2011

umbai: A number of Tata stocks opened on a strong note today a day after Cyrus Mistry 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 companies. 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 Chairman of the groups 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 Tatacentric Sanjeev Srivastava

Nov 24, 2011

ts Tata all the way in the national newspapers. The announcement that Cyrus Pallonji 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 prominence 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: Industrys verdict on Cyrus Mistry: Inexperienced but capable

FP Staff Nov 23, 2011

Tata Sons, the holding company of the over $80 billion conglomerate the 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. 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 announcing that he was severing relations with it. After the announcement, Mistry in a statement said, I take this responsibility very seriously and in keeping 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 issue 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 business and get involved with such a large group like Tata Sons, Ranina told CNBC-TV18. And while he said Mistrys disadvantage was his inexperience with larger public companies, he was confident of him taking on the mantle well. Even when Cyrus Mistrys experience is very limited, Ratan Tatas 12 months grooming will help Mistry fit into Tatas shoes, Ranina said. Market analyst, SP Tulsian, was surprised. I am a bit surprisedit 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 successor to take the company forward.

hile some may be surprised, most have received the announcement of Rata Tatas successor, Cyrus P Mistry (43), well and welcomed it.

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.its great to have a young person with an open mind Indrajit Gupta, Editor of Forbes India couldnt agree more. If you ask me, I think its a great choice because he understands the work, he understands the group, he also represents the largest shareholder base and understands the value of the Tata Group, Gupta told CNBC-TV18. All in all its 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 Mistrys appointment would bring in long-term stability for Tata Group. Having got 12 more months to be mentored by Ratan Tata, Im sure he will come up to the point where not only the Tata growth momentum continues, but he will weather through all the difficulties of the present times and take the group to the next level, he told CNBC-TV18. He said he had heard good things about Mistrys 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 dont know him well enough, L&T has worked closely with Shapoorji Pallonji and all that Ive 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 CNBCTV18. The industry too was positive about Mistrys appointment as Ratan tatas 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 demographics 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 Wednesday, 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 Tatas guidance in the year ahead in meeting the expectations of the group, the release stated.

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