A Story of Building India - The Tata Group

A Story of Building India

Imagine a company that started way back in time, even before your grandparents were born. A company that is now one of the biggest in India. It sells everything from salt for your food and tea you might drink, to cars you ride in and even runs airlines you might fly on. It helps build things and provides computer services. This company is called the Tata Group.

It's not just one company, but a huge group of companies that work together. It's like a big family of businesses. This big group works in many countries around the world – over 100 countries! And its products and services reach even more places, in over 160 countries.

Think about how big that is! It's headquartered in Mumbai, India. The main office building is called Bombay House. As of August 20, 2024, 29 of the companies in the Tata Group are listed on the stock market, and together they are worth a lot of money.

This is the story of how this huge group started and grew. It's a story about people, big ideas, challenges, and helping others. Let's learn about this incredible journey.

How It All Began

Our story starts a very long time ago, in 1868. That's when the Tata Group was founded. The person who started it all was Jamsetji Nusserwanji Tata.

During a time when there was a lot of business happening with cotton in Mumbai because of the American Civil War, Jamsetji Tata and his father worked with a bank. But when the cotton business slowed down, they had problems with money.

Their luck changed in 1868. They got a share in a good deal to supply things for an army trip. This helped their family a lot.

Jamsetji Tata had big dreams. He wanted to build important things for India. He focused on four main goals:

1. Starting a company to make iron and steel.
2. Building a special, famous hotel.
3. Creating a top-level educational place.
4. Developing a way to make electricity using water power.

In 1870, Jamsetji started a trading company with a little bit of money. He then bought an oil mill that was not doing well. He turned it into a cotton mill and called it Alexandra Mill. He sold it later and made a profit. In 1874, he started another cotton mill in a city called Nagpur. He named it Empress Mill.

One of his dreams came true during his lifetime. In 1903, the Taj Mahal Palace Hotel opened in Mumbai. It was built right on the waterfront. Guess what was special about it? It was the first hotel in British India to have electricity!

Building on the Dream

Jamsetji Tata passed away in 1904. His oldest son, Dorabji Tata, became the next chairman. A chairman is like the main leader of the company. Sir Dorabji Tata worked to make his father's dreams come true.

He started the Tata Iron and Steel Company, which people today call Tata Steel. This happened in 1907. Starting this company was a big step towards his father's dream of an iron and steel company.

The group also started thinking about working outside India. Tata Limited opened its first office in another country – London. This showed the group's plans to be a global company.

Another dream of Jamsetji's was to make hydroelectric power. Sir Dorabji helped make the first power plant that used water to make electricity in Western India. This led to the creation of Tata Power.

And what about the educational place? Sir Dorabji helped establish the Indian Institute of Science. This was another of his father's goals. The first students were accepted there in 1911.

So, under Sir Dorabji Tata, important companies like Tata Steel and Tata Power were started, and the dream of a top educational place became real.

There was another chairman, Sir Nowroji Saklatwala, who led the group from 1932 to 1938.

A Time of Big Growth and New Ideas

Then came a very important leader, J. R. D. Tata. He became the chairman in 1938 and stayed in charge for a very long time, until 1991.

Under his leadership, the Tata Group grew enormously. The value of the group's businesses went from about 101 million US dollars to over 5 billion US dollars! When he started, there were 14 companies in the group, but by the time he left, it had grown to 95 companies. These were companies that Tata had started or had a major share in.

J. R. D. Tata was a visionary. He started the group in many new areas. Think about some things we use every day – like chemicals, technology, makeup (cosmetics), and computer services. Tata got into these areas under him. They also got into marketing, engineering, manufacturing, and tea.

A really famous thing he did was start an airline in 1932. It was first called Tata Air Services, then Tata Airlines, and later Air India. Imagine starting an airline!

Later, in 1953, the Indian government bought a major part of this airline from Tata. But even then, J. R. D. Tata continued to be the chairman of Air India until 1977.

In 1945, another big company, Tata Motors, was started. At first, they focused on making parts for trains (locomotives). But in 1954, they started working with a German company called Daimler-Benz to make commercial vehicles, like trucks.

And in 1968, Tata Consultancy Services (TCS) was founded. Today, TCS is one of the biggest IT services companies in the world. This shows how J. R. D. Tata brought the group into the technology age.

Becoming a Global Player

In 1991, Ratan Tata became the chairman. He also led the group for a long time. The year he became chairman was important for India. It was the year India started opening up its economy more. This meant more international companies could do business in India, and Indian companies could compete more globally.

During Ratan Tata's time, the group started buying many companies. This is called an acquisition. It's like when one company buys another company.

Here are some big companies they bought:

1. Tetley Tea Company in February 2000. Imagine, an Indian company buying a famous British tea company!
2. Corus Group, a big steel company, in 2007. This was a huge deal.
3. In 2008, Tata Motors did two big things. They launched the Tata Nano car, which was called "the world’s most affordable car". And they bought the famous car brands Jaguar and Land Rover from Ford Motor Company. Think about it, an Indian company owning iconic British car brands!

These acquisitions helped the Tata Group become a much bigger player on the world stage.

The Leader Today

After Ratan Tata, Cyrus Mistry was chairman for a few years (2012-2016). Then, in 2017, Natarajan Chandrasekaran was appointed chairman. He is the current chairman.

Mr. Chandrasekaran has made important changes. He has reorganised different parts of the business. He also increased the Tata family's ownership stake in the companies.

Under his leadership, the group has continued to grow and buy companies. They bought companies using India's laws for businesses that have problems. They also invested in online shopping (e-commerce).

A very big event during his time was expanding the airline business. Tata Group won a bid to buy back Air India! Remember, Air India was started by J. R. D. Tata, then the government took a majority stake, and now it's back with Tata. They also completely bought another airline called Air Asia India. India's competition commission approved the deal for Air India to buy AirAsia India.

Mr. Chandrasekaran has talked about what the Tata Group will focus on in the future. He wants them to focus on healthcare, electronics, and digital businesses.

In summary, the leaders of the Tata Group over the years have been:

1. Jamsetji Tata (1868–1904)
2. Sir Dorabji Tata (1904–1932)
3. Sir Nowroji Saklatwala (1932–1938)
4. J. R. D. Tata (1938–1991)
5. Ratan Tata (1991–2012, and again 2016–2017)
6. Cyrus Mistry (2012–2016)
7. Natarajan Chandrasekaran (2017–present)

The chairman of the Tata Group is usually also the chairman of Tata Sons, which is like the parent company.

What Kind of Businesses Does Tata Have?

The Tata Group is a conglomerate. This means it has companies in many different industries. It's like having many different types of shops and factories under one big roof.

Here are some of the main types of businesses they are in:

1. Making cars and other vehicles (Automotive). This includes Tata Motors, Jaguar Land Rover, and others.
2. Working with computers and technology (Information Technology). Tata Consultancy Services (TCS) is a very big one here.
3. Making steel (Steel). Tata Steel is a major company.
4. Making chemicals (Chemicals). Tata Chemicals is in this area.
5. Making electricity (Energy). Tata Power is the main company.
6. Building things (Engineering and construction). Tata Projects is an example.
7. Selling things in shops and online (Retail and e-commerce). Companies like Trent, Titan (which makes jewellery and watches). Tata Digital runs online businesses like BigBasket and 1mg.
8. Making food and drinks (Consumer goods). Tata Consumer Products makes things like tea, salt, and works with Starbucks in India.
9. Helping with money matters (Financial services). Tata Capital and Tata AIG are in this area.
10. Running hotels and airlines (Tourism and travel). Indian Hotel Company runs Taj Hotels. Air India is back with Tata.
11. Providing phone and internet services (Telecom and media). Tata Communications is one company here.
12. Working with space and defence (Aerospace and defence).
13. Making and selling things (Trading and distribution).
14. Working with real estate (Real Estate).
15. Making things like refrigerators or washing machines (Home appliances). Voltas is a company in this area.
16. Making jewellery (Jewellery). Titan makes jewellery like Tanishq.
17. Working with medical devices.
18. Involved in sports. They have a football team called Jamshedpur FC.

They have so many different businesses!

When Tata Buys Companies

As we saw, Tata Group has bought many companies over the years, especially since the 1990s. Buying companies helps them grow and enter new markets or industries.

Here are some examples of companies they acquired:

1. In 2000, they bought Tetley Tea Company for $407 million.
2. In 2007, they bought Corus Group for $12 billion.
3. In 2008, they bought Jaguar Cars and Land Rover for $2.3 billion.
4. More recently, in 2021, Tata Digital bought a big share in BigBasket (68%) and 1mg (55%), which are online platforms.
5. Also in 2021, they acquired Air India and Air India Express for a large amount of money.
6. In 2024, Tata Consumer Products bought a big part (75%) of Capital Foods, which owns popular food brands like Ching's Secret.

These are just a few examples, they have made many acquisitions over the years.

Helping People and Giving Back

The Tata Group is also well known for its philanthropy. Philanthropy means giving money and resources to help people and good causes. They have helped start and support many places for research, education, and culture in India.

They even received a special award called the Carnegie Medal of Philanthropy.

Tata has made big donations to universities.

1. In 2008, they gave $50 million to Cornell University in the US to help with farming and food programs in India and to help Indian students study there.
2. In 2010, they gave a large amount (about $50 million) to Harvard Business School in the US. This money was used to build a building for education, which is now called Tata Hall. This was the biggest donation Harvard Business School had received from someone outside the US.
3. In 2017, Tata Trusts gave $70 million to a university in California (University of California, San Diego). They also worked with the university to start the Tata Institute for Genetics and Society (TIGS). TIGS works on important world problems like health and farming. The building where TIGS is located is also named Tata Hall. This was the largest international donation to that university.
4. Also in 2017, Tata Consultancy Services (TCS) gave a huge amount ($35 million) to Carnegie Mellon University. This was the biggest gift from a company to that university. They work together on new technologies like systems that can think like humans and cars that drive themselves.

The Tata Group also helps sports. The Tata Football Academy helped form the Jamshedpur FC football club in the Indian Super League.

When there was the COVID-19 pandemic in 2020, the Tata Group donated a lot of money (INR 15 billion) to help fight the virus in India.

A very recent effort is a new animal hospital in Mumbai for pets like dogs, cats, and rabbits. It is planned to open in March 2024. Ratan Tata himself is very interested in this project because he loves animals.

Most of these helping activities are done through special groups called trusts, which were started by the Tata family members. Some of these trusts include the Sir Dorabji Tata Trust and Allied Trusts, and the Sir Ratan Tata Trust and Allied Trusts.

Facing Difficulties and Challenges

Like any big group, the Tata Group has also faced controversies. These are situations where people raised concerns or criticised the group for different reasons. The sources mention reports related to things like political issues, problems with land, and impacts on the environment.

Let's look at some examples mentioned:

1. Munnar, Kerala: The government in the state of Kerala claimed that Tata Tea had taken over forest land illegally in an area called Munnar. Tata said they had the right to the land they had, and that they actually had less land than they were allowed. The government tried to get the land back, but it was difficult because some people who had land were powerful, and there was also political disagreement. The Tata Group has denied the accusation of taking land illegally .
2. Kalinganagar, Odisha: In 2006, people from tribal villages protested against Tata Steel building a new steel plant. The land was important to them, and some people felt they were forced to leave their homes without enough help to find new places to live. Sadly, the protest became violent. Police responded, and people were injured and killed. There was also violence against a policeman. Family members later said the bodies of those killed were hurt after their death. This incident is connected to bigger issues about taking land from indigenous people.
3. Supplies to Burma's military: Tata Motors decided to make trucks in Myanmar after a military leader from Myanmar visited their plant in India. Human rights groups criticised Tata for doing business that helped Myanmar's military government.
4. Singur land acquisition, West Bengal: This was about land taken from farmers for a factory to make the Tata Nano car. There were protests because farmers felt they were forced to give up their land and were not paid enough. Even though the state government supported the project, Tata decided to move the factory out of West Bengal because they were worried about safety. Another state offered land instead. Later, in 2016, the highest court in India, the Supreme Court, said that the way the land was taken was not legal and it had to be given back to the farmers.
5. Dhamra Port, Odisha: The port, built by Tata Steel and another company, was criticised because it is very close to special natural areas. One area is a major place where a type of turtle lays its eggs (olive ridley turtle). Another is a large mangrove forest (a type of forest that grows in salty water). Groups like Greenpeace said the port could harm the turtles and the forest. Tata Steel said they followed advice from experts to reduce the harm. But some groups felt that a full study of the environmental impact wasn't done properly.
6. Proposed soda plant in Tanzania: Tata Group planned to build a plant to get soda ash near a lake in Tanzania called Lake Natron. Environmental groups were against this because the lake is home to many endangered birds, especially lesser flamingos. Most lesser flamingos in the world reproduce at this lake. The process of getting soda ash involves using water from the lake, and putting used water back, which could change the lake's water chemistry. Many African countries asked for the plant construction to be stopped.
7. Epic Systems legal case: In the US, a court ruled against two Tata companies (Tata Consultancy Services and Tata America International Corp.) in 2016. Another company, Epic Systems, said that Tata had illegally downloaded information about their products to help make their own similar product. The court ordered Tata to pay a large amount of money. Later, a judge reduced the amount. Tata said the ruling was not fair and they are appealing it (trying to get a higher court to change it).
8. Court case by Cyrus Mistry: In 2018, a court in India looked at complaints from Cyrus Mistry, the former chairman. He had made accusations about how the company was managed. The court decided in favour of the Tata company.

These examples show that running such a large and diverse group across many places can come with challenges and disagreements.

What We Learned

Wow, we've learned a lot about the Tata Group! It started from simple beginnings with Jamsetji Tata's big dreams. His sons and later leaders like J. R. D. Tata and Ratan Tata built on those dreams, making the group huge and bringing it into new areas and countries.

The current chairman, Natarajan Chandrasekaran, is leading the group into the future, focusing on important new areas like technology and healthcare.

We saw that Tata Group is involved in so many different things – from steel and cars to hotels, airlines, and software.

We also learned that they believe in giving back to the community and have done so in many ways, by supporting education, science, health, and even helping animals.

And we saw that like any big organisation, they have faced difficult situations and criticisms about their projects and actions in different places.

The Tata Group is a huge part of India's business story, with a long history, many different businesses, a focus on helping others, and a journey that continues to unfold.