Ratan Tata, the philanthropist and former chairman of the Tata Group who has died aged 86, was instrumental in globalizing and modernizing one of India’s oldest business houses.

His ability to take bold, daring business risks provided the basis for a high-profile takeover strategy that kept the salt-to-steel conglomerate founded by his forebears 155 years ago relevant after India liberalized its economy in the 1990s.

At the turn of the millennium, Tata carried out the largest cross-border acquisition in the history of corporate India: the acquisition of Tetley Tea, the world’s second-largest tea bag manufacturer. The iconic British brand was three times the size of the small Tata group company that had bought it.

In the years that followed, his ambitions only grew as his group swallowed up major British industrial giants such as steel manufacturer Corus and luxury car maker Jaguar Land Rover.

Although the takeovers did not always pay off – Corus was bought at very expensive valuations just before the 2007 global financial crisis and remained a drag on Tata Steel’s performance for years – they were big power moves.

They also had a great symbolic effect, says Mircea Raianu, historian and author of Tata: The Global Corporation That Built Indian Capitalism. He adds that they “represented the reversing empire as a company from a former colony took over the valuable assets of the mother country, reversing the derisive attitude with which British industrialists viewed the Tata Group a century earlier.”

The Tata Group’s vision had been “outward-looking” from the very beginning, according to Andrea Goldstein, an economist who published a study in 2008 on the internationalization of Indian companies, with a particular focus on Tata.

As early as the 1950s, Tata companies operated with foreign partners.

But Ratan Tata was keen to internationalize “in big steps, not in symbolic, incremental steps,” Ms. Goldstein noted.

His unconventional training in architecture and a superficial view of his family businesses may have played a role in the way he thought about expansion, Mr. Raianu says. But it was the “structural transformation of the group” that he drove that allowed him to execute his vision of a global footprint.

Tata had to fight an extraordinary corporate battle at Bombay House, the group’s headquarters, when he took over as chairman of Tata Sons in 1991 – an appointment that coincided with India’s decision to open up its economy.

He began to centralize increasingly decentralized, domestically focused operations by opening the door to a series of ‘satraps’ (a Persian term meaning an imperial governor) at Tata Steel, Tata Motors and the Taj Group of Hotels, who ran operations without any supervision from the business community. the holding company.

This not only allowed him to surround himself with people who could help him execute his global vision, but also prevented the Tata Group – hitherto shielded from foreign competition – from fading into irrelevance as India opened up.

At Tata Sons, the holding company, as well as at individual groups within it, he appointed foreigners, non-resident Indians and executives with contacts and networks all over the world to the management team.

He also established the Group Corporate Center (GCC) to provide strategic direction to group companies. It provided “advice on mergers and acquisitions (mergers and acquisitions), helped the group companies mobilize capital and assessed whether the target company would fit with the Tata’s values,” researchers at the Indian Institute of Management in Bangalore wrote in a 2016 paper .

The GCC also helped Tata Motors raise money for high-profile acquisitions such as Jaguar Land Rover, dramatically changing the global perception of a company that was essentially a tractor manufacturer.

“The JLR takeover was widely seen as ‘revenge’ on Ford, which had mockingly refused to take over Tata Motors in the early 1990s and was subsequently defeated by Tata Motors on the deal. Taken together, these acquisitions suggested that Indian companies had ‘arrived’ on the global stage just as growth rates were picking up and liberalizing reforms were bearing fruit,” says Mr Raianu.

Today, the $128 billion group operates in 100 countries, with a significant portion of its total revenue coming from outside India.

While the Tata Group made significant progress abroad in the early 2000s, the Tata Group’s failure at home resulted Tata Nano – launched and marketed as the cheapest car in the world – was a setback for Tata.

This was his most ambitious project, but this time he clearly misinterpreted the Indian consumer market.

Brand experts say an ambitious India did not want to associate itself with the cheap car brand. And Tata himself eventually admitted that the “poor man” label was a “stigma” that needed to be undone.

He believed that there could be a resurrection of his product, but the Tata Nano was eventually discontinued after sales plummeted year after year.

The succession at the Tata Group also became a tricky issue.

Mr Tata remained far too involved in running the conglomerate after his retirement in 2012, through the “back door” of the Tata Trust, which owns two-thirds of the shares of Tata Sons, the holding company, experts say.

“Without blaming Ratan Tata, his involvement in the succession dispute with (Cyrus) Mistry has undoubtedly tarnished the group’s image,” Rainu said.

Mistry, who died in a car accident in 2022, was ousted as Tata chairman in 2016 after a boardroom coup that led to a long-running legal battle that the Tatas eventually won.

Despite many wrong turns, Tata retired in 2012, leaving the vast empire he inherited in a much stronger position, both nationally and globally.

In addition to major acquisitions, his attempt to modernize the group with a sharp focus on IT has served the group well over the years.

When many of his big bets failed, a high-performing company, Tata Consultancy Services (TCS), along with JLR, carried the “dead weight of other ailing companies,” says Mr Raianu.

Today, TCS is India’s largest IT services company and the cash cow of the Tata Group, contributing to three-quarters of its revenue.

In 2022, the Tata Group also brought India’s flagship Air India back into its fold, some 69 years after the government took control of the airline. This was a dream come true for Ratan Tata, a trained pilot himself, but also a risky gamble given the capital intensity of running an airline.

But the Tatas appear to be in a stronger position than ever before to make big, bold bets in everything from airlines to semiconductor manufacturing.

India under Prime Minister Narendra Modi appears to have clearly pursued an industrial policy aimed at creating ‘national champions’, building and promoting a few large conglomerates to achieve rapid economic results across priority sectors.

Together with newer industrial groups like Adani, the cards are clearly in favor of the Tata Group which can benefit from this.