Let us accept that doing business in any country, and particularly in India (with its many states and their many parties in power), is a tough proposition. In this scenario, Ratan Tata has done a commendable job (Exit Stage Right, Dec 17). Indian cars like the Tata Indica or Nano should be considered a national pride, even if they are far from perfect. Remember Ralph Nader’s immortal comment—“unsafe at any price”—about American cars. Hopefully, RNT successor Cyrus Mistry will take to new heights the business conglomerate which does business in a far better way than the others who made it big under the licence raj.
Narendra M. Apte, Pune
Tata Sons, the holding company, does not have more than a 10 per cent share in the group, except perhaps in Telco, where it might be 16 per cent. This is no exception, but almost a rule in the corporate world, that ‘owners’ have only a 2-5 per cent stake but wield all the power in the company. That said, Tata companies are dependable. You can invest in low cycles of stockmarket, and then forget about them. The bonus and dividends over the years, or even in 10 years, can help you recover your investment.
B.V.G. Rao, Hyderabad
None of the Tata Group companies is a symbol of excellence. Instead, they’re like government-run companies where the decision-making is slow and the work ethic pathetic. Mistry was one of the members on the committee to select a successor for Ratan Tata, and ended up becoming the successor himself. All in the family, ultimately. What a sham!
Kiran Voleti, Chennai
RNT is retiring at a time when the conglomerate has started to stumble thanks to the group’s telecom fiascos. Mistry will have to squeeze out all his business acumen to steady the ship.
K.C. Kumar, Bangalore
Do the Tatas use the complexity of our regulatory environment as a strategic strength?
Ashok Lal, Mumbai
Unreservedly proud of Ratan Tata and the group and their success in showing the world what Indians can do.
Atul Chandra, Mumbai
RNT is more of an industry leader than a businessman. His frugal lifestyle, personal humility and dedication to the group put him in a league of his own.
Rishi Vyas, Kangra
Heartening to hear that RNT, post his retirement, plans to set up a veterinary hospital of international standards in Mumbai. An ardent dog-lover, he can at last devote time to his ‘pet’ project.
Beena Mathur, Pune
As per reports, Tata Motors rejected Pakistan’s request for 380 Tata Sumo Grandes for their police, because of its involvement in 26/11. The group could have made more profit, but for them the country came first. I wish our government could also emulate them.
Mahesh Kapasi, New Delhi
It was on these pages that Outlook carried a rant by Arundhati Roy against the Tatas, painting them as blood-sucking evil capitalists. Now it has a whole cover story singing paeans to the man. Is this Outlook’s idea of ‘balanced reporting’?
Ramesh Raghuvanshi, Pune
How the Nano deal is structured
The soft loan of Rs 9,570 crore that the Gujarat government has offered to Tatas will have to be repaid by them in 20 years but the repayment schedule will be linked to the VAT outgo on production capacity of 2.5 lakh cars in first phase.
For first four years, Tatas will have to repay the state government at 200% of the gross VAT payments per month. Estimates are that Tatas will have to pay an annual VAT of Rs 375 crore to the government based on its declared phase one annual capacity of 2.5 lakh cars. This means, the company will have to pay three times this amount or Rs 1,125 crore to the government as its loan repayment for the first four years.
Thereafter, repayments will reduce to 150% of its VAT payment till the state government recovers 150% of the proposed Rs 2,900-crore investment that Tatas will put up in phase one. This repayment will further come down to 100% of the VAT payment over the following years.
Various infrastructure facilities to be provided by the state government to Tatas include construction of a two or four-lane road connecting the project site, construction of a natural gas pipeline to the site, a 200-kva power supply, a 14,000-cubic metre per day water at the project site as well as facilities for waste disposal.
The state government has also promised to provide facilities for development of a ‘Tansportnagar’ on a publicprivate partnership for loading/unloading, lodging and boarding and other facilities in addition to providing 100 acres of land near Ahmedabad for a township at a later stage.
The leak of details of the sops being offered to Tatas, which has been a closely guarded secret, is understood to have set off a scramble within the CMO to find out how the document got leaked. The note was prepared by state industries department on the basis of the MoU with Tatas to get it approved by the Cabinet.
Info on Nano project denied under RTI
Note that the land is fertile land, belonging to the Anand Agricultural UNIVERSITY, is TOTALLY FREE OF COST.
Deal is out: Win-win for Tata, Gujarat
TIMES NEWS NETWORK November11, 2008
Gandhinagar/ Ahmedabad: If this is the deal, it is a win-win situation for both Tatas and Gujarat. A loan of Rs 9,570 crore and that too at an amazingly soft 0.1% simple rate of interest. That’s the big sweetener along with other carrots that the Gujarat government is understood to have doled out to draw Tata’s Nano project to Gujarat.
This, as per a document circulating in Sachivalay on Monday which the Modi administration refused to either confirm or deny was authentic. The government has denied the information sought under the Right to Information Act to the media.
If the document is official, it is a deviation from Chief Minister Narendra Modi’s hard stance on sops. But then look at it another way. Tatas need only Rs 2,900 crore for setting up the Nano plant, including the relocation cost of Rs 700 crores. The remaining Rs 6,670 crore will be spent on infrastructure development, including roads and rail, gas pipelines, effluent treatment plant, electricity, water and all that goes in the name of providing infrastructure to the Nano plant.
This infrastructure will be of use not only to Nano but to fuel the CM’s vision of turning Gujarat into a global auto hub, as more players follow the Nano trail from Singur to Sanand. It is just that Modi is picking up the bill first and Ratan Tata is paying back in easy instalments spread over 20 years. The document is believed to have been put before the Cabinet for approval. Just to give an idea about the size of the loan, it would be a quarter of Gujarat government’s annual budget of Rs 40,000 crore. Tatas have got their share too. They get a 100% exemption on electricity duty in addition to a concessional power tariff. The 1,100 acre land comes highly subsidised without any stamp duty, registration and transfer charges. The payment for land would be made in eight equal annual instalments at a compound interest of 8% per annum.
Tata wants only Rs 2,900 cr for Nano plant
Infrastructure cost of Rs 6,670 cr also billed to Tatas
Repayment of Rs 9,570 cr loan @ 0.1% over 20 years
100% exemption on electricity duty
Concessional power tariff
1,100 acre land comes cheap
No stamp duty, registration and transfer charges
Payment for land in 8 equal annual instalments
Ratan Tata is more of an industry leader than a businessman. His frugal life style, his personal humility and above all, his selfless dedication to Tata Group takes him to a league of his own. Tata gropu minus Ratan Tata will be just another blooming congolmerate.
Reg your point of AGMs of publicly listed companies, one more fact is that most of these big business group, have public institutions such as the LIC, GIC, etc as big shareholders. And that helps both ways. Needless to say government run public institution's representatives do not work for their real stakeholder well being (say policy holders in case of LIC) but for the interest of the employer (the ruling government and party) and in return they blindly favour the promoters.
Not accusing Tatas or Birlash here, I would still say they are infinitely better and more ethical in most business practises than many other business groups, but the point is there is so much of underhand dealing that gets done everywhere and in every possible way. The ruling party (at Delhi) always gets a big benefit in the end. And we aam admi keep eating the crumbs and praise the rulers for being so gracious and good minded to give us some free popcorn !!
Male Unblocked >> The holding pattern of Tatasons is very mysterious, and will not be divulged to us, certainly not by the Indian media.
You are right, but Tatas are not the only one in list.
What about Jet Airways - There are clear rules and laws limiting foreign ownership shareholding (as a percentage of total equity) in aviation sector but there is absolutely no clarity of whether Jet Airways complies with it..
Will OUTLOOK's BUSINESS MAGAZINE DARE TO MAKE A BIG ARTICLE ON MR NARESH GOYAL's RISE, the way they had an entire edition on Jagan Mohan Reddy's crony capitalism?
Please note, I have nothing against Jet Airways, or Goyal,it is just about the basic laws of land are complied with.
I can give more and more examples - like there is one law which says listed companies should have public shareholding of minimum 10%.. But many PSU companies dont follow this rule. Government is the biggest rule breaker , so why do we cry when people break the law?
But But then, we will never know more on this. Indian Media is FULLY owned by crooks who will make big issues of non issues (such as imposition of dress code in some private education institution) etc but we will not hear any investigation on all these.
There are THREE things that All Indians worship :
1. Capitalists ( in fact Anyone who has the dough )
2. Anti-males ( the media sees to this one
3. *The* supernatural ( the invisible guy in the sky who controls us all )
18.6% of Tatasons is owned by Mistry, who has married an Irish citizen and pays taxes to Ireland. The acquisition of Corus, makes one suspicious that the moves to move Tatamoney to Europe are afoot. Mistry is currently the RICHEST IRISHMAN!
Another mystery in this media news, is how much stake Ratan Tata has in all of this.
The holding pattern of Tatasons is very mysterious, and will not be divulged to us, certainly not by the Indian media.
(1) Let us accept that in any country and particularly in India doing business and that too in many States, with all kinds of parties in power, is a very tough proposition. (2) Mr. Ratan Tata may have taken some time to prove his capabilities but I believe that he succeeded in establishing himself as an able Chairman of the house of Tatas. An Indian car like the Tata Indica or a Nano must be considered a national pride, even while accepting that the Tata cars are not perfect cars. In this connection let us not forget Ralph Nader’s well known comment (‘unsafe at any price’) about American cars. (3) It is difficult to predict future of the Tata industrial empire under the new Chairman Mr. Cyrus Mistry. But I am sure that Mr. Mistry would not anything to spoil the reputation of the house of Tatas as a business conglomerate which does business in far better way than most of those who have made it big under the License raj which was dismantled in the nineties.
Way back in 1993 or 1994 , Tata Sons (holding company) had only approx. 6% (six) percent shares in TISCO and about 16% in TELCO.
But then Laxmi Mittal proved to be a terror in later years and Tata Sons Ltd. tried to cover its back as fast as possible to thwart any attempts of takeover of their companies particularly TISCO.
So, there was a very clever strategy adopted. Tata Sons Ltd issued “rights shares” to its own group companies( remember these companies are promoted by Tata Sons only). Now these companies ( since they are cash rich) ploughed back money to Tata Sons to execute their right to purchase these "rights shares'. Generally any limited company when issues "rights shares" , it issues at lesser price than market rates ( available in stock market) and hence investors send money to buy shares to buy from the company. Company simply prints these shares, other than that there would no more expenditure.
Thus TATA SONS got money and used this money to buy more shares of group companies like TISCO and considerably increased its holdings (shares).. And added to there was another adopted. A company like TISCO issued rights shares only to promoters that is again to Tata Sons ltd. with a lock in period. There was an atmosphere of fear of takeover of TISCO by Mittals and Lodhas etc.,
In the investor public TATAs have considerable good will. In AGM of TISCO such rights issues “only to promoter company Tata Sons” were easily passed. In fact many AGM's are stage managed ( not TISCO ) because all shareholders won't come all the way to Mumbai. And raising hands "formality" will also be complimented with distributing gifts in the side by hall where most of the shareholders jostle each other, while on the other hand an AGM 'formality" goes on. A lone or two objecting voices would be quickly drowned by promoters hench men. Debates would be hijacked by promoters paid financial “experts” and crooks. So, finally promoters in 99% cases succeed in passing whatever resolutions they wanted. This is also coupled with a managed price ( keeping share price high with money pumped to compliant stock brokers) .
But in the case of Tatas however there is a genuine love of investors and Tatas knew as to how to cash it.
So, now, Tata Sons holdings in TISCO AND TELCO is about 19.8% or say 20% each.
The group companies market capital ( when you multiply share price with the number of shares of a company ) is about 4,73,701 crores ( in December , it changes every day). In US dollar terms it is 87 billion. There are about 25 companies( $87 billion all put together ).
Tata sons ltd shareholding pattern shows that 66% per cent of shares are held by Tata's trust companies engaged in charity works. These trusts are mostly in the name of dead Tata business tycoons either started by themselves before they died or started by their sons families later on.
16 D, Ramki,
Wikipedia is more balanced than magazines like this in this respect, especially with regards to articles on big business / politics.
There is also information about the holding pattern, ownership and change of nationality of Tatasons, etc., which are interesting to curious readers.
Which other Indian has given up power like this? Almost all Indians hang on to power till their last breath! Ratana Tata has a vision, and he is ready to demote himself so as to train the next generation. A Brave Deed, only exceptional Indians do that!
I adore the man!
You may have a point. But let us admit this - The Tatas, Birlas, Ambanis etc etc as front line capitalists of have their position and power to influence things but they are working in democratic free India under full media glare and cannot get things done by breaking the rule of land in a direct way.
Can we say the same about tier two capitalists of India?
I can if i want read a dozen books on the tales of growth of birlas, tatas, and ambanis. But do I have any written book on the ascent of Shri Rajan Raheja, who is the owner of this magazine?
OUTLOOK's other Business journal recently covered in depth about shri Jagan Mohan Reddy (son of YSR) and his rapid ascent to riches. Very good work. But one thing that surprises me is - why is OUTLOOK doing such stories, well after the guy has gone away from CON party and started opposing Saint Sonia and her party in AP? What stopped Outlook from doing such stories during the 5 glorious years of YSR-Sonia Raj in AP (2004-09)?
Maybe it is time to take a hard look on all these...
With the proposed exit of Ratan Tata there may be huge vacuum in his business empire. And only time will tell whether his successor succeeds in meeting the expectations. Ratan Tata had once mentioned few unforgettable words- "One minute cannot change your life but the utilisation of every one minute will definitely change your life". Tata Group will miss you sir !
There is some information on the holding pattern of Tatasons on wikipedia, I think.
The ownership of Tata is a mystery, because the REAL owner is Mistry, and he pays his taxes to Ireland nowadays. Not India. And his holding is substantially more than 2-3% of Tata sons.
A fact that has curiously not been highlighted by these articles on Outlook leading one to believe that this is paid news.
None of the TATA group companies are symbols of excellence. they make the employees work like donkeys and wont give them growth they deserve. you need to suck up to the bosses to get growth in tata grp. they make tall claims on ethics while they treat indian guests in the taj hotels as rats while they suck up to the foreign guests. the tata group companies are like govt. companies with slow decision making and pathetic work ethic. cyrus mistry was one of the committee members on selecting a successor for ratan tata and he himself becomes the successor! such a sham of a committee...its all in the family. they should not be claiming to be professionals when they are anyways going to appoint family members as leaders. same is the case with birlas and ambanis. only family members can become leaders. its perfectly ok for the family to run the business but they should never make claims that they are professionals.
“With no TATA on top the Group would appear like ‘Pineapple’ without ‘Apple’ and ‘Custard Apple’ without ‘Apple’ too – absurdly TITLED – terribly Nostalgic.”
The cover story is excellant. The 'Ethics of business done
by Tatas cant be erased whatever be the ups and downs they
experienced. But the contribution of Russie Mody could hav been
found more space in this story.
I think Tata Sons , the holding company's share in the group companies is not more than 10% max except TELCO where it may be 16% of shares. It is not an exception, it is almost a rule in india incorporate world. The "owner" in common man's language owns about 2 to 5 per cent shares but controls the company and wields the power.
And yet TATA companies are dependable. You can invest in low cycles of stock market and then forget it. The dividends and bonus etc., over the years or may be in just 10 years can give back all your investments, making the shares you hold as free.
Hats off to outlook for presenting a balance pictureque of Tata's, a mighty and vast empire which nearly took over the whole country under its reign. There will always be controveries in the good works you do and specially when you are doing really good. Ratan Tata has been hard working no doubt the fruits can be seen by the whole country , he has been prone to human weakness in his dealing but that's what world calls busneiss. However we are not to forget the charity work done by tata's, done very quietly and gone unnoticed like in this article. Well yes he retires from the busneiss no doubt but the legend lives on in his deeds and personality.
I must say that the dumping of ethics in the Tata's started with Ratan Tata. People who are in the markets know this while Nira Radia has been successful in managing the media to keep the image of Tata's as a very ethical business group. His hand written letter to Karunanidhi and the sale of Voltas property in Chennai heartland for a pittance to do favors is a clear sign.
The Tatas may be masters of media management, but the public cannot be denied the knowledge of some facts namely
The Tatas were the original beneficiarues of licence raj. They got Indian iron ore from Nehru,just as Ambani got oil from Indira.
The Tata investment in corus is a plain attempt to take money away from India to Europe, even though this was a failing Europian company.
The REAL owner is Mistry. Mistry is an Irish citizen since recently and pays his taxes to Ieland not India.
there is no mention of Tatas fight for cheap land in Bengal nor about Modis largesse.
Ratan Tata has got around the ridiculously government controlled system & we should give him credit for that.
He is an absolute legend in the Indian context.So is Mr.Premji!
All haters, judge him in the indian & not western european context!
@Ramesh Raghuvanshi:When the top 5% wields all the power, why would you not expect bug business and big government to get into bed?
BTW the top 5% here I am referring to is from Our Politics!!
Is he really Entrepreneur just like Bill Gate? I Have not seen any Entrepreneur uin India..All Indian tycoons were either commission agent of British or sundry traders.India never be fertilizer for Entrepreneur.In 19 th century those traders flourished in India they were provider of APHIM to China..Birla,and other Marwadi were prosperous by supplied aphim same way Tata came forward.,Show me single product Tata invented and sale all over the world? That is a tragic phenomena of India `s poverty
To place the shades of grey in perspective, if the regulatory environment became simpler, would the Tatas applaud or do they use its complexity as a strategic strength ?
OUTLOOK had previously covered Arundathi Roy who wrote an entire article "Satanising" the tatas and preaching the dangers of putting the nation's future in hands of Blook sucking evil capitalists like Tata group.
Now OUTLOOK seems to want to undo the damage by having an entire weekly edition in praise of Tatas..
Is this what we call as "Balanced Reporting"
Or is it that the Rahejas want to get something done with Tatas?
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