A rainy night in Mumbai; the birth of Tata Nano

Ratan Tata watched a family riding a scooter through the rain on a night in Mumbai. The sight remained etched in his memory. It made him think about a car, affordable to the common man — a new edition of the Ambassador within the reach of the commoner. The idea gave rise to Tata Indica and later Nano.

Ratan Naval Tata was the major investment JRD Tata had made to make the company, Tata, soar up in the vast horizon. JRD's decision to name Ratan Tata as his successor in 1981 was met with scepticism. There were even voices of dissent. The pertinent question then was over the acumen of Ratan, whether a soft-spoken, shy, and immature personality could lead the corporate behemoth Tata Sons.

JRD was then already a living legend. He had launched Telco and Air India and fuelled the growth of several other companies. The vacuum he had left behind was not easy to fill.

There was a concerted campaign that Ratan Tata was responsible for the crisis in Nelco and the closure of the group's textile industry. The aim was to project Ratan Tata as an incompetent leader.

However, Nelco, which had only two per cent market share, grew to a firm with 20 per cent shares under Ratan Tata, and diversified into inverter and computer businesses. He took the company to the black from the red.

Ratan Tata, who made the Empress Mills profitable, was also positive about the Central Indian Mill. Though he argued that the mill could be made profitable by infusing Rs 50 lakh, some of the directors wanted to see it closed. However, Ratan Tata had to take the blame.

He distributed the annual bonus, a huge amount, among the poor mill workers. JRD was testing Ratan Tata by making him responsible for the firms in crisis. Ratan passed the test with flying colours.

Though Ratan Tata was announced as the chairman of Tata Industries in 1981, there was no guarantee that he would succeed JRD. Insiders said Nani Palkhivala would fill JDR's shoes. JRD, too, was fond of Palhkivala, but the latter's constant criticism of the government might have given the impression that it would affect the group, forcing the patriarch to rethink.

Russi Modi was another competitor but his loose tongue went against him. Anger over being sidelined, he kept creating issues. Ratan Tata took the group to new heights which his predecessor hadn't even dreamt of. The once-shy man even put a price on global brands, Tetley, Corus, and Jaguar Land Rover, and took them over.

He revamped the Tata Group companies, which were functioning as individual maladministered islands. He handheld Tata to the high-tech world from the traditional industries. Ratan Tata seized the opportunity when the central government liberalised the economy and put an end to licence raj. He foresaw the winds of change being ushered in by globalisation. He adapted to the changes after the fall of the Berlin Wall, said Krishnakumar, a strongman in the Tata group.

The group's companies, which were running at a loss, started making profits under Ratan Tata. Investors trusted the Tata brand more even as the company started announcing annual dividends. Rakesh Jhunjhunwala who bulk-purchased Titan shares only because it belonged to the Tatas, became the country's largest investor. Ratan, who romanticised solitude, became dear to the workers.

The decision to list TCS in the stock market was instrumental in Tata's growth. It gave Tata the freedom to acquire Corus and Jaguar Land Rover. TCS soon became the duck laying the golden eggs in the Tata group.

The initial five to six years as the head of Tata presented Ratan with several challenges. Telco — which later became Tata Motors — made a loss of Rs 600 crore, and people competed to write Ratan off. No one noticed that the entire automobile industry was then stuck deep in a crisis.

The decision Ratan Tata made in Mumbai on a rainy night rewrote the history of Tata Motors. Indica zoomed across the length and breadth of the country. Ratan's decisions were behind the rise of Tata Motors as a formidable force in the Indian automobile industry. His decisions had the shrewdness of an industrialist and the compassion of a philanthropist.