A career of exits & mega acquisitions

The defining feature of Ratan Tata's tenure as chair of Tata Sons and the Tata Group was a series of high-profile overseas acquisitions that put the conglomerate - and corporate India - on the global map. These acquisitions transformed a once India-centric family enterprise into a global business group. However, before embarking on global expansion, Tata pruned and consolidated the group's domestic portfolio, giving particular attention to ventures in the consumer space.

- KRISHNA KANT

When Ratan Tata took over leadership from JRD Tata in 1991, the Tata Group was India's largest and most diversified business conglomerate, with interests in nearly every sector except those reserved for the public sector. The group was dominated by industrial companies such as Tata Engineering & Locomotive Company (now Tata Motors), Tata Steel, the three Tata Electric Companies (Tata Power Company, Tata Hydro-Electric Supply Company, and Andhra Valley Power Supply Company), Associated Cement Companies (ACC), and Tata Chemicals. Together, these companies accounted for nearly three-quarters of the group's combined revenues, profits, assets, and market capitalisation in 1990-91 (FY91).

However, Tata had also inherited a varied portfolio of consumer goods, which were, at the time, some of the largest in the private sector. In the early 1990s, Tata was among the top players in several consumer segments through companies like Lakmé Ltd (cosmetics and personal care), Tata Oil Mills (soaps), Goodlass Nerolac (paints), Merind (pharmaceuticals), Voltas (air conditioners and refrigerators), Titan Industries (watches), Tata Tea, Tata Coffee, and Tata Press (printing and publishing). The group was also a major player in computer hardware through its joint venture with IBM and in telecom equipment through Tata Telecom, a partnership with AT&T. Despite their profitability and strong market positions, these ventures, with the exception of Merind, didn't fit Tata's vision for a globally competitive portfolio poised for growth in an era of globalisation and free capital flows. He foresaw challenges to the long-term viability of domestic consumer goods, given India's relatively small consumer goods market and the entrenched position of multinationals in this space.