Tuesday, May 12, 2015

PERSONALITY SPECIAL ...................TATA Under the Radar, but He's Still Flying

RATAN TATA
Under the Radar,
but He's Still Flying


Ratan Tata's investment taste buds may be tickled more by social responsibility
 and plain curiosity rather than the prospect of mouth-watering returns

Great men have often inspired the young and the old alike. But, not many would
have inspired older men when they them selves were young. Ratan Tata, chairman
emeritus of the Tata Group, may claim membership to this rare club of galvanisers.
Among the many entities that Tata started is a Flying Club in Jamshedpur in the
late '60s when he was a strapping lad in his early '30s. It became so popular in the
Steel City that the late Russi Mody, the then managing director of Tata Steel,
acquired a flying licence at the ripe age of 50.
The Tata-Mody relationship took many turns thereafter. They fought over who
should head Tata Steel, although they smoked the peace pipe much later in life.
One bit remains similar, though. Both remained relevant after their retirement
and sought a second innings at 75. The similarities end there. The flamboyant
Mody (who passed away a year ago at age 96) started a trading company called
Mobar as a joint venture with the Bajorias of Kolkata and the German firm
Rohstofftechnologie Overseas Engineering GmbH. The secret ambition was
to rival Tata Steel in sales. He also wore Hawaiian shirts even in his '80s and
regaled audi ences with his commentary at Kolkata business do's. Ratan Tata's
second coming may just be more about philanthropy and less about commercial
returns, the headline-hitting investments in brands like Snapdeal and Xiaomi
nothwithstanding.
That's what Samir Bhatia reckons. The former chairman for retail and commercial
at Barclays Bank in India today works closely with companies like Snapdeal
and Paytm (both Tata investees) to help their partners find funds. “What Ratan
Tata is doing is corporate social re sponsibility (CSR) investing,“ insists Bhatia, f
ounder of SMECorner.com. Here's how.
Tata has invested in nine companies post retirement (in December 2012), mostly
ecommerce firms, save for Xiaomi which is a smart phone maker, Altaeros Energy,
a wind energy firm, and Grameen Capital, which dab bles in microfinance.
Bhatia feels that only Snapdeal and Paytm may make Tata some money, but the
 rest are too small. “In typical CSR you donate money.
In Tata's kind of CSR you invest in something that you believe is a good cause.
Instead of pre senting a tree, you present a seed,“ Bhatia says. He feels Tata is
cuting his application for setting up an airline in India to the directorate general
of civil aviation with Tata in tow (the AirAsia India joint venture, which has
Tata Sons as a 30% partner, was announced months after Tata retired as chairman
of the holding company). In fact Tata did more; he actually flew the plane carrying
the AirAsia team from Mumbai to Delhi. rious about the ecommerce opportunity
and is putting his money wherever his passion is leading him.
But more than money Tata is lending his name. So while Xiaomi wants Ratan Tata
as an investor it may also want to play down the “Chinese“ tag when operating in
India; Malaysian airline AirAsia's head honcho Tony Fernandes perhaps felt more
at ease submit
It Isn't About Money
So how easy is it to get Tata to invest, or to persuade him to lend his name?
One man who has been there is entrepreneur and investor Ronnie Screwvala,
and this was old-school philanthropy. Screwvala got the Jamsetji Tata Trust
to fund projects around water and sanitation in Maharashtra's Raigad district,
which are being executed by Screwvala's Swades Foundation (Ratan Tata
heads all the Tata Trusts that together own over 60% in Tata Sons).
The investment called for two personal meets with Tata, two field visits by
his team, fol lowed by a strong project proposal and finally a meeting with the
governing board of the Jamsetji Tata Trust.
Screwvala says Tata appreciates some skin in the game. “He was particularly
impressed that our family foundation was committing equal financial support
and so matching each rupee; and that the projects have the personal and active
involvement of my wife Zarina and myself.“
Screwvala is clear that the purpose of having Tata on board as an investor was not
to ride on his image and use him as an ambassador of sorts. “We have not used the
name or been public on this; so unlike some of your ecommerce examples where
one can see that his association would bring credibility to an otherwise long-term
loss-leading model, we see his commitment to be one bringing his and his team's
cross learnings to Swades...There can be no better champion than Tata to support
and endorse Swades as a model for others to follow.“
The consensus seems to be this isn't about money. Neither is Tata looking at
making a fortune in his 80s (he is said to be worth around $1 billion) nor is he
giving out dollops of cash. Clearly, as Tata Sons with Cyrus Mistry at the helm
goes about the task of embellishing the Tata brand, the equity and recall of the former chairman are doing just fine.
:: Suman Layak

ETM 3MAY15

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