Winning Bizness Desk
Mumbai: Ratan Tata's legacy has left a profound impact, not only in India but across the globe. His departure has reignited curiosity about the inner workings of the Tata Group, one of India’s largest and most influential conglomerates. With 29 listed companies under its umbrella, many wonder who holds the reins and ensures these diverse entities operate as a unified force. The structure of the Tata Group is unlike most traditional industrial conglomerates. The group operates without a single owner, and the power is distributed through a unique matrix that connects all of its companies. This governance structure, with its emphasis on philanthropy and distributed ownership, sets the Tata Group apart from other business houses, allowing it to maintain a strong ethical foundation while continuing its legacy of growth and innovation.
No Single Person Holds Ownership
The Tata Group consists of about 100 brands, with 29 companies listed on the stock market. These companies are not owned by any one individual. Instead, the primary ownership lies with Tata Sons, which serves as the holding company that controls all of the Tata Group’s assets and brands. What makes Tata Group different is that Tata Sons itself is predominantly owned by Tata Trusts, philanthropic entities that have been tied to the Tata family for decades. These trusts are crucial in maintaining the group's legacy and directing its vision.
How Tata Sons Controls the Group
The massive empire of the Tata Group spans multiple sectors, including chemicals, consumer products, energy, engineering, and information systems. Tata Sons, established in 1917 as a trading enterprise, now acts as the central authority over these companies, managing the Tata name and trademark, and making key decisions on behalf of the group. Interestingly, 66% of Tata Sons is owned by Tata Trusts, which were set up by members of the Tata family. The most prominent among these are the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, which together hold a 50% stake in Tata Sons, giving them substantial control.
Ownership Breakdown
The Sir Dorabji Tata Trust holds 27.98%, while the Sir Ratan Tata Trust holds 23.56% of Tata Sons. Other significant stakeholders include the Shapoorji Pallonji Group with 18.38%, along with smaller stakes held by other Tata family-associated trusts like the JRD Tata Trust and Tata Education Trust.
Who Holds the Power Now?
While Tata Sons is responsible for the overall management of the group, it is the chairman who steers its direction. The chairman of Tata Sons is elected by a board of seven directors, and since 2017, N Chandrasekaran has held this position. He is the driving force behind the conglomerate, responsible for making strategic decisions and keeping the diverse companies of the Tata Group operating in harmony.
