In the shadow of colonial rule, where Indian enterprises were nothing but a concept, the birth of Jamsetji Tata changed it all. Born in Navsari on 3rd March 1839, little did the town know that Jamsetji Tata was set to change the landscape of Indian enterprises and would go on to become the ‘Bhishma Pitamah’ of the Indian Industry. Owing to the foundations laid by Jamsetji Tata, the group has 29 publicly listed companies, with products and services sold in 150 countries across six continents and a combined market capitalisation of 370 billion dollars. The story of the TATA group is not just a business saga; it is how this group built the nation and the numerous initiatives taken decades back, which still bear fruits for us all.
This article will trace the group's humble beginnings and what led to it becoming a behemoth in the Indian landscape.
*Before we begin, here is a section of a family tree of the TATAs that we might need to refer to as the article progresses.
Credit: Shashank singh
Nusserwanji, the father of Jamsetji Tata had moved to Mumbai to pursue business and had taken his family with him. He engaged in cotton trading and had become quite successful in a short period of time. Meanwhile, Jamsetji acquired a college education, got married, had a son named Dorabji Tata and went to Hong Kong. There, he set up a company which dealt in Cotton and Opium( back then dealing in Opium was legal.) The rising tensions in America payed way for the TATAs to go International.
American Civil war
This part of the TATA’s journey reminds me of my favourite Game of Thrones dialogue:
“Chaos is not a pit; Chaos is a ladder.”
Amidst the civil war in America, there was a worldwide disruption in cotton manufacturing as America was a significant source of cotton for Europe. Due to this, Jamsetji and Nusserwanji started aggressively selling cotton to Britishers, with prices rising and reaching almost double the original prices! This allowed the TATAs to open their first European branch in London.
However, things weren’t going to be rosy the whole time.
The civil war ended, and cotton production resumed, the orders TATAs had were cancelled, and they faced heavy losses. To pay off their debts, Nusserwanji sold a seven-story house in Bombay and used these proceeds to pay off their debts. This is the first instance of the name TATAs and trusts becoming synonymous.
Luck prevailed, and Nusserwanji got a godsend opportunity where their businesses supplied blankets and uniforms to Britishers during a war, pocketing 40 lakhs(in 1868). The sum allowed the father son duo to expand and let their ambitions take over.
Empress mills
Jamsetji had a terrific understanding of the business landscape to recognise the need to set up their manufacturing facility and not just rely on trading. The TATAs decided to set up a mill near the cotton-producing area and chose Nagpur. Jamsetji wanted to construct a mill far superior to the ones in India and a mill that could compete with foreign mills in Europe. They named it Empress Mills and inaugurated it on January 1, 1877, in honour of Queen Victoria.
Nagpur wasn't exposed to the hustle work culture that Bombay was, so people would take leave for the slightest of reasons and remain absent for weeks. TATAs came up with an innovative solution. They introduced a general provident fund, an insurance scheme that covered medical costs, events such as sports days and rewards such as gold chains and watches. These methods were ahead of their time, and even the Western economies had yet to adopt such robust employment benefits. It was the genius of Jamsetji Tata to envision such employment policies back then which are still being used now.
Empress Mills was a roaring success and stayed the crown jewel of the Tatas for a while.
Birth of Mysore silk
During a visit to France, Jamsetji recognised the similarity of weather between France and Mysore. He brought back silkworms from France, bought lands in Mysore and Bangalore, and encouraged farms to practise silkworm breeding. This was the birth of Mysore silk; it is not well-known that Jamsetji was responsible for it.
TATA STEEL
Jamsetji had attended a lecture in London where the speaker emphasised the value of Iron. The speaker said the ones who understood the value of Iron would reap its weight in gold. The point stuck with Jamsetji, and he started reading a report by a German geologist about the abundance of mineral deposits in the Chanda district of Central India.
He sent mining samples for testing, but the iron was of lower quality and low calorific value. However, he kept hope and went around for the next seventeen years to find Ore and set up a plant.
Jamsetji went to the USA to study the big steel plants and hired ridiculously expensive geologists to visit India.
Around 1904, Dorabji( Jamsetji’s son) got too busy finding ore. After seeing countless sites with poor or good quality iron but no water source nearby, fortune favoured the persistent. TATAs received a letter from a geologist called P.N Bose, who said that there was a rich iron ore reserve in the Bengal province, and the king in Bengal was ready to give favourable terms to the TATAs.
They had finally found what they needed: the soil had 60% iron ore content, with two large rivers and a railway station nearby. Jamsetji had incredible confidence and hence asked Dorabji to build wide roads for trucks to transport efficiently and to plant fast-growing trees as the plant would generate a lot of heat and carbon dioxide. He even directed him to build hockey, football fields, temples, and Mosques.
The TAJ hotels
With the onset of the twentieth century, Bombay was growing rapidly, and a strong divide began between the Britishers and Indians. Three hotels catered to visitors in Bombay: Esplanade Mansion for Indians, Great Western and Apollo Hotel for Britishers. The story goes that Jamsetji was rejected a stay in one of the two hotels meant for whites and decided to build a hotel himself. We don’t know if this happened, but we do know that all three hotels were of dismal quality, and Bombay really needed a world-class hotel.
Following a pooja on November 1 1898, the work began with little delay or publicity. It wasn't easy to dig 40 feet deep near the sea, but Jamsetji had a vision that wanted all the hotels to face the seaside. The architects hired for the projects built the Victoria Terminus and the Churchgate railway station. The doors opened on 16th December 1903, leading to the beginning of one of India's most iconic hotel chains, the Taj Hotels.
Indian Institute of Science
Jamsetji recognised the need for scientific awareness for a country to thrive. He envisioned a first-of-its-kind science institute to ensure that India had no shortage of Science students. He had met Swami Vivekananda in 1893, and they became good friends. Jamsetji insisted on him joining him for the dream project.
Despite a lot of pushback from the then Viceroy of India, Lord Curzon, Jamsetji still had hope and contacted the Secretary of State of India, Lord Hamilton and gathered enough support to begin the construction of IISc. jamsetji donated 1.25 lakh rupees at that time and was confident many industrialists would understand the cause and donate. Only the Maharaja of Mysore and Industrialist Chablidas Lalubbhai came forward, and thus began the institute's construction. Jamsetji was hell-bent on making it happen and said in his will, “ In case the institute does not come up in my lifetime, my personal wealth may be used to build the same.”
His efforts led to the establishment of IISc, but Jamsetji could not live to see it complete.
His ambitions were too many for a single life; he single-handedly transformed multiple industries and sowed the seeds of modern-day India. There was no gain as a business to set up this institute, yet Jamsetji TATA showed unwavering dedication that could only be because of his love for India
The Rise of Dorabji Tata
TISCO( TATA steel)
With the discovery of iron ore reserves, the next Part was to find adequate capital to build the factory. Dorabji met numerous businessmen, bankers, and investors to fund the ambitious project, but people doubted India's ability to set up a steel plant. Dorabji himself was not in favour of raising capital from foreigners. Nationalism was at its peak, and the overwhelming angst against British rule woke up the few rich businessmen in India to fund the project by Dorabji. He opened a public issue worth 23 crores and 15 crores available for the common man. Thousands of people stood in line the next day to invest the money. In two weeks, around 8000 people had invested; the Maharaja of Gwalior invested 400,000 pounds. Tata Steel (known as TISCO during those times) united the citizens of India and was inaugurated soon. People would flock to Mayurbhanj just to see what the factory looked like! TISCO was paid homage to by Jawaharlal Nehru, Mahatma Gandhi, and many other leaders.
TISCO played a pivotal role during World War I, where they supplied steel for manufacturing tanks and other products. The then Viceroy even praised the TATAs and TISCO. He proceeded to rename the town Jamshedpur as a tribute to Jamsetji Tata. His uncle, RD TATA, played a big role in stabilising the company post-WW1 recession.
Other ventures and feats.
The TATAs set up TATA Oil mills( TOMCO), the first time a woman was appointed in a factory! There were loud protests amongst the employees, but the TATAs stood by their actions, and the protest finally died down. It is a testament to the social integrity that the group has lived by.
TOMCO was responsible for making the use of soaps common throughout India. The TATAs were growing fast; they laid the foundation of Indian cement in 1912 and proceeded to set up the TATA Industrial Bank and New India Assurance.
In 1932, Dorabji Tata sailed for London to pray for his wife's grave, but he died of a massive heart attack. He was laid next to his wife as he had requested.
While Jamsetji TATA flew high, Dorabji Tata was responsible for steering the flight towards safety and consolidating their businesses when necessary. His actions played a big role in ensuring the stability of numerous TATA businesses.
Post his death, TATAs were left without a chairman. However, the adopted son of the younger brother of Dorabji Tata was named the vice chairman, while the chairmanship was given to Nowroji Sakatwala, Jamsetji's nephew. He did well as a chairman but unfortunately passed away two years later.
Little did everyone know that the next chairman of the TATA group, JRD Tata, was to become the industrialist of the century and take the group to heights unimagined.
This concludes the tenure of Jamsetji Tata and Dorabji Tata. The next part of the series will focus on JRD Tata and Ratan Tata.
Key takeaways
Nussarwanji Tata set up the first business in the form of cotton trading
Jamsetji Tata soon joined him and achieved great success by establishing the Empress mills.
He ventured into other businesses by setting up Taj hotels and Mysore Silk production.
Jamsetji Tata laid the foundation of IISC and TATA steel but couldn't live to see them complete.
Dorabji, the son of Jamsetji Tata took charge of the firm and completed the TATA steel project and the IISC project.
He set up other businesses as well, such as TOMCO, Indian cements, TATA Industrial bank and New India Insurance.
He passed away in 1932 and soon, JRD Tata became the chairman and took the group to new heights.
References
Kuber, Giresh, and Vikrant Pande. The Tatas: How a Family Built a Business and a Nation. HarperBusiness, 2019.
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