This story belongs to the Fortune India Magazine January 2025 issue.
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ON OCTOBER 28, 2024 a large crowd thronged the 2-kilometre stretch of Vadodara’s airport road. Prime Minister Narendra Modi and Spanish President Pedro Sánchez were set to inaugurate the final assembly line of the newly-built Tata Advanced Systems-Airbus factory for manufacture of C295 defence aircraft. It was the first time that a private sector company would oversee spot manufacturing, full assembly, and maintenance of such aircraft in India.
It was less than three weeks after the passing away of the iconic Ratan Tata. As tributes poured in from guests, including Michael Schoellhorn, CEO, Airbus Defence and Space, and Natarajan Chandrasekaran, chairman, Tata Group, it was the presence of Noel N. Tata, Ratan Tata’s successor at Tata Trusts and his half-brother, that stood out for its understated elegance. Noel’s name was notably absent from the plaque unveiled jointly by the two heads of state. In fact, during the factory tour, he walked a step behind the more prominent figures, a position he seemed accustomed to.
Noel Tata prefers to shun the limelight despite the legacy that comes with his name. Much like the brevity of his letters to shareholders as chairman of Trent Ltd., he is a man of few words, preferring action over accolades.
“He is hardworking, cautious and systematic,” says a CEO with a foreign firm in relationships with the Tata Group. However, his elevation as chairman of Tata Trusts is a pressing priority that demands a considerable amount of influence and authority to be wielded within the group as well as outside. As a global conglomerate, Tata Group has relationships with governments in developed and developing worlds, and corporates in every sector.
So, what is Noel’s vision for the group?
He will be a customer-centric business leader, focused on creating something afresh every time, says a senior executive in the know. As in the case of Bernard Arnault, chairman and CEO, LVMH Moët Hennessy-Louis Vuitton, Noel believes in balancing financial discipline and creativity. He is focused on offering products catering to customer aspirations at affordable price propositions. “Noel believes in upgrading products every time without additionally charging the customer,” says the executive quoted above. Noel is not a profit-focused businessman. For him, profit is the by-product of the company’s classic offerings.
“He prefers the calibrated aggression that Ratan Tata followed. He will stand for modernisation of the existing businesses of the Tata Group for their next leg of evolution. At the same time, he won’t leave any opportunity unattended,” says a former Tata executive.
And surely enough, history bears witness. In 2022, a partner company of Trent wanted to go aggressive in the Indian market as segment rivals were expanding rapidly. But Noel Tata took the call to be cautious since the segment was going through a transition thanks to new technologies, says an insider. “His (Noel’s) style of functioning is calm and composed. He wants meaningful disruption.” Trent added 850-plus stores in the 25 years of its operations, of which 250 were added last year alone.
But Noel’s litmus test is likely to be the handling of Tata Trusts. He will have to protect the interests of trusts in Tata Sons as the sole income of trusts comes as dividend from the holding company. As the principal shareholder in the group’s holding company Tata Sons, with a 66% stake, Tata Trusts earned ₹933 crore as dividend income from Tata Sons in FY24, compared with ₹467 crore in FY23.
“Two big trusts — Sir Dorabji Tata Trust and Sir Ratan Tata Trust — were created by the sons of Jamshedji Tata and they willed the income of trusts to be deployed, as per trust deeds, in philanthropy. It is the responsibility of the chairman of Tata Trusts to ensure the cash flow to charity projects,” say sources within the group.
Former group executives say Tata Trusts stopped being a benign shareholder following the ouster of then Tata Group chairman Cyrus Mistry in 2016. In fact, the appointment of Noel Tata on the board of Tata Sons in November indicates the active shareholder status of Tata Trusts. With the appointment, Noel became the first person to hold dual roles, after Ratan Tata.
“Noel’s selection is a vote for continuity, not a vote for change,” says Dhanpal Jhaveri, CEO at Eversource, a climate investment platform. It is true that there is nothing urgent in the group that Noel needs to immediately take action on.
Guardian of Trusts
The 26th floor of World Trade Center-1 at Cuffe Parade, Mumbai, the main office of Tata Trusts, was abuzz on October 11 as the board huddled to find the new chairman. The decision was unanimous, says an insider. “Ratan and Noel are different in persona, but same in their humility and broader perspectives on business and philanthropy.” Noel joined the board of Sir Ratan Tata Trust in 2019 and Sir Dorabji Tata Trust in 2022. He was the front-runner to be the chairman of Tata Sons in 2011, but Ratan Tata had a different view, says an old timer. The senior Tata had once openly said his half-brother (both are sons of Naval Tata) required more experience to succeed him as Tata Sons chairman.
The selection of the late Cyrus Mistry, whose sister Noel is married to, was unexpected. With that decision, Ratan Tata kept the Mistry family — the largest shareholder in Tata Sons besides Tata Trusts — on his side and evaded the questions on Noel. But it took barely four years (2012-2016) for Mistry’s ouster — he was sacked on performance issues besides deviating from the “culture and ethos of the group”. The Shapoorji Pallonji (SP) Group of the Mistrys owns 18.4% stake in Tata Sons.
In 2022, shareholders of Tata Sons amended Article 118 of the Articles of Association (AoA) to ensure separate chairpersons for the holding company and Tata Trusts. The move was essentially to decouple ownership and management, and maintain the balance of power.
According to the new AoA, the chairman of either of the two Tata Trusts will not be eligible to become the chairman of Tata Sons. Till 2012, Ratan Tata, who chaired Tata Trusts, was also the chairman of Tata Sons. But subsequent chairmen — Mistry and Chandrasekaran — have not chaired Tata Trusts. Chandrasekaran has been leading Tata Sons since 2017.
But the trusts are no more detached from group companies with the appointment of Noel Tata on the board of Tata Sons. He is the third nominee of Tata Trusts, besides Tata loyalists Venu Srinvasan (TVS group chairman) and former bureaucrat Vijay Singh. These three, along with Mehli Mistry, a staunch supporter of Ratan Tata, who is also the first cousin of Cyrus Mistry, form the executive committee that oversees the functioning of Tata Trusts.
Other trustees include Ratan Tata’s brother Jimmy Tata, senior advocate Darius Khambata, professionals Jehangir H.C. Jehangir, J.N. Mistry, and former Citibank India CEO Pramit Jhaveri. Noel and Aloo Mistry’s children — Leah, Maya and Neville — are part of allied trusts — Sarvajanik Seva Trust, Tata Social Welfare Trust, JRD Tata Trust, Tata Education Trust, RD Tata Trust and The JRD and Thelma J Tata Trust.
The major decisions of Tata Group companies, whether it’s high-stake acquisitions such as Corus Plc, Jaguar Land Rover or Tetley, or rising debt levels, are discussed during the holding company’s board meetings. Capital infusion in Tata Motors and Tata Power was similarly discussed to pare debt at the company level. It was the board’s call on infusing a major portion of Tata Sons’ cash in the last five-six years to pay off Tata Teleservices’ bank loans and other dues to the Department of Telecommunications, totalling around ₹60,000 crore.
The chairman of Tata Trusts will have to take a view on the developments in various group companies, says a Tata executive. “He will have to protect the interests of trusts and its corpus. His views will have a greater weightage.” However, considering his low-profile nature, Noel Tata would prefer to stay out of the discussions around the operations of group companies.
Another big task will be the selection of the future chairman of Tata Sons. Chandrasekaran was reappointed in 2022 for five years and his second term will end when he turns 64 in 2027. Noel Tata, 67, gave up his executive roles at group firms when he turned 65. The age mandates such retirement in group companies, non-executive directors have to quit board positions at 70.
Tata Trusts will have its representation in the selection committee for the chairman of Tata Sons. Noel will have a role there, as well as indirectly in the selection of CEOs and independent directors at group firms. “At present, loyalists of Ratan Tata got placed as directors in group companies. It won’t change immediately, but definitely in the long term,” says an industry expert.
According to recent reports, the trustees have been made permanent members in two major trusts, putting an end to fixed-term appointments. It means no retirement for board members till they decide to step down. Also, new members will be appointed only after unanimous consent. The decision was taken by the board after the death of Ratan Tata, say reports.
This shows Noel’s interest in maintaining status quo and his keenness to give confidence to old-timers. In its fight with the SP Group, Tata Trusts, even under Noel’s chairmanship, has maintained its earlier position, opposing the transfer of the former’s 18.4% stake in Tata Sons as collateral for fresh loans, on grounds that the shares of Tata Sons are not freely transferable under the AoA.
At the trusts, which support institutions majorly in healthcare, education and rural development besides disbursing grants, Noel Tata is likely to take the improvisation route. He is expected to monitor the outcome of the philanthropic programmes. “Noel has experience in building commercial institutions, including Tata International and Trent. But he is leading the social organisation for the first time,” says Kavil Ramachandran, senior advisor at the Thomas Schmidheiny Centre for Family Enterprise in Indian School of Business, Hyderabad.
“His experience in commercial institutions can be applied in the trusts to build value and measure accountability. Noel can improve the functioning and processes of the trusts with an outsider’s perspective and insider’s interest,” he adds.
Cash Flow and Legacy
While addressing shareholders on the afternoon of June 12, 2024, Noel Tata was brimming with pride and showed his rare eloquence while detailing the milestones achieved by Trent in its 25-year journey. His mother, Swiss-born Simone Tata (the step-mother of Ratan Tata), laid the foundation for growth at the retail business of Tata Group since she joined the board of cosmetics company Lakmé in 1962. In 1996, five years after Ratan Tata became chairman of Tata Sons, the group sold Lakmé Cosmetics to Hindustan Lever, and created Trent with money from the sale.
“We completed 25 years in our retail business. We crossed ₹10,000 crore in turnover for the first time. We crossed ₹1,000-crore profit after tax for the first time. We added 250 stores in the portfolio during the year. We received the prestigious Tata Group’s JRD Quality Value leadership award for business excellence. Trent’s market cap crossed ₹1.50 lakh crore, taking it among the top 50 companies in the country by market cap. Now we are ready to launch Star Bazaar as the third engine of growth,” he told shareholders in a video conference. Trent’s market cap has increased to ₹2.5 lakh crore since Noel’s speech.
Food, apparel, beauty, footwear and home-furnishing segments, in which Trent participates, constitute 60% of the retail market, which is projected to grow to ₹375 lakh crore by 2030. The fuelling consumer demand that results in over 7% GDP growth offers better opportunity for retailers. “We are only in the initial lap of our journey,” Noel said at the AGM. He envisages a bigger play in the consumer business in the next 25 years.
In the last fiscal, Trent opened 30 new Westside stores and replaced several small and poorly located ones with “bigger and beautiful stores”. There are now 232 Westside stores across 91 cities. The value fashion concept, Zudio, is in massive expansion drive, and added 203 stores in FY24, besides upgrade and rationalisation of existing ones. It has 545 stores in 164 cities. Trent is adding another 30 Westside and 200 Zudio stores this fiscal.
The food business, Star Bazaar, is a 50:50 joint venture with British retailer Tesco plc. “Over the last two years, we have modified the strategy which led to strong results in customer numbers, loyalty and delivers strong revenue growth,” said Noel. “We believe, in addition to giving exciting offers, it is critical to establish a reputation for a compelling price proposition to our customers.”
Noel joined the Tata Group 40 years ago, soon after graduating from Sussex University (U.K.) and completing the International Executive Programme from Europe’s non-profit business school, INSEAD. He serves as chairman of Trent, Tata International, Voltas and Tata Investment Corp., and vice chairman of Tata Steel and Titan. During his tenure as MD of Tata International, the trading and distribution arm grew from a turnover of $500 million in 2010 to over $3 billion in 2021. Under his leadership, Trent expanded from a single store in 1998 to over 850 across formats.
The influence of Tata Trusts is enormous as it owns a majority stake in the $165-billion Tata empire that operates over 100 companies; 26 of them are listed with an aggregate market value of over ₹31 lakh crore as on March 2024. Software services giant TCS is the major profit churner for the group. It disbursed nearly ₹80,000 crore as dividend and in buy-back offers to holding company Tata Sons in the last three years. TCS contributed ₹18,177 crore in dividend to Tata Sons in FY24. The holding company received around ₹24,000 crore in dividend from 13 of its listed companies, including ₹2,000 crore from Tata Motors and ₹1,450 crore from Tata Steel.
Tata Sons chairman Chandrasekaran is focused on strengthening traditional businesses, seizing opportunities that emerge out of the transition in those businesses. Tata Motors, for instance, was quick in responding to EV opportunities and had the first-mover advantage. Tata Steel is investing heavily in green steel and green hydrogen projects. Tata Power has decided to stop investing in carbon-intensive coal-fired plants and has taken the renewable power path.
Tata Sons is allocating significant capital to support its ambitious growth targets. According to Chandrasekaran, the capital will largely go into new businesses, since every traditional business can fund its growth. “We will step in if they (traditional businesses) face any capital shortage,” Chandrasekaran told Fortune India during an interview earlier. “We want to be future-ready and create future businesses with strong balance sheets.”
The group has been investing an estimated $18 billion every year since 2022. The capital investment in new-tech businesses could rise from a quarter to half of the overall investment of $90 billion planned for 2022-27. In the five years until FY22, Tata Sons had invested ₹1.10 lakh crore in group companies. While Tata Electronics is expected to invest $10 billion in semiconductor and precision components manufacturing, Tata Digital, which owns super app Tata Neu, will continue to see investments from Tata Sons as well. Air India ordered 470 aircraft last year for $70 billion, and recently added another 100 Airbus aircraft to the list.
“Noel Tata’s objectives are not-for-profit as the trustee and for-profit as the director of Tata Sons. His dual role would be a perfect bridge in the alignment of two contradictory interests of the two institutions,” says Abhijit Joshi, founder and managing partner, Veritas Legal. He would also be the perfect brand ambassador and conscience keeper in both entities, enhancing the Tata brand value as well as value systems the group had perpetuated over decades, he adds.
All in the Family
Ratan Tata, who passed away at 86, had named lawyer Darius Khambata and Mehli Mistry as executors of his will. He entrusted half-sisters, Shireen and Deanna Jejeebhoy, to carry out his final wishes. Ratan Tata held a 0.83% stake in Tata Sons at the time of his death, and had a net worth of around ₹8,000 crore. A large portion of his wealth is dedicated to charity.
Family was Ratan Tata’s support system in his old age. Tata, who never attempted grooming Noel, mentored the latter’s children and introduced them to business and trust activities. Tata knew the importance of handholding the next generation as his own life transformed under the “terrific mentoring” of JRD Tata himself. At a time when the Ambanis, Adanis and Godrejs were celebrating the next-gen takeover, the entry and roles of Noel’s children in the group businesses were kept under wraps.
Ratan Tata endorsed the appointment of Leah (37), Maya (34), and Neville (32) as trustees of allied trusts in 2022. They were inducted on the board of Tata Medical Centre Trust where Ratan Tata was the chair, with an intention to groom them under his watch. Leah Tata, who completed her masters in marketing from IE Business School in Madrid, Spain, started her career interning with Louis Vuitton in 2010. Soon she joined Taj Hotels as assistant sales manager. Currently, she is vice president at Indian Hotels Company, focusing on the development and expansion of Taj Hotels.
Younger sister Maya started off in finance and became part of Tata Opportunities Fund of Tata Capital. Post closure of the fund, she switched to the technology and customer-centric business — the Tata Neu super app from Tata Digital. Maya, who studied at the prestigious Bayes Business School and the University of Warwick, U.K., has a tech and data-analytics focus besides B2C, according to insiders.
The youngest, Neville Tata, 32, was seen greeting the high and mighty along with Noel, when Ratan Tata’s mortal remains were kept at Mumbai’s NCPA lawns for public viewing. He also accompanied his father at the recent swearing-in ceremony of the Maharashtra government. Neville, who has worked only with Trent, is heading Star Bazaar as CEO, following his role in the successful expansion of Zudio.
A graduate from Bayes Business School, Neville prefers a low-profile life like his father. His marriage with Manasi Kirloskar, the daughter of the late Vikram Kirloskar, was a private affair held at Ratan Tata’s Colaba home in 2019. Manasi completed her Bachelors in Fine Arts from Rhode Island School of Design, U.S. After her father’s demise in 2023, she was appointed vice chairperson of Toyota Kirloskar Auto Parts and Toyota Kirloskar Motor. She serves as the chairperson of Toyota Engine India Ltd. and three other companies. The couple has two kids, a boy and a girl — Jamsetji Tata and Tiana Tata, respectively.
According to sources, Neville is gentle and prefers to learn from senior people even in the lower ranks. He is now deputed to ramp up Star Bazaar and the FMCG business of Trent. With the next generation in lead roles, the Tata family is back in the operational side of the business after decades. It may be for the first time in modern history that so many Tatas are part of the group’s business and philanthropy, simultaneously.
Noel has a rare blend of old timers and next gen from the Tata family in the cadre to execute his vision of revitalising the Tata ecosystem. His moves will be unhurried, but well-fortified.
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