As is the case with most retirements, Ratan Tata would surely spare a minute or two over the next week, to ponder over and reminisce about his first day in office of a distinguished 50-year professional career.
Perhaps he would also allow a contented smile at what that same company has been able to achieve in the two decades of his chairmanship.
Tata will step down as chairman of Tata Sons on Friday, handing over the reins to Cyrus Mistry.
Starting out as an intern on a shop floor of Tata Steel in 1962, the company that is often referred to as the bedrock of the group holds a special place in Ratan Tata’s heart — That is where in some ways, it all started.
It was also Tata Steel that presented Tata his first major challenge after taking over the mantle in 1991 in the form of Russi Mody, then the managing director of the company.
A larger-than-life personality, Mody was one of the front runners for the top job and was reportedly unhappy with Tata’s appointment. Following a much publicised spat, Tata came out trumps and Mody had to step down.
While Tata grew in confidence as a result and began to set Bombay House in order, the company gained in the process. Since 1991, Tata Steel has seen its turnover grow over 57 times while profit has surged 33 fold.
It has also made a spate of acquisitions — from direct steel-making assets to mineral resources — spread itself across the world which has helped it insulate itself from the cyclic nature of the commodity business.
The crowning glory of the Tata Steel story however, has to be the $ 12.1-billion (over R50,000-crore) acquisition of Anglo Dutch steel maker Corus in 2007.
For a company that was four times its size and had to be funded largely through foreign debt, the takeover is a barometer of the respect Tatas have garnered over the century and the fundamental strength of Tata Steel as the champion in low-cost steel making.
The deal catapulted Tata Steel into the big league and has been attributed to Ratan Tata’s vision for the firm, drawing praise from even Tata’s most staunch critic, Mody himself.
“I have not been in charge for the last fourteen years, but I think Ratan Tata and (Tata Steel managing director) B Muthuraman have done a first-class job in terms of performance of a steel company,” Mody, was quoted in his biography Russi Mody: The Man Who Also Made Steel.
However, unlike the Tata Motors JLR acquisition a year later, the takeover of Corus has not quite gone according to plan. Analysts have criticised the timing of the deal, at the peak of the commodity cycle, that made the assets more expensive.
The intensity of the meltdown in 2008 that shows little signs of abating in Europe has only made matters worse, a fact that Tata himself rued later.
“Both the acquisitions were made, I would say, at an inopportune time in the sense that they were near the top of the market in terms of price,” Tata told Sunday Times in May 2009.
Corus, now re-branded as Tata Steel Europe, continues to be a stubborn problem. In the last fiscal year, the operating profits for the European operations slumped 62%, bringing down with it the consolidated margins for the firm. While JLR is propping Tata Motors up, Europe is weighing Tata Steel down.
The story this year has been no different. Its finances have see-sawed and it suffered an operating loss in the second quarter of the fiscal.
The restructuring plan of 2009 that initiated job cuts and mothballing plants across the continent, are yet to show an impact.
There are no Modys anymore in Tata Steel but Europe is likely to offer Mistry enough chances to show his mettle.