Opinion
Ratan Tata’s will: Why the Tata model is still an inspiration for the rich
Summary
- Ratan Tata’s relatively modest wealth, as seen in his bequest, reflects the Tata Group’s structural orientation. Its commitment to charity should inspire today’s billionaires even if the Tata structure itself seems outdated.
For a business group whose market value peaked above $400 billion last year, it’s remarkable that the man who had long been at its helm was not even a billionaire. The personal wealth of Ratan N. Tata (1937–2024), as revealed by his will that awaits execution, has broadly been estimated at ₹3,800 crore. This works out to $444 million, a sliver that would hardly be visible in a pie-chart of what the Tata Group is worth.
In an era of India producing billionaires thick and fast, Tata’s relatively modest net worth stands out. Nobody familiar with the group would be surprised, though. It reflects its charity orientation that goes back to its founder Jamsetji N. Tata (1839–1904), although the group’s broad structure is a legacy of his successor Dorabji Tata (1859–1932), who left his stake in Tata Sons, which held stakes in its group companies, to a clutch of charities.
Also Read: Equity analysis: India’s billionaire boom isn’t a sign of a hunky-dory economy
Today, Tata Trusts hold a majority in the holding company and value generation for philanthropy remains the overarching purpose. Ratan Tata himself owned little. Even so, the bulk of his bequest, once it’s legally held valid, will go to charitable causes via the Ratan Tata Endowment Foundation and Ratan Tata Endowment Trust. This conforms with the group’s long-held values and model of capitalism, one that Mahatma Gandhi favoured—with business acting as a fount of funds for public welfare through ‘trusteeship.’
As reported, while Tata’s will assigns his shares in Tata Sons to the Foundation by his name, his wider equity portfolio will be shared with the Trust, including his investments in various startups. As for the rest of his financial holdings, a third has been left to his half-sisters Shireen Jejeebhoy and Deanna Jejeebhoy, and another third to Mohini M. Dutta, a former Tata employee. Ratan Tata’s brother Jimmy N. Tata gets a half-shared bungalow in Mumbai’s Juhu, with the other half left to his half-brother Noel Tata and Noel’s mother Simone Tata. An Alibaug estate has been willed to Mehli Mistry.
Also Read: Ratan Tata made India a better, kinder place
Among sundry provisions, a ₹12 lakh corpus will be created for his pets, some loans will be waived and cash sums awarded to people who served him. Among other assets bequeathed, Ratan Tata’s art and watches have attracted some chatter online. But for all the trappings of luxury, he owned very little in the context of his undisputed stature as one of India’s most powerful and successful industrialists.
To be sure, the Tata Group’s structure can seem outdated in an era of closely held businesses and takeover threats. Its complexity can throw up its own problems, as seen in Tata Sons’ run-in with a regulatory detail. As the holding company was classified as an ‘upper layer’ non-banking financial company (NBFC) under Reserve Bank of India rules, in 2022 it was asked to go public and enlist its shares.
Also Read: Manu Joseph: Why Indians who didn’t know Ratan Tata liked him
As reported, Tata Sons’ financial assets were more than half its total assets, while financial income was over 50% of its total revenue. It has since reduced its debt by about ₹20,000 crore to adjust its operational profile in an effort to have its NBFC tag dropped, but the issue is yet to be resolved. This muddle can plausibly be traced to the demands of capital management, on which the group has had to keep a complex balance.
Its do-gooder structure may find few takers today, but its structural commitment remains exemplary. It should inspire multi-billionaires, above all. It doesn’t take more than $1 billion to live well, evidently, and while big money must be re-invested in business growth, there’s also plenty to be done for the needy.
