As this column goes to press, the quiet 43-year-old Cyrus Mistry has been anointed heir to the Tata business empire, bringing to an end years of speculation over who will step into Ratan Tata’s shoes. The elaborate search for a successor has been on for several years; a formal five-member committee, set up in 2010, had drawn a blank. All through, close observers of the group had maintained that the successor will not only be an internal candidate but would be from the Shapoorji Pallonji Mistry family—in effect, the choice would be between Noel Tata and Cyrus Mistry. Noel, who is Pallonji Mistry’s son-in-law and Ratan Tata’s half-brother, had the big advantage of the Tata surname. But he had limited global experience and, apparently, little interest in handling the giant corporate empire of over 100 companies with several formidable CEOs and nearly 0.4 million workers. The quiet Cyrus Mistry was seen as more capable and was considered the more appropriate choice.
Many don’t know that while the Shapoorji Pallonji group is today described as one of the wealthiest families in India, they owe their rise to the Tatas—in particular, to AD Shroff, a financial wizard of the Tata group in the 1950s. Mr Shroff, who was chairman of Bank of India and New India Assurance (in the pre-nationalisation days), was approached by Shapoorji Pallonji Mistry for financial help, when he was a relatively small construction contractor struggling to find collateral for his borrowing. Mr Shroff not only had the loan sanctioned on his personal informal guarantee as chairman, but also helped Shapoorji by giving him construction contracts from New India Assurance. The Mayfair buildings at Mumbai’s posh Malabar Hill were among those that helped Shapoorji build his business and his reputation. For decades afterwards, Shapoorji used to be demonstrably grateful to Mr Shroff. The relationship ended abruptly and badly after Mr Shroff died. However, the Shapoorji group continued to grow rapidly. Old-timers told me that one of Shapoorji’s key strengths was his ability to spot a deal, especially the kind where he got equity in return for financial help. So when Dorab Tata wanted to sell a chunk of his equity in a fit of anger, he found a ready buyer in the Shapoorji Mistry. The rest is history and, for those who know the group, the appointment of Cyrus Mistry was part of this inexorable process too.