Tata #1: Not Among India's Richest

The list of the richest Indians includes the Adani’s, Ambani’s, Birla’s… but not the Tata’s. Even though their business empire covers everything under the sun.


 

The answer, writes Shashank Shah in The Tata Group, lies in the ownership structure. The first set of Tata’s donated a huge part of their estate to two charitable trusts. Those two trusts hold a lot of shares in Tata Sons. What is Tata Sons? It is the promoting company of the entire Tata Group and a significant share holder in many of the companies shown in the pic above. Today, all the trusts (more were created over the generations) put together hold over 66% of Tata Sons.

 

What is Ratan Tata’s share of Tata Sons? A mere 0.83%. That is the answer as to why the Tata family and Ratan Tata don’t show up as the richest folks in India.

 

Note: The trusts are mandated to spend 85% of the dividends received from all those Tata companies. That’s a huge amount of money that the Tatas have been ploughing back into society… for almost a century. Professor Gras of Harvard noted:

“(The Tatas) socialized the business by transferring much of the ownership to charitable trusts. And we in our time have thought that we (America) were original in some of this socialization from within.”

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