How does Tata company work, what is the difference between Tata Group, Tata Sons and Tata Trust? – Read

There is often confusion among the people regarding Tata Group, which works in many sectors like airlines, cars, luxury hotels, software, retail etc., how does such a big company work? Who owns it? Why is Tata Trusts so important in Tata Group and Tata family? So let us tell you today how the business of Tata company runs?

Recently, the company’s honorary chairman Ratan Naval Tata passed away. After this, the biggest change that happened in the Tata Group was that his half brother Noel Naval Tata was made the chairman of Tata Trusts. And it is believed that the person who heads Tata Trusts in the Tata Group is, in a way, the owner of the company. Why is Tata Trusts so powerful?

Tata Trusts and its work

You already know that Jamsetji Tata, who hails from Navsari, Gujarat, started the Tata Group. He had two sons, Sir Ratan Tata (grandfather of Ratan Naval Tata) and Sir Dorabji Tata. A trust was formed for both of their properties. Due to this, Sir Ratan Tata Trust came into existence in 1919 and Sir Dorabji Tata Trust in 1932. Today these two largest trusts are included in Tata Trusts.

Later, separate trusts were formed for his family members or the work done by him for the welfare of the society. It started allied trusts of these trusts like Tata Education Trust, Tata Social Welfare Trust, Nawazbai Ratan Tata Trust, Public Service Trust, Jamsetji Tata Trust, JRD Tata Trust, Lady Meherbai Tata Trust and Lady Tata Memorial Trust etc.

Now, ‘Ratan Tata Endowment Trust’, formed recently after the death of Ratan Naval Tata, will also become a part of this Tata Trusts. In this way, the work of managing the property of the members of the Tata family is done by these different trusts and the work of managing all these trusts is done by Tata Trusts. It is run by a board.

Tata Trusts holds about 66 percent stake in Tata Sons. In this way, Tata Trusts does the work of controlling Tata Sons. Tata Trusts does many charitable works for the country and society. Like running Tata Memorial Hospital, empowering women of Parsi community through Sir Ratan Tata Institute, promoting many educational institutions etc. In this way, Tata Trusts is considered one of the largest philanthropic organizations in the world.

Role of Tata Sons

Now, what does Tata Sons, in which Tata Trusts holds about 66 percent stake, do? Let us tell you that Tata Sons is actually a holding company of Tata Group. Tata Group has more than 100 companies working in different sectors. Of these, there are about 30 companies which are listed in the stock market. Tata Sons is ultimately responsible for managing all these companies. Let us understand it in simple language…

Suppose there is a joint family. In this, grandfather is the head of the family. He has three sons who run their own businesses independently. But when they suffer losses in business, or need money for expansion or starting a new business. Then apart from raising money from his own sources, he asks for help from the head of the family or grandfather. Grandfather helps, but in return he keeps a stake in his sons’ company, so that he can be consulted once before taking any major decision. ‘Tata Sons’ plays the same role of grandfather in Tata Group.

Tata Sons actually works as a promoter in Tata Group companies. It works like a finance company for the Tata Group. She is the owner of the logo and name of Tata Group. Tata Sons gets royalties for Tata Group companies to use its name. The company also earns money from the stake it gets in Tata Group companies and then it is up to Tata to decide how to use the money received by the company. The Board of Trusts does.

size of tata group

Tata Group is actually the business formed by combining all the companies associated with Tata. Be it Tata Consultancy Services or Tata Motors, Tata Steel, Tata Power, Titan, Tata Projects, Air India, Indian Hotels Company, owner of Taj Hotel, Tata Consumer Products, Tata Chemicals, Tata Tea, Voltas, Trent and Croma or Big Basket. All of them are part of Tata Group.