RIP Ratan Tata: Two Decades of Tata Stocks Driving Wealth Creation on Dalal Street

In the last two decades, Titan Company Ltd has delivered staggering returns, skyrocketing by 509.33 times. From a modest price of Rs 6.86 per share, Titan’s value surged to Rs 3,494.05 by March 31, 2024, marking an astounding 50,834 percent growth. This remarkable performance made Titan one of the star wealth creators on Dalal Street, benefiting numerous investors, including the legendary investor Rakesh Jhunjhunwala, who became a multi-billionaire largely due to his stake in the company. Today, his wife, Rekha Jhunjhunwala, continues to hold Rs 16,651 crore worth of Titan shares, symbolizing the lasting impact of this investment.

Tata Group Stocks as Wealth Creators

Over the past 20 years, Tata Group stocks have consistently proven their wealth-creating prowess, with more than a dozen stocks delivering over 20 times returns. Besides Titan, several other Tata companies, including Trent Ltd, Voltas Ltd, and Tata Elxsi Ltd, have provided investors with exceptional gains ranging from 116 to 509 times. These staggering returns highlight the Tata Group’s significant contribution to investor wealth over time, driven by its innovative business strategies and visionary leadership.

Ratan Tata’s Role in the Tata Group’s Growth

As the iconic industrialist Ratan Tata passed away, many on Dalal Street credited his 50-year career at the Tata Group as a major force behind the conglomerate’s success. Under his leadership, the Tata Group reached a $365 billion market value by March 31, 2024, enriching shareholders and investors alike. Ratan Tata’s unique vision and determination played a pivotal role in transforming the salt-to-software giant into a global business empire.

Global Acquisitions that Transformed Tata Group

A key component of Ratan Tata’s legacy was his ambitious global expansion strategy. During his tenure, the group made several high-profile acquisitions, including Tetley Tea, Corus, Jaguar Land Rover, Brunner Mond, General Chemical Industrial Products, and Daewoo. These moves showcased Tata’s willingness to go beyond India’s borders, positioning the group as a formidable player on the international stage.

In addition to these acquisitions, Tata’s bold decision to launch the Tata Nano, a Rs 1-lakh car aimed at making automobiles affordable for the Indian middle class, demonstrated his forward-thinking approach. Though the project faced challenges, it was emblematic of Tata’s drive to innovate and serve society.

Contributions to India’s Growth and Investors’ Wealth

Ratan Tata’s leadership not only propelled the Tata Group’s success but also had a significant impact on India’s economic growth. According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, Tata’s visionary approach allowed millions of ordinary investors to benefit from the growth of the group. Vijayakumar emphasized that investors can learn from the Tata Group’s success, particularly the importance of maintaining a long-term investment horizon to truly capitalize on wealth creation through the stock market.

As Vijayakumar noted, while there may be valuation concerns during bull markets, companies like those built by Ratan Tata are capable of creating sustainable wealth for investors over time. The Tata Group’s consistent performance over the last two decades offers a clear example of how patient, long-term investing can result in significant returns.

Iconic Companies Driving Long-Term Returns

The Tata Consultancy Services (TCS) listing marked the beginning of an era of impressive returns from Tata stocks. Titan’s returns of 509.33 times stand out, but several other Tata companies also delivered exceptional gains. Trent Ltd, a major player in retail, achieved an impressive 27,888 percent (279.87 times) return in 20 years. Voltas Ltd, known for its consumer durables, provided investors with 136 times returns, while Tata Elxsi Ltd, a leader in IT and engineering services, delivered returns of 115.97 times.

Ratan Tata’s Legacy of Philanthropy and Business Vision

Ratan Tata succeeded JRD Tata as Chairman of Tata Sons and the Tata Trusts in 1991, leading the group through several decades of growth and innovation. Tata Sons, the holding company for Tata companies, is largely controlled by philanthropic trusts, with 66 percent of its equity share capital dedicated to funding education, healthcare, livelihood generation, and the arts. This reflects the Tata family’s deep commitment to social responsibility and charity.

Ratan Tata stepped down as Chairman of Tata Sons in December 2012 after 50 years of service but was honored with the title of Chairman Emeritus in recognition of his contributions. His leadership transformed the group into a global powerhouse, and his vision continues to influence the business world.

Multibagger Returns from Tata Stocks

Apart from major names like Titan, Trent, and Tata Elxsi, several other Tata Group companies delivered substantial returns. Artson Engineering Ltd, Rallis India Ltd, Tata Investment Corporation Ltd, Benares Hotels Ltd, and Tata Consultancy Services Ltd offered 28 to 91 times returns in two decades. Other stocks like Nelco Ltd, Tata Consumer Products Ltd, The Indian Hotels Company Ltd, Tata Power Company Ltd, and Tata Motors Ltd also saw gains ranging from 10 to 20 times over the same period.

Tata’s Role in Startups and Future Prospects

Beyond listed companies, Ratan Tata’s foresight extended into the startup ecosystem, where he invested in several growing firms such as Upstox, Lenskart, FirstCry, Snapdeal, Moglix, and Paytm Mall. These investments reflect Tata’s belief in fostering innovation and supporting new-age businesses.

The Tata Group’s ongoing expansion, both in traditional industries and in emerging sectors, highlights the enduring impact of Ratan Tata’s leadership. His contributions will continue to shape the group’s trajectory, benefiting future generations of investors and entrepreneurs.