The Ratans in Tata's Crown

IF SALIM-JAVED — the famous film writer duo behind Big B blockbusters Sholay, Deewar and Don — were to pen a script on Ratan Naval Tata in vintage Bollywood style, the movie's opening shot would show a 23-year-old shovelling limestone into a fiery blast furnace, a la Amitabh Bachchan style. This is no figment of imagination! Tata, indeed, sweated it out in Jamshedpur in the '60s. Despite a life of privileges, Tata, back then, fresh from Cornell University after completing his degree in architecture, was denied the luxury of a car and, instead, he was told to cycle down to work as he was an intern. But the rebel in him went one-up — he chose to walk it out like the other workers! During the three months on the shop floor, Tata also got his hands dirty by shovelling limestone into the "F" blast furnace that even today spews molten metal for the country's largest steelmaker.

The backstory is just a peek into Tata's personality — humble, yet a man of his own gumption and pride. His ascent to the top of Bombay House was no less legendary as he took on the old satraps. After all the accolades and brickbats, Tata capped his innings as the group chairman in 2012, when he turned 75. The exit came on the back of a spectacular performance. During his 21-year reign, group revenues grew 46 times to ₹4.75 lakh crore by FY12, while profits surged 51 times to over ₹33,500 crore. More notably, as Tata harnessed opportunities beyond the shores, overseas revenues for the group vaulted from 10% to 67%.

But then old habits die hard — Tata kept his entrepreneurial zeal alive. In the ensuing decade after retirement, he donned the cape of an investor by investing in 53 start-ups, of which three got acquired. Just as the privately held Tata Sons — the group-holding company — has a diverse presence across businesses, Tata's portfolio is no different. Right from lingerie to pet care, e-commerce to healthcare, genetics to artificial intelligence, Tata has been far more adventurous about his personal investments by participating across the entire funding curve — from angel to growth rounds.

According to Fortune India-Waterfield research, Tata's personal wealth is estimated at ₹12,609 crore, of which a majority (92.30% or ₹11,638 crore) is on account of his 0.83% stake in Tata Sons. The remaining ₹971 crore is the value of his holding in 28 start-ups, as per data from Tracxn. Of the 28, his cumulative investment of ₹100.28 crore in 23 start-ups is now worth ₹763.27 crore. In the other five start-ups, for which Tata's investment details are not available, but based on his stakes, the valuation is estimated at ₹208 crore. Details for the remaining start-ups could not be ascertained by Tracxn. Ratan Tata's office did not respond to an e-mail sent by Fortune India.

His personal investment vehicle is christened RNT Associates Pvt. Ltd., with offices in Mumbai and in Singapore. Currently, Tata's trusted aide, R.K. Krishna Kumar, and Tata are the only two directors in RNT Associates. Besides, Tata has also invested through a fund christened, UC-RNT, in partnership with the investment arm of the University of California. The fund, registered as an alternative investment fund in India, has reportedly invested in Ola, Ant Financial, Mwipe, NestAway, LivSpace, YourStory and Axio Biosolutions, among others. While the initial plan was to have a corpus of $300 million, it is still not clear if the fund is actively co-investing. UC Investment's chief financial officer, Jagdeep Singh Bachher, told Fortune India that he would not be able to comment on the investments.

Since Tata also acts as an adviser to three venture capital firms — Kalaari Capital, Chiratae Ventures (IDG Ventures India) and Jungle Ventures — he has co-invested in some of the funds' portfolio companies. For instance, Tata has invested in seven start-ups — which are part of Kalaari's portfolio. "We would curate a set of companies and the founders would send information to him. A couple of days later, he would convey his decision. His investments had little to do with monetary outcomes and more about the strength of the idea and person behind it," says Vani Kola, founder and MD, Kalaari.

On how he makes an investment decision, Tata had some years back, at an event organised by Chiratae Ventures, said, "In my case, company selection is more by intuition rather than numbers." But the biggest influence for Tata in making an investment is the intent of the founders.

Kola believes Tata's ability to connect with the founders is what seals the deal. "He has an almost child-like curiosity in a way that puts people at ease. He wouldn't mind saying to a founder: 'you know more about it than I do.'" Not surprising that Tata has a demi-god status within the start-up ilk. Kunal Bahl, co-founder of Snapdeal, one of the very first e-commerce investments made by Tata in 2014, says, "I do not know what his financial objectives are, but what comes across very clearly about Mr Tata is the genuine empathy he has for founders as, possibly, he himself has experienced the vagaries of entrepreneurship," says the 38-year-old.

Another investee, Neha Singh, co-founder of Tracxn, recalls her first meeting with Tata. "It was scheduled for 45 minutes but the interaction lasted for an hour and a half. The questions that Tata asked were what you would typically hear from a VC," says Singh.

Though Tata tends not to participate in subsequent funding rounds of his investee companies, he does lend an ear to the founders. "He would give guidance on how people think and act as he has been in similar situations before, and is quite wise about that," says Bahl.

While currently there are eight Unicorns, start-ups valued over $1 billion, in Tata's portfolio, it is not clear if Snapdeal's valuation has come off as the start-up has not gone in for fresh funding since 2019. Instead, it is looking to go public. "We have filed our draft red herring, but it's still early days given the state of the market," says Bahl. There are only three high-value double-digit investments that Tata has thus far made in his portfolio, for which details are available. One of them, Snapdeal, went through a business model change with a focus on value commerce. It was last valued at $1.2 billion in 2019. But Tata's ₹10-crore investment is now worth ₹7.72 crore, as Snapdeal's valuation slid from close to $2 billion in 2015.

On a notional value basis, the other two heavyweights in Tata's portfolio are cult.fit (previously cure.fit) and YourStory Media, where he has cumulatively invested ₹70 crore. Based on the cap tables, cult.fit's ₹51.75 crore is the single-biggest investment made by Tata, both as an angel investor and through RNT Associates in Series A round. That investment is now worth ₹348 crore. The other chunky investment of ₹18.20 crore in YourStory is now worth ₹28.78 crore. But the biggest gainer, in percentage terms, is Upstox, an online stock trading platform, in which Tata's ₹1.36 crore investment is now worth ₹267 crore, a gain of 196 times.

In terms of exits, Tata's cumulative investment of ₹1.43 crore in three start-ups — Ampere Vehicles, Lenskart and Zivame — has fetched him ₹5.04 crore, translating into a return of 3.52x. While Reliance bought lingerie maker Zivame in December 2020, Ampere was acquired by Greaves Cotton in October 2018. On an investment of ₹1 crore in Ampere, the exit fetched 90% gain at ₹1.9 crore. However, Zivame investment was a loss-making one as Tata sold his stake for ₹9.1 lakh against an investment of ₹9.97 lakh. Bumper returns came from Lenskart when Tata exited in a Series G-2 funding round of ₹657 crore. While Tata had invested ₹33 lakh in the eyewear major, the exit amount was worth ₹3.05 crore, fetching a gain of 824%.

It's not known to whom Tata, who turns 85 this December, will bequeath his wealth to. A bachelor, Tata has lived life on his terms — as a passionate industrialist, a committed philanthropist, a dog lover, and as a supercar and jet enthusiast. The latest in his bucket list is relearning to play the piano.