Tata Motors of India keeps its growth plan on track

MUMBAI, India -- A slew of recent acquisitions, including for Britain's Tetley Tea and Boston's Ritz-Carlton Hotel, have thrust the Tata conglomerate — comprising 98 companies — into the global spotlight.

A year ago, Tata Steel became the world's sixth-biggest steelmaker when it bought Britain-based Corus Group for $13 billion. Then in January, Tata Motors grabbed the world's attention when it unveiled the planet's cheapest car: a $2,500 four-seater, the Nano, that could change the global auto industry.

The company has also been named the preferred bidder for Ford Motor's Jaguar and Land Rover businesses.

"We have been thinking bigger than we have done in the past," said Chairman Ratan Tata, 70, in an interview at Bombay House, the group's headquarters. "We have been bolder … and we have been more aggressive in the marketplace."

In five years through March 2007, annual group sales more than doubled to $29 billion, while market capitalization of its 27 listed companies increased six-fold, to $78 billion. The numbers do not include Corus, with sales totaling $19 billion in 2006.

While recent rapid earnings growth at Tata Steel and Tata Motors has slowed, net profit at Tata Consultancy, India's biggest outsourcing company, rose 21% in the October-December quarter.

The globalization strategy will only get bigger, said Tata. "We are at an early stage."

For decades after India's independence from Britain in 1947, the government fixed prices, imposed curbs on foreign goods and capital, brought draconian tax laws and set limits to what a company could produce. The restrictive regime stifled growth and bred corruption.

The Tata Group was hit harder than others because it strove to create a business culture that emphasized transparency and integrity. Tata executives are known for refusing to pay bribes, a widespread Indian practice, and their lifestyles are mostly modest.