InvestorQ : Do you think that the Mistry family and Tatas can actually work together rather than breaking away?
Arti Chavan made post

Do you think that the Mistry family and Tatas can actually work together rather than breaking away?

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Rutuja Nigam answered.
6 months ago
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To an extent, both the parties can stretch themselves a bit. Harish Salve has contended that the Mistry family had substantially benefited from their relationship with the Tatas. That is to a large extent true. The benefits from the loan given many decades ago have been much bigger than the Mistry family had anticipated.

On the one hand, the Mistry family made billions as dividends from Tata Sons. In addition, the construction business of the Mistry family which is their bread and butter has also been a preferred contractor for most Tata construction projects. The association has also enhanced the brand image of the Mistry group which cannot be undermined.

However, there is a lot the Tatas can also do. One option is to convert the Mistry stake, with mutual consent, into more of an institutional investment with limited role in decision making. They can also be compensated for the loss of control. Effectively, that was the model at work till Cyrus Mistry became chairperson of Tata Sons.

Tatas must look to revert to the old model of Mistry family in a passive role in Tata Sons management. This would largely reduce frictions in the group. For most of the past 70 years, the Mistry family and the Tatas have been cordial. That is perhaps still possible.

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