A Magnum Opus and a Powerful Business Empire

A Magnum Opus and a Powerful Business Empire
Sukanta Roy, 1977 Electronics & Tele-Communication Engineering

“जब प्यार किया तो डरना क्या” from Mughal-e-Azam, a fictional saga of the tragic love affair of Mughal prince Salim (Jehangir) with a court dancer, Anarkali, is one of the most poignant love songs in India’s cinema history. Incidentally, the 15-song movie financed by Shapoorji Pallonji, the second generation at Shapoorji Pallonji & Co Pvt Ltd (SPCPL), completed 62 years of its release last August 2022.

In fact, when Shapoorji came on board as producer of the film in 1951, his son Pallonji (father of Shapoor & Cyrus), was nervous about the movie’s escalating budget and wanted his father to pull the plug. Eventually the film, 9 years in the making, costed over ₹1.5 crores, equivalent to today’s 500 crores. It’s release in 1960 – 16 years after the shooting first began in 1944 – broke box office records of it’s time, fetching returns in significant multiples for the Mistrys.

But the investment that altered the fortune of the 157 year old group and continues to power its 4th generation into India’s one of the top 5 richest families, is the investment made by Shapoorji in Tata Sons. The Mistrys hold 18.41% stake in Tata Group’s unlisted holding company, which is currently valued at ₹2,57,995 crores ($32.25 billion) as per independent valuer Fortune India Waterfield Advisors. The stake acquired in three tranches between 1967 and 1974, costed the Mistrys ₹69 crores fetching a 3,739 times in return.

Unfortunately, the Mistry family cannot freely monetise their stake in Tata Sons owing to a fractious fallout with Ratan Tata on the back of Cyrus’s unceremonious exit as Chairman of Tata Sons and a subsequent adverse Supreme Court ruling. Since Tata Sons is an unlisted Private Company, the challenge for Mistrys is that they cannot sell their stake without the approval of Tata Sons (read Ratan Tata). Secondly, Tatas have valued their holding at ₹70,000 – ₹80,000 crores, subsequently lower than that valued by an independent valuer. The problem is compounded by the Tatas rejecting the Mistrys’ proposal to swap the holding for equivalent shares in listed Tata entities, even as the SC verdict is ambivalent on the valuation aspect.

Ironically, Mistrys’ situation can be best described by a dialogue in Mughal-e-Azam, wherein Akbar (Ratan Tata) tells Anarkali (Cyrus & Co) “सलिम (the Tata Sons holdings) तुझे मरने नहीं देगा और हम, अनारकली, तुझे ज़िने नहीं देंगे”। To put it into context, while the legacy of the Mistrys will stay alive in Tata Sons, Ratan Tata will not let the family make most of it. Interestingly in the good old days of bonhomie, within days of assuming office in 1991, Ratan Tata had penned a hand-written note to Pallonji stating: “Our standing together will be a matter of strength …… Let me re-iterate that I will never do anything to hurt you or your family”. That was when he needed Mistrys on his side to unceremoniously remove the famous four Sartaps of Tata Group – Russy Modi, Ajit Kerkar, Darbari Seth and Nani Palkivala.

More than their own group business, Mistrys’ fortune hinges a lot on when and how the Tatas will offer a way out. In the 1960 epic, Akbar decides to entomb Anarkali alive behind a brick wall. But he, eventually, creates a safe passage for the lady to escape with the condition that she will never visit the kingdom ever. Wonder if the Mistrys would seek a similar outcome now that Cyrus is no more.

Acknowledgment (Source) – The Story of Tata: 1868 to 2021.