Nobody can hurt me without my permission.

— Mahatma Gandhi

There are a great many erroneous stories about the Dinshaw relationship with the Tatas and Wadias. The families were indeed close and were leaders in the Bombay community. The Tatas and the Dinshaws were all well known for their deep Zoroastrian faith and extraordinary philanthropic gestures. Both families donated a lot of their wealth to help establish schools and hospitals. However, the Wadia clan’s conversion to Christianity caused some strains in this relationship.

One of the great myths of the Tata narrative is that the Dinshaw family was the bankers of Tata, lenders of the last resort. It was widely reported that the Dinshaws had loaned the Tatas Rs 1 crore on two occasions (in today’s money, about $2 billion) back in the 1920s to help keep the company afloat.

It was rumoured that the Dinshaws had made their money – an absolute fortune – selling supplies to the British Army during the Second Afghan War (1878-81). That part is indeed true. Another common misconception, quoted by numerous sources, was that sometime during the 1920s, Edulji Dinshaw converted his loans into 12.5 per cent equity in Tata.

However, if you examine the Tata Sons Share Registry, you’ll see that the Dinshaws have never held any equity in Tata Sons. They certainly arranged and facilitated many loans that the Tatas required, but they never owned a single share in Tata Sons. None. When Ratanji Dadabhoy (RD) Tata died in 1926, he left his holdings to his eldest son, JRD.

JRD explained to Tata chronicler RM Lala, in his book, Beyond the Last Blue Mountain, that he felt bad about this and decided to divide it equally between his siblings. Like many a good deed done with the best of intentions, it was a decision that would have major consequences for the Tata business.

To pay back the money that Sir Dorab had lent his father, JRD was forced to sell properties. He told Lala that all that was left was the shares in Tata Sons, which equated to 20 per cent of the company, though the exact percentage has not been confirmed.


Pallonji Mistry’s father initially acquired shares in the Tata Group in 1967, when he acquired 5.9 per cent from Rodabah Sawhney – shares she had been given to her by her brother, JRD. It is not exactly clear from the registry how she ended up with 5.9 per cent. Presumably, she inherited some shares from Jimmy when he died in a plane crash in his twenties.

The next purchase by the SP Group was in 1969, when, much to JRD’s annoyance, Naval sold 4.81 per cent of Tata Sons owned by the Ratan Tata Trust. This caused much angst between JRD and Naval. Ratan explained that Naval did so without consulting JRD, who did not approve of the sale but was powerless to stop it.

It was Naval’s way of showing JRD that whilst he was not the chairman, he still had the ability to impact the all-powerful JRD. Ratan, too, was also opposed to his father selling shares to the Mistrys, but was also not in a position to stop the sale.

The final purchase came in May 1974, when Darab, who by this time had fallen out badly with JRD, sold his 6.68 per cent to the Mistrys. A rights issue in 1996 brought the total holding of the SP Group to the 18.40 per cent that it is today. All in all, a total of Rs 69 crore ($11M). The value of their holding in TCS alone is in excess of $2B. This was confirmed by Venkat, the Manager of Tata Trusts.

In sum, JRD’s act of kindness, dividing his shares equally among his siblings, seems to have spectacularly backfired. The results in monetary terms alone are staggering, eye-watering and beyond even the silliest dotcom bonanza.

As the share registry shows, in the decade between 1965 and 1975, the SP Group acquired shares in Tata for approximately $11 million (Rs 69 crore). It is difficult to estimate the value of Tata Sons, as the vast majority of the companies are privately held, but the value of the shares in Tata Consulting Services alone is pegged at least at $2 billion. In addition, SP Group has received over $150 million in dividends as a result of its holdings in TCS.

Overall, the SP holdings across the board in Tata companies has been reported in the Economic Times as being worth $15 billion. This is through two companies owned jointly by Cyrus Mistry and his brother Shapoor. Even adjusting for inflation, the $11 million invested by SP Group in Tata Sons has given them a return of at least 300 to 400 times their original investment.

By any gauge, this is a massive return on a relatively small investment. It could be argued that with results like this, Shapoor Pallonji Mistry could put Warren Buffet, the sage of Omaha, to shame when it comes to successful investing.

So, yes, Cyrus [Mistry] was fired, but there is no need to shed any tears. Forbes estimates the Mistry family to be worth in excess of $20 billion. Unlike many in India, no one in the Mistry family will miss a meal. Whilst Ratan certainly did not begrudge the incredibly massive returns that the Mistrys have made on their Tata investment, their lack of overall philanthropy has not gone unnoticed.

The Story of Tata: 1868 to 2021

Excerpted with permission from The Story of Tata: 1868 to 2021, Peter Casey, Penguin Viking.