The Hindu Business Line : How Sakchi moved from cockfighting to steel-making

On August 26, 1907, was registered Tata Iron and Steel Company Ltd, later referred to as TISCO. “There was a certain debate over the name of the company,” writes R. M. Lala in The Romance of Tata Steel ( www.penguinbooksindia.com ). “Some of the family were of the opinion that Bapuji (Jamsetji) did not like the association of his name with his enterprises. Neither for his mills nor for the Indian Institute of Science had he allowed the use of his surname.”

Perhaps, they did not remember “that over a decade earlier Jamsetji had enthusiastically started a Tata Shipping Line which had been driven out of business by the P&O led foreign shipping lines repeatedly lowering their prices,” the author adds.

Eventually, though, the family’s suggestion was overruled, because there was a clamour from outsiders: “Only confidence in the name of Tatas will bring in the capital.” Tatas had already sunk Rs 5 lakh in explorations, and the question before them was about funding the steel works.

“Everyone in Indian financial circles advised them that the large capital required for a steel plant was jut not available in India and that they needed to tap the financial market of London. Unfortunately, the London market was passing through a bad patch at the time and financiers in London, unsure of the ability of Indians to successfully set up a steel plant, wanted to exert control if they were to invest. After much deliberation, the Tatas decided to take the plunge into the Indian market and issued their prospectus in 1907.”

How was the response to the prospectus? “Subscriptions opened from early morning till late at night. People besieged the Tata offices in Bombay, ‘old and young, rich and poor, men and women they came offering their mites’, and within three weeks 8,000 investors had subscribed,” narrates Lala. Later when the company issued debentures to fund working capital, “the entire issue of £4 lakh was subscribed by the maharaja of Gwalior.

“The Tatas had raised Rs 1.5 crore in ordinary shares, Rs 75 lakh in preference shares, and Rs 7 lakh, in deferred shares. In all a total of Rs 2.32 crore had been raised.”

Dorab Tata would talk about this, thus: “For the first time in India’s financial history, I had succeeded in raising for industrial purposes such a vast sum from the hidden wealth of India for the development of our mineral resources. It was the first time that the raw materials of India did not go out and return as finished articles to be sold in the country…”

The timing of the Tatas moving into the financial market was significant, observes Lala. “India was just recovering from the feeling of helplessness that had pervaded since the revolt of 1857, and the swadeshi movement was giv ing India back her confidence.”

Before the end of 1907, a long search came to an end when C.M. Weld and his assistant Srinivas Rao arrived at Sakchi, a village lying at the meeting point of two rivers, Kharkai and Subarnarekha. “There was even a railway station called Kalimati a few miles away.” To visitors then it would have seemed that cockfighting was the dominant industry in Sakchi.

“The first ingot of steel to roll in perfect shape was on February 16, 1912. War clouds were gathering over Europe and thirty months later, the guns of August boomed. Suddenly, this ‘spot of reclaimed jungle wilderness became a place of international importance. For the Allied Forces, it offered the only potential supply of iron and steel east of the Suez Canal’…”

An entire city was being laid out, the first planned modern city of India, writes Lala. “Street after street of commodious one-storey brick houses, all well ventilated, all supplied with running water and lit by electric lights. Many of the houses had electric fans,” Lovat Fraser, an English journalist was to describe what he saw in Sakchi in 1911. Sakchi would later become Jamshedpur, just as Kalimati came to be known as Tatanagar.

Great account.

D. MURALI

http://BookPeek.blogspot.com

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