Titan is an immensely successful company today but as founding MD Xerxes Desai says in the book, Titan was founded by sheer serendipity. As he said, “Titan is often cited as a remarkable example of corporate success, featuring in management school case studies, but few know that we stumbled upon the opportunity to make watches almost accidentally and that it was a rather long and arduous journey.” My long sessions with Xerxes at his gracious home in Indira Nagar, Bengaluru, are perhaps the last conversations he had about the founding of Titan and its journey before he passed away in 2016.
The Tamil Nadu Connection
Many viewers were surprised to learn that Titan is not wholly a Tata company. The Tamil Nadu Industrial Development Corporation (TIDCO) is its largest shareholder with a 27.88 per cent stake, while the Tata Group holds 25.02 per cent. This unique public-private partnership has been immensely successful, generating substantial dividends for TIDCO and creating enormous shareholder value, making Titan one of Tamil Nadu’s most successful joint-sector enterprises.
The Bureaucrat Who Changed Everything
In the mid-1970s, Xerxes Desai was tasked by the Tata Group to revive Tata Press, with the promise that its turnaround could become a springboard for a new venture. Along with Anil Manchanda, who would later be Xerxes’ co-founder of Titan, they did turn Tata Press around and started scouting for new projects. No interesting projects were forthcoming. At this juncture, in the late 1970s, a chance meeting with scholar-bureaucrat Iravatham Mahadevan proved pivotal. He was a joint secretary in the ministry of industrial development in Delhi and was also a Nehru scholar on leave from the IAS, studying the Indus script with an idea to print and publish a concordance.
10 PM Phone Call
At that time, all presses could only handle either the English or local language fonts and not an unknown and unreadable script. Tata Press took up the task of developing these fonts. While the process was on, Mahadeven resumed his work in Delhi and asked Anil to come to his office so that he could study various project reports and identify one that the Tatas could enter. There were reports for all kinds from ophthalmic glass to granite tombstones to mechanised fishing boats. And, then there were watches. On 21 March 1977, at about 10 pm, Anil phoned Xerxes and said that the best project to enter was watches!
At that time, only HMT and Allwyn made watches, far short of the demand and it made for a lot of smuggling of Swiss brands, causing a big loss to the exchequer. While Xerxes and Anil had plumped for watches as the next line of business, Mahadevan, who happened to be the chairman of a task force of the watch manufacturing industry, supported the choice. However, at that time, watch manufacturing was reserved either for the small-scale sector or large public sector units. Large private sector groups such as the Tatas were not allowed to enter.
Winning Over the Tatas
Meanwhile, Minoo Mody also fought many battles in the Tata group against the watch project. Several directors stressed that the Tatas did not have the degree of sophistication required for precision engineering such as watch movements. However, JRD Tata backed the project all the way. He had remarkable confidence in the abilities of Xerxes, an Oxford humanities graduate and Anil, a post-graduate in statistics from ISI, Calcutta, neither of whom had any precision industry experience.
The project had to get a technical collaborator but Citizen had tied up with HMT, Seiko was in the process of tying up with Allwyn while Timex was in financial trouble. The Swiss had categorically said they would not part with their watch-making technology.
Fortune Smiles Again
For many years, the project was in the doldrums. Fortune came to the rescue again in the form of Mahadevan, who in September 1979, was posted as CMD of TIDCO. Mahadeven discovered that TIDCO had a licence to make watches and had been in dialogue with a French watch movement maker, France Ebauches, but TIDCO was yet to find a joint venture partner. Of course, Xerxes jumped at the idea.
After many twists and turns, the Tatas signed a technical collaboration agreement with France Ebauches. They didn’t reckon with the Indian government, as the then industries secretary in Delhi, said that the Tatas would never be allowed to make watches as it was a reserved sector. Again frustration. The year 1984 brought in seismic changes in India, following the assassination of prime minister Indira Gandhi. With Rajiv Gandhi becoming the PM, some liberalisation happened and the government welcomed the private sector to play a larger role.
The Tatas decided to play it cautiously. An application for a joint venture between TIDCO and a new private company, Questar Investments was made. Later, Questar would be taken over by the Tatas via a rights issue. The new company was named Titan Watches, an acronym for Tata Industries and TAN for Tamil Nadu! Finally, the Tatas’ ambition to make watches moved forward. Destiny beckoned. It was almost eight years since Anil had mentioned the word watches in a 10 pm call from Delhi. The rest, as they say, is history.
