The year, 1906. Jamsetji Tata, founder of the Tata group, had passed away two years earlier. His dream of providing India its first integrated steel plant was still work in progress. One big challenge ahead - significant capital would have to be raised.Jamsetji's son, Dorabji Tata, had now taken over as Chairman. He went to England trying to raise capital for the proposed steel plant. However, English capitalists were wary of sending their money into India. Dorabji Tata returned, utterly disappointed. Would the steel project have to be abandoned, for lack of capital? Dorabji decided that to ensure the steel venture took birth, he would raise the funds in India itself. This was a very bold decision. Such large sums of money had never before been raised domestically, for an Indian venture. Many people predicted failure. And failure would have impacted the Tata group hugely. But Dorabji's belief in his country took over. He was determined to do this for India, and he worked ceaselessly to make the case for investment in Tata Steel. Then, on 27th August 1907 (which was also his birthday), he launched in Mumbai a formal prospectus for raising capital for the Tata Iron & Steel Company (see picture below). This was a milestone day for India - an IPO for the largest start-up of the day. The first of its kind in the country. Would it succeed? Led by Dorabji's energetic efforts, the response from Indians was electrifying. An observer wrote - "From early morning till late at night, the Tata offices in Bombay were besieged by an eager crowd of native investors. Old and young, rich and poor, men and women, they came, offering their mite...". Indians who believed in their country, placing trust in an Indian enterprise. Within three weeks, over 8,000 people had subscribed to this issue, and over Rs. 23 million had been raised. This was an unbelievable sum of money being raised in Indian capital markets at that time. India's first major IPO for an industrial enterprise had been a splendid success ! Later, Dorabji Tata was to write - "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. Above all, it was a purely Swadeshi enterprise, financed by Swadeshi money and managed by Swadeshi brains." Yesterday, 27th August, we marked the 163rd birth anniversary of Sir Dorabji Tata, the man who made this happen. When we speak of IPOs today, let us hark back to this path-breaking swadeshi IPO of Tata Steel, 115 years ago. An act of courage by a legendary leader, based on the belief that we Indians have in our own country.
Source:- by my friend Devender Chachra Sep 5 2022
