Raghavendra Kamath: Nano-dreams

Jamshedpur gave birth to Telco (now Tata Motors) which has just launched the low-cost Nano; Jamshedpur, according to the 35-year old Tata Housing Development Company Managing Director Brotin Banerjee, is what inspired Tata Housing to launch its Shubh Griha low-cost housing project in Mumbai.

Banerjee has been with Tata Housing for the last two years. For now, the group will construct 1,000 low-cost houses in Mumbai, and later do another 4,000 over four years in different cities.

Banerjee, who was born and brought up in Jharkhand and has worked with the Tatas since 1998, says he liked the concept of Jamshedpur, which provided housing to thousands of employees working with Tata companies and others. So, he says, he wanted to try and replicate that model in other cities. ‘The Tatas’, he says, ‘have always worked with the common man in mind. I am just one of them”.

For the record, the Tata Administrative Service officer has been working with the group on mass-products in the past as well. He began his TAS-life with Tata Chemicals making salt for the ‘common-man’ — one of his first jobs was to help relaunch the Tata Salt brand.

After launching the ‘Tata Namak, Desh ka Namak’, he launched ‘Samunder’, a low-priced iodised salt aimed at poorer sections of society. He later moved to Barista Coffee as Vice-President in charge of marketing, strategy and corporate communications and was also its Chief Operating Officer.

According to Banerjee, the project was a long time in the making and the team worked with suppliers, designers and others for over a year to come up with a model which was financially viable — much the same thing, it appears in retrospect, that happened when Tata Motors conceived the Nano.

“We had many board and committee meetings discussing financial and commercial parameters at length. We were able to demonstrate that the project was feasible”, he says.

Will the company’s experiment to reach to the bottom of the pyramid be financially viable when the economy is slowing down, and how will the entry of builders such as Unitech and Omaxe in this very segment affect the Tata project?

“Why not?” counters Banerjee. “There is a shortage of 24 million houses in the country in mid- and lower-income segments, and that cannot be bridged by the government unless there is private sector participation”, he argues.

The similarities with the Nano, of course, don’t end here. The Shubh Griha project, like the Nano, is likely to add more to the buzz around the company than it will to its bottomline. In the next four years, if all goes well, it will contribute just around 5 per cent to Tata Housing’s revenues.

For the rest, the company is banking on mid-income and premium housing projects, IT parks, malls, office complexes and so on. In the same manner that Tata Motors is counting on the truck market to lift its fortunes.