Finally, it has boiled down to the choice of the son over the son-in-law

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of the single biggest shareholder of Tata Sons, with Cyrus Pallonji Mistry, the younger son of construction magnate Pallonji Shapoorji Mistry being anointed successor to Ratan Naval Tata at Bombay House.

This the second instance of someone with a non-Tata surname becoming the chairman of Tata Sons, with the five-member selection panel deciding on Cyrus. His brother-in-law and Ratan Tata’s half brother Noel Naval Tata, widely rumoured for the past couple of years as the chosen successor, did not make the grade. Sir Nowroji Saklatwala, founder Jamsetji's sister's son, was chairman of Tata Sons from 1932 to 1938.

Cyrus, 43, was inducted as deputy chairman of Tata Sons at its board meeting in Mumbai on Wednesday. He will officially succeed Ratan Tata as chairman in December 2012.

Tata historian Russi M Lala told Financial Chronicle,

“The international experience of the Shapoorji Pallonji group will be his strength in running the affairs at the Tata group. With Ratan and RK Krishnakumar, the rocks of the Tata group being there for a year and two years, respectively, he will have a good support system. I believe that if Cyrus runs the group on the principles Ratan has followed, he will not go wrong,” noted .

“He is a very positive person, a young reclusive man who will have a longer period to work, which will give him a tremendous starting advantage. This will help him in developing a long- term perspective. He is very intelligent business wise and sharp too,” said a Tata group insider who is on a common board with Mistry. The managing director of the SP group plans to step down from the board positions in the infrastructure and construction major to avoid conflicts of interest.

Group insiders say that with the elder Tata making public statements that his half brother lacked adequate experience in running a $83.3 billion group, the pitch for Noel was queered somewhat. “Cyrus is intelligent and qualified to take on the responsibility being offered and I will be committed to working with him over the next year to give him the exposure, involvement and the operating experience to equip him to undertake the full responsibility of the group on my retirement,” said Ratan Tata.

“Cyrus has worked closely with Ratan so he has adequate experience at Tata Sons. He comes from a family with an excellent reputation and a lot of experience,” said Nadir Godrej, managing director of Godrej Industries. Ness Wadia, managing director of Bombay Burmah Trading Corporation, said, “I have known Cyrus since I was young. His family has been involved in the Tata group for many years and I think it’s good that the group finally has clarity, particularly with a promoter taking over at the helm. I am sure he will do well.”

The board of directors of Tata Sons has appointed the London educated civil engineer to the new post of deputy chairman. “He will work with Tata over the next year and take over when Tata retires in December 2012 as per the unanimous recommendation of the selection committee,” said a Tata Sons statement. Those who have served on boards with him say the 43- year- old masters degree holder from the London Business School is a voracious reader who digests and implements the latest management wisdom.

“He is a bit like Ratan, shy and gentle and very fair minded with no prejudices, and always keeps an open mind. He is a great joy to work with on the board,” said an official who serves on boards with him and has known him for many years.

“This is the right choice as you need a secure individual who doesn’t have a personal agenda and is selfless. Any other global CEO who came in for a 3-5 year contract would have a personal agenda. This gives long- term continuity and assures constituent company CEOs that the new head will not try to play a game of one-upmanship as he is secure in his position as chairman,” said K Sudarshan, managing partner, Asia emerging markets, at executive search firm EMA Partners International.

The engineering degree holder from London’s Imperial College of Science, Technology and Medicine will have at least two decades at the helm of Tata Sons before he hangs up his boots. “I feel deeply honoured by this appointment. I am aware of the enormous responsibility with a great legacy that has been entrusted to me. I look forward to Mr. Tata’s guidance in the year ahead in meeting the expectations of the group,” said Cyrus P Mistry in a statement.

“Mistry is extremely talented and has wide experience in core industry and not just new-age businesses as Noel does. With the greater width of industry exposure and being a stable, intellectual person who has the ability to grasp and implement new ideas and come up with strategic thinking, I think he is the correct guy for the job,” said R Suresh, managing director of Stanton Chase India.

Harsh Mariwala, Ficci president, said, “He is young, an Indian and from an entrepreneur family. Being a visionary, he has to show results through vision, people management and execution excellence to manage the empire of the Tata group.”

Chanda Kochhar, managing director of ICICI Bank, said, “I congratulate Cyrus Mistry and take this opportunity to extend my best wishes to him for carrying forward the rich traditions of the group and taking its businesses to even greater heights in the years to come.”

Chandrajit Banerjee, CII director- general, said, “This is an exemplary move and speaks volumes about the norms of corporate governance followed by this leading industrial house of our country. In the choice of Mistry, there is a clear message in the trust of the captains of Indian industry in the capabilities of young leaders in the country.”