INDIA CAR SALES RISE 22%

India's local car sales posted their biggest percentage gain in two years in February because of an improvement in retail financing and of a lower sales base in the year-earlier period.

Sales rose 22% to 115,386 cars from 94,757 a year earlier, data issued Monday by the Society of Indian Automobile Manufacturers showed. The sales growth is the first since September 2008 and the highest since February 2007.

The Wall Street Journal

Tata-Ford deal to augur well for Indian M&A scene

Tata Motors' deal worth $2.3 billion with Ford Motor Company for its Jaguar and Land Rover marques will boost India Inc's mergers and acquisition volumes, which stood at 5.96 billion dollars in the first two months of 2008. Tata Motors deal holds significance as the aggregate deal value of 2.3 billion dollars comprises about 40 per cent of the total M&A volumes in the past two months.

The Financial Express
http://www.financialexpress.com/news/
TataFord-deal-to-augur-well-for-M&A-scene/288715/

Tata, Jaguar and Land Rover : Now What

What the Indian conglomerate will do with two luxury-car brands...

DEPENDING on which way you look at it, in acquiring Jaguar and Land Rover (JLR) from Ford for $2.3 billion, Tata Motors has either got itself two of the most famous brands in the car business at a bargain price—or a sea of troubles. In India there is both pride in Tata's global ambition and a fair dose of scepticism. Tata Group, the parent of Tata Motors, may be India's biggest industrial conglomerate, but there are concerns that it may have taken on more than it can manage. ....

The Economist
http://www.economist.com/business/
displaystory.cfm?story_id=10925609

SBI, others to raise $3 bn for Tata Motors

State Bank of India (SBI) led consortium will raise $3-billion loan by April for Tata Motors’ acquisitions abroad, including the $2-billion Jaguar and Land Rover deal. Apart from SBI, the consortium will include leading entities like Citibank, Standard Chartered, BNP Paribas, JP Morgan, Tokyo Mitsubishi UFJ and Mizuho Financial Group, a source said. The country’s largest lender is also in talks with two-three public sector banks to be a part of the consortium...

The Economic Times
http://economictimes.indiatimes.com/News/News_By_Industry/
Banking_Finance_/SBI_others_to_raise_3_bn_for_Tata_Motors/
articleshow/2879832.cms

Stocks to watch

Equities are seen opening higher Wednesday tracking advances in Asian markets. But volatility cannot be ruled ahead of the derivatives contract expiry for the February series.

The Economic Times
http://economictimes.indiatimes.com/articleshow/2818213.cms

World watches Tata Motors Nano unveils

It’s the car that promises to shake up the world automobile industry. The Tata Motors Nano, India’s first original contribution to the car industry, was unveiled on Thursday at a packed, near-stampede launch. As promised, it’s priced at Rs 1 lakh ($2,500). The history-making car, which many industry observers predict will be a huge hit in emerging and even advanced markets, is already attracting world-wide attention with television channels in Europe and the UK telecasting the event live. Already, the launch of the Tata small car, the cheapest in the world, is being compared to seminal events such as the launch of Ford Model T and Volkswagen Beetle.

The Economic Times
http://economictimes.indiatimes.com/
World_watches_Tata_Motors_unveil_Nano/
articleshow/2691032.cms

Land Rover & Jaguar Deal to Mark Indian Auto Sector’s First Billion Dollar Acquisition

The Indian automotive sector is under-going a fundamental shift as companies set out to unlock the benefits of global scale of operations, propelled by ambitions to gain in-roads into the premium league by acquiring state-of-the-art engineering platforms, future proof technology masterpieces and iconic brands patronized by a niche customer segment.

The outcome of the bidding war which will be known by the end of the week for Jaguar and Land Rover, the U.K. based iconic marques owned by Ford Motor Company, the U.S. based world’s third largest automaker, for an estimated price of approximately $2 billion, which features Tata Motors Ltd, India’s biggest automobile company, and Mahindra & Mahindra Ltd, tractor & utility vehicle manufacturer is symbolic of the evolving Indian businesses making a mark in the global market place.

Tata Motor’s parent company Tata Group, with revenue of $55 billion and equivalent to about 5.5% of the country's GDP, is not new to such inorganic growth that has eased the group’s access to new markets, product categories, technology and world-class brands. Tata Motors' international footprint includes Tata Daewoo Commercial Vehicle in South Korea; Hispano Carrocera S.A., a bus and coach manufacturer in Spain in which the company has a 21% stake; a joint venture with Marcopolo, the Brazil-based body-manufacturer of buses and coaches; and a joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market pickup vehicles in that country.

Tata Motors that has been facing critical reviews concerning quality and reliability with its passenger cars ‘Indica’, the small car that it marketed badged as CityRover as per tie-up with British automaker MG Rover in Europe, with the two cult luxury brands Land Rover and Jaguar in its armory will see itself take the first steps in to the un-explored premium segment and graduate to state-of-the-art engineering expertise from a combined workforce of 20,000.

With the deal expected to go to the Indian conglomerate, the moment will be historic as it will mark the automotive sector’s entry into the elite billion dollar acquisitions club.

The sector has already exhibited growing merger & acquisition (M&A) deals worth more than $633 million from 20 deals so far this year, i.e. surpassing the value of deals done by the sector in the whole of last year at $517 from 23 deals.

The other reason why Jaguar-Land Rover deal will be significant is that it will further reinforce the prominence of the Indo-U.K. merger & acquisitions deal activity which has already seen the country’s two of the largest deals – the acquisition of Hutchison Essar Ltd India’s second largest GSM mobile service provider by the U.K.’s Vodafone Group Plc and the acquisition of the U.K.’s largest steel maker Corus Group Plc by India’s Tata Steel Ltd.

Key to such billion dollar acquisitions is the management of the post acquisition integration costs. As skepticism looms large among industry analysts with regards to the loss making Ford’s marques - Jaguar and Land Rover, one company I would bet on being able to get the integration cost down is Tata Group. It is a company that has been brilliant in execution pretty much so far.

Of the $46 billion worth of cross-border M&A deals so far this year, the U.K. contributed to about 40% of all overseas acquisitions by Indian companies (Outbound) in deal value and about 83% of the deals clinched by overseas companies in India (Inbound).

Tata Group has been active in the U.K. market for long. The group had previously acquired U.K.’s top steel maker Corus Group Plc after intense rounds of auction proceedings with rival Brazilian steel company, Companhia Siderurgica Nacional (CSN). Prior to that, the group had acquired U.K.-based Tetley Group, then the world’s largest manufacturer of tea, for $407 million in February 2000. The group has already spent more than $15 billion to fulfill its inorganic growth strategies and the acquisition of Land Rover and Jaguar will likely be the second most expensive buy for the group after Corus.

The investments by India Inc. in Britain during the fiscal year 2006-07 has created 5,130 jobs, second to the U.S., according to the U.K.’s Department of Trade and Industry. In terms of the number of new projects, India has been ranked third with 69 new projects, after 540 new projects of the U.S. and 95 new projects of France.

Indian investment in the U.K. had gone up 111% to 76 projects, creating almost 4,000 jobs during 2005-06. The Indian investment has contributed $67 million (£33 million) to the London economy in 2006-07, according to Think London, an agency promoting investment into the city.

Tatas India’s second most valued group

Leading conglomerate Tata group has retained its position as India’s second most-valued and the only corporate house after Mukesh Ambani group with a market value of over Rs 3 trillion, despite the Anil Ambani group hitting this milestone in intra-day trades twice. Tatas are the biggest corporate house among the three in terms of the number of Companies listed on the bourses. Besides, Tata group also has the lowest average promoter holding among the three leading business groups, while Anil Ambani group has the highest. The cumulative market value of all the 30 listed firms of Tata group currently stands at Rs 3,04,473 crore, based on their BSE share prices at the close of the market on Friday.

The Financial Express
http://www.financialexpress.com/news/
Tatas-Indias-second-most-valued-group/251092/