Also http://business.rediff.com/report/2009/mar/21/tata-tea-to-launch-cold-beverage-tion.htm - http://business.rediff.com/report/2009/mar/21/tata-tea-to-launch-cold-beverage-tion.htm

 

http://ia.rediff.com/business/report/2009/mar/27/tata-tea-buys-majority-stake-in-russian-firm.htm - http://ia.rediff.com/business/report/2009/mar/27/tata-tea-buys-majority-stake-in-russian-firm.htm

 

So it is growing big........

 

Attended tata tea's AGM today and entered into an argument with Mr. Tata. He said he is not interested in declaring dividends for the profits made on stake sale in Rallis. I am also not interested in keeping Tata Tea in my portfolio.

 

At yesterday's AGM, Mr. Tata also said that people were skeptical when Tetley was bought. But then, Tetley hasnt done anything great all this while. increasing market share is just not enough. market shares should be fetched with increasing value, meaning increasing profits. Also, I didnt know that Mr. tata doesnt know that success in the past doesnt mean success in the future.  

 

 

I think the Energy Brands acquisition was a private transaction.

 

 

Everyone knows that.....but it still happens....Our newspaper editorials also cheered all these mega acquisitions.  But they were only doing their jobs.

 

PIPE deals can be wonderful as well.

 

I guess Mr. Tata has been like an ordinary investor....buying when the going is good, and feeling the pinch on the downturn. He is one of those musk-deer who couldnt figure out that it was his own country where the potential lied. So, like a musk deer he went on acquiring companies in UK, Thailand, US.

 

With half the money he spent on JLR, he could have bought the entire Ashok Leyland...that would have given him the position of undisputed leader of Indian CV market. But he chose to perform a more aggressive stunt, and the investors bore the heat of the wrong fall of that stunt.

 

I dont understand what he says. He is still defending his decision of buying Corus and JLR. He says the buyouts are good, only that the crisis came at a wrong time. What then is the forecasting ability of the management? What for we give him the respect if the forecasting ability is so poor. I fail to understand, why doesnt he accept his buy-outs were wrong decisions. Like an ordinary lay investor, he is a victim of poor timing decisions.

 

But what if we try to imagine we are in 2007?

 

Is it looking so bad now...given Arcellor Mittal's (another company which really looks stupid now) growth.

 

I remember tata Steel's then CEO (Muthuraman) giving interviews in 2007 that his constant regret is not doing acquisition earlier.

 

Guess the perfect time to do acquisitions would have been now and the time to sell was then.

 

But then that would make these CEOs (who take advice from McKinsey like gospel truth) Warren Buffett isn't it.

 

Potable water is very vast field which includes niche like natural mineral water which you can say is luxury or premium segment. As I understand the water sold under Himalyan brand is pure natural mineral water, in the sense that water which comes out of earth has exactly the same ideal mineral composition as recommnded for human consumption. There is no processing of this water. It is just packed and sold. This is different comapred to other bottled water available in market which are basically processed water. Evian brand sold by Nestle is also the same type of water. There are not many places in world where such water sources can be found. . This scarcity of natural resource with ideal property for consumption combined with brand power makes it valuable. If Himalayan becomes as big a brand as Evian, it will be give great returns to Tata Tea considering the margins in premium segment.

 

Potable water for mass market is another segment. However, this is liekly to be more or less commodity type of business where competitive advantages are hard to be found.

 

Source of Himalayan brand of water is water wells located in Himachal pradesh. It does come out of earth.

 

Brand value is indeed an issue. I am not sure whether management can make it as big as Evian. If brand becomes big, revenue will come not only from India but from export as well.

 

I was not aware about capping of charges of bottled water. If this is case, it will significantly affect revenue. I did not realise that this businees also carries regulatory risks!!

 

Thanks a lot for link. I read it. It makes lot of difference to this business.

 

I als feel little sad being believer of free market competition.