Tatas have clinched the Jaguar Land-Rover deal and it is going to be consumated in about three-four months. The price paid seems to be alright and is modest $2.3 bn but payable in all cash. The Tata grp as well as its advisers must have seen the pros and cons and there are some benefits there for Tata Motors which fit in to their grand design of being a world class auto manufacturer.
It all adds a feather to the Indian cap but the share holders of Tata Motors would have to suffer for this glorious venture rather adventure of Tatas. Earlier the Corus deal costed heavily to the Tata Steel shareholders and it is now a confirmed reality. Long term may turn out in whatever way but the near term loss of this magnitude should not be downed the throats of powerless shareholders. As conveyed to you on many occasions earlier, the Tata group under leadership of the great Ratan wants to be as much out of India as here in terms of business presence . This is a clear dis-advantage for India as it is crying for investment to harness the true potential of the teeming millions who have capacity to give back incremental return on each of the further invested unit of capital. This is not possible else where in the world , at least in the present scenario. I would have preferred if Tatas had floated a new company here for the aquisitions abroad and asked for subscription from the willing people as well as chipping their own funds . It would have been fair and justifiable. I think the robust cash flows in the Tata group companies and the taxability of the profits may have forced them into the arrangements presently made. As the Tatas have been conscentious business group for over a century , I can not accuse them of blatant disregard of shareholders interests.