A Glass doesn’t hinder our view of the world and we can look through it;
it never gives back anything to us. But you paint the glass from one side and
it becomes a mirror. But a Mirror can be irritating as it shows us our ugly
face. It just reflects the reality. And in the moments of despair and madness
we can break the Mirror. So Cyrus Mistry is broken. But I am really at shock over what has happened with TATAS...i can't expect this type of nasty fight from
Tatas. I am feeling bad for this guy Cyrus...i don't think that he was doing a
bad job with all the heavy load of expensive investments at wrong times. I
don't think that decisions regarding sale of Corus and fight with Docomo for
denial of buying of right issue was entirely of Cyrus....what was Board of
directors doing?
So Cyrus has left a bomb over Tatas...but i hope it is not a time bomb
and will explode now only to have the momentary impact. But there is no need to
panic and pressing the sell button. Just hold on to your fronts and no need to
make any surgical strike either (Buying). Let time clears the clouds.
But it is always not hard to fathom your wrong turns; the hardest thing
is to accept these-especially publicly. In the dream world of becoming hard core
Indian MNC, Tata made some nasty investments that too at the peak of commodity
cycle. Tata's bought Corus at mighty price of $12 billion. I can't understand
how they couldn't see the coming over-supply in the steel world....China
couldn't alone drive the world steel demand and if it was doing it could never
be forever and not sustainable at all. Now China is fearing the heat of huge
amount of melted steel used by it for creating unnecessary redundant
infrastructure. How our so called highly paid economists/CFO's can't take
precautions while going for expensive decisions if they can't predict the
over-supply or lower demand.
Jaguar buy saved Tata although Jaguar has sparkled because of high china
growth and only Tatas can tell whether their decision to buy Jaguar was due to
this china story or they were trying to buy a premium prized asset for western
markets. Indian Hotels bought some costly international properties when growth
in Indian market was the visible choice. Global MNC giants were investing in
India but Tata bought international properties. I think Cyrus was right in
shedding the Fat when he sold some of these high prized hotels.
But we all do mistakes...it is our right to make mistakes in our path to
success and glory. But when we make some mistake and later when we realize it, our
focus should always be on solving it and finding the solutions. But what is
Tata doing off late....it is investing into Airlines business which is also a
high capital intensive business and prone to high losses for 5-10 years. That
can't be the right approach...Tata should have been concentrating only on solving
the mess of Mundra plant, Corus deal etc. Tata global still needs to find a way
to grow its Himalayan Mineral water business for long....Starbucks JV is
operating in dangerous price conscious Indian Market. So Tata is at inflection
point and some tough decisions are required-no point in clinging to your
faults.
I remember how Kishore Biyani is trying to save his retail business. In
this quest he has sold so many of his prized dream assets like Pantaloons,
Capital first etc. Jain irrigation has taken some tough decisions and they have
really saved the day for themselves.
So i think this fight my turn ugly and we'll see more
pain for Tata stocks although i think recent 10-12% fall is already severe and
more than enough. But i don't find anything fishy and material in this 1.18 lac crore loss in the value of
Investments in Power, steel business. Businesses do witness
prolong periods of downturn due to economic and industrial slowdowns or
over-supply. The only option and strategy is to pass/live through these
difficult times gracefully. I think Tata can solve the mess of its power, steel
and tea businesses.
I am still having the faith in Tata group...but the
only thing i am worrying is whether they can do this Gracefully?
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