INDIA BUSINESS WORLD - AUGUST 2006
THE MONTH THAT WAS...

TATAS TO HIKE STAKE IN GROUP COS TO 51%

THE TATA group on Tuesday reiterated that it would raise its stake its group companies where its current holding was less than 51%. “Currently, we have over 51% stake in only two companies — TCS and Tata Tele— in all the other companies we are looking at enhancing our stake,” Ishaat Hussain, director finance of Tata Sons Ltd, told the reporters on the sidelines of a function.

On its proposed investment in Bangladesh , Hussain said that the company's ambitious multi-billion dollar investment plan in the neighbouring country had been put in a “pause mode”, while adding that the proposed project had not been called off.

“We will wait until the elections in Bangladesh is over before we move forward with the plan,” he said.

The Tatas had first proposed an investment of $2.5 billion in October 2004 towards setting up a steel plant, power station and other infrastructure projects, but had later scaled this to $3 billion. The projects have, however, not taken off due to opposition from various fronts. The Tatas too have expressed their dissatisfaction over the delay.

Replying to a question on Tata Tele, Hussain said the group would invest up to Rs 2,500 crore for expansion of its telecom business. He also added that the company would not go in for any further dilution of stake in Tata Tele, especially to international players. “As far as Tata Tele is concerned, we will be going on our own,” he said.

He also added that the CDMAbased service provider had to diversify its offerings and therefore had no plans to enter the GSM space.

Tata Tea Ltd, which now controls nearly 45% of the global beverage space, is looking at fresh acquisitions in the US to increase its presence in the speciality tea segment.

On the anvil are three proposals, according to RK Krishnakumar, vice chairman of the company. These, he said, are being currently examined.

The deal, he added, may be bigger than Tetley acquisition, which had cost the company $270 million. He, however, refused to divulge any further details about the companies that the Tatas plan to acquire.

Based on these fresh acquisitions, Tata Tea group, which includes Tata Coffee and Tata Tea (GB) Ltd, is aiming to achieve a Rs 7,000 crore turnover by 2008-09. Tata Tea group's turnover as on March 31, 2006 stood at Rs 3151.12 crore.