Tata sees no big impact of credit crunch

By Rina Chandran

MUMBAI (Reuters) - India's Tata Group has not seen a significant fallout from the global credit crunch and does not expect it will have a big impact on its acquisition appetite, a senior company official said on Wednesday.

The increasingly international salt-to-software group made corporate India's biggest overseas acquisition yet earlier this year, the $12.9 billion purchase of Anglo-Dutch steel maker Corus by Tata Steel Ltd (TISC.BO: Quote, Profile, Research, Stock Buzz), and is in the running to buy the Jaguar and Land Rover brands from Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz).

The credit squeeze resulting from the subprime crisis has made financing more costly and harder to come by globally, and is expected to slow the pace of merger and acquisition activity.

"So far there hasn't been any measurable impact on our business," Alan Rosling, executive director of Tata Sons, the holding company that oversees the group's businesses, said at the Reuters India Investment Summit.

"We don't expect any dramatic impact ... the impact on us will perhaps be less than on other people because we're a strategic industrial buyer with a strong balance sheet," said Rosling, who spearheads the group's international drive.

"There may well be some opportunities for us in this."

Tata Motors (TAMO.BO: Quote, Profile, Research, Stock Buzz), India's top vehicle maker, is on Ford's shortlist for the Jaguar and Land Rover brands, along with a joint bid from rival Mahindra & Mahindra (MAHM.BO: Quote, Profile, Research, Stock Buzz) and Apollo Partners, and JP Morgan-backed One Equity Partners (JPM.N: Quote, Profile, Research, Stock Buzz).

Rosling declined to comment directly on the deal. He later made a general observation that in the current credit situation, the group may have an edge over private equity firms in competing for assets.

Shares in Tata Motors, which is valued at $7.5 billion, climbed as much as 5.5 percent to a five-week high on Wednesday, up 27 percent from the year's low, which was hit in mid-August. They ended up 4 percent in a Mumbai market that rose 1.1 percent.

GLOBAL PUSH

Tata Group, one of India's largest conglomerates, expects to earn more than half its revenue overseas in the fiscal year to March 2008, boosted by the Corus deal.

Its drive for a more global profile will focus on its software, steel, automotive, tea and telecom businesses, which accounted for about 85 percent of its international revenue in the fiscal year to March 2007, Rosling said.

"In just about every business we're in, we may be quite competitive, but in some of our businesses we are much smaller by way of scale than our global competitors," he said.

"So the expectation is to grow these businesses more significantly," said Rosling, a former investment banker.

At the same time, the group was investing heavily in India in areas such as hotels, automobiles, chemicals and power because of the huge domestic potential, he said.  Continued...