Professional Documents
Culture Documents
TATA COMMUNICATIONS
Tata Communications is a leading global provider of a new world of
communications. With a leadership position in emerging markets, Tata
Communications leverages its advanced solutions capabilities and domain
expertise across its global and pan-India network to deliver managed
solutions
to
multi-national
enterprises,
service
providers
and
Indian
consumers.
The Tata Global Network includes one of the most advanced and largest
submarine cable networks, a Tier-1 IP network, with connectivity to more
than 200 countries across 400 Pops, and nearly 1 million square feet of data
centre and collocation space worldwide.
Tata Communications' depth and breadth of reach in emerging markets
includes leadership in Indian enterprise data services, leadership in global
international voice, and strategic investments in operators in South Africa
(Neo-tel), Sri Lanka (Tata Communications Lanka Limited), Nepal (United
Telecom Limited), and subject to approval by the Chinese government,
China (China Enterprise Communications)
NTT-DOCOMO
NTT DOCOMO is Japan's premier provider of leading-edge mobile voice, data
and multimedia services. With more than 55 million customers in Japan, the
company is one of the world's largest mobile communications operators.
DOCOMO also is an influential force in the continuing advancement of mobile
technologies and standards. In 1999, Docomo launched i-mode the world's
most popular platform for mobile Internet services including e-mail,
browsing, downloading and more.
In 2001, DOCOMO introduced FOMA, the world's first 3G commercial mobile
service based on W-CDMA, which has transformed the mobile landscape in
Japan while bringing the DOCOMO brand global recognition.
The role of mobile phones as "lifestyle tools" was cemented when DOCOMO
launched Osaifu-Keitai, a mobile wallet platform enabling quick, contactless transactions for cash, credit, ID, and more. More than 36 million phones
equipped for Osaifu-Keitai services are now in use.
Building on a solid foundation of research and development, and guided by
its customer-first philosophy, the company leverages the power of mobile
communications to enable customers to enrich their lives.
DOCOMO is expanding its global reach through offices and subsidiaries in
Asia, Europe and North America, as well as strategic alliances with mobile
and multimedia service providers in markets worldwide.
up this deal with an open offer for 20% in Tata Teleservices (Maharashtra)
Ltd -- TTML -- the listed subsidiary of TTSL. At Rs24.70 (50 cents) a share,
this means another $191 million. The offer will open in January.
The Road ahead
Great deal it may be, but it has its risks. One reason is that telecom deals
have been controversial in recent times. This goes back to late last year
when the government sold pan-India licenses for $333 million apiece, amid a
welter of controversy. New players, with no experience in the business, got
these licenses on a first-come-first-served basis. In India also, many of our
companies already are or will soon face major problems in their access to
credit due to the lack of liquidity in the domestic market and also their
inability to effectively raise equity due to the depression in the stock market
and the erosion of investor confidence.
Open offer
Besides, DoCoMo, in accordance with regulations of the Securities and
Exchange Board of India, expects to make an open offer to acquire up to 20
per cent of outstanding equity shares of Tata Teleservices Maharashtra
(TTML), a Tata telecommunication company, through a joint tender offer
along with Tata Sons. TTSL and TTML through the Tata Indicom brand, have
increased their combined share of the fast-growing Indian mobile market
and their combined subscriber base now stands at over 30 million.
Market leader
NTT DoCoMo is a market leader in Japan and is used by over 50 per cent of
Japans mobile phone users.
Post Acquisition
Open Price
18.40
17.60
15.90
17.30
16.70
16.90
16.70
16.10
15.10
13.50
13.60
14.30
13.15
13.80
14.16
15.35
14.00
13.85
16.35
17.50
17.85
17.18
16.88
16.70
16.74
16.30
15.66
15.00
14.52
13.93
13.67
13.80
14.15
14.09
14.23
14.74
15.41
15.91
Date
16.76
16.46
16.08
15.64
15.08
14.56
14.18
14.01
13.93
13.99
14.20
14.53
14.88
16.00
15.56
15.11
14.70
14.35
14.13
14.06
14.13
14.31
15.15
14.77
14.47
14.28
14.20
14.57
Pre Acquisition
Date
14-Oct-08
15-Oct-08
16-Oct-08
17-Oct-08
20-Oct-08
21-Oct-08
22-Oct-08
23-Oct-08
24-Oct-08
27-Oct-08
28-Oct-08
29-Oct-08
31-Oct-08
3-Nov-08
4-Nov-08
5-Nov-08
6-Nov-08
7-Nov-08
10-Nov-08
11-Nov-08
12-Nov-08
17.85
20.00
20.19
20.35
20.25
20.44
19.60
20.00
20.20
19.75
19.21
19.70
19.50
19.90
19.60
19.90
20.60
20.45
20.35
19.55
20.20
19.73
20.25
20.17
20.13
20.10
20.00
19.75
19.77
19.67
19.61
19.58
19.72
19.90
20.09
20.18
20.17
20.23
20.07
20.13
20.03
19.95
19.86
19.76
19.68
19.67
19.70
19.78
19.89
20.01
20.11
20.01
19.94
19.86
19.78
19.73
19.72
19.74
19.81
19.90
19.86
19.81
19.77
19.76
19.78
19.80
20.06
20.02
19.91
19.81
19.73
19.68
19.65
19.65
19.68
19.76
19.84
19.95
20.04
19.91
19.83
19.76
19.70
19.68
19.68
19.72
19.78
19.85
19.77
19.73
19.71
19.71
19.74
19.73
Post Acquisition
Close Price
17.90
16.80
17.05
16.45
16.55
16.75
16.65
15.70
13.90
13.15
13.95
12.75
13.50
14.16
15.16
14.40
13.88
16.00
17.73
16.72
17.99
12-Nov-08
14-Nov-08
17-Nov-08
18-Nov-08
19-Nov-08
20-Nov-08
21-Nov-08
24-Nov-08
25-Nov-08
26-Nov-08
28-Nov-08
1-Dec-08
2-Dec-08
3-Dec-08
4-Dec-08
5-Dec-08
8-Dec-08
10-Dec-08
11-Dec-08
12-Dec-08
15-Dec-08
Open Price
16.95
16.72
16.69
16.42
15.91
15.23
14.67
13.89
13.45
13.50
13.90
13.99
14.22
14.72
15.43
15.75
16.46
Date
16.54
16.19
15.78
15.22
14.63
14.15
13.88
13.75
13.81
14.07
14.45
14.82
15.32
15.67
15.20
14.73
14.33
14.04
13.93
13.99
14.18
14.50
14.80
14.45
14.21
14.10
14.13
14.33
12-Nov-08
14-Nov-08
17-Nov-08
18-Nov-08
19-Nov-08
20-Nov-08
21-Nov-08
24-Nov-08
25-Nov-08
26-Nov-08
28-Nov-08
1-Dec-08
2-Dec-08
3-Dec-08
4-Dec-08
5-Dec-08
8-Dec-08
10-Dec-08
11-Dec-08
12-Dec-08
15-Dec-08
Close Price
17.99
20.19
20.52
20.42
20.46
19.70
19.83
19.80
19.61
19.74
19.61
19.65
19.55
19.50
19.75
20.15
20.25
20.35
19.75
20.15
20.40
19.92
20.26
20.19
20.04
19.88
19.74
19.72
19.68
19.63
19.61
19.61
19.72
19.84
20.00
20.05
20.13
20.18
Pre Acquisition
Date
14-Oct-08
15-Oct-08
16-Oct-08
17-Oct-08
20-Oct-08
21-Oct-08
22-Oct-08
23-Oct-08
24-Oct-08
27-Oct-08
28-Oct-08
29-Oct-08
31-Oct-08
3-Nov-08
4-Nov-08
5-Nov-08
6-Nov-08
7-Nov-08
10-Nov-08
11-Nov-08
12-Nov-08
Post Acquisition
Open Price
18.40
17.60
15.90
17.30
16.70
16.90
16.70
16.10
15.10
13.50
13.60
14.30
13.15
13.80
14.16
15.35
14.00
13.85
16.35
17.50
17.85
17.18
16.88
16.70
16.74
16.30
15.66
15.00
14.52
13.93
13.67
13.80
14.15
14.09
14.23
14.74
15.41
15.91
Date
16.76
16.46
16.08
15.64
15.08
14.56
14.18
14.01
13.93
13.99
14.20
14.53
14.88
16.00
15.56
15.11
14.70
14.35
14.13
14.06
14.13
14.31
15.15
14.77
14.47
14.28
14.20
14.57
Pre Acquisition
Date
14-Oct-08
15-Oct-08
16-Oct-08
17-Oct-08
20-Oct-08
21-Oct-08
22-Oct-08
23-Oct-08
24-Oct-08
27-Oct-08
28-Oct-08
29-Oct-08
31-Oct-08
3-Nov-08
4-Nov-08
5-Nov-08
6-Nov-08
7-Nov-08
10-Nov-08
11-Nov-08
12-Nov-08
17.85
20.00
20.19
20.35
20.25
20.44
19.60
20.00
20.20
19.75
19.21
19.70
19.50
19.90
19.60
19.90
20.60
20.45
20.35
19.55
20.20
19.73
20.25
20.17
20.13
20.10
20.00
19.75
19.77
19.67
19.61
19.58
19.72
19.90
20.09
20.18
20.17
20.23
20.07
20.13
20.03
19.95
19.86
19.76
19.68
19.67
19.70
19.78
19.89
20.01
20.11
20.01
19.94
19.86
19.78
19.73
19.72
19.74
19.81
19.90
19.86
19.81
19.77
19.76
19.78
19.80
20.06
20.02
19.91
19.81
19.73
19.68
19.65
19.65
19.68
19.76
19.84
19.95
20.04
19.91
19.83
19.76
19.70
19.68
19.68
19.72
19.78
19.85
19.77
19.73
19.71
19.71
19.74
19.73
Post Acquisition
Close Price
17.90
16.80
17.05
16.45
16.55
16.75
16.65
15.70
13.90
13.15
13.95
12.75
13.50
14.16
15.16
14.40
13.88
16.00
17.73
16.72
17.99
12-Nov-08
14-Nov-08
17-Nov-08
18-Nov-08
19-Nov-08
20-Nov-08
21-Nov-08
24-Nov-08
25-Nov-08
26-Nov-08
28-Nov-08
1-Dec-08
2-Dec-08
3-Dec-08
4-Dec-08
5-Dec-08
8-Dec-08
10-Dec-08
11-Dec-08
12-Dec-08
15-Dec-08
Open Price
16.95
16.72
16.69
16.42
15.91
15.23
14.67
13.89
13.45
13.50
13.90
13.99
14.22
14.72
15.43
15.75
16.46
Date
16.54
16.19
15.78
15.22
14.63
14.15
13.88
13.75
13.81
14.07
14.45
14.82
15.32
15.67
15.20
14.73
14.33
14.04
13.93
13.99
14.18
14.50
14.80
14.45
14.21
14.10
14.13
14.33
12-Nov-08
14-Nov-08
17-Nov-08
18-Nov-08
19-Nov-08
20-Nov-08
21-Nov-08
24-Nov-08
25-Nov-08
26-Nov-08
28-Nov-08
1-Dec-08
2-Dec-08
3-Dec-08
4-Dec-08
5-Dec-08
8-Dec-08
10-Dec-08
11-Dec-08
12-Dec-08
15-Dec-08
Close Price
17.99
20.19
20.52
20.42
20.46
19.70
19.83
19.80
19.61
19.74
19.61
19.65
19.55
19.50
19.75
20.15
20.25
20.35
19.75
20.15
20.40
19.92
20.26
20.19
20.04
19.88
19.74
19.72
19.68
19.63
19.61
19.61
19.72
19.84
20.00
20.05
20.13
20.18
Tata Docomo
25.00
20.00
15.00
19.80
14.57
10.00
5.00
Op en Price
Tata Docomo
25.00
20.00
15.00
19.73
14.33
10.00
5.00
C lo sing Price
Pre Acquisition
Date
14-Oct-08
15-Oct-08
16-Oct-08
17-Oct-08
20-Oct-08
21-Oct-08
22-Oct-08
23-Oct-08
24-Oct-08
27-Oct-08
28-Oct-08
29-Oct-08
31-Oct-08
3-Nov-08
4-Nov-08
5-Nov-08
6-Nov-08
7-Nov-08
10-Nov-08
11-Nov-08
12-Nov-08
Post Acquisition
Total Turnover(Rs.) Mn
41.4
21.0
34.5
30.3
18.8
12.7
12.4
22.8
35.6
34.0
10.5
26.2
23.2
21.7
32.0
37.5
13.5
124.3
136.2
114.9
317.9
29.2
23.5
21.7
19.4
20.5
23.5
23.1
25.8
25.9
23.1
22.7
28.1
25.6
45.8
68.7
85.3
141.3
22.9
21.7
21.6
22.5
23.7
24.3
24.1
25.1
25.1
29.1
38.2
50.7
73.3
Date
22.5
22.8
23.2
23.9
24.5
25.5
28.3
33.6
43.3
23.4
24.0
25.1
27.2
31.1
26.1
12-Nov-08
14-Nov-08
17-Nov-08
18-Nov-08
19-Nov-08
20-Nov-08
21-Nov-08
24-Nov-08
25-Nov-08
26-Nov-08
28-Nov-08
1-Dec-08
2-Dec-08
3-Dec-08
4-Dec-08
5-Dec-08
8-Dec-08
10-Dec-08
11-Dec-08
12-Dec-08
15-Dec-08
Total Turnover(Rs.) Mn
317.9
336.0
132.2
88.8
35.1
70.0
38.5
25.3
19.4
15.0
16.9
19.0
18.0
25.6
14.1
36.2
21.6
14.6
49.4
16.8
28.4
182.0
132.4
72.9
51.6
37.7
33.6
23.0
19.1
17.7
18.9
18.7
22.6
23.1
22.4
27.2
27.7
26.2
Tata Docomo
26.50
26.00
26.15
25.50
25.23
25.00
24.50
T urno ver
95.3
65.7
43.8
33.0
26.2
22.5
19.5
19.4
20.2
21.2
22.8
24.6
25.3
52.8
38.2
29.0
24.1
21.6
20.5
20.6
21.6
22.8
33.1
26.7
23.2
21.7
21.4
25.2
Pre Acquisition
Date
14-Oct-08
15-Oct-08
16-Oct-08
17-Oct-08
20-Oct-08
21-Oct-08
22-Oct-08
23-Oct-08
24-Oct-08
27-Oct-08
28-Oct-08
29-Oct-08
31-Oct-08
3-Nov-08
4-Nov-08
5-Nov-08
6-Nov-08
7-Nov-08
10-Nov-08
11-Nov-08
12-Nov-08
Post Acquisition
High Price
19.0
17.9
17.4
17.5
17.0
17.3
16.8
16.4
15.5
13.8
14.5
14.5
13.8
14.3
15.3
17.5
14.3
16.6
18.0
17.8
19.1
Date
17.7
17.4
17.2
17.0
16.6
15.9
15.4
14.9
14.4
14.2
14.5
15.1
15.0
15.6
16.3
16.8
17.1
17.2
16.8
16.4
16.0
15.4
15.0
14.7
14.6
14.6
14.9
15.3
15.8
16.2
16.4
15.9
15.5
15.1
14.9
14.8
14.8
15.0
15.4
15.5
15.2
15.0
14.9
15.0
12-Nov-08
14-Nov-08
17-Nov-08
18-Nov-08
19-Nov-08
20-Nov-08
21-Nov-08
24-Nov-08
25-Nov-08
26-Nov-08
28-Nov-08
1-Dec-08
2-Dec-08
3-Dec-08
4-Dec-08
5-Dec-08
8-Dec-08
10-Dec-08
11-Dec-08
12-Dec-08
15-Dec-08
15.1
Pre Acquisition
Date
14-Oct-08
15-Oct-08
16-Oct-08
17-Oct-08
20-Oct-08
21-Oct-08
22-Oct-08
23-Oct-08
24-Oct-08
27-Oct-08
28-Oct-08
29-Oct-08
31-Oct-08
3-Nov-08
4-Nov-08
5-Nov-08
6-Nov-08
7-Nov-08
10-Nov-08
11-Nov-08
12-Nov-08
Date
16.4
16.2
16.1
16.2
15.6
14.9
14.3
13.5
13.0
13.1
13.3
13.5
13.7
13.9
14.4
14.9
15.5
16.1
15.8
15.4
14.9
14.3
13.8
13.4
13.3
13.3
13.5
13.7
14.1
14.5
15.3
14.8
14.4
13.9
13.6
13.5
13.5
13.6
13.8
14.4
14.0
13.8
13.6
13.6
12-Nov-08
14-Nov-08
17-Nov-08
18-Nov-08
19-Nov-08
20-Nov-08
21-Nov-08
24-Nov-08
25-Nov-08
26-Nov-08
28-Nov-08
1-Dec-08
2-Dec-08
3-Dec-08
4-Dec-08
5-Dec-08
8-Dec-08
10-Dec-08
11-Dec-08
12-Dec-08
15-Dec-08
13.9
20.3
20.6
20.4
20.3
20.3
20.2
20.0
20.0
19.9
19.8
19.8
19.9
20.1
20.2
20.4
20.5
20.5
20.4
20.4
20.3
20.2
20.1
20.0
19.9
19.9
19.9
20.0
20.1
20.2
20.3
20.3
20.2
20.1
20.0
20.0
19.9
20.0
20.0
20.1
20.1
20.0
20.0
20.0
20.0
20.0
19.5
19.9
19.8
19.7
19.6
19.4
19.4
19.4
19.4
19.4
19.4
19.5
19.6
19.8
19.8
19.8
19.9
19.7
19.7
19.6
19.5
19.4
19.4
19.4
19.4
19.4
19.5
19.6
19.7
19.8
19.6
19.5
19.5
19.4
19.4
19.4
19.5
19.5
19.6
19.5
19.5
19.4
19.5
19.5
19.5
25.00
25.00
20.00
20.00
20.02
15.00
15.14
Low Price
17.2
19.8
20.2
20.3
20.3
19.2
19.3
19.6
19.6
19.5
19.2
19.4
19.3
19.5
19.5
19.7
20.0
20.2
19.7
19.5
20.0
Tata Docomo
Tata Docomo
15.00
19.1
20.9
20.6
20.6
20.5
20.4
20.1
20.1
20.3
19.9
19.8
20.0
19.7
19.9
19.8
20.4
20.6
20.5
20.5
20.3
20.6
Post Acquisition
Low Price
17.6
16.6
15.5
16.3
16.1
16.5
16.3
15.6
13.5
12.5
13.5
12.6
13.1
13.8
13.8
14.3
13.7
13.8
16.3
16.4
17.2
High Price
10.00
10.00
5.00
5.00
19.46
13.88
Hig h Pr ice
Lo w Price
INTERPRETATION
The calculation of five days moving average for the previous as well as later
month from the date of merger is shown. It takes into account the open,
high, low, close, daily turnover as well as calculation of abnormal return.
This takes into account the daily volatilities of the share prices.
Here, the daily average prices have risen due to positive feedback of
the merger but the turnover has decreased at the same time. This
shows that there are certain shareholders who expect the share prices
to rise much more as compared to actual rise that has taken place and
so they have reduced trading activities and turned themselves into
investors. Such investors value the deal much more and so they
expect the share prices to rise sharply within a period of year or so.
Ex. Return
Abnormal Return
10/15/2008
10/16/2008
10/17/2008
10/20/2008
10/21/2008
10/22/2008
10/23/2008
10/24/2008
10/27/2008
10/28/2008
10/29/2008
10/31/2008
11/3/2008
11/4/2008
11/5/2008
11/6/2008
11/7/2008
11/10/2008
11/11/2008
11/12/2008
-5.77%
-2.06%
-5.63%
2.45%
4.44%
-4.72%
-3.84%
-10.77%
-2.16%
5.77%
0.41%
8.09%
5.53%
2.80%
-4.72%
-3.74%
2.33%
5.65%
-6.49%
-3.03%
-0.10%
-0.04%
-0.10%
0.03%
0.07%
-0.09%
-0.07%
-0.19%
-0.04%
0.09%
0.00%
0.13%
0.08%
0.04%
-0.09%
-0.07%
0.03%
0.09%
-0.12%
-0.06%
-0.10%
-0.15%
-0.25%
-0.21%
-0.15%
-0.23%
-0.30%
-0.49%
-0.54%
-0.45%
-0.45%
-0.32%
-0.24%
-0.20%
-0.28%
-0.35%
-0.32%
-0.23%
-0.35%
-0.41%
P o s t A c quis it io n
Date
Ex. Return
Cumm. A b. Return
11/14/2008
11/17/2008
11/18/2008
11/19/2008
11/20/2008
11/21/2008
11/24/2008
11/25/2008
11/26/2008
11/28/2008
12/1/2008
12/2/2008
12/3/2008
12/4/2008
12/5/2008
12/8/2008
12/10/2008
12/11/2008
12/12/2008
12/15/2008
-1.59%
-1.01%
-3.82%
-1.83%
-3.69%
5.51%
-0.13%
-2.34%
3.82%
0.73%
-2.79%
-1.14%
0.10%
5.53%
-2.87%
2.21%
5.39%
-0.10%
0.47%
1.47%
0.00%
0.00%
0.01%
0.00%
0.01%
-0.02%
0.00%
0.01%
-0.01%
0.00%
0.01%
0.00%
0.00%
-0.02%
0.01%
-0.01%
-0.02%
0.00%
0.00%
-0.01%
0.00%
0.01%
0.02%
0.02%
0.03%
0.01%
0.01%
0.02%
0.01%
0.00%
0.01%
0.01%
0.01%
-0.01%
0.00%
-0.01%
-0.03%
-0.03%
-0.03%
-0.04%
11
/8
/0
8
11
/1
0/
08
11
/1
2/
08
11
/6
/0
8
11
/4
/0
8
11
/2
/0
8
10
/3
1/
08
10
/2
9/
08
10
/2
7/
08
10
/2
5/
08
10
/2
3/
08
10
/2
1/
08
10
/1
9/
08
-0.10%
10
/1
7/
08
10
/1
5/
08
0.00%
-0.20%
-0.30%
-0.40%
-0.50%
-0.60%
11
/1
4/
08
11
/1
6/
08
11
/1
8/
08
11
/2
0/
08
11
/2
2/
08
11
/2
4/
08
11
/2
6/
08
11
/2
8/
08
11
/3
0/
08
12
/2
/0
8
12
/4
/0
8
12
/6
/0
8
12
/8
/0
8
12
/1
0/
08
12
/1
2/
08
12
/1
4/
08
0.00%
-0.01%
-0.02%
-0.03%
-0.04%
INTERPRETATION
The return of the target company Tata Communication has been very poor
since the past 15 to 20 days before the acquisition but it almost got to
break-even soon after the acquisition date. This sustained for the next 8 to
10 days but again got back into negative returns zone due to poor customer
support to
the
RATIO ANALYSIS
TATA DOCOMO (13-1108)
Debt-Equity Ratio
ROCE (%)
net profit margin
P/E
ROE(%)
EPS
OPM(%)
20
18
16
14
12
10
8
6
4
2
0
Pre- acquisition
0.11
7.33
9.55
0
11.14
0.89
16.2
Postacquisition
0.14
7.44
10.61
12
10.97
1.11
18.7
Change
(%)
27.27%
1.50%
11.10%
0
-1.53%
24.72%
15.43%
INTERPRETATION
Debt equity ratio on post acquisition debt is increasing which shows
company debt is increasing after merger.ROCE is constant it has not change
much.Net profit margin increases by 11.10 as it income increases in post
acquisition as compared to pre acquisition. P/E highly increases in post
acquisition from 0 to 12%. ROE is decreasing by 1.53% which shows that it
slightly more debt than equity. EPS is increasing drastically by 24.27%
which is very profitable for investors. Operating profit margin is increased by
15.43% which shows that company profit margin is very fairly profitable.