TCS - the forgotten hero
all lights are on ratan tata and his team for having pulled off the takeover of Corus steel, which will catapult tata steel into the global top 5 in terms of size. i know nothing about the steel industry - whether the tatas have overpaid to buy Corus , which was a penny stock a few years ago or its is truly a show of tata's mettle and benefits will be visible to all in a few years.
but what i do know is that the real heroes of this deal are far away from the spotlight and overseeing an army of programmers , which has created the wealth for mr tata to buy corus and consolidate his holding across group companies. yes, the boring programmers and the sober management of TCS to me are to the true heroes who have enabled tata's bold overseas moves.
from tata tea buys to the corus one, the debt component guaranteed by tata sons , which is primarily the holding company for TCS, has made these takeovers possible. that is, the cash flows from TCS, are being used to fund and guarantee the takeovers. in the Corus case, they even sold some TCS stock worth $2 billlion , i think.
now the issue i have with this is why sell parts of a great software company or keep it in bondage for many years to buy into steel companies or coloured or colourless water. TCS will have a market value equal to Infosys at least if listed on the Nasdaq - thats $33 billion or thrice what tatas have paid Corus. and TCS surely has a great future while larger mergers are always shrouded in uncertainties.
It is not just what you buy that counts but what you sell to enable the buy.
and in this case, the tatas , i think, have sold stupid and in the best possible scenario bought smart.
and maybe its time they acknowledge the real heroes.
but what i do know is that the real heroes of this deal are far away from the spotlight and overseeing an army of programmers , which has created the wealth for mr tata to buy corus and consolidate his holding across group companies. yes, the boring programmers and the sober management of TCS to me are to the true heroes who have enabled tata's bold overseas moves.
from tata tea buys to the corus one, the debt component guaranteed by tata sons , which is primarily the holding company for TCS, has made these takeovers possible. that is, the cash flows from TCS, are being used to fund and guarantee the takeovers. in the Corus case, they even sold some TCS stock worth $2 billlion , i think.
now the issue i have with this is why sell parts of a great software company or keep it in bondage for many years to buy into steel companies or coloured or colourless water. TCS will have a market value equal to Infosys at least if listed on the Nasdaq - thats $33 billion or thrice what tatas have paid Corus. and TCS surely has a great future while larger mergers are always shrouded in uncertainties.
It is not just what you buy that counts but what you sell to enable the buy.
and in this case, the tatas , i think, have sold stupid and in the best possible scenario bought smart.
and maybe its time they acknowledge the real heroes.
posted by tvm at 6:51 PM
1 Comments:
Nice insight - they should invest in the future not the same old building blocks of the last century. In a few years Korea and China will start undercutting the steel markets. However, they have a looong way to go before they can catch up on IT services - if at all.
Post a Comment
<< Home