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9.

1 TATA COMMUNICATION-NTT DOCOMO


About the acquisition
Date: - 13th November 2008
Acquirer: - Ntt-Docomo
Target company: - Tata Teleservices Ltd.
Stake: - 26 %
Deal amount: - US$ 2700 m
Sector: - Tele-communication

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)

Tata Communications Limited is listed on the Bombay Stock Exchange and


the National Stock Exchange of India and its ADRs are listed on the New
York Stock Exchange. (NYSE: TCL)

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.

Detailed case study


Tata Sons Limited, the promoter of Tata Teleservices Limited, announced
today that its transaction with NTT DOCOMO, under which the Japanese
telecom company was to acquire 26 per cent of the common shares of Tata
Teleservices Limitedin accordance with the capital-alliance agreement
announced by the parties in November 2008has been completed.
Tata Sons further stated that DOCOMO has also completed its payment
obligations under the Tender Offer and is preparing to acquire approximately
12 per cent of the common shares of Tata Teleservices (Maharashtra)
Limited (TTML) through an open offer*, with the Tender Offer having closed
on 12 March 2009.
With this development, DOCOMO has become a 26-per cent shareholder in
Tata Teleservices Limited and three DOCOMO Directors will be named to join
the TTSL Board. The partners will now work to increase the enterprise value
of both TTSL and TTML, while creating synergies through their joint activities
including Business & Technology Cooperation Committee.
Tokyo-based DOCOMO, the worlds leading mobile operator, has played a
major role in the evolution of mobile telecommunications through its
development of cutting-edge mobile technologies and services. The company
is a strong market leader used by more than 50 per cent of Japans mobile
phone users. DOCOMO, the worlds leading mobile operator, will work closely
with TTSLs management and provide know-how to help the company
develop its mobile business. TTSL expects to leverage DOCOMOs expertise
in the development and delivery of value-added services, where DOCOMO is
a firmly established market leader. The Japanese telecom giant which, with
53 million customers and 51.5% of the Japanese market, is one of the
world's largest players in the telecommunications industry, bought a 26%
stake in Tata Teleservices Ltd (TTSL) for $2.7 billion. NTT DoCoMo followed

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.

It serves over 53 million customers, including 46 million people subscribing


to FOMATM (in Japan), launched as the worlds first 3G mobile service based
on W-CDMA in 2001.
It offers a variety of leading-edge mobile multimedia services, including imode, the worlds most popular mobile e-mail/Internet service, used by 48
million people.
With the addition of credit-card and other e-wallet functions, DoCoMo mobile
phones have become versatile tools for daily life. It is listed on the Tokyo,
London and New York stock exchanges. TTSL expects to leverage DoCoMos
expertise in the development and delivery of value-added services, where
DoCoMo is a firmly established market leader.

IMPACT ON SHAREHOLDERS WEALTH


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

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.

COMPANYS RETURN BEFORE AND AFTER ACQUISITION


Pre Acquisition
Date

Ex. Return

Abnormal Return

Cumm. Ab. 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

A bno rmal 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%

Cumm. Ab. Return


0.04%
0.03%
0.02%
0.01%

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

newly entered Docomo brand in highly competitive

communications market in India.

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%

TATA DOCOMO 13-11-08 pre


TATA DOCOMO 13-11-08 post

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.