Personalized | Reliable | Innovative 1 Overseas Acquisitions by Indian firms- A Study November 2009

Personalized | Reliable | Innovative 2 Indian Companies’ Forays in the International Arena Since the beginning of this decade several Indian companies have made overseas acquisitions and are continuing to do so. It would be interesting to review the financial performance of such acquisitions since then. Obviously the success of non-financial objectives such as sourcing of technology/ raw materials/ manpower,etc. is also equally important, but may not be visible. Hence this study to take a look at the P&L performance of the acquisitions.

Personalized | Reliable | Innovative 3 Outbound Acquisitions by Indian firms

Personalized | Reliable | Innovative 4 Reasons for Overseas Acquisitions by Indian firms Liberalization by RBI; Appetite for growth; Hunger to make an international footprint; Technology acquisition; Access to Foreign markets & raw material sources.

Personalized | Reliable | Innovative 5 Overseas Acquisitions by Indian firms

Personalized | Reliable | Innovative 6 Overseas Acquisitions by Indian firms

Personalized | Reliable | Innovative 7 Performance of Acquisitions –Percentage of acquisitions that have lost money: 81.25% –Percentage of acquisitions that have made money: 18.75% –Average R.O.I. across all the outbound acquisitions: 6.83%

Personalized | Reliable | Innovative 8 Acquisitions that have yielded positive return

Personalized | Reliable | Innovative 9 Acquisitions that have yielded sub-optimal return

Personalized | Reliable | Innovative 10 Takeaways from the results Overwhelming majority of Indian companies have failed to manage overseas acquisitions well; “Me-too” and unrelated acquisitions have failed; In the boom years, excessive prices have been paid for the takeovers; Lack of managerial depth in mid-size Indian companies that have acquired overseas companies has been instrumental in failures; Irrespective of the area of business, cost of acquisition and ability to integrate operations are the two critical parameters for success in acquisitions abroad.

Personalized | Reliable | Innovative 11 Thank You Disclaimer: This product is distributed for information purposes only. The information in this report does not constitute an offer to sell or a solicitation of an offer to buy any of the securities mentioned in the report. The readers may note that neither the company, its Directors, Officers or employees take any responsibility, financial or otherwise, due to any transaction undertaken or any action based on the information contained herein. The Company, its Directors, Officers or Employees may have a position or may otherwise be interested in the investment referred to in this document.