Impact Of Foreign Acquisitions On 7 Indian Companies' Stocks

2. Hindalco Industries

The flagship company of Aditya Birla Group, Hindalco Industries acquired Canada-based Novelis in 2007. The acquisition turned out to be a great mistake on the part of the Indian company. Although Novelis is four times the size of Hindalco, it continuously made a hole on the balance sheet of Hindalco for the initial two years. The Canadian company finally got a grip by 2010 and returned $1.7 billion to the Indian parent. Novelis is reported to have generated 72 percent of the parent company’s cash flow in 2012.

3. Tata Steel

 Tata Steel made news by acquiring Corus for a startling $12 billion more than five years back. The European entity was expected to add impressive numbers to the profit of Tata Steel. However, the foreign asset soon turned out to be a liability and the Indian parent recently had to write off $1.6 billion from its balance sheet due to European arm’s loss of value.

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