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Old 27th March 2009, 13:47   #46
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Quote:
Originally Posted by NetfreakBombay View Post
TATA's Credit rating is pathetic at the moment.

Its rating is B+ (Subprime, Highly Speculative)

Bond credit rating - Wikipedia, the free encyclopedia

It would be happy to get loans at rates lower then 20%.

So 8.5% interest is a really good news for them.
As a loan 8.5 % is good news for them. But how are they going to pay back the interest. The interest amount has to deducted from the Tata Nano's profit margin. As the there is big difference between demand and supply of Nano that amount will be large.
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Old 27th March 2009, 17:24   #47
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5 lakh bookings at 1 lakh each is 5000 crore
5,00,000 x 1,00,000= 5000,00,00,000
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Old 27th March 2009, 18:00   #48
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No, here is an illustration:

Name:  crore.JPG
Views: 390
Size:  8.5 KB
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Old 27th March 2009, 18:38   #49
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Quote:
Originally Posted by dockap View Post
5 lakh bookings at 1 lakh each is 5000 crore
5,00,000 x 1,00,000= 5000,00,00,000
Quote:
Originally Posted by NetfreakBombay View Post
No, here is an illustration:

Attachment 116572
@NetFreakBombay


Oh man! You got to be kidding all of here, aren't you!!!

Last edited by HappyWheels : 27th March 2009 at 18:39.
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Old 27th March 2009, 19:11   #50
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Yaa I goofed up there.
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Old 27th March 2009, 21:38   #51
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Gosh, I'm feeling embarrassed!
Here we are with simple arithmetic and we're having trouble, are we???!!

C'mon, Team BHP, we're better than that!
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Old 28th March 2009, 13:48   #52
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Originally Posted by vinayasurya View Post
As a loan 8.5 % is good news for them. But how are they going to pay back the interest. The interest amount has to deducted from the Tata Nano's profit margin. As the there is big difference between demand and supply of Nano that amount will be large.
I wonder whether this is the one of the reasons for 5% margin. But hey, they accumulated 1500 crores from retail FD agreeing to pay 10.5% to 11.5% - so this is much better in terms of interest savings - also creates a visible pipeline of orders.
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Old 28th March 2009, 22:50   #53
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Originally Posted by adzegeek View Post
I wonder whether this is the one of the reasons for 5% margin. But hey, they accumulated 1500 crores from retail FD agreeing to pay 10.5% to 11.5% - so this is much better in terms of interest savings - also creates a visible pipeline of orders.
Yes, as a loan this is much better in than issuing a company FD with high interest rates(esp. as credit rating is B+). But ultimately every loan has to paid back with interest. So for Nano customer it is like getting a discount. And Tata is losing money ( potential profit ).

I don't think Tata Motors is going to bust as the thread heading suggests. But it is well known that Tata Motors is not a comfortable financial situation. And Nano is a very good product for them to bounce back.
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