Bangalore - At the beginning of the year it seemed Indian conglomerate Tata Group was on a dream run, first unveiling the world's cheapest car and then buying the Jaguar and Land Rover brands from Ford Motor Co for $2.3 billon.
Tata Group was leading corporate India's overseas expansion, having notched up the country's biggest foreign takeover with its $13 billion deal to buy Corus in 2007, and putting Indian industry on the map with the Nano car project.
But since winning Jaguar/Land Rover in March, 2008 has soured for one of India's largest business houses, hit by the global credit crisis, a dispute over the land where it planned to build the Nano and now the deadly attacks in Mumbai last week.
At least 183 people were killed in India's financial capital after militants struck two of Mumbai's best-known luxury hotels, including the Taj Mahal Palace hotel, the flagship of Tata Group's Indian Hotels Co Ltd.
"It does excellent business throughout the year. All its flagship restaurants are big money spinners for Indian Hotels," Amol Rao, an analyst with Mumbai brokerage PINC Research, said of the 105-year-old Taj hotel.
"It's going to take long to rebuild the structure and loss of business is going to hurt them. Once demand goes away, it's difficult to get it back soon ... the attacks will impact Indian Hotels' revenue for at least the next 24 months."
Indian Hotels has said it will restore the heritage hotel.
"We will rebuild every inch that has been damaged in this attack and bring back the Taj to its full glory," RK Krishna Kumar, vice chairman of Indian Hotels, was quoted as saying on the Tata Group website.
A Tata spokesman said it was too early to assess the damage caused to the hotel by the attacks, and that there would be a "short-term impact" on the business of the Taj, which analysts say accounts for a significant portion of Indian Hotels' revenue.
The Tata Group had revenues of about $62.5 billion in the fiscal year ended March 31, 2008, and operates in sectors including software, steel, energy, automobiles and consumer products.
Founded by Jamsetji Tata in the mid 19th Century, the group's 27 publicly listed enterprises have a combined market capitalisation of some $60 billion and a shareholder base of 3.2 million, the group's website said.
Its top companies include Tata Steel, Tata Consultancy Services, Tata Motors, Tata Tea, Tata Chemicals and Tata Power.
The global financial meltdown has hurt the Tata Group by making it more difficult to refinance short-term loans taken out by Tata Motors for the Jaguar/Land Rover deal.
Plans to raise 41.5 billion rupees ($825 million) via two rights issues in October to repay the loans were hit by a stock market slump, with company founders raising their stake to 42% from 33% as they covered most of the issue.
That month, Tata Motors also said it was rethinking its plans to raise $600 million overseas due to falling markets, and was also reviewing its expansion plans due to softening demand.
In November, Ratan Tata, chairman of Tata Sons, the holding company of the Tata Group, wrote to the heads of group companies, telling them to finalise all pending loan and funding agreements, even if it meant accepting higher interest rates, and put the conglomerate's acquisition plans on hold.
The launch of the Nano, greeted with a rapturous welcome at the Delhi autoshow in January, has been pushed into 2009 after Tata Motors shifted production to Gujarat state in October.
Violent protests by farmers unhappy with the compensation for their land had forced Tata Motors to stop work on the factory in West Bengal state where it planned to build the Nano, which at 100 000 rupees ($2,000) is slated to be the world's cheapest car.
"There will be a short-term impact on the Tatas, which has been facing tough debt and equity market conditions that made fund-raising difficult," said Rishi Sahay of consultancy firm IndusView Advisors.
"The Mumbai attacks add to these adverse conditions. No company can emerge unscathed out of this," he said.
"But the Tata Group will come out it after some time. The kind of balance sheet they have is difficult to underestimate."
"They have excellent brand name and they always manage to pull out some miracle from their hat."