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M&M
to Rev up Aussie Tractor Mart
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Mahindra
& Mahindra (M&M), the country's largest
tractor manufacturer by market share,
is looking at capturing 10 per cent of
the Australian tractor market by 2009.
Australia with a population of 18 million,
has a market volume of 10,000 tractors,
growing at 10 per cent annually. M&M has
exported 200 tractors in the 28 horse
power (HP) to 80 HP segment from its Chinese
and Indian manufacturing facility during
the last financial year. While the company
exports low-end tractors from its Chinese
base, the high-end variants are from its
Indian facilities located at Mumbai and
Nagpur. "M&M is expecting to increase
its exports to Australia (in the 28-80
HP category) by manifold to cross 10 per
cent of the market share by 2009," said
Anjani Kumar Chaudhari, president, farm
equipment sector, M&M. The company has
also set up a unit in Australia to assemble
completely knocked down kits (CKD), he
said. The Australian market is dominated
by companies such as Kubota, Shibaura,
Mitsubishi, New Holland and Daedong. Customers
also prefer used tractors. Many of these
companies have only assembly facilities
as the market size is too small for manufacturing.
M&M is hoping to enrich the company's
brand presence in the country with its
range of tractors and sports utility vehicle
(SUV) in the country. Mahindra supplies
CKD kits from its tractor plants in Kandivli
near Mumbai and Nanchang (of Jiangling
Motor Co) in China. The company also exports
tractors to countries like US, Europe,
and Egypt. The company's tractor exports
in financial year 2006 jumped 29.6 per
cent to 6,981 units, while domestic sales
surged 30 per cent to 85,029 units. The
operations of the company's subsidiary,
Mahindra Australia, began in Brisbane
in early 2005. The Australian strategy
came on the heels of successful tractor
exports to the US. The company has started
its Australian operations, beginning with
Queensland and New South Wales. Three
dealers have launched Mahindra brand in
Brisbane, Lismore and Wauchope inland
from Port Macquarie. It has introduced
both 4WD and 2WD tractor models ranging
from 28 to 80 hp in Australia.
Courtesy:
www.business-standard.com, June 29, 2006
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Tanishq
to Enter US Market
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Tata
Group company Tanishq in an attempt to
secure a larger pie of the international
market has decided to enter the US market
soon. "We will enter the US market with
our own Tanishq brand shortly," Tanishq
Chief Operating Officer C K Venkatraman
said at the launch of the first concept
store. He, however, said the strategy
to roll out the brand store was not yet
finalised and it would either be franchisee
or company owned. "We will start with
one to two stores initially. Location
is also yet to be decided, but it would
be on the East coast of the world's largest
jewellery market," Venkatraman said. Currently,
Tanishq exports to a few middle East and
farEast and also sells through store-in-store
concept. Exports contribute about five
per cent of the total sales.
Courtesy:
www.financialexpress.com, June 29, 2006
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India's
Mobile User Growth Exceeds China: TRAI
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Registering
a phenomenal rise, mobile subscriber's
annual growth rate in India is around
85 per cent since 1999, ahead of China,
which posted a 16 per cent growth in the
mobile user base in 2005. This is one
of the findings of TRAI, which brought
out a study on Tuesday on "Financial Analysis
of Telecom Industry of China and India."
Indian mobile market is much more competitive
than the Chinese mobile market, the report
said. "The growth of mobile services in
India over the past few years has been
phenomenal. Now over 4 million mobile
subscribers are added every month. On
the other hand China has registered a
growth of 16 per cent in the mobile subscriber
base in the year 2005 with monthly addition
of 5 million subscribers every month",
the study said. Total telecom revenue
of Chinese telecom companies increased
from $65 billion to $72.70 billion during
the calendar year 2005. Telecom revenue
in India during 2005-06 was $19.50 billion.
Average revenue per user in India and
China is comparable in GSM pre-paid segment
but ARPU for post paid segment in China
is much higher. ARPU for CDMA services
are also higher in China in comparison
to India. ARPU for Basic Telephone Services
is higher in India when compared to ARPU
for Basic Telephone services in China.
Minutes of Usages (MOU) of cellular mobile
Telephone services are much higher in
India when compared to China's Cellular
mobile telephone services. Minutes of
Usage of GSM and CDMA based cellular mobile
telephone services in India are 32 per
cent and 70 per cent respectively, higher
when compared to Chinese cellular mobile
telephone services, it said. But there
is lower ARPUs in India in spite of higher
usage due to much lower tariffs in India.
The capital employed per subscriber for
the Basic Service is much lower when compared
to India. However, capital employed for
the cellular segment is lower in India.
Chinese companies are able to generate
higher rate of EBIDTA margin than Indian
companies. Chinese Companies earn higher
rate of return on the capital employed
(RoCE) than it Indian counterparts.
Courtesy:
The Economic Times, June 29, 2006
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Praj
Bags US$ 20 Million Order From US Ethanol
Plants
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Bio-fuel
technology major Praj Industries has bagged
two orders worth US$ 20 million to supply
production technology and machinery for
two ethanol plants in the US. The order
not only marks the successful entry into
a stringent market such as the US, but
also promises a quantum leap for Praj
in its quest of becoming the world leader
in ethanol plants. The order is the company's
largest ethanol-making installation after
the two 3,00,000 litres per day plants
it supplied to in Columbia earlier this
year. Pramod Chaudhari, chairman, Praj
Industries, said on Tuesday that the order
by California-based Cilion group is to
supply technology and machinery to erect
two ethanol plants of 6,00,000 litres
per day (55 million gallons per year)
capacity each. Chaudhari said the Cillion
group is planning eight ethanol plants
and has selected Praj's technology for
four of them. "The company has been selected
for supply of machinery for the first
four plants. Cilion has yet to release
machinery orders for the other four,"
he clarified. The order will be commissioned
over a period of 12 to 15 months, he said,
adding that the machinery will be manufactured
in the company's factories in India. This
order is a manifestation of the efforts
of Praj and its vast and varied experience
in the ethanol industry, Chaudhari said.
"With these contracts, Praj will be recognised
as a major supplier to ethanol plants,"
he said. The financial fallout of the
order will be partly witnessed in the
current year itself, Chaudhari informed,
adding that the company's sales revenue
mix will shift strongly in favour of exports
from the current 55:45 tilted towards
the home market. The company's forays
into the US markets will also pick up,
Chaudhari said. "We are looking at strong
engineering capabilities that are suitable
for us in our expansion in the US, though
we have neither finalised a target for
acquisition nor firmed up the possible
structure of our business entity," he
clarified. Chaudhari informed that the
company is planning to set up a new research
and development centre at Pune in order
to focus on industrial biotechnology such
as bio-fuels and bio-energy technologies.
Courtesy:
Business Standard, June 28, 2006
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India
Inc. on Global Shopping Spree
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Indian
pharmaceutical companies have been aggressively
making acquisitions overseas, especially
in the US and Europe, in the last two
to three years. Most of the acquisitions
have been in the generics space, and have
resulted in Indian firms gaining access
to manufacturing facilities in common
trade areas like the European Union, from
where products could be rolled out in
potential markets. The latest announcement
was from Nicholas Piramal this month,
when it acquired Pfizer Inc's integrated
pharmaceu- tical manufacturing facility
at Morpeth, UK, for an undisclosed sum,
making it the company's third acquisition
in the UK since December 2004. NPIL also
entered into a $350 million, 5-year manufacturing
agreement with Pfizer for 12 products,
making it the MNC's largest custom manufacturing
partner in the world. In March this year,
Ranbaxy Laboratories made three acquisitions
in quick succession. It acquired generics
company Ethimed NV, Belgium, for an undisclosed
sum targeting the Benelux territories.
Belgium is the seventh largest pharmaceutical
market in Europe and Netherlands is the
sixth largest market with a combined market
size including Luxembourg, of $7.6 billion
(MAT Dec 05). The company also acquired
96.7% of Romania's Terapia from Advent
International for $324m. Terapia, with
2005 sales of $80 million, is the largest
independent generic company in Romania
and has a strong brand name and profitability.
Ranbaxy also acquired the unbranded generic
business of Allen SpA, a division of GlaxoSmithKline
(GSK), in Italy, through Ranbaxy's Italian
subsidiary, Ranbaxy Italia SpA, thereby
targeting the Italian generics market.
What's driving these companies to clinch
deals abroad? The quest for new markets
and manufacturing licences was a major
factor. According to Mahesh Sawant of
Frost & Sullivan. "Indian companies are
trying to tread the global path in order
to achieve a critical mass and at the
same time to reach global customers. With
product patents being accepted, Indian
companies are also trying to increase
their basket of patentable/patented products
through acquisitions. We can see the consolidation
wave not just in by Indian pharma but
also by global pharma companies as well,
with some of the bigger generic players
merging or acquiring to become still bigger."
In February 2006, Dr Reddy's Laboratories
made the biggest overseas acquisition
by an Indian pharma company, when it acquired
the fourth-largest German generic drug
maker Betapharm Arzneimittel GmbH for
euro 480 million (approximately Rs 2,550
crore) from 3i, a private equity house.
This was the company's second acquisition
in Europe. In 2002, it acquired the UK-based
BMS Laboratories and its wholly-owned
subsidiary, Aurigene Discovery Technologies,
for around $12 million. In the year 2005,
Indian pharma companies made nearly 15
acquisitions.
Courtesy:
The Financial Express, June 28, 2006
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India
Inc. Goes on The M&A Prowl
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India
Inc is on a M&A binge like never before.
The 10 cross-border, big-ticket deals
closed in June alone with a combined transaction
value of US$ 1.5 billion, have dramatically
changed the picture. Around 76 deals worth
US$ 5.2 billion were cut in six months
between January and June this year. Compare
this with 136 deals, valued at $4.7bn,
in the whole of '05. This, perhaps, marks
the emergence of Indian MNCs. First, it
was information technology (IT), followed
by pharma firms. "Today, corporates from
almost every sector is pursuing M&A abroad,
and everyone has a clear logic," says
Harish HV, partner at Grant Thornton India.
The month of June saw a flood of global
M&As by Indian corporates. Aban Loyd's
takeover of Norway's Sinvest (for $446m),
Ballarpur Industries' takeover of Malaysia's
Sabah Forest Industries ($261m) and Tata
Coffee's buyout of US's third largest
coffee chain Eight O'Clock ($220m) are
larger in size. Six other deals - including
Subex Systems' takeover of UK-headquartered
Azure Solutions for $140m, Aditya Birla
Nuvo's $125m open offer for Canada's leading
BPO provider Minacs Worldwide, and GHCL's
takeover of UK's largest home textiles
retail chain Rosebys for $40m - have taken
cumulative transaction value to $1.5bn
in June, a monthly record, so far, for
India Inc. Many pharma, IT, retail, consumer
goods and oil/gas companies are currently
snooping around for international acquisitions.
Investment bankers say that some of the
deals may be concluded in next 3-4 months.
They are confident that the deal size
would cross $1bn by '06 end. Analysts
point out that international M&A deals
by Indian corporates are on the ascent
since '02-03, and the deals are getting
bigger in size. "Most transactions are
leveraged deals, with 50-60% of debt and
some deferred considerations. Subsequently,
they raise less-expensive FCCBs or GDRs
and retire the high cost bridge loans,"
said an analyst. A fascinating side to
the story is that, say analysts tracking
M&As, is the comfort that Indian corporates
are beginning to enjoy acquiring global
companies which are much larger in size.
For instance, the US-based Eight O'Clock
(EOC) is around 2.5 times the size of
Tata Coffee and the acquisition may be
funded through a mixture of non-recourse
debt and equity. It's similar to what
its parent, Tata Tea, which surprised
India Inc in '00 by acquiring the UK heavyweight
brand Tetley, for a staggering 271m pounds.
The acquisition of Tetley made Tata Tea
the second biggest tea company in the
world, after Unilever, owner of BrookeBond
and Lipton. Analysts say that Mittal Steel's
long-drawn takeover of Arcelor has boosted
India Inc's confidence levels. The deals
struck in June present an unusually rosy
picture of India Inc, with newer sectors
striking the M&A route. Offshore, paper,
retail, BPO, consumer goods and the list
is getting longer.
Courtesy:
The Economic Times, June 28, 2006
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Tata
Tea in Race to Gulp Moroccan Company
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After
acquiring Czech brand Jemca last month,
Tata Tea Ltd is gearing up to buy Moroccan
tea brand Somathes, a company that specialises
in Chinese green tea. On the domestic
front, the tea major is scouting for regional
brands to strengthen its product portfolio.
According to industry sources, Tata Tea
is ahead in the race to acquire the Moroccan
tea company along with seven Chinese companies,
who are also in the fray. "After acquiring
Good Earth in the US, Tata Tea is very
aggressive to buy this brand as Somathes
controls 30% of the Moroccan market. The
minimum bid price is around Rs 240 crore,"
the sources pointed out. This yet-to-be
clinched deal will follow a string of
acquisitions by the Tata Group in various
geographies, including Tetley globally,
Good Earth in the USA and Jemca in Czech
Republic. When contacted by FE, Percy
T Siganporia, managing director, Tata
Tea, said, "We are constantly on the look
out for growth opportunities in areas
where we are not present or in a category,
where it makes sense for us to get in.
To mention anything specific at this point
of time will be entirely speculative."
The annual revenues for the target company
for 2004 was $40 million. In India, Tata
Tea is in talks with local and regional
brands to extend its product range. After
test-marketing Tetley Ice Tea in Great
Britain, the company is rolling out the
brand across the country. After Britain,
the company is gearing up to introduce
its ice tea brand in the USA. Tata Tea
(GB) Ltd, the UK subsidiary of Tata Tea,
had acquired Jemca, which is part of the
Czech food processing company, Alima Znac
kova Potravina. Jemca enjoys a healthy
26.6% share of the tea market in the Czech
Republic.
Courtesy:
The Financial Express, June 28, 2006
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TCS
Top Software Exporter in FY06: Nasscom
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Tata
Consultancy Services has retained its
position as the number one software services
exporter (excluding ITeS and BPO) followed
by Infosys and Wipro in Nasscom's list
of Top 20 IT Software and Service Exporters
in India. This list does not include companies
like Cognizant, Accenture, IBM and HP,
which are US listed companies but have
significant offshore operations in India
and would have been placed amongst the
top 10 in the list, were they to be ranked,
Nasscom said. While Satyam Computer Services
has been ranked fourth in the list, HCL
Technologies follows it. The others software
companies in the list are Patni Computer
Systems, I-flex Solutions, Tech Mahindra,
Perot Systems TSI (I), L&T Infotech, Polaris
Software Lab, Hexaware Technologies, Mastek,
Mphasis BFL, Siemens Information Systems,
Genpact, i-Gate Global Solutions, Flextronics
Software Systems, NIIT Technologies and
Covansys India. India's software exports
in FY06 touched $ 17.3 bilion.
Courtesy:
Business Standard: June 28, 2006
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Indian
Real Estate, a Big Bargain For Foreign
Investors
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Indian
realty appears to be truly going global,
with many overseas investors looking to
cash in on the burgeoning property scenario.
Interestingly, this is in spite of the
sharp run-up in property prices over the
past several years and the steep rally
on the stock market (before the sell-off).
Despite suspicion of a bubble, foreign
investors believe Indian real estate to
be a bargain with initial yields north
of 15 per cent on developments and 10
per cent on acquisitions. While accepting
that higher yields are not without risks,
they believe that some of these risks
are built into the high yields that can
be found in emerging markets. To provide
an insight into the Indian property market,
UBS Investment Research has decided to
host a meeting with private real estate
companies on June 29, to coincide with
the last day of the real estate investment
world conference in Singapore. Citing
the heightened activity in Indian real
estate as a result of higher prices and
genuine improvement in underlying demand
conditions, a CLSA Asia-Pacific report
maintains that an excess of $5-billion
worth of funds is to be invested in the
domestic market. "Traditionally, Indian
property market has been largely residential
market and this segment still continues
to be the most significant portion of
the overall market. However, this is now
changing with the emergence of IT/ITES
sector and organised retail as big growth
drivers," the report said. A Citigroup
Research report on real estate investment
trust (REIT) strategy has identified over
$15 billion of capital raised by opportunity
funds targeted at India. Identifying IT
office space as the most straightforward
investment option given the strong demand
and defined rental rates of about $8-10
per square feet per year, Citigroup reports
that India may need $1.5 billion of IT
office space and a few billion more of
other development.
Courtesy:
The Hindu Business Line, June 27, 2006
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Nissan
Plans 1.3 Litre Small Car From New Maruti
Unit
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Japanese
auto maker Nissan is likely to roll out
a 1.3-litre, three-cylinder small car
as its first made-in-India vehicle to
roll out of Maruti Udyog's upcoming plant
in Manesar (Gurgaon). The first Nissan
car, according to industry sources, is
expected to hit roads in the first quarter
of calendar year 2008. The new small car
from Nissan will be used to address both
the domestic and export markets. The initial
capacity is expected to be one lakh units
a year, which will be ramped up to two
lakh units at a later stage. Nissan has
started talks with select component makers
in the country, which will supply the
critical parts for the car. Spokesperson
of the largest domestic car maker Maruti
Udyog, in which Suzuki Motor Corporation
owns a majority stake, refused to comment
on this development. Industry experts
said Nissan is known in Japan, the US
and Europe for its economy class mid-size
sedans - and not for small cars. Hence,
the Japanese company's plans to produce
small cars in India should definitely
have developing markets like India as
target. However, it is not known in which
model of Nissan, the 1.3-litre engine,
code named XH-5, will be fitted. Earlier
this month, the two Japanese auto majors
- Nissan and Suzuki - announced a global
production alliance, which will see Nissan
supply mini vans to Suzuki on an OEM basis
starting from 2006-end. The deal also
included Suzuki's commitment to supplying
a mini vehicle to Nissan on an OEM basis.
Nissan cars are likely to be rolled out
of Maruti's upcoming second plant at Manesar.
Maruti is building its new plant with
an initial capacity of one lakh units
a year. The fresh demand from Nissan would
necessarily mean that India's largest
car company has to start planning fresh
capacity expansion, which the Suzuki and
Nissan's global manufacturing alliance
demands. Maruti Udyog Managing Director
Jagdish Khattar, at the time of announcing
the alliance between Nissan and Suzuki
and its impact on Maruti, had indicated
that there was sufficient land at the
new Manesar plant and expansion of capacity
to accommodate fresh demand from Nissan
can be built at the same location. Industry
sources also said a fresh team with a
new head is likely to be created by Nissan
to handle the India project. Nissan Motor
India is currently headed by Managing
Director Yoshi Moto Hiro, who is expected
to continue to head the sale operations
of the company.
Courtesy:
Business Standard, June 27, 2006
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ONGC
FY06 Net up 11% to Rs 14,431 Crore
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ONGC
Videsh (OVL), the overseas investment
arm of ONGC which has built up an impressive
portfolio with 21 oil equity projects
spanning 21 countries, is now set to begin
oil production in yet another oilfield
in Sudan. OVL will use block 5A, which
it had acquired as an exploration block,
for oil production. "Sudan's block 5A,
in which OVL has a 24.125% stake, began
oil production today," OVL managing director
RS Butola told reporters on the sidelines
of the conference for announcing ONGC's
financial results for '05-06. At present,
the Tharjhat field in block 5A is producing
38,000 barrels per day (bpd) and production
may be stabilized at 40,000 bpd soon,
Mr Butola said. "Mala field in the same
block would come to production in '07
with an output of 10,000 bpd, which would
rise to 20,000 bpd by '08. Our share from
the entire 5A output would be 15,000 bpd,"
he said. "OVL is expected to be the growth
vehicle for ONGC, with the company scouting
for oil properties in Africa and Latin
America," said RS Sharma, chairman and
managing director of ONGC. The upstream
company on Monday reported its highest
ever net profit of Rs 14,431 crore in
'05-06, up by 11% from Rs 12,983 crore
in the previous year. A final dividend
of 200% was declared over and above an
interim dividend of 250%, thus taking
the total dividend payout for the last
fiscal to 450%, an increase of 12.5 percentage
points from 400% paid out to investors
in the previous fiscal. This translates
to a total payout of about Rs 6,417 crore,
of which the government's share will be
Rs 4,758 crore. The company has reported
a gross turnover of Rs 50,556 crore for
'05-06, up from Rs 48,442 crore in the
previous year, a 4% jump. "ONGC earned
the highest ever net profit despite a
payout of Rs 11,956 crore on fuel subsidies.
Courtesy:
Economic Times, June 27, 2006
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Major
Concessions By Mittal Clinched the Deal
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Lakshmi
Mittal and Joseph Kinsch, chairmen of
Mittal Steel and Arcelor, on Monday announced
in Luxembourg details of the merger of
their companies at a joint press conference.
As per the agreement, Mr. Mittal will
become a non-executive president of the
new company, Arcelor-Mittal, and Mr. Kinsch
will retain his post. Arcelor's chief
executive Guy Dolle, who had made personal
attacks against Mr. Mittal, will leave
the company once the merger is firmed
up. "I have spoken to Guy Dolle and he
thinks that to implement the merger we
should now choose a new chief executive,"
Mr. Kinsch said. Expressing satisfaction
at the merger, Mr. Mittal said he hoped
the "marriage" of the two groups would
be a happy and lasting one. The new group
would employ 320,000 people worldwide,
and have an annual output of 116 million
tonnes of steel - three times that of
its nearest rival, Japan's Nippon Steel.
The price of Arcelor shares rose 6.7 per
cent following the merger announcement.
The details of the agreement made it clear
that Mr. Mittal had made a series of major
concessions to win over Arcelor. From
January, when he first announced his takeover
bid, valued at 18 billion euros, Mr. Mittal
steadily increased his offer to reach
27 billion euros. The Arcelor stock, valued
at 23 euros a share in January, is now
priced at 40.40 euros. This is clearly
a shareholder victory. The offices of
the new company will be located in Luxembourg
and not in Rotterdam, where Mittal Steel
is headquartered. The Mittal family will
have a 49 per cent stake in the new set-up
and will not be in a majority position
on the board. However, on Mr. Kinsch's
retirement next year, Mr. Mittal will
be at the helm. His son Aditya, now Mittal
Steel's Chief Financial Officer, is expected
to find a place on the management board.
So the family will clearly retain a great
deal of influence. There was bitterness
in the camp of Russian company Severstal.
Its chief Alexei Mordashov has threatened
to sue Arcelor for breach of contract.
Courtesy:
The Hindu, June 27, 2006
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India
Inc. May Soon Take an Europe Tour
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Mittal
Steel's mega deal with Arcelor will open
the doors for other Indian steel companies
to Europe, and the coming months are expected
to see domestic steel companies acquiring
small and medium-sized companies in Europe,
industry insiders and analysts said. They
also said that the Mittal-Arcelor deal
was done at an 'almost fair' valuation
and the mega deal is now expected to lead
to a re-rating of the industry. This would
make it difficult for Indian steel majors
to look at any sizeable acquisition overseas.
"One has to look at the long-term advantages
of the deal for assessing the valuation
of the deal. At one stroke, the deal will
add about 53m tonnes to Mittal's current
capacity, a capacity which otherwise would
have taken very many years to build. The
deal also enables Mittal Steel access
to technology for high end products, besides
market dominance in Western Europe," said
the head honcho of an Indian steel company,
who did not want to be quoted. Industry
analysts also said though the valuation
'looks' a bit on the higher side, it is
justified because of the strategic nature
of the deal. "In this case, the number
one player is acquiring the number two
player and becomes almost 4 times the
size of the number 3 player. In such a
scenario, this kind of valuation is justified,"
said Religare Securities CIO, Kunj Bansal.
Mittal's latest offer price of Euro 40.4
for each Arcelor share is about 82% premium
over the closing price of Arcelor on January
26, the last working day before the announcement
of Mittal Steel's initial offer. Industry
insiders, however, said Indian companies
currently do not have the financial wherewithal
to make any big time acquisition within
Europe or elsewhere overseas. "Indian
steel companies are facing the constraints
of comparatively high cost capital and
lower valuations and therefore any high
cost acquisitions are still much beyond
their reach," a senior Essar Steel executive
said. According to Hemendra Kothari, chairman,
DSP Merrill Lynch, Indian companies could
now look at the merger route to become
big, provided there are no regulatory
issues. "It (the deal) will pave the way
for Indian listed companies to look at
the possibilities of merging with international
listed companies," he said. Mr Bansal
said though there would be a re-rating
in the steel sector, Indian companies
would be looking at only small and medium
sized companies and the valuations for
these companies may not go up sharply
as there would not be any strategic importance
to such deals. "Internationally, many
of the steel companies are now valued
at a PE of 10 to 12, while Indian companies'
PEs are way down. This limits their ability
to go for any significant acquisition,"
said Arvind Parekh, director (finance),
Jindal Stainless.
Courtesy:
The Economic Times, June 27, 2006
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Tatas
Buy Eight O'Clock Coffee
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Mittal
Steel was not the only company with an
Indian connection which was in acquisition
mode over the weekend. Tata Coffee, a
51% owned subsidiary of Tata Tea, on Sunday
announced that it had acquired the US-based
Eight O'Clock Coffee Company (EOC), from
Gryphon Investors for Rs 1,015 crore ($220m).
The acquisition, which will be financed
through a combination of equity and non-recourse
debt, is in line with Tata Coffee's plans
to enter the US market. "By the end of
the decade, we expect the Tata Tea group,
including Tata Tea, Tetley, Tata Coffee
and Eight O'Clock Coffee combine to become
one of the largest and most admired beverage
players in the world. This move is in
line with the Tata Group's international
strategy," RK Krishna Kumar, chairman,
Tata Coffee said in a statement. JP Morgan
was the financial advisor to Tata Coffee
on this acquisition, while Rabo Bank is
funding the deal, which was signed on
Saturday night. Tata Coffee shares rose
20% on the BSE to reach Rs 325.65 in the
course of a special trading session on
Sunday. "This acquisition is a strategic
fit with our growth plans and helps Tata
Coffee in attaining its objective of becoming
an international and fully-integrated
player in the coffee industry," said MH
Ashraff, MD, Tata Coffee. The acquisition
of EOC by Tata Coffee is thus, in many
ways, similar to parent company Tata Tea's
acquisition of UK tea major Tetley in
the summer of '00. Tata Tea had paid $450m
for a leveraged buyout of Tetley, in what
was then the largest cross-border deal
by an Indian company. It was also among
the first large leveraged buyouts by an
Indian company. The size of the acquisition
was four times Tata Tea's net worth. At
that time, Tetley was twice the size of
Tata Tea in terms of the topline. The
move resulted in Tata Tea becoming the
second-largest tea company in the world,
after Unilever. Though Tata Coffee is
a smaller company-in terms of both topline
and bottomline than EOC - it's parent
company, Tata Tea is, of course, considerably
larger. For the year ended March 31, '06,
Tata Tea reported consolidated sales of
Rs 3,240 crore and a net profit of Rs
305 crore. The consolidated results include
that of Tata Coffee and Tetley, which
is 85.7%-owned by Tata Tea. For the year
ended March '06 (standalone), Tata Tea
posted a 44.9% increase in net profit
to Rs 186.9 crore and a 9.1% jump in revenues
to Rs 982 crore. Some of the Tata Tea
group's earlier acquisitions include,
besides Tetley, Good Earth in the US and
Jemca in the Czech Republic. Good Earth
is a speciality tea brand with a 3.7%
share of the US speciality tea market
and an estimated turnover of $16m. The
acquisition of Good Earth, which was carried
out in October '05, was financed through
borrowings and set an important milestone
in Tata Tea's plans for further acquisitions
around the world. Last month, Tata Tea
subsidiary Tata Tea (GB), UK signed an
agreement to acquire the assets of tea
company Jemca in the Czech Republic, from
the food processing company Alima Znackova
Potravina. The acquisition was funded
by The Tetley Group. JEMCA has an estimated
26.6% volume share of the tea market in
the Czech Republic and a turnover of $12.5m.
It sells black, green, fruit and herbal
teas.
Courtesy:
Economic Times, June 26, 2006
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It's
Official: It's Mittal's Arcelor Now
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It's
official now. After months of pursuing
the Arcelor deal, LN Mittal has finally
succeeded. Arcelor is now his. The new
entity will be known as Arcelor Mittal
and will produce 10% of steel globally,
making it one of the biggest or in fact,
the biggest steel producer in the world.
LN Mittal will be the President, while
John Kinsch will be the Chairman of the
merged entity. The Mittal deal values
Arcelor at 26.9 billion euro or USD 33.66
billion, while Arcelor's shares are valued
at 40.44 euro/share. The alliance proposal
will now be put to Arcelor shareholders.
Arcelor shareholders are to meet on June
30 to approve the deal. Majority of the
new board members would be from Arcelor.
Severstal is to be paid 130 million euro.
Courtesy:
moneycontrol.com: June 26, 2006
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Godrej
in Mission to China
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The
Godrej group is looking at expanding its
presence to other countries in the East,
particularly China. A 16-member Godrej
Management Committee team, which comprises
the CEOs of all Godrej group companies,
is in China at present for an internal
meeting as well as an orientation and
exploratory exercise. HK Press, executive
director and president, Godrej Consumer,
said the company was looking at opportunities
across sectors like foods, real estate,
and consumer products. "We are talking
to people to ascertain what is viable
for the different group companies. The
group is very keen on globalisation and
China, in particular," he said. The company
is exploring various options for furthering
its business in China, and has been talking
to different companies. The plans could
include entering into a joint venture
with a Chinese company, or an acquisition
in case of something suitable. Press indicated
that consumer products- soaps in particular-was
one category that the company was seriously
considering, although nothing had been
finalised at this stage. Godrej Consumer
Products may also look at exporting some
of its products like soaps and hair colour
to China if it feels that the market is
suitable for them. Godrej is the market
leader in the hair colour space in India,
and also exports its hair colour powder
to over 50 countries in Africa, Asia,
and Latin America. Adi Godrej, chairman,
Godrej Group, had said earlier this year
that the group was looking at inorganic
growth opportunities, especially for the
consumer products division. He had indicated
that it was in talks with a number of
companies internationally, and keen on
announcing two or three acquisitions this
year. This comes on the back of the acquisition
of UK-based Keyline Brands in October
last year, which was the first international
acquisition by Godrej Consumer. The company
already has a presence in soaps, hair
colour, and toiletries, and is looking
at broadening into other categories in
the home and personal care space.
Courtesy:
Business Standard, June 26, 2006
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India
Beats China, Becomes Dubai's Top Trading
Partner
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Dubai
recorded a 36 per cent growth in its trade
volume in 2005, with India replacing China
as the Gulf city's major trading partner.
Total imports from India last year were
worth Rs 288 billion, with China coming
next at Rs 264 billion, followed by the
USA, the UK and Japan. India also constituted
Dubai's largest export market with total
exports of Rs 11,113 million, ahead of
Pakistan which accounted for exports worth
Rs 10,572 million. Kuwait, USA and Iran
also figured in the list of Dubai's top
five export markets. India also topped
the list of Dubai's top re-export destinations.
Total value of re-exports to India in
2005 was pegged at Rs 216 billion, followed
by Iran at Rs 141 billion. Iraq, Switzerland
and the Netherlands were among the toppers
in the list. Reinforcing its reputation
as the trading hub of the Middle East,
Dubai has recorded a 36 per cent growth
in trade in 2005, with the transactions
through the city touching Rs 5,760 billion
compared to Rs 4,212 billion in 2004,
according to official figures. The figures
also indicate that Dubai had enhanced
its reputation as a major hub for re-exports,
which recorded a 38 per cent year-on-year
growth.
Courtesy:
Times of India, June 26, 2006
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Birla
Group Buys Canada BPO Firm
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Aditya
Birla Group will acquire Canada's BPO
provider Minacs Worldwide Inc for $125
million (Rs 562 crore). Trans Works, a
wholly-owned subsidiary of Aditya Birla
Nuvo, will acquire 46.5 per cent stake
of Minacs family, the promoter of the
Canadian company, for Canadian dollar
5.50 a share. This will be followed by
an open offer, priced at the same rate,
for the shareholders holding the balance
stake in Minacs. The cost of acquisition,
if 100 per cent stake of Minacs is acquired,
will be $125 million. Aditya Birla Group
Chairman Kumar Mangalam Birla said the
group wanted to acquire entire stake in
Minacs and merge it with Trans Works.
It expected that the entire process-from
acquisition of the non-promoters stake
in Minacs and merger with Trans Works-would
be complete by August. The combined business
of Trans Works, post merger, would be
$300 million. Reichmann Heuer Capital
Partners intended to co-invest in the
acquisition. In return, it would have
a maximum of 10 per cent stake in Trans
Works, post merger. TransWorks CEO Atul
Kunwar said the price of acquisition was
higher than 30-day average rate of Minacs
at Canadian dollar 5.30. The company is
listed on the Toronto Stock Exchange.
Transworks and Aditya Birla Nuvo would
fund the acquisition to the tune of $
105 million and the balance would be financed
by debt. This is the group's third acquisition
in Canada. It has two companies- Atholville
Pulp Mill and Nackawic Pulp Mill in the
country. In India, the group has two Canadian
JVs, with Sun Life and Alcan. TransWorks,
which was acquired by the Birla company
three years ago for $ 13 million, would
have a "global footprint with a right
shore solution to clients in the US, Aanada,
Europe and Asia", Kunwar said.
Courtesy:
Business Standard, June 26, 2006
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BHEL
Bags Rs 55cr Contract in Bangla
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State-run
Bharat Heavy Electricals (BHEL) has bagged
a Rs 55 crore contract for setting up
a sub-station in Bangladesh. The contract
has been awarded by Power Grid Company
of Bangaldesh for supply and installation
of a 230kv substation at Baghabari Power
Plant and extension of Ishurdi substation,
a company release said. The contract is
being funded by Asian Development Bank.
The engineering major has executed several
contracts in the neighbouring country,
including a turnkey project for a 100MW
power plant, but this would be the first
order for substations. BHEL would be involved
in design, supply, construction and commissioning
of 230kv substation at Baghabari and expansion
of Ishurdi substation.
Courtesy:
Business Standard, June 26, 2006
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Bharti
Airtel Among Top 10 on Global List
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Leading
telecom services provider Bharti Airtel
has been ranked among the top 10 best
performing companies in the world by Business
Week . Describing it as a highly innovative
company, the magazine improved Bharti's
ranking from last year's 19 to 10 this
year. The telecom service provider was
the only Indian company that has made
it to the top 10 list, a company statement
said. Bharti was ahead of Motorola (ranked
11), Google (13), Microsoft (37), Hewlett-Packard
(44) and Oracle (51). On being ranked
tenth, Bharti Airtel chairman and managing
director Sunil Bharti Mittal said: "It
has always been our endeavour to create
a world-class organisation that provides
best in class services . We are proud
to be up there with the very best in the
world.'' The companies ranked by the Business
Week were ranked on four criteria-return
of equity, revenue growth, shareholder
return (given equal weight) and total
revenue (which was weighted ), the release
added. Meanwhile, Bharti plans to spend
$100 million (Rs 450 crore) in the horticulture
sector over the next five years as part
of its agri-business foray. "We will invest
$ 100 million in next five years in our
agri-business initiatives,'' group chairman
Sunil Mittal said. He said the investment
would involve acquiring farm lands, setting
up R&D base and other basic infrastructural
facilities like cold storage for developing
the base for a sizeable horticulture business.
He said the group now owns 5,000 acres
of land in Punjab wherein it has already
undertaken plantation of horticultural
crops for export purposes. "We plan to
acquire 1,00,000 acres of agricultural
land in the next five years for this business,''
he said, adding "The venture would concentrate
on horticultural crops that have export
potential.''
Courtesy:
Economic Times, June 26, 2006
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Air
Travel in India on a Higher Plane
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Though
aviation stocks have lost altitude on
the bourses, air travel in India is booming
like never before. The Airport Authority
of India (AAI) figures for the month of
April, show a 46 per cent year-on-year
growth in passenger numbers. Growth has
been phenomenal on both the domestic and
international routes and the new figures
put India in the top position on the global
airport league tables. Domestic traffic
in April '06 grew by 58.6% over last year,
while international traffic grew 19.6%,
with a total of 12.3m passengers travelling
through the airports during the month.
"In March, passenger traffic had grown
46% over the previous year and if the
trend continues, growth projections made
earlier will have to be revised upwards",
says DP Singh, general manager (traffic),
Airport Authority of India. Indian airports
saw an overall traffic growth of 24% during
'05-06. "Air traffic in terms of passenger
and aircraft movements (landings and take-offs
at the airports) has seen a big jump because
of the overall buoyancy of the economy,
combined with the entry of the low-cost
carriers (LCCs)," says Mr Singh. Growth
in India is now the highest in the world,
with the Chinese airports coming second.
The Centre for Asia Pacific Aviation (Capa),
a Sydney-based aviation think-tank has
forecast a growth of over 25% in the next
five years and projected over 70m domestic
passengers by '10. At the current 28%
growth rate, India is the world's fastest-growing
market, albeit from a low base. "The growth
will continue over the next few years
because less than 1% of India's 1.1bn
people currently travel by air," says
Capt Gopinath, managing director of Air
Deccan. The Bangalore-based airline has
been the beneficiary of the traffic boom
and has improved its own market share.
Airline market figures for May show its
share has increased to about 18%. This
takes it within spitting distance of the
national carrier Indian's share of 23%.
However, the official Directorate General
Civil Aviation (DGCA) figures for May
have yet to be made public. The Chinese
airlines carried 150m passengers last
year and traffic in the middle kingdom
is growing at 15%. However, the big difference
between the two countries is that China
has made huge investments in its airport
infrastructure, while India is just taking
its first steps in this direction. The
International Air Transport Association
(IATA) has projected air traffic in Asia
to grow by 6.5% per year until '09, led
by demand from the two countries. Indian
airlines placed orders worth about $12bn
at the Paris Air show last year. The long
term outlook for the airline market is
widely believed to be bullish.
Courtesy:
The Economic Times, June 26, 2006
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Tatas
Buy Eight O'Clock Coffee
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Mittal
Steel was not the only company with an
Indian connection which was in acquisition
mode over the weekend. Tata Coffee, a
51 per cent owned subsidiary of Tata Tea,
on Sunday announced that it had acquired
the US-based Eight O'Clock Coffee Company
(EOC), from Gryphon Investors for US$
220 million. The acquisition, which will
be financed through a combination of equity
and non-recourse debt, is in line with
Tata Coffee's plans to enter the US market.
"By the end of the decade, we expect the
Tata Tea group, including Tata Tea, Tetley,
Tata Coffee and Eight O'Clock Coffee combine
to become one of the largest and most
admired beverage players in the world.
This move is in line with the Tata Group's
international strategy," RK Krishna Kumar,
chairman, Tata Coffee said in a statement.
JPMorgan was the financial advisor to
Tata Coffee on this acquisition, while
Rabo Bank is funding the deal, which was
signed on Saturday night. Tata Coffee
shares rose 20% on the BSE to reach Rs
325.65 in the course of a special trading
session on Sunday. "This acquisition is
a strategic fit with our growth plans
and helps Tata Coffee in attaining its
objective of becoming an international
and fully-integrated player in the coffee
industry," said MH Ashraff, MD, Tata Coffee.
EOC is the third-largest coffee brand
by volume behind Folgers and Maxwell House
in the $21bn (Rs 97,000 crore) US coffee
market and has approximately 67% of All
Commodity Volume penetration of the US
retail coffee market, according to a statement
issued by Tata Coffee. Headquartered in
Montvale, New Jersey, EOC operates its
roasting and packaging facility in Landover,
Maryland. In calendar year '05, EOC had
net sales of $109m (Rs 505 crore) and
EBITDA of $27m (Rs 125 crore). It has
a 54% market share of the branded whole
bean coffee market, according to agency
reports. For the year ended March '06,
Tata Coffee reported a net turnover of
Rs 190 crore and a net profit of Rs 22.6
crore. The acquisition of EOC by Tata
Coffee is thus, in many ways, similar
to parent company Tata Tea's acquisition
of UK tea major Tetley in the summer of
'00. Tata Tea had paid $450m for a leveraged
buyout of Tetley, in what was then the
largest cross-border deal by an Indian
company. It was also among the first large
leveraged buyouts by an Indian company.
The size of the acquisition was four times
Tata Tea's net worth. At that time, Tetley
was twice the size of Tata Tea in terms
of the topline. The move resulted in Tata
Tea becoming the second-largest tea company
in the world, after Unilever. Though Tata
Coffee is a smaller company - in terms
of both topline and bottomline than EOC
- it's parent company, Tata Tea is, of
course, considerably larger. For the year
ended March 31, '06, Tata Tea reported
consolidated sales of Rs 3,240 crore and
a net profit of Rs 305 crore. The consolidated
results include that of Tata Coffee and
Tetley, which is 85.7%-owned by Tata Tea.
For the year ended March '06 (standalone),
Tata Tea posted a 44.9% increase in net
profit to Rs 186.9 crore and a 9.1% jump
in revenues to Rs 982 crore. Some of the
Tata Tea group's earlier acquisitions
include, besides Tetley, Good Earth in
the US and Jemca in the Czech Republic.
Good Earth is a speciality tea brand with
a 3.7% share of the US speciality tea
market and an estimated turnover of $16m.
The acquisition of Good Earth, which was
carried out in October '05, was financed
through borrowings and set an important
milestone in Tata Tea's plans for further
acquisitions around the world. Last month,
Tata Tea subsidiary Tata Tea (GB), UK
signed an agreement to acquire the assets
of tea company Jemca in the Czech Republic,
from the food processing company Alima
Znackova Potravina. The acquisition was
funded by The Tetley Group. JEMCA has
an estimated 26.6% volume share of the
tea market in the Czech Republic and a
turnover of $12.5m. It sells black, green,
fruit and herbal teas.
Courtesy:
The Economic Times, June 26, 2006
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Bahrain's
EDB Forges Links With Indian Firms
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The
Bahrain Economic Development Board (EDB)
is forging closer ties with the auto components
and aluminium business community in India.
As part of a drive, EDB along with the
EXIM Bank of India plan to hold seminars
in Chennai and Pune, focusing on the business
opportunities Bahrain can offer for the
aluminium downstream industry, including
auto components. Indian business houses,
which mainly export their products to
the US market, will listen to EDB's delegates
explaining ways of benefiting from the
Free Trade Agreement between Bahrain and
the US. The visit is one of the EDB's
initiatives towards encouraging aluminum-based
industries to utilise Bahrain as a hub,
to cut costs and obtain duty free access
to the US market, it said yesterday. The
delegation will be led by EDB deputy chief
executive Dr Zakaria Hejres. The group
will also meet senior industrialists to
increase awareness of Bahrain and its
position in the region.
Courtesy:
Economic Times, June 25, 2006
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AV
Birla Group to Buy Canadian BPO Firm
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The
Aditya Birla Group on Saturday announced
that it has entered into an agreement
to acquire Minacs Worldwide Inc, Canada's
leading BPO (business process outsourcing)
provider, for a total cost of $125 million.
The Aditya Birla Group entered into a
definitive agreement with Minacs Worldwide
to offer Canadian $5.50 per share in cash
for all outstanding common shares of Minacs
on a fully-diluted basis. The acquisition
will be made through TransWorks, a leading
Indian BPO provider and a wholly owned
subsidiary of Aditya Birla Nuvo Limited.
The total expected cost of the acquisition
would be $125 million, including payment
for all common shares, and in-the-money
option and warrant securities of the company.
The combined business will have a revenue
base of about $300 million. "The acquisition
demonstrates our commitment to emerge
as a leading global BPO services provider
and expand our global footprint," said
Kumar Mangalam Birla, Chairman of the
Aditya Birla Group, here on Saturday,
while addressing a press conference. "Importantly,
even as the transaction offers many longer
term opportunities to deliver enhanced
services to existing and new clients,
the top priority in the near-term will
be to ensure consistent and reliable services
to existing clients,'' said Sanjeev Aga,
Managing Director of Aditya Birla Nuvo.
ReichmannHauer Capital Partners (RHCP),
a Toronto-based private investment firm,
partnered the Aditya Birla Group in evaluating
the transaction and intends to invest
in the combined entity. "The combination
of Transworks and Minacs creates a BPO
provider well positioned for industry
leadership. "The resulting firm will have
an outstanding global delivery footprint,
superior solutions offerings, and strong
brands and customer relationships,'' said
Philip Reichmann, co-founding partner
of RHCP. The deal is expected to be completed
by the end of August, subject to necessary
approvals and other conditions.
Courtesy:
The Hindu, June 25, 2006
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India
on Radar of Many Cross-Border Real Estate
Investors'
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Predicting
accelerated investments by domestic and
cross-border real estate funds into the
Indian market, a latest report by global
realty consultant Jones Lang LaSalle has
said that suburban offices and residential
sectors are likely to offer greatest opportunities
in the short term, while the retail sector
would be the growth driver in the medium
term. "India is now on the radar screen
of many cross-border real estate investors,
and a substantial weight of both domestic
and global capital is now seeking real
estate investment opportunities in India,"
said the report, titled `Emerging City
Winners'. "The current investment market
includes active participation from domestic
real estate funds, institutions, high
net worth individuals, and local developers.
Domestic debt also remains strong as a
financing option, primarily in the form
of construction finance as well as lease
rental discounting." While the current
cross-border investment activity is currently
dominated by Singapore firms, other Asian
players, and US opportunity funds, a number
of European players are also looking at
options to enter the market. The report
said that for suburban offices, occupier
demand would be supported by over 30 per
cent annual growth forecast for the IT/ITES
sectors and that strong growth in emerging
sectors such as telecom, financial services,
pharmaceuticals, and biotechnology, would
contribute in boosting the demand and
broadening the occupier base. Campus developments
are expanding rapidly, and sale and leaseback
opportunities are emerging. On the residential
side, favourable demographics, urbanisation,
rising incomes, and easier access to finance
are fuelling strong demand for residential
accommodation. According to the report,
India offers a huge potential for retail
expansion, and the sector was growing
in the region of 10 per cent a year. "Organised
retailing currently accounts for only
2-3 per cent of the market, but the sector
is undergoing a structural change, with
leading domestic retailers going through
rapid growth, format migration, and consolidation.
Shopping centre construction is high,
but most is of poor quality and is strata
titled, and vacancy risk is high." The
report added that there was large untapped
potential for high-quality shopping mall
development.
Courtesy:
The Hindu Business Line, June 23, 2006
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Pidilite
Ind Acquires Two US firms
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Pidilite
Industries, the Mumbai-based makers of
art materials and adhesives, has acquired
the assets and businesses of two companies
in the US through its 100 per cent subsidiary
Pidilite USA, based in Delaware. One of
the companies is Sargent Art, an art materials
company while the other, Cyclo Industries,
is a car care products company. The deals
were struck on June 13 and June 20, respectively,
and both companies have a combined annual
sales turnover of approximately $19m (Rs
87 crore). "With these acquisitions, we
are looking at expanding our presence
in the US and in other countries as well
as expanding the existing product range.
Currently, the US accounts for only about
Rs 5 crore of our overall business in
consumer products. Going forward, we would
want this to increase," Apurva Parekh,
director, Pidilite Industries, told ET.
Mr Parekh said the amount for the acquisition
could not be disclosed at this point,
but is under $19m. Some of Pidilite's
popular brands in the consumer products
space are Fevicol, Steelgrip, Acron, Dr
Fixit, Fevitite and M-seal. Last year,
the company acquired Jupiter Chemicals
in Dubai and Chemson Asia Pte, an existing
Singapore-based company in the business
of manufacturing waterproof coating and
emulsion paints, thereby adding to its
construction chemicals and paints range.
In May last year, the company incorporated
a subsidiary, Pidilite Do Brasil Desenvolvimento
De Negocios, in Sao Paulo, Brazil and
another wholly-owned subsidiary, Pidilite
Middle East, as an offshore company in
the Jebel Ali Free Zone of Dubai for its
international operations. Sargent Art
has a wide range of offerings in the art
material segment like paints, modelling
clays, tampera cakes and crayons, among
others. Cyclo Industries has a range of
products in the car care category like
car performance, maintenance, absorbents,
cleaners and lubricants, to name a few.
Pidilite's closing price on the BSE on
Wednesday was up 2.2% to Rs 88.6.
Courtesy:
The Economic Times: June 22, 2006
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Four
Indian Firms Make it to S&P BRIC 40 Index
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Four
Indian companies - HDFC Bank, ICICI Bank,
Infosys Technologies and Satyam Computer
Services - have been included in a new
global index introduced by Standard &
Poor' (S&P). These companies will form
part of the newly launched S&P BRIC 40
Index, which will provide exposure to
40 leading companies from Brazil, Russia,
India and China (BRIC), the company said
in a release on Wednesday. The index constitutes
large, well-traded and liquid companies
trading on Hong Kong Stock Exchange, London
Stock Exchange, Nasdaq and New York Stock
Exchange. India's share will be the lowest
at 9.16% in the index. However, individually
Infosys Technologies will have a weightage
of 5.39%, the fifth largest in the index.
ICICI Bank will have a weightage of 1.45%,
Satyam Computer Services 1.33% and HDFC
Bank 0.99% in the index. China, which
has the biggest economy among the four
countries, will have the largest weightage
of 36.37%, followed by Brazil at 28.62%
and Russia at 25.84%. "Securities in emerging
markets are an increasingly popular option
for investors, asset managers and plan
sponsors. However, liquidity of the issues
continues to be a cause of concern," said
David Blitzer, managing director and chairman
of the index committee at Standard & Poor's.
"The construction of S&P BRIC 40 Index
accounts for both the liquidity of the
underlying stocks as well as the liquidity
of the overall portfolio resulting in
an index, which is more efficient to invest
in," Blitzer added. The S&P BRIC 40 Index
already has licensed products based upon
it and is calculated by means of the divisor
method used in most Standard & Poor's
indices. It is rebalanced annually and
treats corporate actions in a transparent
procedure similar to other S&P indices.
The index uses a modified market capitalisation-weighing
scheme, with modifications being to market
cap weights, if required, to reflect available
float, reduce single stock concentration,
and enhance index basket liquidity. The
index's constituent companies are also
members of S&P/IFCI index series that
meets minimum market capitalisation and
liquidity requirements.
Courtesy:
The Financial Express, June 22, 2006
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Food
Sector's FDI Pie to Hit US$ 3 Billion
Mark
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Foreign
direct investment (FDI) in the country's
food sector is poised to hit the US$ 3-billion
mark. In the last one year alone, FDI
approvals in food processing have doubled.
Add to this the $55mn that has been invested
in sugar and cooking oil companies, and
you can see how the changing diet of upwardly
mobile India along with the new mega food
parks are becoming dishy to overseas investors.
Foreign direct investment in food already
beats the money being pumped into the
far-more-glamorous hotels and tourism
industry. According to latest industry
ministry data, the cumulative FDI inflow
in food processing reached Rs 9,826 crore
($2,804m) in March '06. In '05-06, the
sector received approvals worth Rs 185
crore ($41m). This figure is almost double
the Rs 100 crore ($22m) approved in '04-05.
As a result, the food processing segment
now has an almost 4% share of the total
FDI approved by the government. To put
that in perspective, cumulative foreign
direct investment in hotels and tourism
by March '06 was only Rs 4,984 crore ($1,371m).
Hotels and tourism actually received less
than 2% of the total foreign money that
has been permitted to flow into India.
The government approved 105 proposals
between January '02 and May '05 from foreign
industrialists to set up food processing
industries in the country involving Rs
643.5 crore ($144m). Meanwhile, investor
interest is growing in vegetable oils
and sugar. Vegetable oils and vanaspati
have received $37.4m in foreign direct
investment until now. Sugar has received
$17.3m in foreign direct investment cumulatively.
Interestingly, the farm machinery segment
has also received $166.8m in overseas
investment. However, the numbers are still
too low, given the potential the food
processing segment has for generating
profits and jobs. The government has been
trying to promote the sector as a prime
opportunity, along with airports and power,
in all the international fora. According
to industry estimates, the sector needs
investment of about $28-35bn to meet the
changing food demands in India. The outlay
for the food processing segment has been
increased from $19.5m in '04-05 to $41.4m
in the next year, more than twice the
earlier amount. The Confederation of Indian
Industry (CII) has estimated that the
food processing sector has the potential
to generate employment of 9m person-days.
Courtesy:
The Economic Times, June 21, 2006
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Global
Realty Funds Eye India With US$ 15 Billion
Kitty
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With
doors open for foreign investment in realty
sector, opportunity funds targeted at
India have raised US$ 15 billion overseas.
According to the latest research report
by Citigroup Global Markets on real estate
investment trusts, global property investors
appear to be eager to put money in India,
where a developer can recoup his cost
on rental properties within three to four
years - something that is not seen in
most developed markets. The initial yields
are pegged at 15 per cent and even higher
on developments and 10 per cent on acquisitions
of properties. The high yields are, however,
not without risks, which include currency,
economic, political, macro and potential
event upheavals, points out the report.
There are distinct possibilities of overbuilding,
increasing speculation, and pullback or
slowdown in outsourcing. The need for
money is estimated for IT office development
at $1.50 billion for 30 million square
feet (MSF) of office space at an all-in
cost of $50 per square feet (PSF). Retail,
residential, and other development could
amount to a few billion dollar more. IT
office is the most straightforward investment
option in India with strong demand and
defined rental rates of about $8-$10 PSF
per year. Residential offers enormous
margins of 30 per cent-50 per cent, as
it is usually pre-sold before constructions
starts, allowing most developers to self-fund
their ambitious development programmes.
India has become the desired backoffice
for much of the western world owing to
its human capital who speak English and
burgeoning IT capital. Currently, an estimated
1.2 million people are working in IT and
BPO, which expected to grow 30 per cent-40
per cent per year, generating an estimated
annual need for 30 MSF office space. At
present, there is only 90 MSF of IT office
space in India. The fear is that global
capital will chase land prices up for
IT office for development on a level that
will generate low-double digit yields.
Office development costs of $50 PSF are
a bit higher that actual cost on Tuesday
with land accounting for $15 PSF. Tenant
credit quality, however, is not a concern
as majority of office space is likely
to be leased by Fortune 500 companies
from the US and top companies in Europe,
the report says.
Courtesy:
Business Standard, June 21, 2006
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India,
an Emerging Destination For The Global
Professional
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Foreign
professionals are realising gradually
that from technology firms to the media
industry India is the most happening country
for them to be in and figures with recruitment
agencies and industry experts speak for
themselves. In recent months, Headhunters
India, one of the country's leading recruitment
agencies, has recruited more than 150
foreign professionals in some of India's
largest companies such as Reliance Industries
and Bharti Televentures. And the consultancy
firm's officials claim at least 400-550
unsolicited résumés are received every
day from job seekers in France, Germany,
Britain, Spain and the US - all looking
for that suitable opening in an Indian
company. 'These candidates prefer to work
in India rather than China due to the
people's English-speaking capability here,'
says Kris Lakshmikanth, the chief executive
of Headhunders. 'The experience of working
in India also gives the expatriates a
value addition to their curriculum vitas
and they get lucrative promotions once
they return to their countries,' Lakshminath
told IANS. The reason may be India's booming
economy or loss of jobs in the west, but
the reality today remains that India is
emerging as a favoured destination for
foreigners to work. The National Association
of Software and Service Companies (Nasscom),
the main software industry lobby in India,
estimates the number of expatriates working
in India at three times what it was two
years ago. Today, over 30,000 expatriates
are working in information technology
and off-shoring companies alone, the association
says. But booming Indian economy may not
be the only reason why workers from diverse
cultures like Japan, Spain and Germany
want to work here - an adventurous mind
also plays a very significant role in
their decision to work in India. 'Indians
are very tolerant, patient and quite hard
working and that suits us very much as
the Chinese are also basically work-oriented
and professional in their approach.'
Courtesy:
dailyindia.com: June 21, 2006
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India
Mobile Users to Treble by 2011: Bharti
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India's
top mobile operator, Bharti Airtel Ltd,
said on Tuesday it expected the number
of cellular subscribers in the country
to treble to 300 million in the next three
to five years. Phone ownership is surging
in India, Asia's third-largest economy,
which has the world's cheapest local mobile
call rates at less than 2 U.S. cents a
minute. "This whole growth phase is just
beginning. India is very under-penetrated
with 100 million mobile users," Sanjay
Kapoor, Joint President, Mobility at Bharti,
said. "The country should get down to
the 300 million mark over the next three
to five years, and even then, with about
27 per cent penetration rate, it's far
below levels of most Asian countries,"
said Kapoor, the joint head of the firm's
mobile operations.
Courtesy:
www.financialexpress.com, June 21, 2006
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India
Tops Carpet Export With 35 Per Cent Marketshare
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India
has emerged the biggest exporter of handmade
carpets in the world beating traditional
powerhouse Iran and China. The country
has grabbed 35.5 per cent of the US$ 2.6
billion export market, according to the
latest data available with the Carpet
Export Promotion Council (CEPC). "While
we are happy with the performance of the
Indian carpet industry to emerge as the
main supplier to the world market, the
plan is to further consolidate our position
and double production in the next five
years," said Sanjay Agarwal, Development
Commisioner (Handicrafts). Apart from
cost advantage in production, flexibility
has been the key agent in scoring over
the global competition. "While other carpet
producing countries concentrate on one
or two areas of specialisation, India's
strength has been its ability to produce
diverse variety of carpets that meet various
needs. Indian exporters offer knotted,
tufted, woven, Indo-Nepalese, Indo-Tibetian
and other kinds of weave patterns," said
T S Chadha, executive director, CEPC.
"Indian weavers also have the skills to
replicate designs quickly and produce
these designs cheaper than in the country
of origin. Innovation is another big asset
as our weavers can modify or produce new
designs according to emerging trends and
demands." According to the latest available
figures, China figures next with 20 per
cent marketshare amounting to $500 million
in value terms. Iran follows closely with
an 18 per cent share, followed by Pakistan
with 10.4 per cent, Nepal with 4.4 per
cent and Turkey with 3.4 per cent. The
others account for the remaining 8 per
cent. Indian handmade carpet exports accounted
for over $900 million for the calendar
year 2004 even as the demand for handmade
carpets grew by just 4.69 per cent in
three years. The marketshare of handmade
carpets is only 8-9 per cent of the global
carpet market, while machine woven carpets
make up for the rest. Export data for
2005 is yet to be tabulated.
Courtesy:
Business Standard: June 21, 2006
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Nicholas
Piramal Acquires UK-Based Pfizer
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Nicholas
Piramal India Ltd on Tuesday said it has
completed the acquisition process of Pfizer
Inc at Morpeth, UK, on asset purchase
basis for an undisclosed amount. The acquisition
was completed as per the schedule on June
19, the company informed the Bombay Stock
Exchange. The deal includes a supply agreement
till November 2011 totaling potential
revenues of above $350 million, site fixed
assets and property and certain net current
assets, it said adding, and the transaction
is on a liability and cash free basis.
The acquisition is the third by Nicholas
Piramal after acquiring Rhodia's inhalation
anesthetics business in December 2004
and Avecia's custom manufacturing business
in December 2005. The Morpeth unit is
one of Pfizer's global, integrated facilities
with end-to-end production and supply
chain capabilities that cover Active Pharmaceutical
Ingredients, finished dosage, packaging
and distribution, it said. The purchase
by the company's subsidiary, NPIL Pharmaceuticals,
would expand its global footprint, particularly
in the finished Active Pharmaceutical
Ingredient, contained finished dosage,
packaging and supply chain areas, it added.
Courtesy:
The Economic Times, June 21, 2006
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Sesame
Seed Exporters Bag Korea Order
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Indian
sesame seed exporters have bagged an export
order of 4,800 tonnes from South Korea
through tender participation on Tuesday.
South Korea had floated a tender for supplying
of 5,000 tonnes sesame seed for the current
month. Of this, Indian exporters cornered
about 4,800 tonnes and the remaining 200
tonnes were allotted to Ethiopia, trade
sources said. "In the latest tender opened
on June 20, the exporting firms have offered
$809-824 a tonne of white 98/2/1 quality
and $758-780 a tonne of crushing quality,"
Mr Sanjiv Sawla, Chairman, Indian Oil
and Produce Exporters' Association (IOPEA),
told Business Line. India continues to
enjoy a lion's share of the Korean sesame
seed market, where imports are regulated
by way of tenders. The country of about
49 million people consumes over 80,000
tonnes of sesame seed alone. Over the
last 3-4 years, Indian seed quality has
become very well accepted in the Korean
markets. Korea imposes Customs duty of
650 per cent on imports of sesame seed.
"Practically, no material is imported
into the country by paying such duties
as one kg of Indian sesame seed costing
Rs 35 would cost Rs 350 after paying duties
and other costs," Mr Sawla said. Most
imports are by way of Government tender
or private licences, which too are available
at a premium of about 300 per cent. "In
view of WTO obligation, Korean markets
will have no option but to reduce Customs
duties on sesame and this would reduce
domestic prices of sesame. As a result,
imports and consumption could even double
subsequently, making it a lucrative market
for Indian exporters," he added. Sesame
sowing is yet to commence in Gujarat,
a major producer of the crop.
Courtesy:
www.thehindubusinessline.com, June 22,
2006
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SEZs
Post 25.8 Per Cent Growth Rate in 2001-05
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The
Government's focus on developing special
economic zones (SEZs) as export growth
drivers seems to be paying off, even though
the zones may have a long way to go in
emulating the success of their Chinese
counterparts. Exports from the eight SEZs
functioning in the country have registered
a healthy compounded annual growth rate
of 25.8 per cent between 2001-02 and 2004-05,
according to the Ministry of Commerce
and Industry data. However, the growth
rate is way behind the blistering pace
set by their Chinese counterparts. For
instance, the Shenzhen SEZ in China recorded
a growth of 38 per cent CAGR between 1981,
when it was started, and the year 2004
- the highest economic growth rates recorded
from any such enclave worldwide. It must
be mentioned, though, that the Chinese
SEZs are much larger in scale and also
have been operational much longer than
the Indian ones. While the Indian SEZs
have some catching up to do with respect
to the Chinese zones, the SEZs here could
prove to be instrumental in the Government's
efforts to get anywhere close to the Ministry
of Commerce and Industry's target of capturing
a one per cent share of world exports
(exports to the tune of $80.48 billion)
by the end of the current fiscal. According
to Ministry estimates, this requires growth
projections of 11.9 per cent (CAGR) for
exports between 2002-2007 and the high
export growth recorded by the SEZ units
could prove to be a big plus in closing
in on the targeted growth.
Courtesy:
The Hindu Business Line: June 21, 2006
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Reliance,
Tata Vie For Biggest Bandwidth Deal
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The
race between Reliance and the Tata group
for supremacy on the global telecom turf
has started once again, with the two companies
bidding for German telecom major Deutsche
Telekom AG's bandwidth contract-he biggest
such order till date. Deutsche Telekom,
which has a global retail broadband presence,
is in advanced stages of negotiations
to buy huge volumes of undersea bandwidth
between the US and Europe for its broadband
businesses. The contract is for 150-200
GB of bandwidth, which is much more than
the total international bandwidth consumed
in India, sources close to the deal told
Business Standard here today. The deal
is valued at "hundreds of millions of
dollars" and the Indian companies are
competing with global majors like Global
Crossing (owned by SingTel) and Apollo
(Cable & Wireless). Deutsche Telekom AG
is the biggest telecommunications company
in both Germany and the European Union.
Executives of the Indian companies declined
to comment. According to an industry analyst,
"The winner of this deal will get a major
lead in the global arena." The competition
between Reliance and the Tata group has
been on for quite sometime, with both
of them earlier bidding to acquire submarine
cable companies Flag Telecom, Tyco Global
Network and Teleglobe. While Reliance
beat Tata to Flag, the Tata group-owned
VSNL managed to acquire Tyco and Teleglobe.
The companies had also bid for VSNL, which
was acquired by the Tata group. Of late,
the companies have also locked horns over
access to cable landing station in India,
with Reliance alleging that Tata company
VSNL was refusing access to its own landing
station in India. An international tribunal
had ruled in favour of Reliance and asked
VSNL to allow it access to the Indian
landing station.
Courtesy:
Business Standard, June 21, 2006
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Volvo
to Buy More Truck Parts From India
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Swedish
truck and bus maker Volvo said on Friday
it will buy more components from India
and that it expects the country's improving
infrastructure to boost demand for its
trucks. Volvo, which has been in India
since 1998, exported truck components
worth 50 million euros to the Volvo group
in 2005, and expects to reach 70 million
euros ($56 million) this year. Expanding
traffic and rules on over-loading would
encourage demand growth and the company
had seen 16 per cent sales growth in the
first five months of 2006, Volvo India
Managing Director Eric Leblanc said at
the launch of a new line of trucks. "We
see the high-performance segment expanding
quickly on the stricter emission and safety
rules, as well as improving infrastructure,"
he said. Volvo's factory in Hoskote, near
Bangalore, has an annual capacity of 1,200
trucks and buses. It sold 400 buses and
600 trucks in India last year. The company
would add more shifts when demand increased,
Leblanc said. Volvo's city buses were
launched in Bangalore in January. The
market for these buses is estimated at
about 10,000 units a year and expected
to rise as domestic travel picks up. Volvo,
which has invested about Rs 3 billion
($65 million) in India so far, also exports
buses to neighbouring Sri Lanka and Bangladesh,
and trucks to South Korea. It also hoped
to expand to other markets, Leblanc said.
India's $5-billion truck and bus market,
the world's fifth-largest, is dominated
by leader Tata Motors Ltd and Ashok Leyland.
There are new entrants: Force Motors has
a joint venture with Germany's MAN AG
to make heavy trucks, while Mahindra &
Mahindra has a joint venture with a unit
of Navistar Inc. to make medium and heavy
trucks. Korea's Hyundai Motor Co is also
looking to enter the market. Volvo in
February opened a technology and product
development centre in Bangalore and said
it would step up sourcing of services
from India as its business in Asia expanded.
Courtesy:
www.hindustantimes.com, June 21, 2006
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Reliance
Signs India's Biggest SEZ Deal With Haryana
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Reliance
Industries and the Haryana government
on Monday formally inked a joint venture
agreement to set up what is touted to
be India's biggest SEZ project. The Rs
40,000-crore project, comprising a cargo
airport and a 2,000-MW gas-based power
plant, will be spread over about 25,000
acres in the Gurgaon and Jhajjar districts
of the state. The agreement was signed
here by Rajiv Arora, MD, Haryana State
Industrial and Infrastructure Development
Corporation (HSIIDC), and Anand Jain,
director, Reliance Ventures, in the presence
of RIL chairman Mukesh Ambani and state
chief minister Bhupinder Singh Hooda.
"This is the first time Reliance has committed
such a big investment outside Western
India," Mr Ambani told reporters later.
"We will get the best of the Fortune 500
companies here. The aim is to set up an
aggregation hub that is beneficial not
only for Haryana but also for North India,"
Mr Ambani said. According to Reliance
circles, the project is expected to be
completed within 5-10 years. "Big infrastructure
projects have a long gestation period.
The completion of the project would take
its due time. But what this agreement
signifies is the long commitment of Reliance
towards investing in Haryana," said Mr
Ambani. A special purpose vehicle called
Reliance Haryana has already been floated
to set up the project. Initially, around
1,395 acres, which has been acquired by
HSIIDC near Garhi Harsaru village in Gurgaon,
would be transferred to Reliance. In return,
HSIIDC would get the total cost of acquisition
(plus capitalised interest at 9% per annum)
and the administrative cost (15% of the
total cost of acquisition). This would
entitle HSIIDC for an amount of Rs 360
crore as against Rs 300 crore paid by
it for acquiring the land. It would also
get sweat equity without any investment
at 10% of the total equity. The newly-floated
company is expected to go for an IPO.
"We might be going to the public in two-three
years," said Mr Jain. Mr Ambani said that
the SEZ would be an exemplar of excellence
and would be comparable to the best of
the SEZs in countries like China, Malaysia
and Singapore. "There is a lot of lament
about India's poor infrastructure. This
project would show how we can develop
world class facilities by adapting the
public private partnership model," he
said.
Courtesy:
Economic Times, June 20, 2006
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China,
India Remain Investors' Darling: Survey
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China
and India are the favoured markets of
investors living outside their home countries,
while fears about corporate governance
standards in emerging markets have waned,
according to a brokerage firm's survey
on Monday. Some 56 percent of investors
said they were confident about putting
money to work in China, up from 38 percent
a year ago, while 43 percent of them said
they were confident about India, unchanged
from last year, according to a poll of
400 expatriate investors in June by Luxembourg-based
brokerage internaxx. Concerns about lax
corporate governance standards in some
emerging market economies also fell over
the past 12 months, the survey found.
Only 3 percent of respondents said they
had concerns, down from 16 percent a year
before. "They feel there are fewer barriers
to investing ... last year people were
a bit concerned about corporate governance,
such as in countries like China ... that
appears to have been lowered," Robert
Glaesener, general manager at internaxx,
told Reuters. Expatriate investors living
away from their countries of origin are
an increasingly important part of the
investment population and typically take
a more sophisticated and international
approach to managing money, Glaesener
said. There are about 300,000 expatriate
Britons living in areas such as the Middle
East and Far East, for example, while
the total number of expat employees and
investors can be counted by the millions
although exact figures are hard to pin
down, he said. Among other findings, the
survey showed that 81 percent of investors
claim to have either beaten or matched
performance by market indices. Investors
turned less confident about the British,
U.S. and euro zone economies as places
to put money, citing ageing populations,
rigid labour laws and saturated home markets
as reasons for their caution. The most
favoured sectors are energy and telecoms,
while retail and mining were the least
favoured.
Courtesy:
The Pioneer, June 20, 2006
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India
Top Exporter to Dubai, Overtakes China
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India
has overtaken China as the main exporter
to Dubai with a 30 per cent increase in
trade in 2005, official figures reveal.
The Dubai Ports, Customs and Free Zones
Corporation (PCFC) figures said that total
trade increased from Rs 2692.62 billion
(Dh 215.73 billion) in 2004 to Rs 3505.75
billion (Dh 280.46 billion) in 2005. India's
trade with Dubai accounted for Rs 540.75
billion (Dh 43.26 billion) in 2005, an
increase of 37.94 per cent over 2004,
compared to China's Rs 280.75 billion
(Dh 22.46 billion), an increase of 22.39
per cent over 2004. Increase in trade
of gold is the main reason behind India's
performance. Dubai is a very important
worldwide player dealing with 10 per cent
of the world's physical gold, Dr Eckart
Woertz, programme manager for economics
at the Gulf Research Centre, was quoted
as saying in Emirates Today. Dubai imported
Rs 562.62 billion (Dh 45.01 billion) worth
of semi-precious and precious stones and
metals, including gold, and re-exported
more than half, or a total of Rs 334 billion
(Dh 26.72 billion).
Courtesy:
www.hindustantimes.com, June 20, 2006
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ONGC
Mittal Bags 2 Blocks in Nigeria
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ONGC
Mittal Energy, (OMEL) has kicked off its
oil safari in style. It has finally opened
an oil account with two blocks-OPL 212
and 209-in Nigeria, estimated to have
reserves of about 500m barrels each and
that too for a song. Although, OMEL will
be pumping in almost $6-bn back-to-back
infrastructure support to Nigeria in return
for the blocks, it has managed to acquire
these blocks in the mini-bidding round
by offering a signature bonus of just
$50m and $65m respectively. This comes
at a time when acquisition of oil acreages
is at an all-time high. A case in point
is Sinopec's recent bid for oilblocks
in Angola where it bid a high of $1,100m
for a single block. OMEL is also learnt
to be in the hunt in Kazakhstan. where
the government is in the process of offering
oil acerages. OMEL is now in negotiations
with the Nigerian government over the
production sharing contract for the blocks.
It is likely to take on board a local
content vehicle partner for the oil blocks.
OMEL which had the option of bidding for
three blocks under this round opted to
bid only for two. Sources close to the
deal say that the two blocks which OMEL
has acquired are amongst the best blocks
that were on offer. One of the relinquished
blocks, which OMEL will now operate on
a lease, is close to the Bongo fields
of Shell-a discovered field with reserves
of 1bn barrels. OPL 209, the other block,
is close to the field operated by Exxon
and Shell and has a reserve of 800m barrels.
"Proximity to these discovered fields
and the geological reserves indicate a
good potential for these blocks. OMEL,
which has committed to investments in
the infrastructure developments of Nigeria
as part of the deal is expected to take
up projects like refineries, pipelines
etc," a source said.
Courtesy:
Economic Times, June 20, 2006
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Nokia
to Run its Global Network From Chennai
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Finnish
telecom giant Nokia on Monday announced
that its global network management business
will now be led from its India centre
in Chennai. Nokia also announced that
it will take over the network management
services of Hutchison Essar in 10 new
telecom circles in the country. This contract
is an extension of the five-year deal
signed in January this year where the
company had bagged the deal to manage
Hutchison Essar's network in nine circles.
Following the extension, Nokia will eventually
run 19 of Hutchison Essar's 23 telecom
circles. While the two companies refused
to divulge the deal size, industry sources
said that it could be about Rs 100 crore.
Nokia will also take-over 200 Hutchison
Essar staff, bringing the total strength
to over 800 since the start of the year,
the release added. The company also said
that its first global networks solutions
centre (GNSC) in Chennai had started operations,
and it will eventually serve as the hub
for other Nokia operations centres around
the world. The Chennai GNSC offers services
like remote care, remote integration,
consulting, planning and optimization.
It currently supports operators including
Bharti Tele-Ventures. Currently, Nokia
manages the network operations of eight
telecom circles for Bharti, while the
remaining circles are managed by Ericsson.
"Today's announcements reiterate Nokia's
long-standing commitment to India as a
strategic market. They build on Nokia's
recent manufacturing unit launch, and
will enable us to create a complete telecom
ecosystem in the country that will address
not only local but also global demand.
Courtesy:
Economic Times, June 20, 2006
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US
aviation major Lockheed Martin, in the
race to sell 126 F-16 jets to the Indian
Air Force, is in talks with firms like
HAL and the Tata group for the outsourcing
of aircraft components, and if the deal
fructifies, build them from scratch a
company official said today on the reported
$9 billion deal. The firm's advanced development
programs divisions, which works on research
in cutting edge areas like stealth and
surveillance technologies, is also keen
on forging ties with Indian information
technology and research firms, said Lockheed's
Director of Communications Joseph Stout.
"We have had preliminary talks with firms
like Hindustan Aeronautics Limited, Tata
and Larsen and Toubro and our teams have
surveyed their capabilities. We are very
encouraged by their capabilities," stout
told PTI here. As part of efforts to establish
a presence in India, Lockheed was eyeing
the prospect of outsourcing components
for the F-16 fighter jets and other aircraft,
including the hugely successful C-130
Hercules transport aircraft, to Indian
firms. If Lockheed bags the deal to supply
126 jets to the Indian Air Force, the
request for proposals for which are likely
to be issued soon, a "majority" of the
jets will be built by state-owned HAL
following the transfer of technology,
stout said. "Frank Cappuccio, the Executive
Vice-President of Advanced Development
Programs or Skunkworks which is working
on network-centric warfare systems and
unmanned aerial vehicles (UAVs), will
visit India this year to scout avenues
for cooperation," he said.
Courtesy:
www.financialexpress.com, June 20, 2006
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ONGC
Leads India in FT Global 500 Listing;
Ranks 158
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Oil
and Natural Gas Corporation (ONGC), with
a market capitalization of $41.9 billion
on 31st March 2006 - has been ranked at
158 in the 10th annual Financial Times
Global 500 listing of the world's largest
companies. The company was placed at 192
last year. ONGC leads the pack of eight
(8) Indian corporates who have made it
to the FT Global 500 listing. The market
cap of the second Indian company (in private
sector) is only around half that of ONGC,
said a release from the company. In FT
Global 500, companies are ranked by market
capitalization - the greater the stock
market value of a company, the better
it's ranking. Market capitalization is
the share price multiplied by the number
of shares issued. FT Global 500 considers
each and every company in the world whose
'free float' (the number of shares in
market circulation) is 15 per cent or
higher. The day chosen for the calculation
was 31st March 2006; the exchange rate
considered for converting the market cap
of companies (which are listed in non-dollar
denominations) into dollars was also that
of 31st March 2006. Comparison by market
cap has a number of advantages over comparison
by other parameters like Turnover (Fortune
ranking) or Profits. Other weaknesses
apart, the most critical drawback of these
non-market-cap methods is timing; Profit
and Turnover figures come from Annual
Reports (which are staggered through the
year), any ranking based on them are out
of date. Rankings based on market cap
also contain a forward-looking element
as share prices factor in shareholders'
expectations about the company.
Courtesy:
The Pioneer, June 20, 2006
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Why
India is Not Like China?
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A
"breathtaking shift" in US policy towards
India - declaring it a strategic partner
and offering it a bilateral deal to share
nuclear know-how - can be explained, according
to Time magazine, simply by one phrase:
India is the un-China. Washington's new
approach to India is so explained by the
American newsmagazine in its latest issue
hitting the newsstands on Monday with
its cover story "INDIA INC - Why the World's
Biggest Democracy is the Next Great Economic
Superpower- and What it Means for America."
Making friends with India is a good way
for the US to hedge its Asia bet, says
author Michael Elliott as the US has learned
that dealing with China is never easy
as it "bristles too much with old resentments
at the hands of the West." India is no
pushover either but democrats are easier
to talk to than communist apparatchiks,
he says. Democracy aside, there is a second
way in which India is the un-China. In
most measures of modernization, China
is way ahead. Yet the litany of India's
comparative shortcomings omits a fundamental
truth: China started first. China's key
economic reforms took shape in the late
1970s, India's not until the early 1990s.
But India is younger and freer than China.
Many of its companies are already innovative
world beaters. India is playing catch-up,
for sure, but it has the skills, the people
and the sort of hustle and dynamism that
Americans respect, to do so. It deserves
the new notice it has got in the US. "We're
all about to discover: this elephant can
dance," says Elliott. Illustrating the
changing face of India with the cover
photo of a classical Indian dancer wearing
a telephone operator headset, Time says
the world will never be the same, as fuelled
by high-octane growth, the world's largest
democracy is becoming a global power.
The magazine cites India's "pro-growth
Prime Minister, Manmohan Singh" as saying,
he dreams that Mumbai will someday make
people "forget Shanghai"- China's financial
capital, whose modern gleam is a reminder
of the gap between India and its eastern
rival. But if India's biggest city is
its great hope, Mumbai also embodies many
of the country's staggering problems.
The obstacles hampering India's progress-poor
infrastructure, weak government, searing
inequality, corruption and crime-converge
in Mumbai. Although India boasts more
billionaires than China, 81 percent of
its population lives on two dollars a
day or less, compared with 47 percent
of Chinese, according to the 2005 UN Population
Reference Bureau Report. That class divide
is starkest in cities like Mumbai, where
million-dollar apartments overlook million-population
slums. A new word has appeared during
water-cooler conversations in offices
across the US. The term is "Bangalored."
It refers to India's high-tech hub, and
it means your job has just moved to India
without you. India, which viturally invented
offshore outsourcing is becoming a victim
of its own success. Such companies as
Infosys, Wipro and Tata Consultancy Services
(TCS) grew into billion-dollar behemoths
by tapping armies of quick coding, English-speaking,
low-wage techies to do the software programming
and back-office tasks that US companies
used to perform in-house. But Indian salaries
are rising - the median annual wage for
a software engineer jumped 11 percent,
from $6,313 in 2004 to $7,010 in 2005,
according to India's National Association
of Software and Service Companies (NASSCOM).
Millions of expectations will have to
be satisfied. But for now, the City of
Dreams is living up to its name. In another
piece "Hooray for Bollywood", Indian director
Mira Nair who lives in New York City,
notes that today Bollywood is on as many
screens in midtown Manhattan as in an
Indian neighborhood in Queens.
Courtesy:
Economic Times, June 20, 2006
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Microsoft
Initiative to Promote Indian IT Market
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THE
INDIAN IT industry has earned a great
name in the global software market but
has failed to develop the domestic market
with the same vigour. Only a small number
of IT companies are focusing on building
custom solutions or developing affordable
packaged software for the Indian market.
In the absence of ready-to-use packaged
software, local users in many cases have
to depend on custom solutions. Strangely
it has been left to the software giant
Microsoft to fill this critical gap through
its network of ISVs (IT solutions vendors).
Microsoft India, according to its Chairman
Ravi Venkatesan, has tied up with 4,000
partners to offer technology-based solutions
to its customers in India. Microsoft has
been making significant investments in
`skills transfer' and `joint go-to-market'
initiatives with tier-2 ISVs, enabling
them to tap the domestic and international
markets. The company works closely with
over 6.5 lakh developers in India with
the aim of empowering them with the tools,
technologies and training required to
develop high-end skills and compete in
the global market place. Its scope of
work with the Indian technical community
is spread across the country and the Indian
business contributes one per cent of its
global revenue, he says. According to
him, there are two important reasons for
the lack of focus on the domestic market.
For one, the domestic demand depends on
PC (personal computer) usage. This is
very low in India compared to developed
countries. Generally, government is among
the early spenders on IT. In India, it
is not so. The second important factor
is piracy in software. Nearly 75 per cent
of IT solutions used in India are pirated.
According to a Business Software Alliance
(BSA) study of global trends in software
piracy, conducted by International Data
Corporation (IDC) India, wherever IT exports
are more than three times the domestic
IT market, the piracy rate is around 74
per cent-despite the strength of its world-class
software development skills and government
efforts to quell piracy. This is a major
inhibitor of growth of a local packaged
software industry. Unfortunately, the
high piracy regions have also been the
high market growth regions, he says. In
high piracy countries such as China, India
and Russia, the IT market is growing at
15 per cent or more. The emerging markets
account for over one third of PC shipments,
but only a tenth of the spending on PC
software. The programme aims to educate
rural masses on the usability of PC and
avoid interference of middlemen in their
livelihood. Till date, Microsoft has made
grants aggregating Rs. 30 crore. If there
is a synchronised growth in rural development
and IT, it will be easy for State governments
to adopt the e-governance model. The two-pronged
strategy is to create employability and
unlock innovation. For this, it has tied
up with various universities for providing
the right education for the right job.
Microsoft's project Shiksha - "Empowering
for the future" - is designed to deliver
affordable software solutions, comprehensive
training and curriculum leadership for
students and teachers in government schools.
The company has invested $20 million in
India for Project Shiksha over a five-year
period. The aim is to promote increased
technology access for students through
wide deployment of donated PCs in classrooms.
Under the Vikas project, small and mid-tier
companies are connected and provided with
affordable IT solutions. Though Microsoft
is working hard to improve PC penetration
in the country, it is still the Centre's
responsibility to make IT one of the main
infrastructures. With the world's largest
software company sharpening its focus
on India, the IT market is likely to see
accelerated growth and witness a marked
change in the market dynamics.
Courtesy:
The Hindu, June 19, 2006
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Now,
Marico Begins its African Safari
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Six
months after it acquired Nihar hair oil
from Hindustan Lever for Rs 216 crore,
consumer product major Marico is on the
prowl again. This time, it is looking
at buying out local consumer product companies
and brands in the African sub-continent.
Ernst & Young, a leading management consulting
firm, has been given the mandate to identify
possible acquisition targets and distribution
tie-ups not just in Africa, but in South
East Asia and the Middle East as well.
If sources are to be believed, Marico
has already begun due diligence on a couple
of possible acquisitions in Egypt and
South Africa. In fact, chairman Harsh
Mariwala even visited Egypt recently,
sparking off speculation that the formal
announcement of a deal may be in the offing
in the next couple of months. When contacted,
company officials said it was too premature
to discuss the specifics of its M&A drive
Sources say that Marico's new global gameplan,
scripted about one and a half years ago,
is driven by two broad approaches. The
Marico board, which includes key senior
professionals like PepsiCo India chairman
Rajeev Bakshi, former senior Titan executive
Jacob Kurien and Infosys' former head
of HR Hema Ravichander, has advised the
management to look for newer markets for
its core hair oils business, given that
the oiling habit is on the decline here.
Egypt is among one of the largest hair
oils market in that region. Two, Marico
is also pursuing consumer markets, which
are at a slightly higher stage of evolution
compared to the domestic market. By buying
out local firms in markets like South
Africa, the firm believes it could gain
access to technology and learnings in
newer product categories, which can be
brought back to its home base. The size
and profile of these acquisition targets
in Africa aren't yet known. But it is
likely that the deal in Egypt may be less
than Rs 100 crore. Once the markets improve,Marico
is expected to go in for a private placement-cum-rights
issue to raise capital to fund these new
acquisitions as well as convert some of
the high-cost debt it took on for the
Nihar acquisition. In the past few years,
Marico has made steady progress in expanding
the scope of its international business.
Valued at Rs 117 crore, the international
business group contributes about 10% of
the company's turnover. Analysts say that
while the buoyant growth in Bangladesh
has been blighted by the depreciation
in the taka, the local currency.
Courtesy:
Economic Times, June 19, 2006
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Bajaj
May Set up Manufacturing Unit in Brazil
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Bajaj
Auto has zeroed in on Brazil for its second
manufacturing facility outside India.
The company's only other unit abroad is
in Indonesia and will be operational by
the end of this year. Sanjiv Bajaj, executive
director, Bajaj Auto, confirmed the company's
plans to set up a manufacturing unit in
Brazil. "Bajaj Auto plans to set up an
integrated manufacturing facility in Brazil
to cater to the South American markets,"
he told Business Standard. However, this
venture may not get moving immediately
as the company first wants to strengthen
its presence in Indonesia and the neighbouring
markets. Bajaj pointed out that the exact
mode of entry-whether Bajaj Auto would
go it alone or with a local partner-had
not been worked out yet. Though he declined
to comment on the investment required,
industry sources said the company would
need to invest at least Rs 300 crore initially
to set up a manufacturing base in Brazil.
At present, Bajaj Auto has a marginal
presence in Brazil, which has a market
for one million two-wheelers. The company,
however, exported more than 70,000 two
and three-wheelers to other South American
markets including Colombia, Guatemala
and Peru last year. Industry sources said
the company might also set up assembly
units in Argentina, Thailand and Malaysia.
However, Bajaj said nothing had been finalised
yet. Incidentally, Bajaj's domestic rival
TVS is also in talks to enter Brazil through
a joint-venture assembly unit. It has
already finalised setting up of an assembly
joint venture in Colombia.
Courtesy:
Business Standard, June 19, 2006
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CII
Initiates Steps to Double Indo-US Trade
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Industry
body Confederation of Indian Industry
(CII) is working on doubling Indo-US bilateral
trade in goods and services from the current
$40 billion to $80 billion over the next
three years as part of which it plans
to organize a series of conferences. The
body has designed an eight-point multiple
agenda, '9 days of India in the US', which
includes discussion, dialogues on innovation,
strategy, tri-lateral talks on Indo-US-Japan
healthcare, launch of Indian business
forum and Indian Americans, it said in
a statement. CII has taken these initiatives
to double goods and services trade between
India and the US, enhance India's investment
in the US, connect Indian Americans to
India's development needs, update US government
and industry on India's economic performance
and promote an overall understanding on
India in the global community. The industry
body has arranged discussion with Aspen
Strategy group on the overall international
political and security scenario, regional
security issues, domestic politics in
both countries, globalization and cooperation
in multilateral fora, among others, a
statement by CII said. CII will also lead
an Indian team to participate in a conference
organized by Asia Foundation later this
month that will provide an opportunity
for a discussion between American foreign
policy community and their Indian, Chinese
counterparts.
Courtesy:
Economic Times, June 18, 2006
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ONGC,
GAIL Find Gas Field in Myanmar
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The
government owned oil and gas companies,
ONGC and GAIL, have found a huge gas field
in the Myanmar shore A-3 block, which
is estimated to have a capacity of 57.6
million cubic feet (MCF) of gas per day.
The recent discovery from the Mya-1 oilfield
could be another giant gas find with a
recoverable reserve between 2.88 TCF (trillion
cubic feet) to 3.56 TCF. In the Mya-1
discovery, the ONGC's overseas arm, OVL,
has a 20 per cent stake and GAIL a 10
per cent interest. South Korea's Daewoo
International is the main operator of
block A-3, which lies adjacent to block
A-1 where 4 to 6 trillion cubic feet (tcf)
of gas reserves were previously found.
OVL and GAIL together hold 30 per cent
interest in A-1.Daewoo International,
which holds 60 per cent stake in both
A-1 and A-3 blocks, had earlier hit a
32-metre gas column with the MYA-1 find.
Some officials have estimated in-place
reserves at about 2 tcf. In another success,
Mangalore Refinery and Petrochemicals
Ltd (MRPL), a subsidiary of ONGC, has
signed an agreement for supply of approximately
1.03 million tons of petroleum (MMTPA)
products to the State Trading Corporation
(STC) of Mauritius for 2006-07 commencing
from August 2006.According to a Press
release issued here today, the products
to be supplied are gas Ool (3,50,000 tons),
Jet A1 (2,60,000 tons), Mogas (90 000
tons), Fuel Oil 180 CST/380 CST (3,30,000
tons) and represent one year's requirement
of Mauritius.
Courtesy:
The Statesman, June 18, 2006
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BoI
Eyes Acquisition in E Asia
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Bank
of India (BoI), which was the first Indian
bank to start overseas operations, is
"seriously considering" an acquisition
in east Asia, bank chairman M Balachandran
said here. He said the name of the target
firm could not be divulged, but confirmed
that an announcement would be made within
a month. BoI, which has 24 offices abroad
including full-fledged branches and representative
offices, has lined up major expansion
plans abroad, including setting up a branch
in Doha, Qatar. The bank's Middle East
operations will get another boost when
it opens a representative office at the
Dubai International Financial Centre.
The Doha branch will also be its first
branch in the Middle East. Mr Balachandran
said the bank was upgrading its Shenzen
and Vietnam representative offices to
branches. In addition, a representative
office was opened in Shanghai last month.
The bank's overseas expansion programme
includes a branch in Antwerp, Belgium
and a wholly-owned subsidiary at Dar-es-Salam,
Tanzania. Mr Balachandran said other overseas
offices on the anvil included a branch
in Johannesburg, and more branches in
the SAARC region, Africa and Europe, besides
expansion of the bank's Indonesia operations.
BoI is also planning to add Rs 1,500 crore
to its capital this fiscal through debt
instruments. Mr Balachandran said the
bank hoped to raise the money via perpetual
hybrid debt bonds, preferably from overseas,
and that RBI's clearance for the same
was awaited. BoI's capital adequacy ratio
currently stands at 10.75% and after enhancing
the capital, the CAR is likely to be over
11%. The bank had recovered Rs 700 crore
in the last fiscal, which was aided by
the Securitization Act. The act had prompted
many business houses to initiate settlement
negotiations on their own, he said. BoI
has drawn up plans to record a total business
of Rs 2 lakh crore and earn a net profit
of Rs 1,000 crore this fiscal, and to
achieve zero NPA level in the next fiscal.
The bank had posted a net profit of Rs
701.4 crore in '05-06.
Courtesy:
Economic Times, June 18, 2006
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GHCL
Eyes Acquisitions in Europe
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Bidding
to expand in European home textiles retail
segment, chemical and textiles company,
GHCL, is looking for a series of acquisitions
that could be worth $200 million. "Currently,
talks are on with four separate entities
in England, Germany, France and Italy,
the overall value of which could be about
$200 million,'' GHCL Chairman, Sanjay
Dalmia, told.
Courtesy:
The Hindu, June 16, 2006
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Indian
Medicare Eyes Foreign Markets
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India's
fast-growing medical tourism industry
is set to get a further boost with two
companies coming together to market the
entire range of medicare facilities overseas.
Global Medicare, a healthcare consultancy,
and Uday Tours and Travel, a leading travel
firm, have signed an agreement to endorse
super-specialty medical facilities in
the US, Britain, South Africa, Canada
and the Middle East. "Initially we will
take about top 40 recognised hospitals
and promote their expertise overseas.
Non-resident Indians will be our initial
target but gradually the purview will
be broadened to all sections of the society
in those countries," VN Seth, chief of
Global Medicare, said. The 40-odd private
hospitals that have been selected from
major cities of the country have world-class
facilities and will be recognised by the
Confederation of Indian Industry (CII).
Escorts Hospital, Indraprastha Apollo
Hospital, Max Healthcare, Shankar Netralaya,
Chennai, and Narayan Hrudalaya in Bangalore
are a few of them. The joint collaboration
will market the entire gamut of medical
facilities available in India including
cardio vascular treatment, cancer treatment,
joint replacement surgery, hip surgery,
cosmetic and plastic surgery and eye treatment.
While Global Medicare will be in charge
of networking with the top medical institutions
in India, Uday Tours will undertake marketing
and promotional activities overseas. It
will also make all the travel and ground
arrangements like accommodation and sight
seeing for their clients. With India offering
world-class medical facilities at competitive
rates, foreigners are increasingly coming
to the country for medical treatment.
Seth said around 150,000 foreigners visited
India in 2004 and about 200,000 in 2005
for treatment. According to a study by
the CII and McKinsey, the medical tourism
industry is expected to grow to 1.21 billion
pounds by 2012.
Courtesy:
Hindustan Times, June 16, 2006
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Might
of The Bulls - Sensex Gains 1,000 pts
in Less Than 6
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Nothing
can beat the bulls of the Dalal Street
when they come charging - after remaining
on the sidelines for over a month they
propelled the benchmark Sensex by more
than 1,000 points in a record time of
less than six hours of trading. After
ending nearly five and half hours trading
session yesterday, with a jump of 615
points, the 30-share barometer index of
the Bombay Stock Exchange completed its
fastest ever 1,000-point rally by adding
another 385 points within fifteen minutes
of trade today. Thursday's 615-point jump
was the biggest single-day gain in the
history of Sensex, while the barometer
index recorded an intra-day gain of more
than 450 points early in the morning trade
and once again surged past the the recently-lost
psychological support level of 10,000
points. Bullish sentiments were seen across
the board with all the BSE sectoral indices
trading with robust gains. All the 30
Sensex scrips were also seen trading firm
in the positive territory, while Tata
Steel, Satyam, Hindalco, Bajaj Auto, Tata
Motors, Hero Honda and TCS leading the
pack of gainers. All the BSE 100 scrips
were also seen trading in the positive
territory, while there was just one BSE
200 stock was seen in the red. The overall
market breadth was also strong with 84
per cent of all the BSE stocks trading
with gains as against just 14 per cent
trading in the red.
Courtesy:
Hindustan Times, June 16, 2006
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Looking
Good With Ayurveda
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It
is a 'cosmetic change' that may revolutionise
the prospects of ayurveda. The 5,000-year-old
system of Indian medicine has not only
got cures for many chronic ailments in
its kitty but also formulas that may thrill
beauty-conscious youngsters. Ayurvedic
cosmetics are the latest buzzword among
the younger lot who are afraid to use
'artificial' creams to get rid of their
pimples and dark shadows under the eyes.
Catching on to the trend, many beauty
parlours have come up in various places
offering traditional treatments for skin
problems and hair nourishment. "Today's
youngsters are afraid of side effects
while using creams available in the market,"
said Dr K. Purna Rajeswari of Suraksha
Health Village in Vijayawada. "Ayurveda
has safe cures for pimples, grey hair,
dull skin and puffy eyes." Dr Rajeswari
said that ayurveda had a branch known
as Soundarya Vardhini which suggests enormous
amounts of herbal remedies for beauty-related
problems. According to ayurveda, health
and beauty are inter-related and it emphasises
balancing both in a natural way. Its practitioners
also stress this balance and insist on
addressing the root cause of skin problems
even while giving herbal preparations
to get rid of pimples. Nasya Karma, Udhavarthanam,
Sirodhara, Takradhara, Sodhanam and Samanam
are popular treatments that are offered
in Soundarya Vardhini. "Before starting
with beauty therapies, we focus on eliminating
harmful toxins from the body," said Dr
Rajeswari. "Blood purification plays a
vital role in retaining the glow of the
skin." In Nasya Karma, a few drops of
medicated oils are used as nasal medicine
to clear pimples and to provide more glow
to the skin. The treatment is 'personal'
and depends on the client's body constitution
and seasonal changes. Medicated ghee will
relieve you from the problem of black
circles around the eyes and Udhavarthanam
or scrubbing removes dead tissue and revitalises
the skin. Manjista, hibiscus, tulsi, chandan,
aloevera, papaya, roses, amla, brungaraj
and aswagandha are extensively used in
beauty treatments in the form of oils,
powders and face packs. "Bleaching is
a strict no no in ayurveda," said Dr Salina
Beevi of Dhanwantari Vaidyasala in Vijayawada.
"Instead we pamper skin with Ksheeradhara
(treatment with milk)." Takradhara (a
mixture of buttermilk with medicines)
is used for removing dandruff and Sirodhara
stimulates the nervous system and makes
the skin brighter. "Herbal massages are
followed by steam bath with improves blood
circulation, reduces stress and improves
hair and scalp condition," said Dr Salina
Beevi.
Courtesy:
The Asian Age, June 16, 2006
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TCS
in Race For UK-Based BPO Vertex
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India's
largest software company Tata Consultancy
Services is holding discussions with United
Utilities to acquire its Business Process
Outsourcing arm 'Vertex' for an estimated
$800 million (Rs 3,600 crore). "Talks
are at preliminary stages," sources in
the know said. Meanwhile in response to
a query, TCS told Bombay Stock Exchange
that as a matter of policy it does not
respond to any speculative news items
or queries in such matters. "As indicated
in the past, acquisitions are a part of
the company's growth strategy. Accordingly,
the company considers from time to time
various proposals for acquisitions and
mergers," it said. A company spokesperson,
when contacted, refused to comment. Sources,
however, said that the acquisition of
Vertex could cost around $800 million
to TCS. Vertex - which runs back office
in areas like customer services, human
resources, procurement, finance and accounting
- is already a client of TCS. It has 9,000
employees across UK, US, Canada and India.
The company has two centres in Gurgaon
and 1,800 employees. Vertex's revenues
have been flat for a while and this could
be one of the reasons for the sale. Its
revenues this year were $688 million as
against $673 million last year. It made
an operating profit of $35 million this
year. United Utilities, the parent of
Vertex, operates electricity distribution
and water works in England. For the sale
of Vertex, the company has appointed Merrill
Lynch as an advisor. If TCS is successful
in its bid for Vertex, it will be the
largest acquisition by it anywhere. The
largest acquisition by the company so
far is Aviation Software Development Consultancy,
which it bought for $140 million in March
2004.
Courtesy:
Hindustan Times, June 15, 2006
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Dutch
Firms Bullish on India Inc.
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Netherlands-based
corporate houses have been strengthening
their ties with India and are looking
forward to establishing new relationship
with their Indian counterparts. "The possible
business opportunities can be in agriculture,
logistics, pharmaceuticals, entertainment
and communication sector," said Hans Ramker,
Consul General for Netherland at a meeting
organised by the Mahratta Chamber of Commerce,
Industry and Agriculture (MCCIA) on Monday.
"Indian agriculture exporters - especially
flower and vegetable - are already active
in the Netherlands and we can enhance
the relationship with co-operating in
processing, packaging and distribution
of India agri-produce," he said. Services
business between the two countries, led
by information technology, is expanding
and there are strong signs of its growth,
he said. "The highest investments from
Indian companies have come to the Netherlands
in 2005-06 and it grew to $244 million.
The trade between the country and the
Netherlands is around $2 billion," he
said. He said Dutch multimedia companies
were sourcing India's skills in design
and printing and had partners in cities
such as Ahmedabad and Mumbai. There are
greater opportunities in movie making
and processing," Ramker said. Indian exporters
can use the Netherlands as distribution
base as it offers excellent connections
to Europe and North America, he pointed
out. There is a significant scope for
Indian bulk drug and generic pharmaceuticals
companies to export to Netherlands.
Courtesy:
Business Standard, June 14, 2006
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Tata
Motors Bags Bus Order Worth US$ 12 Million
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Tata
Motors Ltd, India's top bus and truck
maker, said on Tuesday it had received
an order worth US$ 12 million for supply
of buses to Kinshasa in the Democratic
Republic of Congo. The buses will be used
in the revamp of the capital city's urban
transport system, the company said in
a statement. It has already delivered
228 buses. Tata Motors exported more than
6,000 buses in the fiscal year to March
2006, up 45 per cent from the year earlier.
Courtesy:
The Economic Times, June 14, 2006
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SMBs'
IT Spend to Reach US$ 5.8 Billion in 2008
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Small
and medium businesses (SMBs) in India
will increase their IT spend to US$ 5.8
billion in '08 from US$ 4.6 billion in
'05, according to a study by AC Nielsen
and the Computer Society of India (CSI).
The key areas for SMBs are IT staff training,
data protection and security. The study
has been conducted across eight cities
and 1,200 people were interviewed across
different sectors-manufacturing, transport
and logistics, pharmaceuticals, hospitality,
travel and ITES. For convenience, SMBs
have been defined as companies with a
turnover between Rs 50 crore to Rs 400
crore and employee strength of 100 to
500. About 24% of the small businesses
operating in the IT/ITES sector are likely
to increase their IT budgets in two years.
The IT companies were followed by the
pharma sector. According to the study,
currently, there are 51,891 SMBs in India
and this number is expected to grow to
53,963 by '08. "We are now consolidating
our focus and intend to launch syndicated
research in this arena," said Partha Rakshit,
MD, AC Nielsen South Asia. The IT industry
apex body Nasscom estimates total IT spending
in India to be about $10 billion. Of this,
the SMB spending is estimated to be in
the region of $4.5b. The World Bank has
granted loans of about $120m to Sidbi,
to support the effort. Meanwhile, Avaya
Global Connect, a communcations company
based in Gurgaon, has made an entry into
the SMB segment. Sanjay Singh, Avaya's
head SME unit, says small companies look
for returns in the shortest possible time
so the companies need solutions focussed
technology rather than complicated software
and hardware. The segment is growing at
20% CAGR and migrating to IP telephony.
This is because within the SMB segment
there are fast growing contact centres
with 30-60 agents who service domestic
clients. According to a survey conducted
by Frost and Sullivan, by '08, SMB spend
on IP telephony is expected to rise to
Rs 450 crore from the current levels of
Rs 150 crore. The companies are also making
an effort to keep the look and feel of
the products designed for SMBs simple.
Giving an example, Rajiv Mittal, group
director, Microsoft, said their company
has a product called Dynamics for the
SMBs which is quite similar to Outlook
Express. Using this, SMBs can link their
back office operations, customers and
vendors.
Courtesy:
The Economic Times, June 14, 2006
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Tata
Motors Gets $12 mn Bus Order For Kinshasa
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Tata
Motors Ltd, India's top bus and truck
maker, said on Tuesday it had received
an order worth Rs 550 million for supply
of buses to Kinshasa in the Democratic
Republic of Congo. The buses will be used
in the revamp of the capital city's urban
transport system, the company said in
a statement. It has already delivered
228 buses. Tata Motors exported more than
6,000 buses in the fiscal year to March
2006, up 45 per cent from the year earlier.
Courtesy:
Hindustan Times, June 13, 2006
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Now,
India Inc Cheers up Investors
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Despite
the gloom and doom scenario in stock markets,
higher dividends are giving investors
a reason to smile. Share prices may have
taken a beating in the past few weeks,
but it still makes economic sense for
investors to stay invested to reap benefits
of hefty dividend payouts offered by India
Inc. Several blue-chip companies have
announced substantially higher dividends
for shareholders, after recording a better
performance during '05-06. Reliance Industries
(RIL), Infosys Technologies, NTPC, TCS,
SBI, GAIL, HCL Technologies, HDFC, Bajaj
Auto, Bhel and Satyam Computer Services
are among the notable examples of companies
doling out higher dividends. A ranking
based on amount of dividend paid by these
companies showed that PSU power giant
NTPC distributed Rs 2,309 crore of its
net profit as dividend payout, the highest
among the lot. The company announced 28%
dividend for '05-06, compared to 24% for
the previous year. NTPC is followed by
another PSU company Indian Oil with a
payout of Rs 1,460 crore. Leading the
pack of private sector heavyweights, RIL
paid Rs 1,394 crore as dividend which
was hiked to 100% from 75%. Keeping with
its traditions, tech bellwether Infosys
Technologies increased its payout sharply
to Rs 1,238 crore (900%) from Rs 313 crore
(230%) in '04-05. According to analysts,
dividend yields of many stocks have turned
attractive after a sharp fall in share
prices in the past one month. Investors
tend to take a long-term view if they
are assured of good and regular returns
in the form of dividend payouts. Most
of the above mentioned blue-chip companies
have maintained an excellent track record
of dividend payment, which makes them
the most valuable among all the listed
companies, analysts said. Stocks, which
pay a high dividend in relation to their
share price, are defined as dividend yield
stocks. Dividend yield is calculated as
dividend per share divided by share price.
"Dividend yield stocks provide good investment
opportunities in the sensex that there
is a high possibility of regular returns
and also good potential for appreciation
in the long run.
Courtesy:
The Economic Times, June 13, 2006
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Mfg
Sector to Create 25 mn New Jobs
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India's
manufacturing sector is likely to touch
the $100 billion mark in exports, apart
from creating 25 million new jobs by the
year 2010, a study has said. In a paper
titled 'Manufacturing: India's growth
locomotive', industry body Assocham said
exports from the Indian manufacturing
sector would double from the current 50
billion dollar to 100 billion dollar by
2010. "Global trends to manufacturing
and sourced products to low cost countries
like India would gather strength over
the next 10 years, particularly in skill-While
25 million jobs are likely to be created
in the manufacturing intensive industries,"
Assocham president Anil K Agarwal said
in a release. sector in the next four
years, 9-10 million people would be employed
in the textile sector alone. The textile
sector currently employs around 35 million
people including manufacturers, suppliers,
wholesalers and exportes of cotton textiles,
handlooms and woolen textiles, the paper
said. The paper has sought lowering of
manufacturing costs in the country, with
continued focus on public sector manufacturing
industries. Basic infrastructure needs
of the industries also need to be met
to remove bottlenecks, which continue
to make the country's manufacturing sector
highly uncompetitive, especially within
the ASEAN region, it added. Courtesy:
The Economic Times, June 13, 2006
Courtesy:
The Economic Times, June 13, 2006
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Indian
Company Buys Into New Zealand Coal Mine
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Gujarat
NRE Coke Limited, India's largest stand-alone,
publicly listed coke-making company, is
to take a NZ$20 million (about $12.6 million)
stake in New Zealand's Pike River Coal
Limited, it was announced Tuesday. Pike
River's parent company, New Zealand Oil
& Gas Limited (NZOG), said Gujarat NRE
Coke had also contracted to buy 40 percent
of Pike's coal production for the life
of its mine, near Greymouth, on the west
coast of the South Island, at market prices.
The company is the second Indian investor
in the mine, which is scheduled to start
producing 1.3 million tonnes of coking
coal a year in the second half of 2007.
NZOG announced last September that it
was joining forces with India's biggest
privately owned coke maker Saurashtra
Fuels (SFL) to develop the mine and list
it on the New Zealand Stock Exchange through
a public offering of shares. SFL will
buy at least 150,000 tonnes of coking
coal a year from the Pike River mine,
which will also export to Taiwan and South
America. Pike River's general manager
Gordon Ward said the Indian company's
investment was subject to regulatory approvals
including the consent of the Overseas
Investment Commission.
Courtesy:
Hindustan Times, June 13, 2006
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India
'The Next Big Thing' in Real Estate
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India
is being considered as "the next big thing"
in real estate with many Israeli companies
lining up for major investments there,
a media report here said. The latest addition
to the growing list of possible investors
in the Indian real estate sector is US
tycoon Shaya Boymelgreen who recently
bought Azorim Investment in Israel for
$500 million from IDB Holding Corp Ltd.
He is joining hands with Nochi Dankner,
a prominent Israeli businessman who briefed
him over the prospects in the Indian market,
business daily 'Globes' reported. The
two entrepreneurs are in contact and considering
a number of joint investments in India,
the daily said adding that Azorim Investment
CEO David Lev is due to visit India in
a few days in this regard. Meanwhile,
Big Shopping Centers (2004) Ltd has already
set up an Indian subsidiary, Big India,
with a local partner who owns 40 per cent
of the joint venture, the report said.
Big India bought two half-acre plots on
which it plans to build commercial centres
at an investment of $40 million. Another
company, Elbit Medical Imaging Ltd, Chairman
Motti Zisser declared early this year
that he planned to invest in India. The
company plans to build three commercial
centres in India, which will become an
important component of the company's real
estate assets. "India now resembles the
real estate market in Eastern Europe ten
years ago. Elbit Medical accumulated great
experience in Eastern Europe, and it sees
India as an excellent business opportunity,"
company sources told the business daily.
Alony Hetz Property and Investments Ltd
controlling shareholder Natan Hetz also
recently announced plans to invest $100
million with partners in Indian ventures.
The company will own 25 per cent in this
joint venture, the report said. Gazit-Globe
Ltd, controlled by Chairman Chaim Katzman,
and Ocif Investments and Development Ltd
controlled by Doron Aviv and Dafna Harlev,
are also interested in investing in India,
it added.
Courtesy:
The Economic Times, June 13, 2006
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The
index of industrial production (IIP) clocked
a growth of 9.5% in April '06 as against
8.1% in the same month last fiscal on
the back of a robust growth in manufacturing.
Over two-thirds weight in the index is
accounted for by manufacturing, that grew
by 10.4% compared to 9.2% last year, according
to official data released here on Monday.
The mining sector lagged behind with a
growth of only 4.3%, but it was more than
the 0.9% growth registered during '05-06.
The electricity sector grew 5.6%, the
statement said. The corresponding growth
in mining and electricity, respectively,
was 2.8% and 3.1% in April last year.
The fiscal '05-06 ended with an industrial
growth of 8.1% compared to 8.4% in '04-05,
according to official data released by
the Central Statistical Organisation.
With the capital goods sector recording
a growth of 24.9% and intermediate goods
clocking a 5.3%, manufacturing will continue
to grow in double-digits. During April
'05, capital goods grew 14.6% and 'intermediate
goods' recorded a growth of 2.5%. As per
use-based classification, the 'basic goods'
sector grew 9.1% in April compared to
6.2% in April '05. However, there was
a steep fall in the overall growth of
'consumer goods' in April at 8.7% compared
to 13.5% in the same month last year as
is typical in the beginning of the year.
While the growth of 'consumer durables'
sector fell to 10.6% in April from 18.7%
in the same month last year, the 'consumer
non-durables' sector grew 8% as against
11.9% in the same month of '05. In terms
of industries, as many as 13 out of the
17 industry groups have shown positive
growth during April '06, as compared to
the corresponding month of the previous
year. Among the industry groups, the 'other
manufacturing industries' has shown the
highest growth of 36%, followed by 20.7%
in 'basic metal and alloy industries'
and 16.3% in 'transport equipment and
parts'.However, 'leather and leather and
fur products' have shown a negative growth
of 28.3%, followed by 16.1% in 'wood and
wood product; furniture and fixtures'
and 6.6% in 'jute and other vegetable
fibre textiles (except cotton)'.
Courtesy:
The Economic Times, June 13, 2006
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IHDP
Aims $1 bn Exports in 3 Years
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Noida-based
International Home Deco Park (IHDP), which
has been positioned as the interface for
exporters and international retailers
for home furnishing products, has set
a target of achieving exports worth one
billion dollars in another three years
time. "The park when fully functional
should be able to do business worth $400-500
million dollars in the initial year. In
three year's time we expect to achieve
gross exports worth $1 billion," IHDP
Director Aditya Gupta told media. Slated
to start operations and open to buyers
by September-October this year, the park
is expected to house about 100 export
companies at the 4,00,000 square feet
space off the Taj Express Highway. "Already
we have begun the marketing exercise and
30 per cent of space has already been
booked by companies, including premium
exporters like TextTrade, Extra Weave
and La Sorogeeka," Gupta said, adding
in order to woo international retailers,
the park has already kicked off overseas
campaigns. "On an ongoing basis we will
be spending about a million dollars every
year on international campaigns. Already
we have started the exercise with Home
Furnishing News, which will run till September,"
he said. He said the company, which had
invested about $20 million in the park,
expected to achieve a high growth in the
first year of operations itself. "The
industry has been growing at 25 per cent
and although India's share in the global
home decor market, which is worth about
$350 billion, is 2 per cent, we expect
it to go up," he said, adding the park's
strategic location should help generate
more business.
Courtesy:
The Economic Times, June 13, 2006
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to Index
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Higher
Dividends Gives Investor a Smile
|
| |
|
Despite
the gloom and doom scenario in stock markets,
higher dividends are giving investors
a reason to smile. Share prices may have
taken a beating in the past few weeks,
but it still makes economic sense for
investors to stay invested to reap benefits
of hefty dividend payouts offered by India
Inc. Several blue-chip companies have
announced substantially higher dividends
for shareholders, after recording a better
performance during '05-06. Reliance Industries
(RIL), Infosys Technologies, NTPC, TCS,
SBI, GAIL, HCL Technologies, HDFC, Bajaj
Auto, Bhel and Satyam Computer Services
are among the notable examples of companies
doling out higher dividends. A ranking
based on amount of dividend paid by these
companies showed that PSU power giant
NTPC distributed Rs 2,309 crore of its
net profit as dividend payout, the highest
among the lot. The company announced 28%
dividend for '05-06, compared to 24% for
the previous year. NTPC is followed by
another PSU company Indian Oil with a
payout of Rs 1,460 crore. Leading the
pack of private sector heavyweights, RIL
paid Rs 1,394 crore as dividend which
was hiked to 100% from 75%. Keeping with
its traditions, tech bellwether Infosys
Technologies increased its payout sharply
to Rs 1,238 crore (900%) from Rs 313 crore
(230%) in '04-05. According to analysts,
dividend yields of many stocks have turned
attractive after a sharp fall in share
prices in the past one month. Investors
tend to take a long-term view if they
are assured of good and regular returns
in the form of dividend payouts. Most
of the above mentioned blue-chip companies
have maintained an excellent track record
of dividend payment, which makes them
the most valuable among all the listed
companies, analysts said. Stocks, which
pay a high dividend in relation to their
share price, are defined as dividend yield
stocks. Dividend yield is calculated as
dividend per share divided by share price.
"Dividend yield stocks provide good investment
opportunities in the sensex that there
is a high possibility of regular returns
and also good potential for appreciation
in the long run. Investors in such stocks
earn some returns even in a falling market,"
said the head of research of a leading
brokerage firm in Mumbai.
Courtesy:
Economic Times, June 13, 2006
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to Index
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Dabur
Eyes Abroad For Acquisitions to Boost
up Growth
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Homegrown
FMCG major Dabur has chalked out major
expansion plans for overseas markets and
is "actively considering" acquisitions
and alliances outside India as it aims
to corner 15 per cent of sales in foreign
soil in the next four years. "... the
company has re-organised its international
business around the focus, potential and
opportunistic markets to be able to tap
its potential to the fullest," Dabur Chairman
V C Burman told shareholders in the company's
annual report for 2005-06. The company,
which revamped the organisational structure
of its international business last fiscal,
said geographical expansion was among
the major plans on its agenda. "Going
forward, the expansion markets will be
clearly identified based on strategic
choice. The company will commit major
investments and human resources in focus
markets," the company said. International
business for Dabur recorded a growth of
19 per cent in 2005-06 at Rs 216.1 crore
and contributed 11.4 per cent to overall
sales of Rs 1,900 crore. The company,
which has overseas manufacturing bases
in Middle-East and Africa, said it will
leverage the "natural platform" as it
moves ahead with growth in the foreign
markets. "This will make full use of the
growing global demand for natural products
by occupying differentiated competitive
niches in the health care and the personal
care segments," it said. The organisational
revamp for overseas business, which operates
under Dabur International Ltd, will see
the company split international business
into two portfolios. "Portfolio one would
comprise Asian markets including Bangladesh,
Malaysia, Nepal, Pakistan, Sri Lanka and
developed markets including US and UK.
Healthcare business in CIS countries and
markets in Asia Pacific would also be
covered under the Portfolio one ambit,
which would be supported by the manufacturing
facility at Silvasa," the company said.
On the other hand, Portfolio two would
focus on markets in the Gulf Cooperation
Council (GCC) countries, African markets
including Egypt, Morocco, Nigeria, Sudan
and other middle-east countries like Iran
and Iraq. These and personal care business
in CIS and other markets would be addressed
by manufacturing facilities in the Middle
East and Africa. Dabur has also got plans
for neighbouring Pakistan market where
it made a foray through its subsidiary
Asia Consumer Care (Pak) Ltd. "The initial
response has been good, and the company
is optimistic about its prospects there.
A team has been put in place, headed by
a Pakistani national," it said. To support
the massive growth plans abroad, the company
is upgrading its Silvasa unit which has
been transformed into an Export Oriented
Unit.
Courtesy:
The Economic Times, June 13, 2006
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Advantage
Rural India, Agro-Enterprises Gaining
Ground
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Rural
India still holds the key to the country's
basic economy. According to the findings
of the Economic Census 2005 of Ministry
of Statistics and Programme Implementation,
enterprises in rural areas registered
a growth rate of 5.53 per cent compared
to 3.71 per cent in urban areas in the
past seven years. The employment growth
rate in rural areas also witnessed a 3.33
per cent growth against 1.68 per cent
in the urban areas."The findings indicate
that agro-processing, and agro-enterprises
are gaining ground in the country. A much
clearer picture would emerge once the
final report is prepared. In all, 4.2
crore enterprises engaged in different
economic activities other than crop production
and plantation were enumerated to derive
the conclusions. "The enterprises have
grown at the rate of 4.8 per cent as against
2.36 per cent as recorded during the previous
economic census," Minister of State for
Statistics and Programme Implementation
GK Vasan said on Monday. Contrary to general
expectations, rural areas have 76.8 per
cent non-agricultural enterprises as compared
to 23.2 per cent agricultural enterprises.
As much as 20.9 per cent agricultural
enterprises in the rural areas deal with
the non-crop production and plantation
activities. According to the Census, there
are 2,58,09350 non-crop production and
plantation enterprises in the rural areas,
employing as many as 50185441 persons.
The enterprises in urban areas employ
4.87 crore persons. Adult female workers
account for about 19 per cent of the total
persons employed and the corresponding
figures in the rural and urban areas are
24 per cent and 14 per cent respectively.
Maharashtra with 43,74,767 enterprises
employs 11,82,6566 persons. Tamil Nadu
employs 98,66633 persons with 4446999
enterprises. Among the union territories,
Delhi accounts for 4.12 per cent of the
total employment followed by Chandigarh
0.25 per cent, and Pondicherry 0.20 per
cent. The Census puts Jammu and Kashmir,
Sikkim, Kerala, Haryana, and Tripura in
the category of top five states with showing
the growth rate in total employment at
the rate of 6.82, 5.52, 5.39, 5.12, and
5.07 per cent respectively.
Courtesy:
The Pioneer, June 13, 2006
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Haworth
Plans Manufacturing Hub in India
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Haworth
(India) Pvt Ltd, the wholly-owned subsidiary
of Haworth Inc, one of the world's largest
office furniture manufacturers, has decided
to make India its manufacturing hub for
southeast Asia and the Middle East by
2010. Kapil Agarwal, managing director,
Haworth India told Business Standard that
the company was gearing itself for a massive
expansion to meet demand in both the Indian
and international markets. "India's strategic
location is ideal to make it the manufacturing
hub for SE Asia and Middle East. Moreover,
the Indian market is expected to grow
significantly," said Agarwal. Production
at the Pune factory, which was recently
commissioned, is expected to be trebled
by 2007. "We have invested around $10
million for our Pune factory. The production
capacity of individual shifts will be
doubled during 2006 and trebled in 2007,"
he added. At the same time, the company
was planning to set up a second manufacturing
unit in any of the special economic zones
(SEZ). "The company will be making a major
investment to set up the second manufacturing
unit in an SEZ area. It is likely to come
up within the next two-three years," he
said. The production from the second unit
will not only cater to the international
market in southeast Asia and Middle East,
but also the company's domestic clients
who are based in other SEZs, explained
Agarwal. Though Agarwal was unable to
project any investment figures for the
second unit, he confirmed that investment
could be anywhere between $10 million
and $20 million. Meanwhile, the company
was gearing itself up to record a 50 per
cent growth in its Indian turnover. "We
are expecting to record sales turnover
of $30 million in 2006 in India, 50 per
cent higher than last year's turnover
of $20 million," said Agarwal.
Courtesy:
Business Standard, June 12, 2006
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Industry
Grew 9.5% in April 2006
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|
Indian
industry has logged a growth of 9.5% in
April 2006 as against 8.1% in the same
month last fiscal. The growth in the index
of industrial production was largely on
account of manufacturing, which rose 10.4%
as compared to 9.2% in April 2005, according
to official data released today.The mining
sector lagged behind with a growth of
only 4.3%, while the electricity sector
increased by 5.6%. The corresponding growth
in mining and electricity was 2.8% and
3.1% in the same month of 2005.
Courtesy:
Business Standard, June 12, 2006
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Punj
Lloyd Bags Rs 302 cr Order
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Construction
firm Punj Lloyd Ltd on Monday said it
has bagged a project worth Rs 302 crore
from Road Infrastructure Development Company
of Rajasthan Ltd (RIDCOR) for improvement
and performance-based maintenance works
on the Lalsot to Kota Road in Rajasthan.
The project involves widening of the 195
km stretch of existing road to two lanes
with a width of 10.5 metres. The improvement
work is expected to be completed within
21 months and the maintenance would be
completed in another 60 months after the
improvement work is completed, the company
informed the Bombay Stock Exchange. "We
are already executing 3 other RIDCOR projects
valued at Rs 593 crore. With this project,
Punj Lloyd has to its credit four highways
projects in Rajasthan. This reiterates
the confidence of our clients in our competencies,"
company Chairman and Managing Director
Atul Punj said. The company has also bagged
a Rs 117 crore order from Singapore-based
Helios Terminal Corporation Pte Ltd, for
procurement and construction of storage
tanks and other works for the 'Bulk Liquid
Storage and Blending Facility, at Jurong
Island Singapore. RIDCOR is a joint initiative
between the Rajasthan Government an IL
and FS Ltd. The shares of the company
were trading at Rs 811.10, up 1.31 per
cent on the BSE. Punj Lloyd is an engineering
construction company, which provides design,
engineering, procurement, construction
and project management services for energy
industry and infrastructure sector projects.
Courtesy:
The Economic Times, June 12, 2006
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Boom
Time in Realty Sector
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The
Rs 2,250-crore real estate deal by Adani
group in Mumbai's Bandra-Kurla Complex
(BKC) in May and the Rs 821-crore deal
struck by the Delhi-based Parsvnath developers
in Chandigarh, recently, have once again
catapulted the Indian realty sector into
the spotlight. If the present trends continue
to be mirrored in the coming months, then
the Indian property market could witness
a healthy growth in the medium-term horizon,
experts in the industry said. A report
by a leading international consultancy,
puts it in perspective by stating that
"in India's fast-growing economy, real
estate has emerged as one of the most
appealing investment areas for domestic
as well as foreign investors." The interest
shown by investors from Singapore to invest
in Indian realty by forming a consortium
to promote real estate projects recently,
is another indication of the immense potential
as well as increasing foreign interest
in this sector. According to reports,
these investors are awaiting regulatory
approvals for their foray into the Indian
market. Another growth-driver "will be
the basic need for modern real estate",
the report stated. The report further
said that the growing young population
with huge surplus earnings is also likely
to channelise money into real estate,
housing, educational establishments, shopping
malls and infrastructure projects. Reflecting
this view, Mr Bharat Udeshi, a stock-broker
and real estate industry observer, sad
that "with the bourses now exhibiting
extreme volatility there is every possibility
of investors diverting some money into
the real estate sector. If this happens,
it will instill greater buoyancy into
the already-robust Indian realty sector."
According to him, a robust real estate
market also has the potential to fuel
growth in associated sectors like cement
and steel, which, in turn, will help contribute
to the growth of the country's economy.
The realty boom has also had a positive
spin-off on other segments as well; for
example, on real estate mutual funds.
LICHF has invested Rs 50-crore in Kotak
Mahindra's India's Realty Fund and another
Rs 10 crore in Unitech's CIG Realty Fund.
Most of the funds floated in the recent
past have received a strong response from
investors and market reports state that
over the last six months, nearly $500
million has flowed into the sector. The
current trends in the sector indicate
that the property market in the metros
and other urban centres, will continue
to remain hot while momentum will begin
to gather soon in Tier II and Tier III
towns as well.
Courtesy:
The Statesman, June 12, 2006
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to Index
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Birlas
Close to Acquiring Tatas' 48% Stake in
Idea
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The
Aditya Birla Group and the Tatas are close
to finalizing the Idea Cellular deal wherein
the Birlas are acquiring the 48% stake
of the Tatas in Idea. However, the Birla
plan to place a part of the stake with
financial investors is unlikely to take
off simultaneously. The deal is likely
to be completed in two stages. Earlier,
the understanding was that the two transactions
would have a simultaneous conclusion.
"We need to first own the shares before
we can sell them," said informed sources.
The Birlas will be placing about 35% of
the 48% stake acquired from the Tatas
with financial investors. Aditya Birla
Nuvo (ABNL) which is acquiring the 48%
stake will eventually hold about 65% in
Idea, after the completion of the deal.
ABNL managing director Sanjeev Aga could
not be reached for comment. The Birlas
are said to be talking to financial investors,
including private equity players and hedge
funds, to place a part of the Idea equity.
It's learnt that the Birlas are not too
keen on having on board big financial
investors who may demand some rights.
"We are not offering any rights to the
investors," said sources. According to
them, the 35% stake may be divided among
several investors. While IDFC, which has
been associated with Idea in the past,
is expected to pick up a small stake,
this could not be confirmed. IDFC sources
denied they were in negotiations with
the Birlas. For the Birlas, it will be
the first time that they will be in the
driving seat at Idea Cellular. It also
marks a new beginning for the fourth-largest
private mobile operator that has suffered
in the past on ownership issues. For instance,
it's the only major mobile operator that
does not have a presence in Mumbai, one
of the two biggest mobile markets in the
country.
Courtesy:
Economic Times, June 12, 2006
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Indian
Exports Doing Well on EU Market
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Nearly
half of India's exports to the 25-nation
European Union (EU) entered at either
zero duty or at reduced rates of duty
during the last year, says an official
report. Indian exports, valued at 10 billion
euro, were entitled to such preferential
access to the EU market under the EU's
generalised system of preferences (GSP).
Exports worth eight billion euro benefited
from the GSP scheme, out of total exports
to the EU of just over 17 billion euro
in 2005. According to the report on GSP
utilisation between 2003 and 2005 issued
by the EU's Trade Commissioner, Peter
Mandelson, India was not alone in taking
advantage of the GSP scheme, which provides
preferential access to the EU market for
the exports of nearly 180 developing countries.
India once again was one of the main beneficiaries
of the GSP scheme, first introduced by
the EU in 1971. Some 40 percent of its
textile and clothing exports, worth just
over 3 billion euro, out of total exports
of 4.8 billion euro, benefited from the
GSP scheme. Exports of footwear did even
better. Nine-tenths of India's footwear
exports, valued at 600 million euro, out
of total exports of 675 million euro,
profited from the GSP scheme. However,
only two-thirds of chemical exports, valued
at 750 million euro, out of total exports
of over one billion euro, entered the
EU under its GSP scheme. Other Indian
exports that benefited largely from the
GSP scheme, with utilisation rates of
over 80 percent, included animal products
(88 percent), gems and jewellery (85 percent),
transport equipment and common metals
(each 83 percent). The Mandelson report
notes that the biggest gains from the
abolition of textile and garment quotas
from Jan 1, 2005, went to China and India.
Their exports rose by 42 percent and 18
percent respectively last year. Most other
developing country suppliers lost out,
although the re-imposition by the EU of
quotas on Chinese exports in mid-2005
had a positive effect on their exports
in the second half of the year, according
to INEP agency. The report also notes
that many exporters of clothing made from
woven fabric experienced difficulties
in using the GSP scheme. This was particularly
true of countries like Bangladesh, which
use imported fabrics for garment manufacture.
Countries with their own weaving industries,
notably India and Pakistan, made extensive
use of GSP facilities. The EU's rules
of origin are mainly responsible for the
fact that only 25 percent of Bangladesh's
exports of garments from woven fabrics
entered the EU duty-free in 2004, as against
81 percent in the case of knitted garments.
These rules are currently under review,
and may well be simplified. The GSP scheme
is not the only instrument under which
a developing country's exports can enter
the EU at preferential rates of duty.
Regional and bilateral free trade agreements
also provide for preferential access to
the EU market.
Courtesy:
Economic Times, June 11, 2006
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Ranbaxy
Completes Terapia Acquisition
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Ranbaxy
Laboratories Ltd on Thursday said it has
got approval from the Romanian Competition
Council for acquiring 96.7 per cent stake
in the country's leading pharmaceutical
company Terapia SA. The pharma major said
that the approval was given to its holding
company Ranbaxy Netherlands BV. Ranbaxy
had earlier announced the acquisition
of the equity stake in Terapia from Terapia
Holding BV for a sum of $324 million.
"With the completion of the transaction,
Romania now becomes the third largest
market for us in terms of revenue. We
are deeply committed to developing our
operation here as a strategic hub for
Europe and CIS. We will continue to strengthen
our global presence particularly in our
key geographies," Ranbaxy's CEO and Managing
Director Malvinder Singh said. This deal
combines the strengths of the two leading
generic companies and allows the Ranbaxy
to leverage its expanded base in the rapidly
growing Romanian pharmaceuticals market
across the European Union and the CIS
markets.
Courtesy:
The Economic Times, June 09, 2006
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BPO:
India to Lead For Another 30 yrs
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Powered
by its continuing dominance in providing
low-cost IT skills, the great Indian BPO
story continues unplugged despite the
emergence of new competitors like China,
Philippines and Indonesia. According to
the latest study on global outsourcing
market, India will maintain its low-cost
IT skills leverage in the offshore outsourcing
market for at least another 30 years.
Global outsourcing advisory and research
firm Everest said in its '2006 Global
Sourcing Market Update' that the concerns
related to sharp wage inflation and skill
shortages leading to an adverse impact
on India's offshore cost advantage were
grossly exaggerated. The US-based research
agency said India's offshore outsourcing
market is likely to maintain its low-cost
labour advantage over the UK for at least
next 30 years. The country will also retain
its low-cost wage supremacy over the US
for at least another 18 years, the report
added. Along with its Asian peers like
Philippines, India continues to aggressively
move ahead with policies aimed at minimising
the adverse impact of wage inflation,
it added. Value additions to the relevant
workforces, both on quality and quantity
fronts, along with development of more
low-cost offshore locations, the report
added. After establishing its footprint
in centres like Bangalore, Delhi-NCR,
Pune and Hyderabad, the BPO industry is
expanding into new and non-metro places
like Jaipur, Lucknow and Chandigarh.
Courtesy:
Hindustan Times, June 09, 2006
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Cell
Subscriber Base Crosses 100-Million Mark
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India's
cellular subscriber base has crossed the
100m mark in May '06. Cellular operators,
offering GSM, as well as CDMA services,
added a total of 4.3 million users during
the month. While GSM operators roped in
3.2 million users, rival CDMA operators,
represented by the Association of Unified
Telecom Service Providers (AUSPI), added
1.1 million users. The all-India GSM subscriber
base grew from 72.2m in April '06 to 75.3m
in May '06, registering a growth of 4.2%
over the previous month according to the
Cellular Operators Association of India
(COAI), which represents GSM players.
Bharti Airtel retained the top position
among GSM players, adding 1.2m users.
Bharti's total user base reached 21.9m,
with a market share of 29%. Public sector
BSNL saw an addition of 0.4m users, taking
its total subscriber figure to 18m and
its total market share to 23.9%.BSNL was
followed by Hutch, which added 0.7m new
subscribers and a total user base of 16.7m.
Around 0.4m users signed up for Idea Cellular
and the corresponding figure for MTNL
was 0.1m. The chart for CDMA operators
was led by Reliance Infocomm, which added
0.5m subscribers during the month, taking
the total mobile user base to 19.3m. Tatas
added 0.6m new subscribers. With this,
their total customer base has reached
around 6m, according to AUSPI.
Courtesy:
The Economic Times, June 08, 2006
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Car
Companies Queue up to Source Parts From
Here
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Nissan,
Fiat and Mitsubishi may soon join the
league of global vehicle makers which
source components from India through their
joint venture (JV) partners. A two-way
joint venture to provide product and technology
to India and source components in return
seems to be the flavour of the season
in the automotive industry. According
to the recent manufacturing arrangement
between Japanese car majors Nissan and
Suzuki, Nissan models for emerging markets
will be produced at Maruti's facility
in Gurgaon. The components required for
producing these vehicles are likely to
be sourced from Maruti's suppliers in
India, according to analysts. Tata Motors
is in discussions with its partner Fiat
SpA, to extend their areas of co-operation
including supply of auto components, company
officials said. Tata Motors' subsidiary
Tata Auto Components has already been
supplying auto parts and services to global
vehicle makers and could also be the sourcing
partner for Fiat globally. Hindustan Motors
(HM), which has a manufacturing tie-up
with Mitsubishi of Japan, is also looking
at catering to the global component needs
of the latter. Vehicle makers like Mahindra
& Mahindra, Force Motors, Ashok Leyland
and TAFE have similar arrangements. In
fact, Force Motors, which has a JV with
MAN Nutzfahrzeuge for producing commercial
vehicles, expects business of around Rs
1,000 crore for the Indian component industry,
in supplying to MAN's European operations.
It is a win-win situation according to
industry observers. While the Indian partners
gain in products and technology, the foreign
partner benefits due to the low cost advantage
India offers.
Courtesy:
The Economic Times, June 08, 2006
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Bridgestone
to Invest US$ 17 Million in Pithampur
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Bridgestone
India Private Limited, a part of Bridgestone
Corporation, Japan, is on an expansion
spree. The company is expanding its Kheda
(Pithampur, near Indore) facility with
an investment of US$ 17 million. The company,
according to a government source, plans
to further expand its operations. However,
a project report for necessary requirements,
if any, is yet to be submitted to the
state government. Bridgestone, one of
the leading manufacturers of tyres in
India that carries a tag of official tyre
supplier for Formula 1, is expanding its
Kheda facility by another 2,500 tyres,"
said a top government official of the
department of industries. "The company,
which has already made an investment of
about Rs 400 crore and has a capacity
of manufacturing 8,000 tyres a day, will
augment its capacity by 2,500 tyres a
day with an investment of Rs 80 crore.
The expansion is on," the government official
told Business Standard. Bridgestone India,
according to the official, will expand
its capacity by 4,000 tyres per day with
an investment of Rs 180 crore, but we
are awaiting details from the company.
"It is preparing a project report. They
are probably entering in truck and bus
radials," the source added. Bridgestone
entered Madhya Pradesh in 1996 as a joint
venture between Bridgestone Corporation
of Japan (BSJ) and the Associated Cement
Companies of India Ltd (ACC). The commercial
production started in 1998. Bridgestone
India, which manufactures passenger steel
belted radial tyres, tubes and steel belted
radial tyres for light commercial vehicles,
became 100 per cent subsidiary of Bridgestone
Corporation of Japan in March 2003. The
Singhanias-promoted JK Tyres is also expanding
its Banmore facility in Madhya Pradesh.
"A number of big firms are showing interest
to invest in Madhya Pradesh, thanks to
our investor-friendly approach, better
facilities, sops and concessions. We are
also making amendments in our existing
Industrial Promotion Policy of 2004 to
make it more investor-friendly and employment-oriented,"
said OP Rawat, principal secretary, department
of industries. The state government has
recently constituted a sub-committee to
iron out problems of industries. The committee,
after holding discussions with various
industrial groups, is preparing a report
to be submitted to the chief minister
and his team to launch the new Industrial
and Employment Policy.
Courtesy:
Business Standard, June 08, 2006
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AOL
Bullish on Indian Mobile Data Software
Market
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US-based
AOL's wireless divison, Tegic is bullish
about Indian mobile data solution sector
and will be launching several new services
in the country mainly eyeing B and C class
cities. "We are very optimistic and bullish
about Indian market mobile solutions for
data transfer where mobile handsets are
projected to grow very fast in the Indian
market," AOL Mobile senior country manager
Mridul Srivastava said here today at the
launch of its Bengali supported T9 software.
"We are close to launching several new
solutions like mobile search, mobile navigator
and text output softwares," Srivastava
said. He said, during 2007, new mobile
handset growth was pegged at 40 million
and 54 million during 2008, according
to a research firm. Total mobile penetration
as on April 2006 was 97 million. "The
major growth in new users of mobile will
come from B and C class towns. And, there
we are optimistic because users in smaller
towns prefer to send SMS in local languages,"
Srivastava said. Currently, 12.3 billion
SMSs are exchanged between mobiles in
the country, but this number is projected
to expand to 180 billion by 2010. The
company has T9 software in eight Indian
languages like Hindi, Punjabi, Marathi,
Tamil and Urdu and in other 55 global
languages. The softwares are embedded
in handsets. The company launched the
Bengali version here today. There is a
270 million Bengali-speaking population
worldwide of which 80 million reside in
India.
Courtesy:
The Economic Times, June 08, 2006
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Textiles
Companies on a Roll
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The
textile sector has woven a fine success
story for the second year in a row after
the removal of quotas. Of the 116 companies
which have declared their annual results
so far, a few of them have not only come
out of the red, but have posted handsome
profits. The success story has been led
by textile majors Mahavir Spinning Mills,
Alok Industries, Raymond, SRF, JBF Industries
and Rajasthan Spinning and Weaving. These
companies have contributed about half
the revenues of the industry. Their profits
have increased by an average of 50% since
last year as the sector has been in the
thick of M&A action and fund raising to
implement projects. This has also helped
revive the industry. The total profits
(net) of the sample of companies shows
over a 100% growth from last year. The
net profit of Mahavir Spinning Mills rose
by 62%, Raymond grew by 46% and SRF grew
by 75%. In the case of Mahavir Spinning,
one of the largest players in cotton yarn,
lower cotton prices and a sharp drop in
the interest cost have resulted in profits.
Raymond has expanded its product portfolio
and increased its capacities through joint
ventures. This has resulted in a better
performance of the company. SRF managed
to stay strong despite pressure from Chinese
competition in technical textiles and
industrial yarns. Sixteen companies that
earlier incurred losses also posted profits
this year. S Kumars has showed the highest
increase with net profits rising to Rs
100 crore from a loss of Rs 19 crore last
year. The sector is also attracting investor
attention. A large fibre base, increasing
garment manufacturing and exporting, low-cost
skilled labour and a large domestic market
are throwing up opportunities for the
sector. In the last year, Mahavir Spinning
has seen a 40% rise in stocks, and SRF
has seen a 53% rise. Raymond, Alok Industries
and JBF Industries have seen a moderate
rise of 29%, 18% and 19% each in stock
prices.
Courtesy:
The Economic Times, June 08, 2006
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India
Leads The Pack in The FII Race
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India
has one of the highest exposures to FII
inflows among other emerging economies.
While in India, FIIs formed nearly 70
per cent of foreign investment (FDI plus
net portfolio equity flows) flow, in China
and Brazil the percentage was 26 per cent
and 30 per cent, respectively, for '05.
Unlike India, a major chunk of foreign
investment entered China, Brazil and Russia
as FDI. India, on the other hand, attracted
nearly 20% of the net portfolio investments
flowing into developing countries, while
its FDI inflows were barely 2.4% of what
was received by emerging economies, according
to data from the Global Development Finance
report '06. During January-December '05,
while India's current account deficit
stood at $13bn, it had a large capital
account surplus amounting to $26bn. Nearly
half of these inflows, however, were portfolio
investments considered volatile by RBI.
In comparison, not only are the other
three BRIC economies running a surplus
in their current account, Brazil and Russia
received nearly $15bn of FDI each in '05,
and China received close to $53bn, forming
a substantial portion of the capital inflows.
India, on the other hand, received barely
$6.5bn. While the recent FII outflows
have raised questions on the vulnerability
of India's Balance of Payments, some economists
feel that fears of FII volatility and
its impact on the country's BOP are unfounded.
Even if FIIs decide to exit the market,
other sources of inflows will continue
to provide dollar inflows. Moreover, the
country's forex reserve cushion of $150bn
will more than cover the India's import
requirements.
Courtesy:
The Economic Times, June 07, 2006
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'Technology,
Pharma, Auto Components Lead M&As'
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The
technology, pharmaceuticals and auto components
sectors are the most important today for
the merger and acquisition market in the
US and India, according to Virtus Global
Partners, a US-based investment and advisory
firm that has recently stepped into the
Indian market. At a media briefing here,
the Managing Partners of the company,
Mr Anil Kumar and Mr Harry Minj, announced
that the firm would focus on cross border
mergers and acquisitions (M&A), and strategic
partnerships and related advisory services
for mid to large size Indian and US companies.
Mr Kumar said that with the Indian companies
flush with cash, coupled with the increasing
appetite of private equity players, and
banks to fund overseas acquisitions, the
pace of cross border M&A was scaling new
heights. Indian companies acquired 42
overseas companies worth $2.3 billion
in 2005. Whereas, in the first four months
of 2006, Indian companies already have
acquisitions valued at over $2.1 billion.
Mr Minj said that he saw the M&A market
clearly increasing in the future in spite
of certain challenges such as deal structuring
and contingent liabilities. Mr Kumar said,
"Companies are surer about their requirements
today. They have very specific needs because
of which the M&A market both in US and
India is getting healthier." According
to the partners, the trend seen was that
Indian companies typically bought 100
per cent shares of an US company, whereas
US companies bought only a part of the
Indian company shares initially, buying
the rest eventually having tested the
waters. Mr Kumar said that what the Indian
companies require were innovation and
more product-based companies rather than
service based firms. At present, Virtus
Global Services is engaged in providing
M&A advice to clients with revenues in
the range of $40-150 million and assisting
in private placements to the tune of $15-60
million. Mr Kumar said that the firm was
already looking at six mandates in technology,
two in pharmaceuticals and a couple more
in the auto component sector.
Courtesy:
The Hindu Business Line, June 07, 2006
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Mutual
Fund Investor Base Increases 6 Per Cent
During May
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The
investor base of mutual funds in May rose
to 23,517,652, up 6.02 per cent over April
led by gains in diversified equity and
fund of funds schemes, as per the Securities
and Exchange Board of India data released
on Tuesday. Gilt and income funds saw
loss of investors. In April, the industry
had seen a 1.6% rise in investor tally.
Diversified equity schemes saw an increase
in investor base, mainly due to new scheme
launches from Fidelity Fund Management,
Franklin Templeton Mutual, and Sundaram
Rural India Fund, and ABN Amro Mutual.
Although these schemes were launched in
April, the mop-up and investor numbers
were reflected in May-end figures. Fidelity
Special Situations Fund added 225,000
investors, Sundaram Rural India Fund added
145,000 investors, and ABN Amro Future
Leaders Fund 75,000 investors. Despite
a rise in investor count, assets of diversified
equity schemes fell 12.8% led by around
13.6% decline in Indian equity market.
Stock market crashed during May led by
weak global markets, fall in metal prices
on London Metal Exchange and foreign fund
sales. Investors count in fund of funds
schemes rose following the entry of Australian
multi-manager specialist, Optimix in India.
Its maiden scheme raised Rs 2.5 billion.
On the debt side, income funds and gilt
funds lost investors, while liquid funds
added investors. In May, bond yields hardened
due to the rise in interest rates by US
Federal Reserve, worries over oil price
hike and its impact on inflation and interest
rates. When yields rise, the long-term
debt schemes take more hit on capital
appreciation compared to short-term schemes.
Courtesy:
The Financial Express, June 07, 2006
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Leather
Industry Poised For Growth
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The
country's leather industry is poised to
grow by leaps and bounds in the next five
years with exports expected to touch US$
7 billion in the next five years. Besides
creation of new employment opportunities
for one million people, according to a
government vision document on the industry.
India's current leather exports are pegged
at $2.5 bn and the industry employs $2.5
mn people, mostly women. Releasing the
Vision Document for 2010-11, Union Minister
of State for Commerce Jairam Ramesh told
reporters here that five Special Economic
Zones would be set up across the country
to cater to this sector. "The SEZs have
been planned in Chennai, Kanpur, Kolkata,
Agra and Tada." Outlining the plans in
the Vision Document, Ramesh said "Only
one-third of our leather exports is footwear
while the global proportion is two-thirds.
We need to increase the proportion of
footwear exports in the next five years
from one-third at present to 50 per cent."
In terms of markets, India exported 63
per cent to Europe while only 12 per cent
went to the US. There was a need to make
a determined effort to increase the exports
to USA to about 20 to 25 per cent in the
next five years, he said. "There is no
regular 'direct' shipping service from
the East coast of India to the US. There
is only a 'once a week' service from Tuticorin
to Europe. This is a very serious issue."
The minister said he would take up the
issue with the Union Shipping Minister,
as almost two-third of the leather exports
were shipped. "There should be 'once a
week' direct shipping service to the US
and one to Europe," he said.
Courtesy:
The Economic Times, June 07, 2006
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Jet,
Sahara Merger Inches Forward
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The
merger of Air Sahara with Jet Airways
moved a step forward on Monday, with the
government clearing the appointment of
four Jet nominees on the board of the
Sahara Group airline. However, confusion
has arisen over the likely structure of
the revamped Air Sahara board, since security
clearance for Jet chief Naresh Goyal has
not materialised so far. The home ministry's
approval clears the way for the appointment
of Saroj Dutta, Vijay Kelkar, Javed Akhtar
and Victoriano P Dunca as members on the
board of Air Sahara, sources said. While
Mr Dutta is the executive director of
Jet, the other three are directors on
the airline's board. After the ministry
cleared the names of these four directors,
the civil aviation ministry has written
to the Directorate General of Civil Aviation
(DGCA) about the approval. The DGCA can
now authorise appointment of these four
on the Air Sahara board, the sources said.
Jet is running Air Sahara as a subsidiary,
deputing a team of its officers as 'consultants'
to man the day-to-day operations of the
Sahara Group airline. The airline will
be run as a subsidiary till all regulatory
clearances are obtained. The lack of clearance
for Mr Goyal to join the Air Sahara board
has led to confusion as he is already
chairman of Jet Airways. The question
that is being asked in civil aviation
circles is: How can a person who is already
chairman of one airline be ineligible
for becoming chairman of another airline.The
Rs.2,300-crore deal of Jet to take over
Sahara, the largest so far in the Indian
aviation sector, has obtained a number
of approvals including clearance from
the ministry of company affairs. Approval
from the Monopolies and Restrictive Trade
Practices Commission (MRTPC) is expected
next month while the civil aviation ministry
has said that transfer of airport infrastructure
of one airline to another is allowed,
subject to certain conditions.
Courtesy:
Economic Times, June 6, 2006
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BILT
to buy Malaysia's SFI
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With
a target to double capacity by June 2008,
Ballarpur Industries Ltd (BILT) today
announced that it has agreed to buy paper
and pulp company Sabah Forest Industries
(SFI) in Malaysia, where it may set up
a pulp mill at an investment of around
$500 million. The company said the conditional
share purchase agreement for buying 97.78
per cent stake in SFI for $261 million
was in partnership with JP Morgan which
will hold 20 per cent stake. SFI, part
of Malaysia's Lion Forest Industries,
has a paper capacity of 1,44,000 million
tons per annum (MTPA) and pulp capacity
of 1,20,000 MTPA and provides BILT access
to 2,89,000 hectares of forest land. "We
will begin due diligence exercise for
SFI and this is expected to be completed
in the next 120 days," BILT vice-chairman
and managing director, Mr Gautam Thapar
told reporters here. He said BILT was
moving ahead to double overall production
capacity to 10 lakh MTPA by June 2008
against the current 4.8 lakh MTPA. "While
the 3.5 lakh MTPA domestic expansion will
cost around Rs 1,400 crore, the acquisition
in Malaysia gives us an additional 1.4
lakh MTPA. All this will raise our capacity
to 10 lakh MTPA by June 2008," Mr Thapar
said.
Courtesy:
The Statesman, June 06, 2006
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IBM
to Pump in $6 Billion in India
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IBM,
the world's largest computer services
company, on Tuesday announced plans to
invest nearly $6 billion in India over
three years, underscoring the country's
growing importance as a global hub for
information technology outsourcing and
expertise. "India and other emerging economies
are an increasingly important part of
IBM's global success," Samuel Palmisano,
the firm's chairman and chief executive,
told more than 10,000 company employees
gathered in the grounds of a palace in
Bangalore, India's IT hub. IBM said it
plans to expand its services, software,
hardware and research businesses in India,
where it already is the largest multinational
company with 43,000 employees in 14 cities.
The deal, almost triple the $2 billion
that IBM has already invested in India
over the past three years, is the biggest
investment by a multinational corporation
in India in recent years. International
Business Machines Corp. of Armonk, New
York, is among a growing number of multinational
companies boosting investments in India,
whose economy expanded nearly 8 percent
last year as demand surged for its vast
pool of English-speaking and relatively
low-wage technical workers. The meeting
in Bangalore includes the company's first
investor conference outside the United
States, IBM said. Chief Executive Samuel
Palmisano, Chief Financial Officer Mark
Loughridge and the heads of IBM's main
businesses are attending the two-day event.
Palmisano said IBM's plans in India include
centres to automate information technology
services and provide clients with "one-stop
shopping" for computer hardware information
and products. IBM earlier this year opened
a centre in Bangalore that combines its
business consulting, research, software
and hardware capabilities to help customers
improve supply chain functions and monitor
banking risks and compliance. In 2004,
IBM bought Daksh, an Indian back-office
consulting business that now employs about
20,000. India's software services sector
is likely to grow by more than 25 percent
for the year to March, 2007, on rising
demand for outsourcing, National Association
of Software and Service Companies (NASSCOM)
said last week. Contracts worth a combined
$100 billion are coming up for grabs over
the next two years, the group estimated.
Round Rock, Texas-based Dell Inc. , the
world's No. 1 personal computer maker,
in March said it planned to double its
staff in India over three years, to 20,000.
In information technology consulting,
IBM's competitors in India include Tata
Consulting Services Ltd. Infosys Technologies
Ltd. and Wipro Ltd. India's software exporting
industry is on track to reach a target
of $60 billion in exports by 2010, NASSCOM
President Kiran Karnik said last week.
Courtesy:
Times of India, June 06, 2006
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Indians
Are Going Out Much More
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WEOY
Award Jury Chairman Sunil Bharti Mittal
spoke to Business Standard in an exclusive
interview. Excerpts: There are awards
and awards. But this is placed at the
international level. In some ways, it
is like a beauty pageant. The candidate
is also subjected to a lot of rigour.
They are interviewed formally and informally.
The award function per se has the Oscar
format. Till the winners are announced,
one does not know who has won it. It is
a bit tough for everybody. There is only
one overall winner. In the past few years,
many Asians have become world winners.
Our job is to select the right candidate.
Indian entrepreneurs are going out into
the world much more today. They are clearly
making a global impact though it is early
days. The financial parameters are important,
but more than that, it is the entrepreneurial
spirit that is important. I would define
entrepreneurial spirit as something that
will include the business model, ability
to impact people and society, induction
of disruptive technologies and breakthrough
innovation. Finally, high integrity and
ethics are important. Ultimately, E&Y
sees this is as a forum where everybody
is a winner. Their names are etched in
the hall of fame.
Courtesy:
Business Standard, June 06, 2006
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India
World No. 1 in Gold Jewellery Making
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India
has surpassed Italy and is now officially
the largest gold jewellery producer in
the world. Confirming the development,
Federazione Nazionale Orafi Gioiellieri
Fabbricanti Aderente a Confindustria or
Federorafi, which is the federation of
Italian jewellers said India has relegated
Italy to second place in gold jewellery
production. Federorafi said India surpassed
Italy due to "competitive production costs,
better access to global markets due to
lower customs tariffs, good product quality
and a huge internal market," which they
say is not accessible to Italian/European
goods due to high tariffs and due to administrative
barriers. According to data from the precious
metal consultancy, GFMS Ltd, India with
gold jewellery production of 539 tonne
in 2005 was numero uno followed by Italy
with 228 tonne. Third spot went to China
with 198 tonne and Turkey was fourth with
197 tonne. If scrap gold is included,
India again emerged as No 1. Federorafi
said Italy lost out due to high labour
costs, absence of trade reciprocity from
other countries, towards non Organisation
for Economic Co-operation and Development
countries (India, China and South America
amongst others), high rate of exchange
of the euro compared to other currencies
and difficulty in checking the distribution
of goods. Federorafi said Indian jewellery
designs have reached high standards and
were recognisable the world over. Italian
gold jewellery has a reputation of producing
sophisticated designs and for many years
floral designs of Indian jewellery did
not attract too many international customers.
But this is now slowly changing.
Courtesy:
Economic Times, June 05, 2006
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Reliance
Retail Hub in Thailand
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Company
to set up sourcing warehouse. Reliance's
retail division will make Thailand its
procurement hub for consumer products
and will set up a warehouse in that country.
Sources close to the development said
Reliance would source a bulk of fast moving
consumer goods (FMCG) and consumer durables
from China and other countries in South
East Asia like Thailand and Indonesia,
which it would stock at its warehouse
in Thailand before bringing them to India.
Some local companies said the Reliance
move to source a large part of the products
internationally was a cause for concern.
"Products, mainly toiletteries and food
products from South East Asia, are available
at organised retail chains and even neighbourhood
outlets, which are cheaper than their
Indian counterparts. With Reliance coming
into the picture, the prices of these
products will go down even further," industry
analysts said. The company, it may be
mentioned, plans to open about 5,500 outlets
across the country. Reliance sources refused
to comment. The company has also started
working out agreements with local FMCG
companies to source products. It has sent
out detailed mails and questionnaires
to the companies, outlining its plans,
and asking for details on their products.
The company is believed to be pushing
for heavy discounts of about 40 per cent
on the maximum retail price or MRP of
products, far higher than the 20-30 per
cent that is generally given to modern
trade. But sources indicate that Reliance
has been open to negotiations and the
discounts have been agreed upon more or
less in line with those given to most
modern retailers. Considering that in
case the rollout goes as planned Reliance
will soon control about 1 per cent of
retail outlets in the country, this is
one chain suppliers cannot afford to miss
having their products in.
Courtesy:
Business Standard, 05 June, 2006
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Infosys
Sitting Pretty on Huge Cash Surplus
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Call
it strong treasury management or attirbute
it to its debt-free status, India's second
largest software exporter Infosys Technologies
enjoys a strong liquidity position with
over Rs 6,000 crore in assets, including
cash surplus. This liquidity makes Infosys
flexible to make rapid shifts in the direction
of the market, the Nasdaq-listed company
said in its Annual Report adding: "We
continue to be debt-free; and maintain
sufficient cash to meet our strategic
objectives. Liquidity in the balance sheet
needs to balance between earning adequate
returns and the need to cover financial
and business risks. "Our growth has been
financed largely thorugh cash generated
from opertions and to a lesser extent,
from the proceeds of equity. During 2005-06,
our internal cash accruals more adequately
covered working capital requirements,
capital expenditure and dividend payments
leaving a surplus of Rs 1612 crore. As
on March 2006, the company had liquid
assets including investments in liquid
Mutual Funds of Rs 4463 crore." This collectively
make the liquidity strength of Rs 6078
crore. These funds have been deposited
with banks, highly rated financial institutions
and in liquid Mutual Funds. In 2004-05,
the Nasdaq-listed company had Rs 2851
crore liquid assets including investments
in liquid mutual funds. The company had
invested Rs 684 crore in liquid Mutual
Funds as against Rs 1168 crore."We derived
an averae yield of 4.48 per cent (tax
free) as against 3.78 per cent (tax free)
in the previous year from these investments.
Courtesy:
Times of India, June 04, 2006
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Lockheed
Martin Zeroes in on Indian Tie-Ups
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Realising
the tremendous opportunities that India
now offers both as a market and pool of
scientific and technical manpower, Lockheed
Martin-one of the largest manufacturers
of fighter planes-is preparing to enter
into partnership with Indian companies,
in both private and public sectors. As
such, agenda for Lockheed is clear. It
visualises an Indian business opportunity
of some $10 billion in next five-10 years.
In long-term, it needs India to make itself
more competitive in global arms market.
With the opening up of the Indian economy
and new relationship with America, Lockheed
is also looking to do business in civilian
sector like border security and airport
upgradation. Best known in India so far
as producer of F-16 and its supplier to
Pakistan, Lockheed has started pitching
for nearly half-a-dozen fighter planes,
helicopters, missiles and other defence
equipment before the Indian Government.
It has got the requisite clearance, in
some cases licence, from the Bush Administration
to do presentation before Indian officials.
Topping the list from its stable is F-16
that in past 25 years has been supplied
to two dozen countries. It is the same
F-16, which Pakistan wants. Selling F-16
to Pakistan was not on Lockheed's radar
right now and as of now, it has not been
put on its production schedule, June Shrewsbury,
vice-president, F-16 Programmes, told
The Indian Express. Orville Prins, vice-president
Business Development, India, said Lockheed
Martin was also interested in offering
F-35 Joint Strike Fighter, the patriot
advanced capability (PAC-3) defence missile
system and C-130J-30 Hercules helicopters.
Having recently expanded its office in
New Delhi, it is also planning to jump
into the civilian sector as well, including
the border security, border surveillance,
airport traffic management, postal department,
census and aerospace programme of India.
''Sale of fighter planes and other products
is part of establishing a long term relationship
with India,'' said Prins. Lockheed has
either already entered into a dialogue
with private and public sector companies
or has initiated exploratory round of
talks with them. Among the prominent companies
it is having talks in this regard are
the Tatas, Reliance, Infosys in the private
sector and the Hindu Aeronautics Limited
and Bharat Electricals Ltd in the public
sector. While Lockheed would bring expertise,
intellectual capital and rapid growth
of engineering talent, the low-cost structure
would bring a potential blend of capabilities,
he added. As a result of the tie up, Indian
companies could have export capabilities.
Besides entering into a long term partnership
with Indian companies with regard to joint
production, Lockheed is interested in
entering into a R&D (Research and Development)
relationship with them. It has been talking
to a number of companies in this regard
for the past one year now. The Bush Administration,
officials said, had already given licences
in a number of products, including F-16,
to have technical discussions with the
Government of India. Though a final deal
will require a Congressional approval,
Lockheed officials said it was merely
a formality as all such approvals had
been made in the past.
Courtesy:
Indian Express, June 04, 2006
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Cakewalk
For Indian IT Firms
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Even
as industry titans like LN Mittal, Vijay
Mallya and Ratan Tata are facing stiff
opposition to takeovers on foreign turf,
Indian IT firms are having a cake walk
when it comes to acquiring firms overseas.
However, unlike Mallya and Mittal who
are aiming for large companies, the shopping
cart of IT companies include mostly mid-to-small-size
acquisitions. Having adopted the 'string-of-pearl
approach,' a phrase coined by Wipro's
Azim Premji, IT companies are managing
their overseas acquisitions with great
ease.This strategy offers a win-win situation
as it provides bigger platform for smaller
firms in US and Europe and improve the
existing portfolio of the Indian companies,
besides blowing up their revenues, industry
observers said. Foreign small tech firms
are turning towards Indian IT companies
as they are offering better valuations
than their foreign counterparts. Risks
might be lower in small acquisitions but
it offers only negligible growth in topline
or bottomline for the IT companies. Wipro
was the fastest among IT majors with five
acquisitions in last six months, namely
-- US-based Quantech Global services,
NewLogic, mPower, cMango and one of its
largest overseas acquisitions by taking
over Portugal-based retail solutions provider
Enabler for 53 million dollars. The Enabler
acquisition will not only strengthen Wipro's
retail services division, but also give
it a foothold in the Latin American market.
Though TCS has not yet announced any foreign
acquisitions so far this year, in November
2005, the company made a strategic move
to enlarge its base in Latin America with
the acquisition of the business process
outsourcing Chilean company, Comicrom
for 23 million dollar. Infosys Technologies
invested 248 million dollar and 148 million
dollar in fiscal 2005 and 2006 respectively
on acquisitions, according to the company's
annual report. The company said that the
net cash used in investing activities,
relating to its acquisition of additional
property, plant and equipment for fiscal
2005 and 2006 was 186 million dollar and
246 million dollar. Infosys COO and deputy
MD Kris Gopalakrisnan had recently said
that the company is looking for acquisitions
in specific verticals like banking, health
care or life sciences, in 50-100 million
dollar range, without divulging the possible
geographies. The software major plans
to grow exponentially in China and is
looking at setting up a campus in that
country, he added. Satyam Computer Services
had announced in March this year its plans
to set up operations in Guangzhou, China
in order to increase presence in that
country. Another IT services provider,
HCL Technologies is also eyeing small
foreign tech firms that can help it offer
a combined value larger than the independent
value of the acquired company. Earlier
this year, NIIT Technologies acquired
UK-based Room Solutions and its IT training
firm NIIT is looking for buy-outs in India,
as well as the US and European markets.
According to a report by corporate finance
house Close Brothers, the number of overseas
acquisitions made by Indian IT companies
has risen sharply in the last four years
and is set to increase further. Since
2002 Indian corporates have acquired 101
international companies across all industry
sectors in deals worth a total of more
than 2.9 billion pound - with 1.1 billion
pound deals in the first four months of
2006 alone.
Courtesy:
Times of India, June 04, 2006
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ADAG
Set to Bag Mumbai Metro Project
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By
2011, the first private company-owned
train will roll down the tracks of Mumbai.
The company, Anil Dhirubai Ambani Group
(ADAG)-led consortium, is all set to bag
the contract for Phase-I of the ambitious
and much-delayed Mumbai Metro rail project.
The Union urban development ministry,
it is learnt, has given the green signal
to Maharashtra government to clear the
project after deciding on the viability
gap funding (VGF). Ministry sources say,
the ADAG-led consortium has reduced the
difference between actual expenditure
and expected returns on the 15-km Versova-Andheri-Ghatkopar
corridor, as desired by the state government.
The project's VGF - which is the difference
between actual expenditure and expected
returns - has been reduced by almost 50%
to Rs 650 crore. ''This will be the first
Metro rail project to be built on public-private
partnership. The plan will be implemented
on built-own-operate and transfer basis,''
a top official in the urban development
ministry said, adding that the company
will be given a lease of 25-30 years.
''After all necessary approvals, the contract
will be awarded to the ADAG-led consortium
as its VGF falls within the state government's
estimates,'' the official said. The ambitious
Metro project, expected to help ease congestion
in the metropolis, both on roads and suburban
railway system, is likely to kick off
in October. Phase I is expected to be
complete by 2011. The government will
retain some control over deciding the
fares. ''Fare structure will be decided
by the state government and metro panel
in consultation with the private operator,''
the official said. The Mumbai Metro project
will be undertaken in three phases - Versova
to Ghatkopar, Charkop to Colaba and Mahim-Bandra
to Mankhurd. The 15-km Versova-Ghatkopar
corridor is the most congested of all
stretches and the Metro here is expected
to carry about 5 lakh passengers daily.
In February, the Reliance Consortium had
emerged as the front runner for Phase-I
of the project by bidding the lowest of
Rs 2,300 crore, beating the IL&FS-led
consortium which bid Rs 3,400 crore.
Courtesy:
Economic Times, June 04, 2006
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Jindal
Steel Wins Rights in Bolivia, to Invest
$2.3bn
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In
one of the largest overseas acquisitions
in the mining sector, Jindal Steel and
Power (JSPL) on Friday announced that
it has bagged the development rights for
the 20bn tonne reserve El Mutun iron ore
mine in Bolivia. The company will invest
a total of $2.3bn over a 10-year period
in mining and setting up a 1.7mt steel
plant there. JSPL will also set up a 6mt
direct reduced iron/sponge iron (DRI)
plant and 10mt pellet plant, besides a
400 MW captive power plant there. JSPL
executive vice-chairman and managing director
Navin Jindal said that the company had
agreed to pay the Bolivian government
an 8-10% royalty on export of iron ore
and concentrates (pellets) and a 5% royalty
on export of steel. The formal contract
for the development rights is to be signed
in a month, Mr Jindal said. JSPL is expected
to submit the techno-economic feasibility
report on the project to Bolivian authorities
within 2 months. Though the exact break-up
of JSPL's investment plans is yet to be
worked out, Mr Jindal said that broadly
the company had agreed to invest $1.5bn
in the first five years and then taking
it to a total of $2.3bn over 10 years.
The company has to provide a bank guarantee
for 1-2% of the investments upfront. Mr
Jindal said that since Bolivia is a land-locked
country, the company would have to invest
heavily in infrastructure for transportation
of the products to the nearby river. From
there, these products would have to be
taken to the sea using barges. He said
that the company plans to fund the Bolivian
projects mainly through borrowings. "The
investment plan is spread over a long
period and we have the capacity to raise
this kind of money during this period,"
Mr Jindal said, adding that the projects
would be funded in a 60:40 debt-equity
ratio. The Mutun mine is estimated to
have a total reserve of 40bn tonnes. The
Jindals will be able to mine half of it
as they have been given the mining rights
for 10 years. Initially, the Bolivian
government had been demanding a 54% royalty
on exports of iron ore and concentrates.
JSPL's top honchos, however, brought it
down to 10% through negotiations. This
is said to be the reason for the delay
in announcing the award of the mine to
JSPL, despite the company emerged as the
lone bidder for the massive mine, after
the Mittal Steel's bid was disqualified.
Courtesy:
The Economic Times, June 03, 2006
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IT,
ITeS Exports Soar 33% to $23.6bn in FY06
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Exports
of Indian IT and IT enabled services (ITeS)
continued to grow more than 30% for the
fourth year in a row with an increase
of 33% to touch $23.6bn in '05-06, industry
association Nasscom said. The overall
growth of the industry including both
exports and the domestic market registered
a 31% increase to reach $29.6bn, according
to the annual Nasscom report. Though the
projected growth in the exports for the
year '06-07 will continue to outstrip
the growth in the domestic market, the
industry is expected to meet its target
to be a $60-bn industry by '10. Taking
a conservative view, Nasscom has projected
exports to grow 27-30% in '06-07 to $29-31bn,
while the overall industry is expected
to grow 25-28% to $36-38bn. "Industry
is on track to reach targeted $60-bn in
exports by '10. For exports to reach that
level the growth rate of 26.3% is required
as against the 34.6% growth achieved between
'00-06," Nasscom president Kiran Karnik
said. Of the total exports in '05-06,
IT software and services grew by 33% to
$17.3bn, while exports of the business
process outsourcing industry grew 37%
to $6.3bn. For the year '06-07, Nasscom
has estimated that exports of software
and services will increase to $21-22bn,
while BPO exports will touch $8-8.5bn.
The domestic market for software is estimated
to reach $6bn in the current year from
$4.8bn in the previous fiscal. According
to the Nasscom annual report, the total
number of employees in the IT and ITeS
industry grew to 1.29m in '05-06 from
1.05m in the year '04-05. "The industry
is expected to employ about 1m people
in the current year with 250,000-300,000
people in the direct employment and the
rest as indirect employment," added Mr
Karnik. Expressing concern over the tax
on packaged software and service tax on
domestic call centres, Mr Karnik said
that this will be counter-productive to
the increased use of IT in small and medium
business. "The tax and fiscal structure
should not be detrimental to the sector
but with the new tax structure announced
in the Budget, this is likely to be counter-productive,"
added Mr Karnik.
Courtesy:
The Economic Times, June 02, 2006
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41
Per Cent Growth in Life Insurance Industry
in 2006
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Life insurance sector
grew by 41 per cent in 2005-06 due to
better performance of country's largest
life insurer, LIC, and private players
like Bajaj Allianz and ICICI Prudential.
The 15 life insurance companies together
collected Rs 35,898 crore in the fiscal
ended March this year, compared to Rs
25,343 crore in the previous fiscal, according
to data compiled by regulator IRDA. Life
Insurance Corporation's premium income
rose more than 28 per cent to Rs 25,645
crore after it sold 3.16 crore policies
as against Rs 19,972 crore collected a
year ago. However, LIC's market share
dipped by 6.63 per cent to 71.44 per cent
from 78.07 per cent in the year ago period
due to stiff competition and aggressive
marketing of private life insurers. The
14 private players were able to steadily
increase their market share from 21.93
per cent to 28.56 per cent in a year's
time by collecting Rs 10,252 crore during
the period under review.
Courtesy:
The Economic Times, June 02, 2006
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Furnace
Fabrica Bags US$ 700 Million Yemen Project
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Mumbai-based
engineering company Furnace Fabrica India
(FFI) has bagged the contract to build
a 45,000 barrel per day (bpd) refinery
in Yemen worth of US$ 700 million. The
company will look after the engineering,
procurement, construction and commissioning
of the project. A company official confirmed
the development about building a refinery
in Ras Issa in Hodeidah on the Red Sea
coast of Yemen. The project will be owned
by a company set up by Yemeni and Saudi
investors. Ras Issa is home to a terminal
which handles exports of crude oil pumped
by pipeline from the Marib oilfield. Indian
oil major Reliance Industries (RIL) is
also involved in building a refinery in
Ras Issa. In this 60,000 bpd refinery
project, RIL has 25 per cent stake while
Yemen's Hood Oil Ltd is owning 50 per
cent of the pie. The $450 million refinery
of Hood and RIL is due to start up by
the third quarter of 2007. According to
sources, "The first phase of the FFI project
is expected to cost $200 million and will
produce diesel, furnace oil, LPG, kerosene
and naphtha. The construction work has
already started and the refinery would
be completed by June 2007." The second
stage to expand the refinery would involve
an additional investment of $500 million.
The company had constructed three fired
heaters and hydrogen reformer for Indian
Oil Corporation (IOC) at Panipat refinery.
Apart from that, it had completed the
petrochemical projects of Indian Petrochemicals
Corporation Ltd (IPCL), Hindustan Petroleum
Corporation (HPCL) and Mangalore Refinery
& Petrochemicals (MRPL). In the chemicals
and fertilisers segment, FFI had built
gas-based sulphuric acid plants for Hindustan
Zinc, Sterlite Industries and Binani Zinc.
It built sulphuric acid plants in Kuwait,
Qatar and Zambia.
Courtesy:
Business Standard, June 02, 2006
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Garment
Exports High on Retail Demand
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Garment
exports may be booming, but it hasn't
taken the sheen off the local market.
Thanks to the retail rush, pure exporters
are now receiving orders from the domestic
sector as well, and are using their additional
capacities to meet the extra demand. According
to Ashok Rajani, chairman, Export Promotion
Committee of the Apparel Export Promotion
Council (AEPC), "With the retail culture
taking off, and many foreign retail brands
set to come in, Indian exporters don't
want to miss out on tapping this vibrant
market and grabbing a chunk before more
competition sets in." Mr Rajani, also
the chairman of export company, Midas
Touch Apparel, plans to launch a domestic
brand soon, and use his capacities to
supply to the domestic retailers like
Pantaloon, Shoppers' Stop and Lifestyle.
Premal Udani, president, Clothing Manufacturers'
Association of India (CMAI) and managing
director of the Rs 100-crore export firm
Kaytee Corporation, said, "We have been
supplying T-shirts for men and children
to Pantaloons and Shoppers' Stop for the
last six months, under their brand names.
It is inevitable that large format stores
turn to exporters as we have the capacities
to cater to their volume demand." He further
added the company will launch its own
brand once it tests the market. The Rs
300-crore Technocraft Industries, launched
its own domestic brand, Haute Chilli in
October '05. Sharad Kumar Saraf, MD, Technocraft,
said, "With a capacity of 4.5 lakh pieces
a month, we have been approached by Pantaloons,
Shoppers' Stop, and Reliance to supply
to their stores." Reliance Retail has
a blueprint to cover over 800 towns and
is looking to supply affordable, branded,
quality clothing to customers in the tier
II and tier III cities.
Courtesy:
The Economic Times, June 02, 2006
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IBM-Daksh's,
The Second Largest BPO
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Big
blue is getting bigger and betting big
on BPOs out of India. Its BPO arm, IBM-Daksh
added over 10,000 staff in the last 12
months and now, with over 20,000 employees,
it has emerged as the second largest business
process outsourcing vendor in India, in
terms of headcount. Ahead of IBM-Daksh,
is the $500m Genpact with over 23,000
people. Significantly, the BPO operation
has become one of IBM's key growth drivers
in India. IBM-Daksh accounts for about
50% of IBM's total staff strength in India
and serves some of its largest clients.
Some of its key clients include Amazon,
PayPal, Sprint, HP, Yahoo, Citibank and
Bharti Televentures. The last is its biggest
client in the domestic business. However,
the India operations that service over
30 clients continue to do a lot of voice
tasks. Almost 66% of the work relates
to handling calls and barring technology
support, this mainly relates to customer
care type of activities. When asked about
this, Mr Vaish told ET, "We are focused
on CRM, HR, F&A and procurement verticals.
We do a lot of high-end finance analytics
tasks also. This includes supporting IBM
CFOs around various geographies." While
there has been speculation that Daksh
founder and IBM-Daksh CEO Sanjeev Aggarwal
is quitting, the company declined to comment
on this. Says Pavan Vaish, COO, IBM-Daksh,
"We do not comment on speculation." Commenting
on IBM-Daksh's growth, Mr Vaish said the
employee base has grown by 234% in the
last two years. IBM acquired Daksh in
'04 and at that time, its employee strength
was around 6,000 people. "We have also
beefed up our business transformation
outsourcing (BTO) capabilities and we
service several end-to-end transformation
accounts out of India," he said. Dun &
Bradstreet (D&B), a business intelligence
and consulting firm, is one such account.
IBM has signed a seven-year $180m business
transformation deal with the company.
IBM Daksh helps innovate and manage more
than 1,00,000 customer relationships,
as well as selected financial and business
functions. These include finance and accounts,
customer service and collections tasks
for D&B. The account is serviced from
IBM's centres in Latin America, Europe
and India.
Courtesy:
The Economic Times, June 02, 2006
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Now,
Citibank Eyes Super-Rich Here
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The
growing list of Indians with a high net
worth are set to be wooed further with
global banking major Citibank setting
its sights on this segment to offer private
banking services. Citi has now forayed
into a segment which several major foreign
banks are currently targeting. The bank
has launched Citigroup Private Bank, a
division of Citibank NA, to target ultra
high net worth Indians. Membership into
this exclusive club doesn't come easy.
Only those with a net worth of at least
$10m could be potential clients. India's
private banking market is reckoned to
have grown by 50-100% YoY during the past
three-four years, powered by one of the
fastest growing economies in the world.
Currently, there are only a handful of
entities that offer the high-end of private
banking in India. These include ABN Amro,
BNP Paribas, Deutsche Bank, DSP Merrill
Lynch, besides Soc Gen. Others like UBS
and Credit Suisse are looking at launching
private banking services in India. HSBC
is in the process of launching this service
in India. Currently, most of the existing
players are targeting clients with an
investible surplus in the range of Rs
1-4.5 crore. Citigroup Private Bank has
appointed Puneet Matta as chief officer,
India, for leading its onshore wealth
management business. "Unprecedented levels
of wealth creation is expanding the size
of the country's affluent and high net
worth market, and the need for new standards
in wealth management," says Deepak Sharma,
CEO, Citigroup Global Wealth Management,
Asia-Pacific & Middle-East.
Courtesy:
The Economic Times, June 02, 2006
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Wipro
Buys Enabler for 41 mn Euros
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Country's
third-largest software services exporter,
Wipro Ltd, said on Thursday it had agreed
to acquire Europe-based retail solutions
provider Enabler for about 41 million
euros in an all-cash deal. At the same
time, Portuguese phone and internet company
Sonaecom said it had sold its Retailbox
unit to Wipro for a capital gain of 23
million euros. Retailbox is the controlling
shareholder of Enabler. The buyout will
help Bangalore-based Wipro strengthen
its services to global retailers, said
Sudip Banerjee, president for enterprise
solutions at Wipro Technologies. "The
acquisition will be profit accretive with
immediate effect," he said. Enabler has
310 staff and its turnover exceeds 30
million euros. Founded in 1997, the company
has a presence in Italy, Germany and France
amongst other European countries, according
to its website. Last week, Wipro Chairman
Azim Premji said in an interview in Tokyo
that the firm was scouring Europe and
the United States for acquisitions. Wipro
has been swallowing up smaller players
to help it remain ahead of average industry
growth rates. Enabler is Wipro's fifth
purchase since December. New York Stock
Exchange-listed Wipro has about $1 billion
in cash on its balance sheet. The stock
closed 1.3 per cent lower at 443.85 rupees
on the Mumbai exchange outperforming the
3.15 per cent slide on the 30-issue main
index.
Courtesy:
The Economic Times, June 02, 2006
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Wipro
Buys Portugal co Enabler for Rs 240 cr
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Continuing
with its 'string of pearls' acquisition
strategy, Wipro has made one of its largest
overseas buys by taking over the Portugal-based
retail solutions provider Enabler for
$53.3m (Rs 240 crore). This is Wirpo's
fifth acquisition over the past six months.
The consideration for Enabler includes
an upfront cash payment ($53.3m) - which
includes actual cash and cash equivalent
on the balance sheet - on closure of the
transaction as well as earnouts on achieving
agreed financial targets over a two-year
period. The revenues for Wipro from this
acquisition will start accruing from July
'06. The acquisition will not only strengthen
Wipro's retail services division, but
also give it a toehold in the Latin American
market. Enabler with 310 people has two
development centres - one each in Portugal
and Brazil. The retail division of Wipro
Technologies has revenues of $200m (Rs
900 crore), 2,500 people and contributes
around 13% to Wipro's overall revenues.
Addressing mediapersons, Sudip Banerjee,
president, enterprise solutions, Wipro
Technologies, said that the acquisition
gives it access to a development centre
in Brazil, which it is keen on expanding,
and facilitates a foray into the European
retail market. Enabler, which started
in 1997, posted revenues of $39m (Rs 175.5
crore) in '05 and has a current customer
base of 15, including the likes of Tesco,
Sonae, Espirit. Its expertise lies in
the integration of Oracle retail solutions
and consulting services. Wipro has continued
with a flurry of acquisitions over the
past six months. The first one was of
Austrian firm NewLogic ($56m) in December
'05 with the latter buys - mPower, cMango
and more recently Quantech - being smaller
in size. According to Enabler CEO Antonio
Murta, the company's customer base comprises
entities which are very large, with just
one of them being a less-than-$1bn company.
However, that company's gross margins
stand at 15% of its revenues. Wipro Technologies'
chief strategy officer Sudip Nandy said
its acquisition strategy is guided by
three factors: strengthening of domain
expertise, adding new service lines and
increasing the geographical footprint.
Wipro has continued with a flurry of acquisitions
over the past six months. The first one
was of Austrian firm NewLogic ($56m) in
December '05 with the latter buys - mPower,
cMango and more recently Quantech - being
smaller in size.
Courtesy:
The Economic Times, June 02, 2006
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Rolls
Royce Launches 'Phantom' in India
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European
auto major Rolls Royce on Wednesday launched
the 'Rolls-Royce Phantom' luxury car in
the Indian market aimed at tapping the
growing consumer demand for luxury vehicles
in the country. The car is priced at Rs
3.5 crore, a company release said in Mumbai.
Rolls Royce has opened the first showroom
in India and Navneet Motors Pvt Ltd would
be the authorised car dealer in India,
it added.
Courtesy:
Hindustan Times, June 01, 2006
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Turbo
Tech to Supply Gas Turbines to Taiwan
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Turbo
Tech Precision Engineering Ltd has received
orders for supply of 500- kw gas turbines
to Taiwan for meeting off site power generation
requirements. Speaking to Business Line,
Turbo Tech's Managing Director, Mr B.R.
Krishna Kumar, said the orders for the
turbines were placed by the Industrial
Technology Research Institute of Taiwan.
Taiwan's requirements are estimated at
400 turbines, he said. Given this large
demand, the company proposes to set up
a joint venture in Taiwan for making the
turbines, he added. Turbines are to be
used for meeting power generation in regions
prone to natural disasters in the island
nation. Turbines are preferred in view
of the cost advantage. Turb Tech's turbines
cost the equivalent of about $300 per
kw, which is considerably cheaper than
its international competitors, he added.
Besides, the company is already shipping
turbines to Philippines and Korea. He
said the company also plans to set up
another joint venture in the United Arab
Emirates. The location though is undecided.
This is to cater to the large retail demand
in West Asia for small turbines for power
generation. Turbo Tech makes versatile
turbines fired on gas, and recovers waste
steam for air conditioning as well as
heating water. In addition to gas turbines,
Turbo Tech has obtained orders for supply
of high RPM (revolutions per minute) from
the West Bengal Renewable Energy Department
for powering rice mills in the State.
These orders are for supply of 250 KW
and 400 KW turbines fired through boilers
burning rice husk. This would allow for
reduction in energy demand from the State's
power grid and thereby save on electricity
costs for the mills. Referring to investments
by the International Finance Corporation
(IFC), the World Bank's private sector
lending, Mr Krishna Kumar said, the documentation
was complete and disbursement was expected
shortly. IFCI is investing the equivalent
of $600,000 in the form of convertible
preference shares in Turbo Tech. The conversion
would be at the discretion of the IFC,
he said, though during the period, the
company would have to service the equity
at 8 per cent per annum.
Courtesy:
The Hindu Business Line, June 01, 2006
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Jewellery
Exports to US Seen Rising 25 Per Cent
to US$ 5.88 Billion
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Owing
to increased demand from the Americans,
the Gems and Jewellery Export Promotion
Council (GJEPC) expects a 25 per cent
increase in exports to the US at US$ 5.88
billion during this financial year compared
with US$ 4.7 billion in the previous financial
year. A huge potential for jewellery exports
lies in places such as Latin America,
Canada, West Indies etc which Indian exporters
have been trying to exploit since long.
The Indian jewellers are confident that
participating in JCK - Las Vegas 2006
(June 3-7), would open a new opportunity
for them to send their consignments to
the US and neighbouring areas for better
realisation which is evident from the
huge number of exhibitors enrolled so
far. About 10,000 visitors are estimated
to witness the many enlightening designs
by about 2,700 designers spread over 100
booths where approximately 190 exhibitors
would be showcasing their products and
designs. Gems and jewellery exports to
the US accounts for 28 per cent ($4.7
billion) of India's total exports of $16.6
billion, thus, making the US the largest
export destination for the sector. India
has been one of the largest suppliers
of mass produced jewellery to the US.
The gems and jewellery industry is facing
the challenge to retain investment within
the country by preventing migration and
enhancing competitiveness. To tackle these
factors, GJEPC has requested the government
to implement a turnover-based tax which
will enable the industry to compete effectively.
With this simplified tax regime, the foreign
direct investment (FDI) in the sector
may rise upto $2 billion by 2006-07. In
lieu of this, GJEPC is awaiting the committee's
report set up in the aftermath of the
Budget proposal announced this year in
this regard. The report is expected by
September 30. Other areas of concern for
the sector are the need for better trade
facilities.
Courtesy:
Business Standard, June 01, 2006
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Infosys
All Set to go Shopping
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The
software services major Infosys Technologies
is looking for acquistion of small & medium
software companies in banking and financial
services, besides health and life sciences
sector. The target company should have
revenues in the range of US$ 50-100 million
Infosys COO Kris Gopalakrishnan said.
He, however, clarified that as of now
no deal is in the offing. "We are always
scouring for strategic acquisition opportunity
and its an ongoing opportunity. However
it doesn't mean we are in negotiations
or close to signing any deal," Mr Gopalakrishnan
said. He refused to confirm or deny a
report in the section of media which said
that the company is close to acquiring
a financial services software company
in North America. "I can't comment on
various speculations or rumours going
around," he added. He also announced the
company's plan to set-up in five SEZs
in Tier II cities such as Mysore, Bangalore
and Thiruvananthapuram. "We currently
have nine development centres across India
including Tier-II cities such as Mangalore,
Mysore, Bhubneshwar, Chandigarh and Thiruvananthapuram.
All our future growth in Tier-II cities
will occur in SEZs. For this, either we
will open our SEZs or take up space in
third-party SEZs," he added.
Courtesy:
The Economic Times, June 01, 2006
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Forget
Market Plunge, The Tiger is Still on The
Hunt
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Beating
expectations, the Indian economy grew
9.3 per cent during the fourth quarter
of 2005-06. In the process, it pushed
up gross domestic product to 8.4 per cent
during the last fiscal, as against 8.1
per cent in the earlier estimates and
7.5 per cent in 2004-05. Among the other
big emerging economies, only China grew
faster, registering 9.9% increase in 2005
and followed it up with a 10.2% rise during
January-March 2006. The Russian economy
grew 6.1% in 2005, while Brazil reported
a 2.3% rise in GDP last year. RBI has
forecast a 7.5-8% growth during the current
fiscal. The Central Statistical Organisation's
revised GDP estimates (at 1999-2000 prices),
released on Wednesday, pegged economic
activity at Rs 25,95,339 crore during
2005-06. This translates to per capita
income of Rs 21,005, 6.9% higher than
the 2004-05 level of Rs 19,649. Fourth
quarter of the last fiscal year saw the
country's economy grow by 9.3%. While
manufacturing and services sectors provided
the growth impetus, mining and quarrying
was the laggard, growing 0.9% in 2005-06.
Even agriculture provided some cheer with
farm output growing 3.9% last fiscal,
against 0.7% in the previous year. The
finance minister attributed the growth
largely to rising domestic demand spurred
by growing consumerism. "We need to make
larger capital investments, and such investments
are possible only if reforms continue,"
he said, adding the government would carry
out structural, legal and administrative
reforms. Chidambaram said foreign investors
remained bullish on India and the temporary
sale of shares by foreign institutional
investors shouldn't be taken as an outflow
of foreign capital. "Global markets are
volatile and this is reflecting in Indian
markets too. I believe that we will continue
to attract foreign capital," he said.
Chidambaram also said that the movement
of rupee against dollar should not be
viewed as a cause for concern.
Courtesy:
The Economic Times, June 01, 2006,
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Arvind
Mills Scouts For Local, Foreign Buys
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Is
textile major Arvind Mills close to acquiring
a company abroad? Even as company executives
remained tight-lipped, industry sources
say Arvind is aggressively exploring possibilities
of acquiring companies both in India as
well as abroad, and may be even close
to an acquisition. One of the largest
integrated textiles players, Arvind, is
eyeing companies, which are mainly into
making suitings, industry sources said.
While Arvind is already in the race to
take over OCM, known for its all wool-worsted
and wool-blended worsted suitings, industry
sources say it is also in talks with some
Egyptian firms for a possible acquisition.Sources
say the company is negotiating with players
in Egypt for a possible tie-up or even
an acquisition to strengthen its presence
in the high-end garments and suiting-shirtings
space.However, the talks are at a primary
stage. Apart from this acquisition, industry
sources say the company is also negotiating
with a textile company in Italy for purchase
of machinery. The company executives neither
confirmed nor denied the development.
Sources say suitings is the only area
where the company does not have an enough
market share. "Right from denims to garments,
they have a nice product mix. The only
missing link is suitings," said an analyst.
Apart from OCM, the company is also in
the process of identifying other Indian
suiting manufacturers for possible tie-ups,
say sources. But Arvind and WL Ross, one
of the world's largest stressed asset
management funds, are being seen to be
the most serious bidders. Birlas took
over OCM in 1972 and its production facilities
were converted to manufacturing worsted
fabric from carpets and carpet yarn. The
company has already stated that it will
continue to focus on its strategy of de-risking
the cyclical business by verticalisation
and renewed focus on the domestic market
and the efforts in these directions will
become visible in the oncoming times.
Courtesy:
The Economic Times, June 01, 2006
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