Sunday, December 30, 2007

Rupee to continue rise against the dollar in 2008

The Indian rupee, that has appreciated about 12% against the dollar in 2007, will continue to rise against the dollar in 2008 but move in the 38-41 band to a dollar.After nearly three decades, the rupee has appreciated 12% against the greenback and about 6% against a basket of six major world currencies belonging to the US, the UK, Japan, Euroland, China and Hong Kong. The rupee began the calendar year 2007 at Rs44.26 a dollar.


2007: A year of big deals

It has been a year of frenzied deal-making. From mega public floats such as the DLF Ltd’s domestic initial public offer (IPO) and and ICICI Bank Ltd’s mega overseas offering, Indian companies raised resources to fund its breakneck pace of growth in 2007. Huge amounts were raised both from the domestic and international bond and equity markets. New avenues such as the qualified institutional placement (QIP) route gained in importance, while convertible offerings were also a hit. The amounts raised in 2007 have been higher than in the preceding years except for domestic bonds, while the number of deals done have also been higher, except for overseas equity offers and domestic bonds. Foreign investment banking firms topped the league tables in five out of six categories, including managing domestic bond issues and QIPs.


Fourteen executives in fray for top PFC job

Fourteen executives from NTPC, BHEL, NHPC and other state-run enterprises are in the race for the top post of Power Finance Corporation, the country's prime lender in power sector which went public early this year. Those in the fray include three Power Finance Corp (PFC) officials believed to be among the front-runners for the post of the company's chairman and managing director, as the present Chief VK Garg retires on July 31 next year.

The Economic Times
NTPC, BHEL, NHPCarticleshow/2657482.cms

Finland Inc targets Indian markets to boost growth

After the big rush from the US and Europe, it’s the turn of Finnish industry to set sights on India to widen its global reach. Driven by innovative products and technologies, a clutch of small- and medium-sized Finnish companies have drawn up plans to step up their India exposure. The idea is to cash in on their advancements in R&D to increase revenues and profits using India as the key base.

The Economic Times

Kejriwal powers Temasek-Merrill deal

India may still be in the initial years of experiencing the financial might of global private equity (PE) and sovereign wealth funds, but Indian brainpower has started making its presence felt in large PE deals abroad. The latest big budget PE deal announced early this week— $6.2 billion stake purchase in Merrill Lynch, the world’s largest brokerage firm, led by Singapore-based Temasek, has an Indian connection. Manish Kejriwal, who heads the India office of Temasek, led the Merrill Lynch deal, which is seen as a bailout for the brokerage firm after the subprime crisis hit most of the bulge-bracket US finance majors.

The Economic Times

Fashion giants step up sourcing from India

International fashion brands such as Nautica, Puma, Marks Spencer and Espirit have stepped up their local sourcing as they expand their presence in the domestic market. With advantages of higher profits, lesser lead time and competitive price points, these brands are now shedding their inhibition towards local sourcing. Nautica, the sportswear brand introduced by VF-Arvind Brands in India, plans to source locally the core or standard products that are non-seasonal. Puma too plans to take its local sourcing of apparel to the maximum extent possible for the domestic stores next year.

The Economic Times

It's US Vs Russia over $40 bn India market

The United States is gearing up to battle Russia and Europe for sales of billions of dollars in jet fighters, cargo aircraft and other arms to India. US officials regard sales to India, with a potential $40 billion arms market including missile-defense systems, as a way to cement strategic ties and boost bilateral military cooperation as a hedge against China's growing clout.

Express India

Forbes List: India does it again

After billionaires and household names like Ambanis and Mittals, it is the turn of little-known microfinance institutions from India to hit the pages of famed magazine Forbes, which has named seven such entities in the list of world's top 50 -- highest for a country. In its first ever list of World's Top 50 Microfinance Institutions, the US business magazine has named Kolkata, West Bengal-based Bandhan at the second position.

The Financial Express

India Inc sells record shares in '07

Indian Companies sold shares worth a record 451.37 billion rupees in 2007 through public issues, with real estate Companies dominating the initial public offer (IPOs) route, a primary market monitoring firm said on Wednesday. The amount raised in 2007 was 83 per cent higher than last year's mobilisation of 246.79 billion rupees, Prime Database said in a statement.

The Financial Express

World's top IPO - $8-bn; India's total - $8.3-bn

Indian bourses saw over eight billion dollars worth of initial public offers in 2007, but this is just a shade higher than the world's single-largest IPO that was brought by a Russian company, latest data show. The worldwide IPO activity raised a record capital of 255 billion dollars till November in 2007, including 8.3 billion dollars on Indian bourses, according to data compiled by international consultancy firm Ernst and Young. India was the fifth largest market in terms of number of IPOs and seventh largest in terms of the proceeds for the year, E&Y said.

The Financial Express

Thursday, December 27, 2007

Land Rover & Jaguar Deal to Mark Indian Auto Sector’s First Billion Dollar Acquisition

The Indian automotive sector is under-going a fundamental shift as companies set out to unlock the benefits of global scale of operations, propelled by ambitions to gain in-roads into the premium league by acquiring state-of-the-art engineering platforms, future proof technology masterpieces and iconic brands patronized by a niche customer segment.

The outcome of the bidding war which will be known by the end of the week for Jaguar and Land Rover, the U.K. based iconic marques owned by Ford Motor Company, the U.S. based world’s third largest automaker, for an estimated price of approximately $2 billion, which features Tata Motors Ltd, India’s biggest automobile company, and Mahindra & Mahindra Ltd, tractor & utility vehicle manufacturer is symbolic of the evolving Indian businesses making a mark in the global market place.

Tata Motor’s parent company Tata Group, with revenue of $55 billion and equivalent to about 5.5% of the country's GDP, is not new to such inorganic growth that has eased the group’s access to new markets, product categories, technology and world-class brands. Tata Motors' international footprint includes Tata Daewoo Commercial Vehicle in South Korea; Hispano Carrocera S.A., a bus and coach manufacturer in Spain in which the company has a 21% stake; a joint venture with Marcopolo, the Brazil-based body-manufacturer of buses and coaches; and a joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market pickup vehicles in that country.

Tata Motors that has been facing critical reviews concerning quality and reliability with its passenger cars ‘Indica’, the small car that it marketed badged as CityRover as per tie-up with British automaker MG Rover in Europe, with the two cult luxury brands Land Rover and Jaguar in its armory will see itself take the first steps in to the un-explored premium segment and graduate to state-of-the-art engineering expertise from a combined workforce of 20,000.

With the deal expected to go to the Indian conglomerate, the moment will be historic as it will mark the automotive sector’s entry into the elite billion dollar acquisitions club.

The sector has already exhibited growing merger & acquisition (M&A) deals worth more than $633 million from 20 deals so far this year, i.e. surpassing the value of deals done by the sector in the whole of last year at $517 from 23 deals.

The other reason why Jaguar-Land Rover deal will be significant is that it will further reinforce the prominence of the Indo-U.K. merger & acquisitions deal activity which has already seen the country’s two of the largest deals – the acquisition of Hutchison Essar Ltd India’s second largest GSM mobile service provider by the U.K.’s Vodafone Group Plc and the acquisition of the U.K.’s largest steel maker Corus Group Plc by India’s Tata Steel Ltd.

Key to such billion dollar acquisitions is the management of the post acquisition integration costs. As skepticism looms large among industry analysts with regards to the loss making Ford’s marques - Jaguar and Land Rover, one company I would bet on being able to get the integration cost down is Tata Group. It is a company that has been brilliant in execution pretty much so far.

Of the $46 billion worth of cross-border M&A deals so far this year, the U.K. contributed to about 40% of all overseas acquisitions by Indian companies (Outbound) in deal value and about 83% of the deals clinched by overseas companies in India (Inbound).

Tata Group has been active in the U.K. market for long. The group had previously acquired U.K.’s top steel maker Corus Group Plc after intense rounds of auction proceedings with rival Brazilian steel company, Companhia Siderurgica Nacional (CSN). Prior to that, the group had acquired U.K.-based Tetley Group, then the world’s largest manufacturer of tea, for $407 million in February 2000. The group has already spent more than $15 billion to fulfill its inorganic growth strategies and the acquisition of Land Rover and Jaguar will likely be the second most expensive buy for the group after Corus.

The investments by India Inc. in Britain during the fiscal year 2006-07 has created 5,130 jobs, second to the U.S., according to the U.K.’s Department of Trade and Industry. In terms of the number of new projects, India has been ranked third with 69 new projects, after 540 new projects of the U.S. and 95 new projects of France.

Indian investment in the U.K. had gone up 111% to 76 projects, creating almost 4,000 jobs during 2005-06. The Indian investment has contributed $67 million (£33 million) to the London economy in 2006-07, according to Think London, an agency promoting investment into the city.

Wednesday, December 26, 2007

60 car launches planned through 2008

On offer would be everything from haute hatchbacks and green tech hybrids to adrenalin-dripping super premium luxe models. Not to mention the world’s cheapest automobile, the Rs 1 lakh people’s car from Tata Motors. As usual, the biggest action will be in the small car market where global best-sellers will rub shoulders with locally-developed tarmac scorchers. Maruti Suzuki will kick off the action with its Splash and A-Star concept, though the latter would be a predominantly export model. In the premium hatchback category, the Swift, Getz, U-VA troika will face competition from the likes of the Skoda Fabia and the Fiat Grande Punto, though all eyes would definitely be on the Rs 1-lakh car.

The Economic Times

Hunt begins for a new chief of Air India

Government has began search for a new head of National Aviation Company of India Ltd, which runs the merged Air India, almost three months ahead of the end of incumbent chairman and managing director V Thulasidas' tenure. The CMD would oversee all activities of the company, which has about 33,000 employees and operates 140 aircraft, besides being in the process of inducting about 111 more planes over the next four years.

The Economic Times

$120-150bn needed by 2012 in energy sector

India’s current level of energy consumption is very low. For the year 2004 – 05, the total annual energy consumption for India is estimated at 572 Mtoe (million tons oil equivalent) and the per capita consumption at 531 kgoe (kilograms oil equivalent). With a target GDP growth rate of 8-10% and an estimated energy elasticity of 0.80, energy requirement is expected to grow at 6.4-8.0%. This would mean a five-fold increased in India’s energy requirement over the next 25 years.


Global pharma MNCs find China tough

Colleen Cheng and Angel Chen, Chinese marketing executives in their 30s, should be the ideal customers for US and European drugmakers. So far, they are a tough sell. Glued to their cell phones at an expensive Beijing restaurant, the working moms would fit in at any cafe in New York or London with their fluent English and stylish clothing. They spend hundreds of dollars monthly on herbs, acupuncture and supplements. What they don’t buy are Western pharmaceuticals, like Johnson & Johnson’s cold medicine Sudafed and Sanofi-Aventis’s sleeping pill Ambien.

The Economic Times

India set to mint money for neighbours

During the second half of British rule, till 1928, India would get its currency notes printed at UK's Thomas De La Rue Giori, one of the world's largest financial printers then. Some 80 years down the line, India is exploring the possibility of minting money for some of its neighbours, and that too, on a regular basis. The Indian government has recently received requests from undisclosed neighbouring countries to print their currency notes.

The Economic Times

Mukesh trails Anil in creating wealth for investors

Mukesh Ambani, the richest Indian and head of market leader Reliance Industries Ltd, was not the leading wealth creator for small investors in 2007 but was pipped for the top spot by younger brother Anil. A comparison of cumulative share price gains for the listed companies from the two groups puts the surge for Mukesh Ambani group at 153 per cent, as against about 232 per cent for the Anil Dhirubhai Ambani Group (ADAG).

The Economic Times

FIIs on year-end selling spree

Retail investors are now emerging as important players in the equity markets, supporting BSE sensex to remain in the range of 19,000 to 20,000 points, despite foreign institutional investors (FIIs) preferring to sell out. In the last four trading sessions since December 17, FIIs have sold equity worth $1.28 billion (Rs 5,156 crore). But the sensitive index fell by just 441 points during this period to close at 19,162 on Friday as retail investors lent support.

The Economic Times

Sixth good year too much to ask for

Emerging stock markets have had five very good years. But don’t bank on them enjoying a sixth. A combination of tighter credit conditions and rising domestic inflation will make life much tougher for many developing countries in 2008. The two biggest emerging markets—China and India—have more downside potential than upside. One of the few candidates to outperform in the year ahead is South Korea.


India has lessons for UK in PSU pension reforms

The UK can actually learn some lessons from India, at least in one area of financial sector reforms —the politically sensitive area of pension reforms for govern-ment employees. Despite heavy political odds, the Indian government has been successful in laying down a system which entails shifting from defined benefits (DB) to a defined contribution (DC) system.

The Financial Express

Clipping the dragon’s wings

Americans may well be delighted by new figures that show China’s GDP is 40% smaller than previously thought. Has the devious Beijing government been massaging the numbers, as communist planners are wont to do? Hardly. China’s GDP in yuan terms remains unchanged. What has happened is that the World Bank has changed the calculations it uses to make international comparisons of the size of economies.

The Financial Express

Toyota announces plan to sell 9.85 mn vehicles in 2008

Toyota, in a neck-and-neck race that could dethrone General Motors as the world's top automaker this year, said today it plans to sell 9.85 million vehicles globally in 2008. Toyota also said it plans to produce 9.95 million vehicles worldwide during the same year, up 5% from this year -- the same percentage jump for the automaker's global sales.

The Financial Express

Tuesday, December 25, 2007

Bharti eyes Big Apple as starter for retail feast

Bharti Enterprises, slated to start its retail business in the first quarter next year, may acquire Big Apple — the Delhi-based supermarket chain with 65 stores. Bharti’s acquisition blueprint in the retail sector may be a replay of its telecom business, where the group built up a pan-India mobile presence by acquiring telcos such as JT Mobile in Karnataka and Andhra Pradesh, Skycell in Chennai and Hexacom in Rajasthan.

The Economic Times

Argentum to infuse Rs 500 cr in Daewoo facility

Argentum Motors, the present owners of the erstwhile Daewoo Motors's India unit in Greater Noida, will infuse Rs 500 crore to modernise the facility over the next 18 months as it gears up to host global commercial vehicle maker Daimler for the latter's proposed LCV roll out.

The Economic Times

Merrill Lynch may pick 20% stake in Sharekhan

Private equity(PE) investor Citigroup Venture Capital (CVC) is diluting a part of its 75% stake in brokerage firm Sharekhan. Financial services major Merrill Lynch is said to be the front-runner to pick a minority stake even as other PE firms, including Baring Private Equity, are believed to be in the race. The industry buzz is that the deal for 20% stake is valued at around Rs 300 crore. However, a source close to Sharekhan said CVC is looking to dilute its stake only by 10% and the deal value is close to $50 million or Rs 200 crore.

The Economic Times

QVC to invest $200 mn in new, existing realty projects

India’s first venture capital-funded real estate company, QVC Realty Pvt. Ltd, plans to invest $150-200 million (Rs594-792 crore) in 2008 in new and existing projects. The Bangalore-based company, which had raised $100 million of venture capital funding in April this year from IL&FS Investment Managers Ltd (IIML), has already committed $80 million to date.


Spiralling rentals hit retail boom

First came political misgivings and then street protests by small-store owners across the country, who were afraid they would be put out of business by the deep pockets and discounting powers of the retail chains. But that perhaps didn’t worry Indian tycoons as much as the surge in rentals and space shortages they are now battling in a bid to open thousands of stores and change the way the subcontinent shops.


Indian chip design firms acquiring for scale, R&D

Indian information technology companies, such as Wipro Ltd, Sasken Communication Technologies Ltd and MindTree Consulting Ltd, which offer chip-design services, are in an acquisitive mode to consolidate their position in the global market. In the last two years, these firms have together made five acquisitions totalling Rs502 crore, mainly to broaden their customer base and intellectual property (IP) assets.


Rupee is BRIC’s second fastest growing currency

The rupee has become the second most appreciating currency against the dollar among BRIC currencies, with a surge of 11% in 2007, says an analysis. While all the four BRIC countries — Brazil, Russia, India and China — have seen a sharp rise in their currencies against the dollar, the pace of rupee appreciation is only next to the Brazilian currency since the beginning of this year.


Indo-France talks to be wide ranging during Sarkozy visit

Foreign Minister Bernard Kouchner put a positive spin on French ties with India on 24 December ahead of a visit next month by President Nicolas Sarkozy but admitted no deals would be signed. “After these four days, I feel that we are very close to each other. You will see that my president will precise a lot of common ground,” he told reporters in English. “We have a lot to achieve together,” Kouchner said.


It's the right time to be in India: Mashelkar

With the advent of research and development in private sector, India is witnessing a positive trend with its talents returning back to the country, Raghunath Mashelkar President Indian National Science Academy said. "It's the right time to be in India," the leading scientist told reporters here. India is becoming a global R&D platform with more than 300 companies setting up their centres here. This has opened up opportunities for the young students who need not leave the country for better jobs, he said. In last three years 30,000 scientists and researchers have returned to India to be absorbed in various organisations, Mashelkar said quoting NASCOM at INSA's 73rd General Body Meeting.

The Indian Express

Indian revenues to touch $1 bn in '07: IBM

IT major IBM on Saturday said it expects revenue from Indian operations to touch USD 1 billion by the end of December, growing at a rate of 39 per cent currently. "We expect our revenues to reach USD one billion by the end of this calendar year up from 700 million in 2006 driven by strong factors. In the first three quarters of the current financial, the company's revenue has grown by over 39 per cent," IBM Vice President (Financial Management) Jesse Green said here.

The Indian Express

Maruti eyes 1 mn sales by 2010, bigger role in Suzuki’s global operations

‘We want to make small cars exclusively in India for export to Europe; our R&D has shown huge potential with contributions to Swift & Concept A-Star’….As for my main targets for the future, firstly, we will stay focused on the goal of achieving 1 million sales by 2010. This will require capacity expansion and upgradation of manufacturing facilities, for which we have already announced an investment of Rs 9,000 crore. The expansion of our sales and service network is underway for the 1 million target.

The Indian Express

Western ports draw huge pvt funds to meet NMDP targets

States along the west coast that have been aggressive in attracting private investment for developing ports and shipyards along their coastlines also seem to have clocked the maximum progress in implementing the Ministry of Shipping’s Rs 55,000-crore National Maritime Development Programme (NMDP).

The Indian Express

Friday, December 21, 2007

Valuation conundrums

With the year coming to a happy end, action is getting geared up for the next year. And the valuations question raises its head again. “Is the market overvalued?”, the million dollar question once again makes the rounds. There is no doubt the Indian market is expensive. The price to earnings ratio is now around 26 times trailing earnings and the long-term average has been around 15-17 times. The price to book value is now more than 6 times, and clearly the highest ever. But then these ratios should be looked at in perspective, says optimists.

The Financial Express

Tatas India’s second most valued group

Leading conglomerate Tata group has retained its position as India’s second most-valued and the only corporate house after Mukesh Ambani group with a market value of over Rs 3 trillion, despite the Anil Ambani group hitting this milestone in intra-day trades twice. Tatas are the biggest corporate house among the three in terms of the number of Companies listed on the bourses. Besides, Tata group also has the lowest average promoter holding among the three leading business groups, while Anil Ambani group has the highest. The cumulative market value of all the 30 listed firms of Tata group currently stands at Rs 3,04,473 crore, based on their BSE share prices at the close of the market on Friday.

The Financial Express

The uncomfortable rise of the rupee

India, it is fair to say, is not yet reconciled to the new-found strength of its currency. One poor wretch, pressed against the car window at a Delhi traffic light, tries to change a dollar bill she presumably cadged off a tourist. She wants Rs 50 for it. Alas, the dollar now fetches less than Rs 40(see left-hand chart). India’s currency has strengthened by about 15% against the greenback in the past year and by over 10%, on an inflation-adjusted, trade-weighted basis, since August 2006. The rupee’s rise may be less dramatic than that of the Philippine peso, Brazilian real or Turkish lira. But it is uncomfortable nonetheless.

The Financial Express

Doha pact: India dares US on anti-dumping

While conceding that the earliest conclusion of the six-year-old Doha Round negotiations at the WTO would only be in 2009-10, India on Thursday, however, threatened that it would not support any agreement in the multilateral talks which allows “zeroing”, a US-backed rule which allows imposition of higher anti-dumping duties. India is backed by at least 15 other countries that all have said zeroing would help US enhance its protectionist tendencies. Anti-dumping duty is imposed by an importing country when it is found that the normal price of a product in the exporting country is higher that its export price. The duty imposed depends on damage suffered by the domestic industry due to the imported product.

The Financial Express

Retail cos look on the fair side of hiring

Some of the biggest players in the organised retail turf are looking up to the fairer sex, especially when it comes to dealing with killer attrition blues. Reliance Retail, Future Group, Shopper’s Stop and RPG Retail are experimenting with a host of hiring models to improve the ratio of fairer sex in their workforce.

The Economic Times

Cisco to ramp up talent pool for business roles

It has been a year since Cisco announced that India will be its globalisation centre east. As part of the drive, the networking major is now planning to ramp up its corporate function resources in the next two years. This is apart from growing its engineering and development staff in the company’s main offshore destination.

The Economic Times

HP India to tie up with institutes to retain talent

Hewlett Packard India is betting on educational initiatives and tie-ups as a way to retain talent in the company. The IT major is looking for tie-ups for short- and long-term courses in technical and business areas for its employees with institutions like IIM, XLRI, Symbiosis and T A Pai Management Institute, according to HP India HR director Zarir Batliwala.

The Economic Times


China property boom falters, but crash unlikely

High prices, rising interest rates and a government drive to cool speculation are dampening the market. Many Chinese bought property several years ago partly because of talk that preparations for the 2008 Beijing Olympics would boost prices in the capital and other cities — so now that the Olympics are near, some fear a crash may be looming

The Economic Times

Indian and Chinese firms go shopping for Western companies

It appears that Tata’s purchase of the Anglo-Dutch steel company Corus at the start of this year at $11.3 billion dollars, has given a boost to Asian companies to go for shopping of companies in the Western world. The deal has been ranked sixth best deal of the World in 2007 by Time magazine.The Tata’s acquisition of Corus reverses the trend of western companies acquiring firms of Asia. The hunger of Tata for acquisitions in the Western world is just the beginning. The trend is increasing with each passing day. Latest in series is the Jaguar and Land Rover brands of the car making company Ford, of Britain. Tata is going to acquire the two car brands and unit produce these cars at an expense in excess one billion pounds. Several other companies like Hindalco have also gone for outright purchases of Western companies.

Meri News

M&As were toast of season for India Inc in 2007

India's corporate honchos spent a considerable time and energy this year at deal tables and executed over thousand transactions involving sale or purchase of equity stakes in their companies. On an average, every single day of 2007 saw about three deals being announced. This included a total of 1,047 merger and acquisitions as well as private equity deals for a total value of $68.32 billion (about Rs 2,75,000 crore).

The Economic Times

India Inc signs deals worth $68.32 b in 2007

India Inc was on a shopping spree in 2007, striking deals including merger and acquisition (M&A) and private equity investment worth $68.32 billion against $28.16 billion last year, a rise of 142.61 per cent, according Grant Thornton’s Dealtracker It was $18.35 billion in 2005. The average Indian M&A deal size was close to $77 million, while the average Indian PE deal size was around $44 million in 2007. Corporate India signed 661 M&A deals valued $51.17 billion in 2007 against 480 deals worth $20.30 billion in 2006.

The Hindu Business Line