Saturday, November 29, 2008


Powered by construction and services, the Indian economy notched a reasonable growth rate of 7% in the second quarter of the current fiscal, but analysts said monetary supply should be further eased to prevent the growth from declining in the remaining quarters.


Shocked at the most terrible terrorist attack in the country, IT companies beefed up security in campuses across cities, including Bangalore, and said the industry will not "bow down to terror".

The IT Industry association Nasscom said, "We will not bow down to terror. As an industry that is international and services customers across the globe, we continue our operations, uninterrupted, from centers across India and even Mumbai."

The Economic Times

Mumbai, the commercial capital of India, comes under attack from terrorists yet again, at a time when the world’s second-fastest growing economy is seen by many analysts to be a critical part of the solution in fighting a global recession.

Mumbai is one of the world's top ten centres of commerce and contributes to about 5% of India's GDP and accounts for 25% of the industrial output, 40% of maritime trade, and 70% of capital transactions to the economy. Mumbai's per-capita income is Rs. 48,954 ($990) which is almost three times the national average.

“Mumbai is a very resilient city," says Bundeep Singh Rangar, Chairman, IndusView Advisors Ltd., the India-focused cross-border advisory firm. “Each time it’s been the target of a terrorist attack, it rebounds stronger and more resolute.”

Post the July 11, 2006 Mumbai train bombings, for example, as a show of investor confidence, the Bombay Stock Exchange (BSE) had rebounded, starting the day with the BSE Sensex Index up by nearly 1% in morning trade. Foreign investors also retained confidence, with the Sensex up almost 3% at 10,930.09 at the end of the day's trade.

India is set to register a strong growth of about 7.5% this financial year, a marginal drop from 9% that the country achieved last year when compared to emerging markets peer China that will drop to similar level from about 12% last year, its lowest since 1990, according to estimates.

This firm footing that the Indian economy finds itself in, has a lot to do with the contribution from Mumbai, its financial capital that brings 40% of foreign trade, 60% of customs duty collections, 40% of income tax collections, 20% of central excise tax collections, and Rs. 40,000 crore ($10 billion) in corporate taxes to the Indian economy.

This apart, the city hosts headquarters of a number of Indian financial institutions such as the Bombay Stock Exchange, Reserve Bank of India, National Stock Exchange, the Mint, as well as the corporate headquarters of many large Indian companies – including the three largest private sector companies Reliance Industries, Tata Group and Aditya Birla Group – and numerous multinational corporations. Most of these offices are located in downtown South Mumbai which is the nerve centre of the Indian economy.

Strategic Industries

Mumbai is home to Bollywood, the largest film making industry in the world; the Bhabha Atomic Research Center, which will see its role gaining significance once the Indo-U.S. civil nuclear deal comes in to force. Other prominent industry sectors in the city include aerospace, optical engineering, medical research, information technology, computers and electronic equipment, shipbuilding and salvaging, renewable energy and power.

Thursday, November 13, 2008


--- Potential market of 700 million subscribers and $37 billion revenue base by 2012

--- Tata Teleservices - NTT DoCoMo, Swan Telecom – Etisalat and Unitech Telecom – Telenor deals expose Indian Telecom M&A Potential: Deals at $5.8 billion

--- IT and Telecom most consolidating sectors; only sector to cross three digits mark of 100 deals for $6 billion with 21.4% share in M&As worth $28 billion this year to October;

--- IT and Telecom sectors expected to close the year with deals worth $10 billion

The deal by NTT DoCoMo Inc, Japan’s largest mobile telecommunication service provider to pick up 26% stake in Tata Teleservices Ltd, the telecom services arm of India’s largest private sector diversified Tata Group for $2.7 billion exposes the India entry potential for global mobile telecom service providers who do not have on their radar an India entry strategy yet.

Such service providers are missing out on opportunities in a country where incumbent mobile telecommunication service providers collectively add more than nine million subscribers a month and are projected to have overall mobile services revenues of more than $37 billion by 2012 growing at a CAGR of 18%, according to estimates.

The string of investments in Indian telecom companies, including, Tata Teleservices Ltd, the telecommunication services arm of India’s largest private sector diversified Tata Group by NTT DoCoMo, Inc., the largest Japanese mobile telecom service provider; Unitech Telecom, the telecom arm of India’s second largest real estate developer Unitech Ltd by Norwegian telecom firm Telenor ASA, world’s seventh largest telecom service provider at $1.36 billion; and Swan Telecom, a start-up GSM telecom service company of a Mumbai-based real estate developer Dynamix Balwas Group by Dubai-based Emirates Telecommunications Corp (Etisalat) at $900 million; or, South Africa’s largest telecom company MTN Group’s attempts to enter the Indian market – are an indication of the fact that there is ample room to enter this market, at least inorganically.

The investments in Tata Teleservices by NTT DoCoMo and the start-up operations of Swan Telecom by Etisalat and Telenor ASA’s in Unitech Telecom exposes the potential for inorganic activity in a market that is otherwise considered to be crowded but has a tele-density of less than 30%, signifying the expected growth potential in the sector.” said Bundeep Singh Rangar, Chairman IndusView Advisors Ltd, the India-focused cross-border advisory firm.

The Tata Teleservices deal will accelerate the telecommunication sector deal activity to $5.8 billion from about $3.1 billion in the deal street that grossed more than $28 billion this year to October.

Opportunities Exist

Other international telecom service providers seeking an India entry include Kuwait-based Zain Group, Qatar Telecom, Bahrain Telecom, Italy-based Telecom Italia SpA, South Africa’s MTN Group, among others. However, some of the global mobile telecom service providers such as Telefonica SA of Spain, French mobile telecommunication services provider, France Telecom and Deutsche Telekom AG of Germany are among those missing out on the opportunity to tap the growing mobile subscriber base expected to reach more than 700 million by 2012 from the current 300 million, at a CAGR of 21%.

Such growth trends bring with it corresponding increase in investments as government estimates suggest that the overall telecommunication sector will need $73 billion over the next five years to achieve a tele-density of up to 45%. And, a major chunk of the investment is expected to be realized through Foreign Direct Investment (FDI), particularly in the area of mobile communication.

It becomes significant as the government has granted new licenses and spectrum to aspiring operators such as Datacom Solutions a subsidiary of one of India’s leading consumer durables company Videocon Industries Ltd; Loop Telecom, a BPL Mobile Communications group company; S Tel Ltd, joint venture between Skycity Foundations and Telecom Investments (Mauritius) Ltd; among others which are likely targets – but within the regulatory purview of the overseas entity’s stake in the domestic company not to exceed 74%.

“MTN Group, South Africa’s largest mobile service provider with operations in 21 countries is another service provider waiting in the pit-lane to move in to India after its attempts to do so failed on two earlier occasions with leading Indian telecom service providers Bharti Airtel Ltd on the first count, followed by Reliance Communication, which could have been the largest emerging markets telecoms merger worth more than $65 billion.” added Rangar

Other large mobile telecom deal this year included Idea Cellular Ltd, the telecom business of the diversified Aditya Birla Group, acquiring 40% stake in Spice Communications Ltd, a regional cellular services provider for $675 million.

Information Technology (IT) and Telecom: Deals Despite the Downturn

Taking a collective view of the inorganic growth activity in the technology driven businesses, Information Technology (IT) & IT enabled Services (ITeS) and Telecommunication together account for deals worth about $6 billion emerging as the most consolidating sectors crossing the three digit mark of 100 deals with 21% share in M&As worth $28 billion to October this year.

Some of the large deals in the sector so far include:

§ The acquisition of Citigroup's captive Business Process Outsourcing (BPO) arm Citigroup Global Services (CGSL) for $505 million by India’s largest IT services exporter Tata Consultancy Services - the largest buyout of a foreign captive BPO in India;

§ WNS Holdings acquisition of Aviva Global services for $228 million,

§ Quatrro BPO Solutions buying a majority stake in the U.K.-based Babel Media for $110 million, and

§ Essar-owned Aegis BPO buying Nasdaq-listed People Support for $250 million

§ ITeS company CBay Systems bought 69.50% stake in MedQuist Inc. for $287 million.

In fact the pending purchase of Axon Group Plc, the U.K.-based provider of SAP implementation consulting, by HCL Technologies Ltd for $814 million after it rivalled the bid of its larger competitor and second largest IT services company Infosys Technologies Ltd, will give the IT and Telecom sector top slot in the sectoral ranking of the merger and acquisition (M&A) table with deal value exceeding $10 billion (including the Tata Teleservices deal).

The other deal in the making is that of Tata Consultancy Services’, India’s largest software services exporter, expected acquisition of Europe's largest engineering conglomerate Siemens AG’s IT Solutions and Services (SIS) unit.

Prior to the announcement of the Tata Teleservices-NTT DoCoMo, Swan-Etilsalat and Unitech-Telenor deals, the Power sector led the M&A activity with deal value grossing $5 billion followed by Pharmaceutical sector with M&A deal values of more than $4 billion. These sectors were followed by the Banking & Financial Services at $3 billion and Automotive Sector with deal value of about $2.5 billion.

Tuesday, November 04, 2008


An overwhelming 81% Indian-Americans will vote for Democratic presidential nominee Senator Barack Obama while merely 19% will support the Republican nominee Senator John McCain, an opinion poll suggests.


Sunil Mittal-promoted Bharti Enterprises on Monday said it is eyeing a turnover of Rs 1,000 crore from its retail operations by the end of current fiscal in March 2009 and added that the current economic slowdown will not impact it.

The Economic Times

German auto major Volkswagen AG is embarking on an auto component sourcing drive from India, which will see the company ordering materials worth one billion euro for its global operations, within the next two years.

The Economic Times

Despite being cautious of the holiday season consumer spending in the US, Indian contact centres have stepped up temporary hiring to meet an expected surge in volumes over the next two to three months.

The Hindu Business Line

Even though bears have minced domestic markets considerably, has the decline in commodity or energy prices helped the domestic stock market perform better than its Asian peers and other BRIC constituents? While crude prices tumbled by around 60% since its July 11 peak and a 40-50 % correction has set in metals and agro-commodities, the Indian stock market has fallen by 27% from mid-July - which is much less than its Asian and BRIC peers, analysis shows. Equity markets in other comparable Asian countries such as Korea (-29 %), Taiwan (-32 %), Japan (-35 %), Hong Kong (-37 %) and Singapore (-39 %) have sharply fallen even as the commodities' tide turned.

The Economic Times