sectorsnippets issue 24:tp4 whitepaper a4.qxd · 2008-10-27 · • magneti marelli of fiat group...
TRANSCRIPT
Sectoral SnippetsIndia Industry Information
Issue 24 - October 2008
KPMG IN INDIA
Page 2 of 16
Sectoral Snippets
About Sectoral Snippets
Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought out by
KPMG in India. This newsletter provides an overview of the Indian economy in the form of
news-briefs from across key sectors.
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Table of Contents
1. Indian Economy 3
2. Auto and Auto Components 4
3. Banking and Insurance 5
4. Consumer Markets and Retail 6
5. Hospitality 7
6. IT / ITeS 8
7. Media 9
8. Oil and Gas 10
9. Pharma 11
10. Power 12
11.Real Estate and SEZs 13
12.Telecom 14
13.Transport and Logistics 15
Sectoral Snippets, Issue 24
The�economic�developments�of�the�last�monthhave�been�unprecedented,�impacting�much�ofthe�global�financial�landscape.�India�is�alsoexperiencing�the�effects�of�the�global�creditcrunch,�albeit�indirectly-�aversion�to�risk�hastranslated�into�reversals�in�capital�and�FII�flows,causing�liquidity�constraints�and�putting�pressureon�the�rupee.�Macro-economic�indicators�havereflected�this�impact,�with�the�Index�of�IndustrialProduction�for�August�touching�4.9�percent.
In�response,�India’s�central�bank,�the�ReserveBank�of�India�has�stepped�in�with�measuressuch�as�reducing�its�cash�reserve�ratio�and�reporate�by�250�and�100�basis�points�respectively,aiming�to�ease�the�liquidity�situation,�spur�lowerinterest�rates�and�boost�economic�growth.�
Indian�companies�are�assessing�the�impact�ofthe�last�30�days�on�their�businesses.
We�hope�you�find�this�edition�of�SectoralSnippets�useful.
Regards,
Russell
Russell Parera
Chief Executive Officer
KPMG in India
©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
The�collapse�of�reputed�financial�institutions�on�Wall�Street�and�the�impending
recession�in�the�US�economy�has�raised�concerns�on�the�degree�of�its�impact�on
the�Indian�economy.�After�three�years�of�an�exceptional�growth�trend,�the
country�is�now�facing�macro�challenges�in�sustaining�its�growth�rates�at�8-9
percent.
The�subsequent�exit�of�foreign�funds�from�emerging�markets�is�evident�from�the
state�of�the�Indian�capital�market�where�the�Sensex�has�corrected�by�over�40
percent�from�its�peak�last�year.�
The�Indian�real�estate�sector�is�likely�to�see�lackluster�participation�from�Private
Equity�(PE)�investors�owing�to�the�liquidity�crunch�globally.�The�real�estate
companies�are�heavily�dependent�on�foreign�funds�since�the�Reserve�Bank�of
India�has�placed�restrictions�on�financing�from�Indian�banks.�Since�some�of�these
PE�funds�were�launched�by�investment�banks,�their�current�situation�is�likely�to
put�constraints�on�the�availability�of�funds�in�India.�
The�outsourcing�industry�may�also�experience�a�deceleration�in�demand�as�firms
in�the�US�and�Europe,�the�key�markets�for�Indian�IT�services�firms,�are�holding
up�ongoing�projects�and�deferring�decisions�on�new�ones.�While�the�rupee�has
depreciated�against�the�dollar�by�over�20�percent�,�revenue�has�also�become
hard�to�come�by�because�of�the�financial�crisis�in�the�US.
In�addition,�with�the�recent�approval�of�the�proposed�USD�700�billion�bailout
package�by�the�US�government�to�the�troubled�financial�institutions�in�the�US,
immediate�release�of�funds�may�bring�some�comfort�in�the�short�term.
Conversely,�increasing�US�deficits�may�cause�the�dollar�to�rise�significantly,
which�in�turn�would�impact�import-oriented�sectors�like�manufacturing,�consumer
goods,�oil�&�gas�etc.
Indian�regulators�are�likely�to�assess�the�current�situation�and�seek�ways�to
weather�the�global�meltdown.�The�recent�approval�of�a�landmark�US�civil�nuclear
deal�is�expected�to�bolster�the�country’s�strategic�clout.�In�addition,�congruent
steps�by�policymakers�to�insulate�the�Indian�economy�from�global�shocks�can
assist�the�country�in�sustaining�a�healthy�GDP�growth.
Indian EconomyPage 3 of 16
Analyst: Asmita Deshmukh©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
“We have not been as exposed tothese new and innovativeinstruments, which have been thesource of financial distressinternationally so I do not thinkthat direct impact on the Indianfinancial system is going to besignificant at all. There will beindirect effect because if the restof the world gets disturbed andcapital flows and liquidity shrinks,there is bound to be spillovers notjust on India but all over theworld." Montek Singh Ahulwalia, Deputy Chairman of thePlanning Commission.(Source: Business Standard October 2008)
• India’s Autoline Industries acquires a majority stake in Italian
design company
Pune-based�Autoline,�a�metal�sheet�component�maker�for�automobile
manufacturers,�has�reportedly�acquired�11�percent�stake�in�SZ�Design�and
Zagato,�an�Italian�designing�company.�Autoline�has�thus�increased�its�stake
from�49�percent�to�60�percent�in�the�Italian�firm,�becoming�the�majority�stake
holder.�The�acquisition�is�valued�to�be�USD�13�million�of�which�USD�4.3�million
has�already�been�paid�and�the�remaining�amount�is�expected�to�be�paid�in�the
next�2�months.�With�the�acquisition�of�Zagato,�Autoline�now�possess�a�full
range�of�services�from�manufacturing�and�advanced�engineering�to�exclusive
Italian�designs.
• Al Dobowi Group to invest USD 219 million in India
Al�Dobowi�Group,�a�Dubai�based�global�tyre�manufacturer�is�reportedly
investing�USD�219�million�in�a�new�manufacturing�plant�in�the�state�of�West
Bengal.�A�MoU�for�the�same�is�expected�to�be�signed�in�the�near�future.�The
plant�is�expected�to�cater�to�the�export�market�of�Al�Dobowi.�The�company�has
its�operations�spread�across�three�continents�-�Africa,�South�Asia�and�Europe.
Apart�from�tyres,�their�business�includes�batteries,�lubricants�and�technical
rubber�products.
• Magneti Marelli of Fiat Group forms a JV with Unitech Machines
Magneti�Marelli�of�the�Fiat�Group�has�formed�a�joint�venture�(JV)�with�Gurgaon-
based�Unitech�Machines.�The�Italian�firm�is�expected�to�hold�51�percent�stake
in�the�JV.�The�JV�is�to�be�set�up�with�an�investment�of�USD�16.4�million�for
design,�production�and�assembly�of�motor�vehicles�and�electronic�components
such�as�instrument�cluster,�body�electronics�and�telematic�devices.�Unitech
Machines�is�expected�to�set�up�a�facility�at�Manesar�for�the�new�venture�with
an�investment�of�USD�8.8�million.�The�plant�is�expected�to�commence
operations�by�the�first�quarter�of�2009.�
• Ultra Motors to invest USD 33 million in India
UK-based�two-wheeler�maker�Ultra�Motor�has�planned�to�invest�USD�33.5
million�in�India�over�the�next�3�years.�The�invested�amount�will�be�utilized�to
expand�operations�and�launch�new�products.�The�company�plans�to�launch�five
new�e-scooters�this�fiscal�year�and�is�expected�to�launch�an�e-bike�in�the�next
two�years.
• Ashok Minda Group plans an investment of USD 197 million
Auto�component�manufacturer�Ashok�Minda�Group�plans�to�invest�USD�197
million�over�the�next�2-3�years.�The�investment�is�a�part�of�its�expansion�plans
of�the�current�capacities�through,�acquisitions,�joint�ventures�and�by�setting�up
green-field�units�across�the�world.�The�company�is�currently�running�feasibility
studies�in�Europe�and�Latin�America�to�set�up�new�plants.�The�group�has�also
announced�the�acquisition�of�the�German�firm�Schenk�Plastic�Solutions�for�an
undisclosed�amount.
Page 4 of 16
Auto and Auto Components
Analyst: Rajiv Somani©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
“We would continue designingproducts specifically for thismarket which reflect globalYamaha DNA. Going forward, wewant to be perceived as apremium bike maker in India withwhich youth of this countryidentifies” Tsutomu Mabuchi, CEO and Managing Director, IndiaYamaha Motor (IYM)(Source: The Press Trust of India Limited, September 142008)
• Reliance Money forays into investment banking
Reliance�Money�is�entering�into�Investment�Banking�business�and�has�obtaineda�merchant�banking�license�from�market�regulator�Securities�Exchange�Board�ofIndia�(SEBI).�The�company�plans�to�focus�on�small�and�mid-sized�companies�toprovide�a�wide�range�of�investment�banking�services�such�as�issuemanagement,�underwriting,�private�equity�advisory�and�corporate�financeservices.�The�company�is�looking�to�leverage�on�its�2.5�million�strong�customerbase�and�wide�distribution�network�of�more�than�10,000�outlets.�The�companywould�initially�concentrate�on�issue�management�activities�such�as�initial�publicofferings,�rights�issue,�follow-on�public�offerings,�qualified�institutionalplacements,�open�offers,�buyback�offers,�delisting�offers�and�preferential�issueof�listed�equity.
• Religare forms alliance with The Bank of Bahrain and Kuwait (BBK)
Religare,�one�of�the�leading�Indian�financial�services�providers,�has�signed�anagreement�with�BBK�to�offer�Portfolio�Management�Services�(PMS)�toexpatriate�Indians�in�Bahrain�and�Kuwait.�The�alliance�was�formed,�looking�atthe�rising�expatriate�population�in�the�Middle�East�with�huge�investable�wealthand�with�an�aim�to�provide�them�with�sound�investment�research�and�smartportfolio�management�strategy�to�serve�their�financial�goals.�The�otherprominent�reason�leading�to�the�deal�was�the�strong�reach�of�BBK�within�theIndian�community�in�Bahrain�and�Kuwait.
• RBS to expand its Indian business
Royal�Bank�of�Scotland�(RBS),�which�started�with�its�Indian�operations�in�2002,is�all�set�to�expand�its�presence�in�India�after�taking�over�ABN�Amro’s�variousbusiness�operations.�The�bank�is�working�closely�with�Indian�regulators�tointegrate�the�ABN�Amro�businesses�and�is�planning�to�utilize�its�intellectualcapital�in�the�advisory�business�as�it�has�wide�presence�in�SME�(mid-cap�andlarge-cap)�and�wholesale�banking�activities,�including�M&A�and�riskmanagement.�The�bank�has�a�strong�presence�in�wealth�management�businessalso�and�the�acquisition�of�ABN�Amro�is�expected�to�help�in�expanding�itsbusiness�further.�The�bank�has�extensive�operations�in�Mumbai,�Delhi�andChennai�and�plans�to�be�a�major�competitor�in�the�Indian�market�by�leveragingon�its�skills�and�capabilities,�including�global�distribution�from�North�America,Europe�and�throughout�the�Asia-Pacific.
• TPG to invest USD 12O million in Shriram's finance arm
Leading�global�private�equity�TPG�Capital�has�entered�into�an�agreement�toinvest�USD120�mn�in�Shriram�City�Union�Finance�Ltd�(SCUFL),�the�consumerfinance�vertical�of�the�Chennai-based�Shriram�Group.�TPG�would�own�upto�26.7percent�of�SCUFL,�excluding�shares�that�might�be�tendered�in�the�open�offer,making�this�its�second�investment�in�the�Shriram�Group.�TPG�plans�to�leverageShriram�Group’s�large�chit-fund�network�to�build�its�asset�book�in�personal�andenterprise�loans�by�primarily�targeting�non-metro,�semi-urban�and�rural�areas.TPG�has�been�involved�in�the�consumer�finance�business�of�the�group,�whichhas�significantly�strengthened�SCUFL’s�business.�A�number�of�other�PrivateEquity�(PE)�investors�such�as�Chrys�Capital,�Merrill�Lynch,�Cambridge,�ICICIVenture,�Asia�Bridge�and�Bessemer�have�also�invested�in�Shriram�group�in�thepast�couple�of�years.
Page 5 of 16
Banking and Insurance
Analyst: Kunal Jain©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
Source:�Reserve�Bank�of�India
Commercial Banking - Annual Growth Rate (%)
• Nestle India to invest USD 256 million in 2009
Global�FMCG�major�Nestle�plans�to�double�its�investment�in�India�from�USD128�million�in�2008�to�USD�256�million�in�2009,�as�a�part�of�its�expansionstrategy.�The�funds�are�planned�to�be�utilized�for�research�and�development,advertising�and�capacity�building.�The�company�plans�to�continue�to�reinvestand�expand�in�India�and�provide�Nestle�India�with�the�financial�resources�togrow�in�one�of�the�fastest�growing�markets.�Nestle's�sales�in�India�grew�by�25percent�in�the�first�half�of�2008�and�India�contributed�1.5�percent�of�its�globalturnover.�
• Reliance strikes JV with Vornado to set up shopping centers in
India
Reliance�Industries�(RIL),�India’s�leading�public�limited�company,�entered�into�a50-50�partnership�with�US-based�real�estate�investment�trust�Vornado�to�investUSD�250�million�each�to�acquire,�develop�and�operate�retail�shopping�centersacross�key�cities�in�India.�The�shopping�centers�are�expected�to�have�500,000to�1,000,000�or�more�square�feet�area.�The�centers�would�typically�be�anchoredby�a�hypermarket�which�will�be�owned�and�operated�by�Reliance.�RIL�currentlyoperates�over�700�retail�stores�in�multiple�formats�in�India.�Vornado�Realty�Trustis�a�fully�integrated�equity�real�estate�investment�trust.�It�is�one�of�the�largestowners�and�managers�of�real�estate�in�the�United�States.
• Texas Chicken forays into Indian fast-food market
Texas�Chicken,�the�fast-food�brand�of�the�US-based�Church's�Chicken,�hasforayed�into�the�Indian�fast-food�market.�The�company�launched�its�Indianoperations�by�setting�up�its�first�outlet�in�Hyderabad�and�plans�to�launch�andadditional�30�in�the�Andhra�Pradesh�region�in�the�next�5�years.�The�companyplans�to�open�at�least�300�outlets�in�the�next�10�years�and�would�first�targetthe�major�metros�for�expansion.�The�fast�food�retailer�has�undertaken�thefranchisee�route�in�India�and�appointed�the�SH�Group�as�franchisee�for�AndhraPradesh.�Texas�Chicken�has�a�network�of�1,600�outlets�in�20�countries�andabout�425�stores�are�outside�the�US.
• Metro AG to double its Indian presence
Metro�Cash�&�Carry,�the�wholly�owned�Indian�subsidiary�of�Germany’s�largestretailer,�Metro�AG,�is�looking�at�doubling�the�number�of�its�wholesale�retailstores�in�India�from�the�present�four�to�eight.��Metro�plans�to�pump�in�USD120�million�for�this�expansion�and�set�up�stores�in�the�state�of�West�Bengal.Metro�is�one�of�the�early�entrants�in�the�wholesale�cash�and�carry�format�inIndia.�The�expansion�comes�at�the�time�when�global�rivals�have�struck�deals�toenter�the�attractive�Indian�retail�space�with�similar�formats.�Wal-Mart�StoresInc.�,�which�has�a�venture�with�Bharti�Enterprises,�plans�to�open�its�firstwholesale�center�in�India�next�year,�and�aims�to�roll�out�10-15�centers�over�7years.�
Britain's�Tesco�Plc,�which�tied�up�with�Tata�Trent,�also�plans�to�set�up�its�firstwholesale�centre�in�India�towards�the�end�of�2009,�while�Carrefour�also�plansto�make�its�foray�in�the�country.
Page 6 of 16
Consumer Markets and Retail
Analyst: Sonia Topiwala ©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
“Spiraling income and risingeconomic growth will see theIndian retail industry touch USD378.2 billion by 2010 withorganized retail expected toconstitute about 13 percent of thetotal market to reach USD 48.1billion.”Terry Leahy, CEO, TESCO.(Source: The India Retail Report 2009, Images F&RResearch.)
• Intercontinental exploring management agreements in India
UK-based�Intercontinental�Hotel�Group�(IHG)�who�entered�India�with�franchiseecontracts�is�now�exploring�options�of�management�agreements�with�domesticplayers.��The�group�has�ended�its�franchise�alliance�with�the�Grand�Group(Bharat�Hotels).�IHG�plans�to�develop�20�new�hotels�in�India�in�next�2-3�years.Of�the�20�new�hotels,�15�would�be�operated�under�its�mid-market�brandHoliday�Inn.
• Carlson forays into hotel management in India
Carlson�Hotels�Worldwide,�a�US-based�company�which�operates�its�brandsunder�the�franchise�contract,�plans�to�operate�as�a�full-fledged�hotelmanagement�company�in�India.�As�a�franchiser,�Carlson�operates�three�hotelsin�India—Radisson,�Park�Plaza�and�Park�Inn,�that�are�not�under�its�direct�control.Carlson�is�now�looking�to�take�over�the�management�of�these�hotels.�CarlsonHotels�Worldwide�plans�to�acquire�complete�ownership�of�the�RHW�HotelManagement�company�that�runs�Radisson�in�India.�Also,�the�franchiseagreement�of�the�other�two�hotels�Park�Plaza�and�Park�Inn�that�are�exclusivelyfranchised�to�Sarovar�Hotels,�is�not�likely�to�be�renewed.�
• Rendezvous hotels forms JV for India operations
Sydney-based�Rendezvous�Hotels�and�Resorts�International�(RHI),�has�formed�aJV�with�X�S�Real�Properties�Ltd,�a�Chennai-based�real�estate�company�formanaging�hotels�and�resorts�in�India.�RHI,�subsidiary�of�The�Straits�TradingCompany�Limited�would�hold�a�51�percent�stake�in�the�JV.�The�JV�company,Rendezvous�India�Hospitality�Pvt.�Ltd.,�plans�to�set�up�its�hotels�across�Indiawith�an�initial�focus�on�strengthening�its�presence�in�southern�India.�
• Mahindra Holidays to spend USD 77.8-88.9 million on expansion
Mahindra�Holidays�&�Resorts,�a�subsidiary�of�Mahindra�&�Mahindra�Ltd.,�plansto�add�750�rooms�with�an�investment�of�USD�77.8-88.9�million�(INR�3.5-4billion)�taking�its�room�count�to�1,500.�Out�of�the�planned�750�rooms,�500rooms�are�expected�to�be�operational�by�the�end�of�this�financial�year�andanother�250�in�the�following�year.�Additionally,�the�company�has�acquired�theTaj�Garden�Retreat�at�Thekkady�in�Kerala.
• Hotel Leelaventure plans USD 444 million investments
Hotel�Leelaventure�plans�to�add�seven�new�luxury�hotels�at�Udaipur,�Jaipur,Delhi,�Hyderabad,�Agra,�Pune�and�Chennai�in�line�with�its�pan-India�strategy.The�hotel�plans�to�invest�USD�444.4�million�(INR�20�billion)�investment�over�thenext�3-5�years,�adding�2,000�rooms�to�the�company’s�existing�capacity.�The‘Leela�Hotel�and�Residency’�in�Gurgaon�and�the�‘Leela�Palace’�at�Udaipur�areexpected�to�open�in�2009�while�the�‘Leela�Palace’�at�New�Delhi�is�likely�to�becompleted�by�October�2010.�In�addition,�the�company�is�to�set�up�a�300�roomhotel�in�Mumbai.
Page 7 of 16
Analyst: Pallavi Phatak
Hospitality
©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
“The hotel industry is verysustainable, and there is still a lotof demand with only 30,000 roomsin the organized segment. Ourstrategy is to have profitableportfolio of hotels in major metrosand other key cities includingPune and Dehradun, where thereis a demand for internationallybranded and managed hotels."Jan Smits, Chief Operating Officer (South Asia &Korea), IHG (Source: Economic Times, September 27 2008)
• Indian IT market expected to reach USD 110 bn in 2012
According�to�Information�Technology�(IT)�research�and�advisory�firm�Gartner,Indian�IT�industry�is�expected�to�generate�USD�110�billion�revenues�by�2012with�Compound�Annual�Growth�Rate�(CAGR)�of�14.8�percent�in�end�userspending.�In�2008,�IT�end�user�spending�is�on�track�to�reach�USD�64.7�billion,�a17.2�percent�increase�from�2007.�Small�and�midsize�businesses�are�likely�todrive�the�growth�of�various�IT-related�industries,�with�the�vital�role�being�playedby�value�added�resellers,�distributors�and�retailers.�Furthermore,�the�Indiangovernment's�favorable�policies�and�increasing�adoption�of�IT�is�likely�toencourage�local�companies�seeking�to�invest�in�and�use�IT.
• SAP Venture invests in Newgen Software for minority stake
SAP�Venture�the�venture�capital�arm�of�SAP�AG,�has�acquired�a�minority�stakein�a�software�product�company�Newgen�Software�Technologies�Ltd.�(Newgen)for�an�undisclosed�amount.�Delhi-based�Newgen�is�one�of�the�leadingproviders�of�Business�Process�Management�and�Enterprise�ContentManagement�services.�The�company�plans�to�use�these�funds�to�fuel�itsgrowth,�including�product�development�and�global�expansion�particularly�innew�geographies�like�US.�The�company�is�aiming�to�expand�its�sales�andmarketing�operations�to�100�countries�in�next�4�years.
• TCS signs five-year application management contract with
Ericsson
Tata�Consultancy�Services�(TCS),�one�of�India’s�leading�IT�services,�businesssolutions�and�outsourcing�firms�has�inked�a�global�contract�with�Sweden-basedtelecommunications�company�Ericsson.�The�five�year�contract�is�to�deliverapplication�maintenance�and�development�services�for�Ericsson’s�internal�IToperations.�TCS�has�been�selected�as�one�of�the�two�strategic�partners,��todeliver�application�maintenance�services�to�Ericsson�and�a�preferred�supplierfor�application�development�services.
• Datatec buys Inflow Technologies Private Limited
Datatec,�a�South�Africa-based�Information�and�Communications�Technology(ICT)�group,�has�acquired�50.01�percent�stake�in�an�India-based�ICT�distributorInflow�Technologies�Private�Limited�(Inflow).�Inflow�is�a�value-added�ICTdistributor�with�a�strong�focus�on�technology�enablement�and�distribution�ofsecurity,�storage�and�networking�products,�solutions�and�services.�In�FY�08,Inflow�reported�revenues�of�USD�32�million�and�had�about�130�employees.�
• Infotech Enterprises America Inc. to acquire Time To Market Inc.
Infotech�Enterprises�Ltd.�(IEL),�through�its�wholly�owned�subsidiary�InfotechEnterprises�America�Inc.,�has�agreed�to�acquire�Time�to�Market�Inc.�(TTM)�andall�its�affiliates.�The�deal�marks�IEL’s�foray�into�Hitech�design�services.�US-based�TTM�has�40�engineers�in�San�Jose,�CA,�and�about�80�in�Hyderabad�andBangalore,�India.�As�per�the�terms�of�agreement,�TTM�is�to�become�part�of�thenewly�created�Hitech�vertical�at�Infotech,�focus�on�the�US�markets�andleverage�its�recent�entry�into�Japan�in�the�short�term.�
Page 8 of 16
Analyst: Parnika Patil
IT / ITeS
©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
"India is a very large and fastgrowing market offering strongprospects in our sector with alower cost of entry compared tomany other developing marketsand potentially higher returns andgreater organic investmentopportunities".Jens Montanana, Chief Executive, Datatec.(Source: The Economic Times, September 12, 2008)
• Deutsche Bank acquires stake in Indian Film Company
Deutsche�Bank�AG�has�acquired�a�10.55�percent�stake�in�Indian�Film�Company(IFC),�promoted�by�TV�18�group,�for�approximately�USD�4.6�million.�IFC�is�anentertainment�company�with�a�focus�on�production�and�distribution�of�Indianfilms�worldwide.�In�the�future,�the�company�plans�to�invest�in�films�where�itcan�retain�full�ownership�of�Intellectual�Property�Rights.�In�June�2007,�the�IFCraised�over�USD�100�million�from�its�listing�at�the�Alternative�InvestmentMarket�of�the�London�Stock�Exchange.
• Big Entertainment forms alliance with DreamWorks
Big�Entertainment,�part�of�the�Reliance�-�Anil�Dhirubhai�Ambani�Group,�hassigned�a�USD�1.2�billion�deal�with�DreamWorks,�promoted�by�Steven�Spielberg.Of�the�USD�1.2�billion,�USD�500�million�is�to�be�raised�through�equity�and�theremaining�amount�through�debt.�The�deal�provides�DreamWorks�with�thenecessary�financial�support�required�to�start�their�new�venture�by�parting�awaywith�Viacom�Inc.'s�Paramount�Pictures.�The�venture�is�expected�to�produce�upto�35�movies�in�the�next�5�years.�Big�Entertainment�has�also�acquired�majoritystake�in�the�US-based�Willow�TV�Inc.,�a�portal�for�live�internet�streaming�ofimportant�cricket�events�from�across�the�world.��
• Government eases norms for private FM radio firms
The�Union�cabinet�has�permitted�private�FM�radio�companies�to�set�upsubsidiaries�as�well�as�de-merge�their�existing�businesses.�This�policy�change�isexpected�to�make�the�radio�business�more�efficient�and�would�help�the�privateFM�radio�companies�consolidate�their�business.�As�per�the�new�guidelines�forthe�company�to�set�up�a�subsidiary�or�de-merge�its�existing�firm,�the�majorityshareholders�in�the�existing�company�are�required�to�retain�their�majorityshareholding�in�the�de-merged�firm�or�the�subsidiary�to�at-least�51�percent.However�the�cabinet�has�not�increased�the�Foreign�Direct�Investment�(FDI)cap,�which�currently�remains�at�20�percent.
• BSNL to launch Internet Protocol Television (IPTV) in 98 cities
Bharat�Sanchar�Nigam�Limited�(BSNL),�one�of�India’s�leading�telecom�serviceproviders,�plans�to�launch�IPTV�in�98�cities�by�the�end�of�November�2008.�Thecompany�is�planning�to�roll�out�its�IPTV�platform�under�the�franchise�model�andhas�already�appointed�five�franchises�namely,�Aksh�Optifibre,�Smart�Digivision,IOL�Broadband,�Times�Broadband�and�Maharashtra�Knowledge�Company.�Thecompany�has�commercially�launched�its�services�in�three�regions�of�Rajasthan.The�IPTV�rollout�is�being�done�under�the�public�private�partnership�model�andthree�franchises�are�expected�to�be�allowed�in�each�city,�four�to�five�monthsafter�the�launch�by�BSNL.�The�company�has�targeted�a�customer�base�of150,000�by�March�2009.
Page 9 of 16
Media
Analyst: Mehul Desai©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
“This comes as a very favorablemove for the industry especiallyfor broadcasters who had appliedfor the de-merger. We’re hopingthat this announcement will alsopave way for further deregulationfor the industry by way ofincreased FDI, multiple licensingand allowing news and currentaffairs on FM radio”.Ms. Apurva Purohit, President, Association of RadioOperators of India, and CEO, Radio City(Source: Business Line, September 12, 2008)
• Videocon-BPCL team buys Brazil oil explorer
State-run�Bharat�Petroleum�Corporation�Limited�(BPCL)�in�consortium�with
Videocon�Industries�has�acquired�Encana�Brasil�Petroleo�Limitada�from�their
Canadian�gas�producers;�EnCana�and�Alberta.�Encana�has�been�acquired�for
USD�283�million.�The�consortium�is�expected�to�pay�USD�118�million�as
reimbursement�towards�the�Canadian�firm’s�expenses�and�USD�165�million�for
the�purchase�consideration.�
• India and Colombia sign agreement for cooperation in
hydrocarbon sector
India�and�Colombia�have�entered�into�a�Memorandum�of�Understanding�(MoU)
in�the�hydrocarbon�sector,�particularly�in�the�field�of�exploration�and�production
of�oil�and�gas.�The�MoU�includes�the�exchange�of�professionals�and�technicians
along�with�training�and�human�resource�development�between�the�two
countries.�The�agreement�is�likely�to�help�India�to�expand�its�presence�in
Colombia.�
• OIL plans USD 1.5 billion coal-to-liquid project in Assam
Oil�India�Limited�(OIL),�India’s�second�biggest�state�run�oil�explorer�has�decided
to�enter�the�race�for�converting�coal�into�oil.�Towards�this�goal,�the�company
has�initiated�talks�with�Coal�India�Limited�(CIL)�in�order�to�set�up�USD�1.5�billion
plant.�OIL�will�also�thread�in�Indian�Oil�Corporation�(IOC)�and�Engineers�India
Limited�(EIL)�as�their�strategic�partners.�The�project�is�likely�to�be�a�small�size
business�initially�and�with�time�it�would�increase�its�scale.�The�company�states
that�such�a�move�is�likely�to�establish�them�as�an�integrated�oil�firm�from�an
upstream�oil�company.
• CPCL to invest USD 1.71 billion for expansion
A�group�company�of�Indian�Oil�Corporation�Limited�(IOC),�Chennai�Petroleum
Corporation�Limited�(CPCL)�has�decided�to�invest�USD�1.71�billion�in�a�span�of
4�years.�This�amount�is�expected�to�be�utilized�for�the�expansion�of�the
company’s�Manali�refinery.�The�refinery�would�be�upgraded�to�match�the
international�standards�i.e.�the�Euro�IV�standards.�For�this,�the�company�is�likely
to�fund�the�Resid�Upgradation�project�and�Auto�Fuel�Quality�Upgradation
project�and�also�refurbish�its�Naphtha�hydro�treating�and�catalytic�reforming
unit.
.
Page 10 of 16
Oil and Gas
Analyst: Rajiv Parekh©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
‘‘Coal-to-liquid (CTL) project willbe a viable solution as long ascrude remains over USD 60 perbarrel. The plan is to produce 1.5million tonne of petroleumproducts from 3.5 million tonne ofcoal. The cost of such projectwould be around USD 1.5 billion.”NM Borah, Director (operations) Oil India Limited (OIL),commenting on OIL’s plans to enter the Coal to LiquidProject. (Source: Economic Times, September 10, 2008 )
• Lupin acquires a majority stake in Pharma Dynamics, South Africa
Lupin�Limited,�an�Indian�manufacturer�of�generic�and�branded�formulations�andActive�Pharmaceutical�Ingredients�(APIs),�has�acquired�a�majority�stake�inPharma�Dynamics,�a�South�Africa-based�generics�company�for�an�undisclosedamount.�The�acquisition�is�expected�to�facilitate�Lupin’s�presence�in�the�SouthAfrican�market,�which�is�estimated�at�USD�2.5�billion.�Pharma�Dynamics�isexpected�to�launch�at�least�12�new�products�in�the�current�year.�It�expects�tobenefit�from�Lupin’s�backward�integration�capabilities�as�well�as�its�existingproduct�pipeline�and�manufacturing�capabilities.��
• Dr Reddy's has launched a subsidiary in the US
Dr�Reddy's�Laboratories,�a�leading�Indian�pharmaceutical�company,�has�launchedits�US�specialty�business�through�its�wholly-owned�subsidiary�Promius�PharmaLLC.�This�move�is�expected�to�assist�Dr.�Reddys�in�establishing�its�presence�in�theUS�dermatology�market.�The�subsidiary�would�primarily�focus�on�the�brandeddermatology�market�and�already�has�a�pipeline�of�three�in-licensed�and�co-developed�dermatological�products�that�are�expected�to�be�launched�in�2008�and2009.�It�also�has�a�pipeline�of�topical�products�under�development�at�its�IntegratedProduct�Development�Facility�in�India.
• Orchid & Merck & Co., Inc. tie-up to work jointly on the
development of novel drugs
Orchid�Chemicals�and�Pharmaceuticals�Ltd.�has�entered�into�a�ResearchCollaboration�and�License�Agreement�with�Merck�&�Co.,�Inc.�for�the�discovery,development�and�commercialization�of�molecules�vital�for�treating�bacterial�andfungal�infections.�The�discovery�and�candidate�development�through�Phase�IIaof�clinical�trials�would�be�done�by�Orchid�Research�Laboratories,�Orchid’swholly-owned�discovery�research�subsidiary.�The�later�stages�of�clinicaldevelopment�and�commercialization�would�be�undertaken�by�Merck.�As�per�theagreement,�Orchid�is�expected�to�get�an�undisclosed�upfront�amount,milestone�payments�totaling�approximately�USD�100�million�for�any�researchand�development�objective�achieved�as�well�as�royalties�on�worldwide�net�salesof�any�products�commercially�marketed�under�this�agreement.�
• Advinus collaborates with Ortho-McNeil-Janssen Pharmaceuticals
for drug discovery and development
Advinus�Therapeutics,�a�research-based�pharmaceutical�company�in�India�and�apart�of�the�Tata�group,�has�entered�into�an�agreement�with�Ortho-McNeil-Janssen�Pharmaceuticals,�Inc.�(OMJPI)�for�developing�drug�candidates�acrossmultiple�disease�targets.�Advinus�is�expected�to�conduct�drug�discovery�andearly�clinical�development�until�the�completion�of�Phase�IIa�studies.�OMPJI�isexpected�to�advance�the�drug�candidates�through�late�stage�clinical�trials�andglobally�commercialize�the�molecules.�Under�the�agreement,�Advinus�isexpected�to�be�paid�an�upfront�payment�as�well�as�payments�amounting�toapproximately�USD�247�million�on�successful�development�of�two�targets.Advinus�is�also�expected�to�receive�royalties�on�the�drug�sales.�
Page 11 of 16
Pharma
Analyst: Nandita Kudchadkar & Dhruti Parikh
©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
“The collaboration provides agreat opportunity to synergize thetalent of Indian drug discovery anddevelopment scientists at Advinuswith the scientific, clinicaldevelopment and commercialstrengths of a company likeOMJPI for bringing new medicinesto market with speed, efficiencyand cost-effectiveness." Dr. Kasim Mookhtiar, CSO and Head of DrugDiscovery of Advinus Therapeutics (P) Ltd.commenting on the agreement(Source: Company Press Release, September 30, 2008)
• India targets 60,000 MW of hydropower by 2025
India�aims�to�harness�60,000�MW�of�hydro�power�potential�by�2025.�Accordingto�the�Minister�of�State�for�Power,�India’s�long-term�plan�would�be�to�generate50,000�MW�of�power�domestically�while�the�balance�10,000�MW�would�besourced�from�Bhutan.�Domestically,�Arunachal�Pradesh�alone�is�expected�togenerate�50�percent�and�the�rest�would�be�contributed�by�projects�in�Sikkim,Himachal�Pradesh,�Uttarakhand,�and�Jammu�and�Kashmir.
• PGCIL to evacuate power from Mundra UMPP
Power�Grid�Corporation�of�India�Ltd.�(PGCIL)�plans�to�invest�USD�1113�millionover�next�4�years�to�set�up�transmission�lines�to�supply�power�generated�fromthe�Mundra�Ultra�Mega�Power�Project�(UMPP).�Power�Grid�would�lay�1,835route�km�of�transmission�lines�and�supply�power�in�northern�and�western�India.
• Green power retailing from 2009
A�Hyderabad-based�renewable�energy�developer,�Greeko�Group,�plans�to�startgreen�power�retailing�from�first�quarter�of�2009.�The�company�has�received�thenecessary�regulatory�approvals�and�has�started�ground�work�in�this�direction.Greeko�intends�to�retail�excess�power�only�after�meeting�its�obligation�towardsthe�respective�state�electricity�boards�and�grids.�Currently,�the�company�istargeting�business�houses�that�have�commitments�to�buy�green�power�forreducing�their�carbon�footprints.�
• Tata Power buys 11.4 percent in Geodynamics
Utility�company�Tata�Power�has�bought�11.4�percent�equity�stake�for�USD�44million�in�Australian�geothermal�energy�company,�Geodynamics.�Thisinvestment�is�expected�to�help�Tata�Power�strengthen�its�renewable�energyportfolio�and�also�give�it�a�foothold�in�growing�renewable�energy�market�inAustralia.�Australian�government�has�aimed�to�have�20�percent�of�its�electricityfrom�renewable�sources�and�has�recently�announced�a�USD�450�millionprogramme�to�fund�deep�geothermal�drilling.
Page 12 of 16
Power
Analyst: Rajiv Parekh©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
Source:�CEA
• Redevelopment of pre-1940 buildings in Mumbai receives approval
The�Supreme�Court�(SC)�has�given�an�approval�to�redevelop�pre-1940
buildings/chawls�in�Mumbai.�As�per�the�directives�of�the�SC,�the
buildings/chawls�that�were�constructed�prior�to�1�September,�1940�whether
dilapidated�or�not,�can�now�be�demolished�and�new�highrise�towers�can�be
constructed�on�the�land.�However,�a�minimum�70�percent�of�the
tenants/occupants�of�these�buildings�along�with�their�landlords�must�be�willing
to�redevelop�their�property.�The�developer�undertaking�this�development�has�to
provide�a�minimum�area�of�225�square�feet�to�all�the�existing
tenants/occupants�free�of�cost�in�the�new�building�and�sell�the�remaining�area.
According�to�the�statistics�provided�by�Maharashtra�Housing�and�Area
Development�Authority�(MHADA)�there�are�16,502�such�buildings�in�Mumbai
that�can�now�be�redeveloped.
• Tishman Speyer plans USD 1 billion realty fund
Tishman�Speyer,�a�US-based�property�developer�and�fund�manager,�is�planning
to�raise�about�USD�1�billion�in�a�private�fund�over�the�next�8-10�months�to�invest
in�real�estate�market�in�India.�The�company�had�earlier�this�year,�raised�USD�350
million�in�a�private�fund�and�has�invested�in�4�real�estate�projects�in�South�India.�
• Red Fort to invest USD 760 million in realty
Red�Fort�Capital,�a�private�equity�fund,�is�planning�to�invest�about�USD�760
million�(INR�3200�crore)�in�various�real�estate�projects�in�India�by�the�end�of
2008.�The�company�has�already�invested�about�USD�190�million�of�this�amount
in�4�different�real�estate�projects.�The�main�focus�of�investment�of�the�company
is�residential�projects�and�it�has�fixed�the�investment�limits�at�a�minimum�of
USD�24�million�(INR�100�crore)�and�maximum�of�USD�71�million�(INR�300
crore).
• DHFL Venture Capital raising USD 250 Million real estate fund
DHFL�Venture�Capital,�the�asset�management�arm�of�Dewan�Housing�Finance
Corporation�(DHFL),�is�raising�a�USD�250�million�international�real�estate�fund.
DHFL�would�raise�about�USD�100�million�in�the�first�phase�in�the�next�2
months�from�offshore�investors.�The�company�plans�to�invest�the�money�in
various�real�estate�projects.�In�2006,�the�company�had�launched�its�first�USD
24�million�(INR�100�crore)�real�estate�fund,�in�which�DHFL�had�invested�USD�9
million�(INR�35�crore)�and�the�remaining�USD�15�million�(INR�65�crore)�was
raised�from�banks�and�financial�institutions.�DHFL�has�investments�in�various
real�estate�projects�in�Hyderabad,�Bangalore�and�Pune.
• Omaxe and Patiala Development Authority to develop a township
Omaxe,�an�NCR�based�real�estate�developer,�has�entered�into�a�joint�venture
(JV)�with�Patiala�Development�Authority�(PDA)�to�develop�an�integrated
township�at�Patiala�on�a�public-private-partnership�(PPP)�basis.�The�overall
investment�in�the�project�is�estimated�at�USD�190�million.�The�township�would
cover�an�area�of�336�acres�and�would�have�an�IT�park,�a�biotech�park�and�1,000
residential�plots.�As�per�the�agreement,�Omaxe�would�undertake�the�project
implementation�involving�design,�marketing,�sale,�development,�financing,
construction,�operation�and�maintenance.
Page 13 of 16
Real Estate and SEZs
Analyst: Nitin Dehadraya ©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
“The reason for our highinvestments in Indian real estatemarket despite the slow down inthe sector is that, the projectvaluations are more rational andthe terms of a deal are moreattractive today compared with ayear earlier.” Rajnish Changrani, vice-president, research andinvestments, Red Fort Capital.(Source: Financial Chronicle, September 11, 2008)
• Shyam Telelink to receive USD 1.7 billion from Sistema
Russia's�Sistema�plans�to�invest�USD�1.7�billion�in�2009�to�expand�theoperations�of�its�Indian�telecom�unit.�Sistema�currently�holds�73.7�percent�inShyam�Telelink�Ltd.�which�has�recently�acquired�a�CDMA�spectrum�for�telecomservice�areas�in�India.�Shyam�Telelink�launched�its�CDMA�services�in�the�stateof�Rajasthan�and�is�expected�to�launch�its�services�in�South�India�next�quarter.Shyam�Telelink�has�also�received�a�license�to�provide�GSM�services.
• Reliance Communications to invest USD 381 million in GSM
operations.
Reliance�Communications�(RCom),�the�telecom�arm�of�the�ADA�Group,�is�allset�to�launch�its�GSM�mobile�services�across�Mumbai,�Delhi�and�major�cities�inGujarat,�Punjab�and�South�India.�RCom�has�set�up�2,500�towers�each�in�Delhiand�Mumbai,�2�of�India's�biggest�telecom�circles,�with�an�investment�of�closeto�USD�381�million.�RCom�intends�to�issue�around�10,000�GSM�SIM�cards�toits�employees�for�the�soft�launch�in�Mumbai�and�Delhi.�The�company�is�aimingto�grab�25�percent�market�share�in�the�GSM�and�CDMA�segments�across�thecircles�in�which�it�operates.�
• Etisalat to acquire 45 percent stake in Swan Telecom for USD 900
mn
UAE-based�Emirates�Telecommunications�(Etisalat)�is�expected�to�acquire�a�45percent�stake�in�Indian�telecom�firm�Swan�Telecom�for�USD�900�million�toenhance�its�footprint�in�the�high-growth�Indian�telecom�market.�Swan�Telecom,controlled�by�real�estate�and�hospitality�business�group,�Dynamix�Balwas�(DB),holds�universal�access�service�licenses�in�13�telecom�circles�across�India.�Inaddition�it�is�in�the�process�of�acquiring�licenses�in�two�additional�telecomservice�areas.��
• Department of Telecom to auction 3G and Wimax spectrum
simultaneously
The�Department�of�Telecom�(DoT)�has�decided�to�conduct�a�simultaneousauction�for�third�generation�(3G)�mobile�services�and�broadband�wirelesstechnologies�such�as�WiMax.�The�decision�to�conduct�a�simultaneous�auctionwas�taken�so�that�the�operators�are�not�given�an�opportunity�to�speculate�or�tryto�get�any�undue�advantage�during�the�bidding�for�WiMax�spectrum.�The�moveis�likely�to�ensure�that�the�Government�gets�aggressive�bids�for�both�streamsof�radio�frequencies�given�the�uncertainty�of�the�end�result�during�the�auction.3G�and�WiMax�bidders�are�expected�to�pay�close�to�USD�440�million�and�USD220�million�respectively�for�pan-India�spectrums.�
• Idea Cellular gets USD 100 million IFC loan for new rollouts
International�Finance�Corporation�(IFC),�the�private�sector�funding�arm�of�theWorld�Bank,�is�expected�to�provide�a�USD�100�million�loan�to�Idea�Cellular�tolaunch�services�in�Bihar�and�strengthen�its�existing�networks.�The�loan�is�alsoexpected�to�help�Idea�Cellular�establish�a�national�long-distance�network�tomeet�growing�demand�for�services.�IFC�and�Idea�are�developing�a�project�toestablish�Pocket�Public�Calling�Offices�which�are�to�deliver�mobile�phone-basedcommunications�and�other�value-added�services�to�under-served�ruralcommunities�and�the�urban�unconnected�areas�in�India.�
Page 14 of 16
Telecom
Analyst: Mehul Desai©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
"We consider India as one of themost attractive markets with highpotential growth".Vladimir Evtushenkov, Chairman, Sistema JSFC. (Source: Dow Jones International News, September30, 2008 )
• Bhel plans to set up a locomotive plant
Power�equipment�major,�Bharat�Heavy�Electricals�(Bhel)�has�planned�to�set�upa�greenfield�project�for�manufacturing�locomotives�in�the�country.�It�isreportedly�in�talks�with�global�majors�such�as�French�train�maker�Alstom,German�rail�transit�solutions�firm�Bombardier�Transportation�GmbH,�Siemensand�General�Electric�for�forming�a�joint�venture.�Bhel�proposes�to�offer�49percent�equity�to�its�partner�in�the�new�venture.�The�project�is�expected�tostart�with�an�initial�investment�of�USD�219�million.�The�company�has�alreadyidentified�two�locations�for�the�same,�namely�Bhopal�in�Madhya�Pradesh�andVizag�in�Andhra�Pradesh.
• Essar Shipping to invest USD 1.9 billion by the end of the year
Essar�Shipping�Ports�and�Logistics,�is�expected�to�raise�USD�1.9�billion�by�theend�of�the�year�for�its�various�expansion�plans.�The�company�has�laid�out�anexpansion�plan�worth�USD�2.5�billion�in�the�next�3�years.�The�amount�would�beinvested�with�a�mix�of�equity�of�USD�600�million�and�the�rest�through�debt.�Thecompany�is�also�in�talks�with�a�few�global�container�port�operators�for�a�tie-up,to�foray�into�the�container�berth�operations�in�the�Indian�ports�sector.�The�Essargroup�is�expected�to�hold�a�majority�stake�in�the�joint�venture,�with�the�foreignpartner�expected�to�provide�expertise�in�container�operations.
• Safexpress to invest USD 220 million in the next 4 years
Logistic�solutions�provider,�Safexpress�is�planning�to�invest�close�to�USD�220million�in�the�next�4�years�to�expand�its�business.�The�company�plans�to�investa�sizeable�amount�in�the�North�East�as�this�region�has�been�a�major�market�forthe�company�over�the�years.�The�company�has�already�established�a�strongpresence�in�the�major�towns�in�the�region�and�is�keen�to�expand�the�existingnetwork.
• GIL inks enters into joint venture with Norway's DOF
Greatship�(India)�(GIL),�a�wholly-owned�subsidiary�of�Great�Eastern�Shipping,entered�into�a�50:50�joint�venture�with�DOF�Subsea�ASA�of�Norway.�The�jointventure�plans�to�focus�on�sub-sea�project�opportunities�in�the�Indiansubcontinent.�This�is�expected�to�be�the�first�deepwater�specialized�company�inthe�country�and�plans�to�work�on�offshore�development�in�east�coast.�Thecompany�is�expected�to�commence�operations�in�next�four�to�six�months.
• All cargo to form SPV for USD 440 million port project
AllCargo�Global�Logistics,�a�multi-modal�logistics�service�provider�plans�to�setup�two�greenfield�ports�on�both�coasts�of�India.�It�also�plans�to�soon�launch�aSpecial�Purpose�Vehicle�(SPV)�along�with�a�shipping�company�for�implementingthe�project.�The�construction�work�for�the�projects�is�expected�to�begin�in�ayear.�The�company�plans�to�initially�invest�USD�120�million�for�the�project�andlater�scale�up�its�contribution�to�USD�440�million�in�next�4-5�years.�Thecompany�is�also�looking�at�acquisition�opportunities�in�the�logistics�space�in�US,Japan�and�Germany.�
Page 15 of 16
Transport and Logistics
Analyst: Preeti Sitaram©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
"This region has been a majormarket for the company over theyears and therefore Safexpress iskeen to venture into every nookand corner in the North East." Vineet Kanaujia, General Manager (Marketing),Safexpress (Source: Assam Tribune, October 1, 2008)
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