sectorsnippets issue 24:tp4 whitepaper a4.qxd · 2008-10-27 · • magneti marelli of fiat group...

16
Sectoral Snippets India Industry Information Issue 24 - October 2008 KPMG IN INDIA

Upload: others

Post on 30-May-2020

2 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

Sectoral SnippetsIndia Industry Information

Issue 24 - October 2008

KPMG IN INDIA

Page 2: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

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.

Contact [email protected] if you are interested in receiving this newsletter on a

regular basis, or wish to unsubscribe.

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.

Page 3: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

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)

Page 4: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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)

Page 5: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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 (%)

Page 6: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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.)

Page 7: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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)

Page 8: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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)

Page 9: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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)

Page 10: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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 )

Page 11: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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)

Page 12: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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

Page 13: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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)

Page 14: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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 )

Page 15: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

• 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)

Page 16: SectorSnippets Issue 24:TP4 WhitePaper A4.QXD · 2008-10-27 · • Magneti Marelli of Fiat Group forms a JV with Unitech Machines ... (Source: The Press Trust of India Limited, September

in.kpmg.com

KPMG in India

MumbaiKPMG House, Kamala Mills Compound448, Senapati Bapat Marg,Lower Parel, Mumbai 400 013Tel: +91 22 39896000Fax: +91 22 39836000

Delhi4B, DLF Corporate ParkDLF City, Phase IIIGurgaon 122 002Tel: +91 124 307 4000Fax: +91 124 2549101

Pune703, Godrej CastlemaineBund GardenPune - 411 001Tel: +91 20 30585764/65Fax: +91 20 30585775

©�2008�KPMG,�an�Indian�Partnership�and�a�member�firmof�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.All�rights�reserved.KPMG�and�the�KPMG�logo�are�registered�trademarks�ofKPMG�International,�a�Swiss�cooperative.

The�information�contained�herein�is�of�a�general�nature�and�is�not�intended�to�address�the�circumstances�of�any�particular�individualor�entity.�Although�we�endeavour�to�provide�accurate�and�timely�information,�there�can�be�no�guarantee�that�such�information�isaccurate�as�of�the�date�it�is�received�or�that�it�will�continue�to�be�accurate�in�the�future.�No�one�should�act�on�such�informationwithout�appropriate�professional�advice�after�a�thorough�examination�of�the�particular�situation.

Reference material for preparing this document is

taken from following sources:

Asia Pulse

Business India

Business Standard

Business Today

Central Statistical Organisation (CSO)

Confederation of Indian Industries (CII)

Dow Jones International News

Factiva

Financial Express

Hindustan Times

India Infoline

Indian Brand Equity Foundation (IBEF)

Indian Business Insight

Infraline

India Today

Mergerstat

NASSCOM

Oil Asia Magazine

Petrobazar

Petromin News

Pharma Biz

Press Trust of India

RBI

Reuters News

The Asian Age

The Economic Times

The Financial Times

The Hindu Business Line

The Namibian

The Statesman

Times of India

Voice & Data Magazine

Xinhua News Agency

Antara News

Travers Smith

BangaloreMaruthi Info-Tech Centre11-12/1, Inner Ring RoadKoramangala, Bangalore – 560 071Tel: +91 80 39806000Fax: +91 80 39806999

ChennaiNo.10 Mahatma Gandhi RoadNungambakkamChennai 600 034Tel: +91 44 3914 5000Fax: +91 44 3914 5999

Hyderabad8-2-618/2Reliance Humsafar, 4th FloorRoad No.11, Banjara HillsHyderabad - 500 034Tel: +91 40 6630 5000Fax: +91 40 6630 5299

KolkataPark Plaza, Block F, Floor 671 Park StreetKolkata 700 016Tel: +91 33 22172858Fax: +91 33 22172868

Contact us:

For further information about this newsletter, please contact:

Ramesh Srinivas

Head - Consumer Markets

e-Mail: [email protected]

Tel: +91 (80) 3980 6800

Abizer Diwanji

Head - Financial Services

e-Mail: [email protected]

Tel: +91 (22) 3983 5301

Rajesh Jain

Head - Information, Communication & Entertainment

e-Mail: [email protected]

Tel: +91 (22) 3983 5300

Subramaniam Harishanker

Head - Infrastructure & Government

e-Mail: [email protected]

Tel: +91 (124) 307 4101

Yezdi Nagporewalla

Head - Industrial Markets

e-Mail: [email protected]

Tel: +91 (22) 3983 5101

Vikram Utamsingh

Head - Private Equity

e-Mail: [email protected]

Tel: +91 (22) 3983 5302

Research Inputs by KPMG’s India Research Center