sectorsnippets issue 35:tp4 whitepaper a4.qxd€¢ park hotels to add 4 more hotels in the country...
TRANSCRIPT
Sectoral SnippetsIndia Industry Information
Issue 35 - September 2009
KPMG IN INDIA
Page 2 of 18
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 Financial Services 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 35
Recent�statistics�released�by�the�CentralStatistics�Organisation�show�that�Indianindustrial�output�when�measured�by�the�index�ofindustrial�production�touched�an�annual�growthpace�of�6.8�percent�in�July�’09,�on�the�back�ofhigher�government�spending,�and�lowerborrowing�costs.�Between�October�2008�andApril�2009�alone,�the�Reserve�Bank�of�India�cutinterest�rates�no�less�than�six�times.
Domestic�consumption�also�remained�strongwith�an�8.8�percent�growth�in�consumer�goodswithin�the�manufacturing�segment.�Earlyindicators�for�industrial�activity�in�August�‘09�tooare�showing�an�uptrend,�including�steelproduction,�cement�dispatch�and�automobilesales,�but�it�remains�to�be�seen�if�industrialgrowth�this�year�can�pick�up�enough�pace�tooffset�the�impact�of�the�reduced�growth�inagriculture�on�the�country’s�GDP�growth.
I�hope�you�find�this�edition�of�the�snippetsinformative�and�useful.
Regards,Russell
Russell Parera
Chief Executive Officer
KPMG in India
©�2009�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.
In�spite�of�the�global�financial�crisis,�India’s�economy�expanded�by�6.1�percent�in
the�April-June�quarter�of�the�current�fiscal.1 The�increase�in�economic�output�was
driven�by�trade,�hotel�and�transportation�services,�as�well�as�mining�and
manufacturing.
While�this�growth�has�been�higher�than�the�5.8�percent�in�the�previous�quarter,
there�has�been�a�decline�when�compared�to�the�7.8�percent�economic�expansion
recorded�during�the�corresponding�period�of�the�last�fiscal.1
Poor�monsoons�are�also�likely�to�pose�macroeconomic�risks�to�GDP�growth�and
inflation.�A�below�normal�rainfall�has�also�caused�concerns�for�agricultural
production�as�only�40�percent�of�India’s�farmland�is�irrigated.2
While�it�is�premature�to�evaluate�how�much�growth�will�be�affected,�the�degree
of�damage�is�likely�to�depend�on�Indian�farmers’�ability�to�shift�to�shorter-duration
crops�and�post-monsoon�showers�that�will�determine�soil�moisture.
Nonetheless,�India’s�economy�has�still�managed�to�emerge�in�a�better�shape�than
most�of�its�regional�peers.�
Alongside,�India’s�Five�Year�Foreign�Trade�Policy�(2009-14)�was�announced�on
August�27,�2009.�The�short�term�objective�of�the�policy�is�to�seize�and�reverse
declining�trend�of�exports�by�providing�additional�support�to�those�sectors�which
have�been�hit�badly�by�recession�in�the�developed�world.
The�policy�has�set�an�annual�export�growth�target�of�15�percent�(USD�200�billion)
by�March�2011.�In�the�remaining�three�years�of�this�Foreign�Trade�Policy�i.e.�up�to
2014,�the�country�is�expected�to�come�back�on�the�high�export�growth�path�of
around�25�percent�per�annum.�By�2014,�the�policy�expects�to�double�India’s
exports�of�goods�and�services.�The�long�term�policy�objective�of�the�Government
is�to�double�India’s�share�in�global�trade�by�the�year�2020.3
Through�this�policy,�the�Government�in�tandem�with�industry�stakeholders�hopes
to�make�Indian�exports�globally�competitive�and�achieve�the�policy�objectives.
Indian EconomyPage 3 of 18
Analyst: Asmita Deshmukh©�2009�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.
1�Central�Statistical�Organization,�August�20092 www.usaid.gov3�Foreign�Trade�Policy�Document,�Government�of�India,�August�27,�2009
7.8 7.7
5.8 5.8 6.1
0
1
2
3
4
5
6
7
8
9
1Q FY'09 2Q 3Q 4Q 1Q FY'10
% C
hang
e Y-
o-Y
India’s GDP - Change from Previous Year
Source:�Central�Statistical�Organization,�August�2009
• Ashok Leyland signs supply agreement with WABCO
Indian�commercial�vehicles�manufacturer�Ashok�Leyland�has�reportedly�enteredinto�an�agreement�with�Belgium-based�WABCO�for�the�development�oftransmission�automation�technology�and�the�long�term�supply�of�automatedmanual�transmission�systems�from�2010�through�2015.�WABCO�is�expected�tosupply�to�Ashok�Leyland�its�new�Optidrive�modular�AMT�system�which,�asstated�in�a�WABCO�press�release,�is�a�breakthrough�in�transmission�automationtechnology�and�one�of�the�most�creatively�engineered�products�in�WABCO’sportfolio.�It�is�reported�that�Ashok�Leyland�will�be�the�first�manufacturer�in�Indiato�adopt�the�Optidrive�system�in�volume�production.
• Nissan to shift Micra production base to India
Japanese�automobile�major�Nissan�is�planning�to�transfer�the�manufacturing�ofits�small�car,�Micra,�to�India�from�the�UK,�post�which�the�company�is�expectedto�start�manufacturing�four�more�models�in�India.�Cost�advantages�and�a�highquality�vendor�base�is�key�reason�for�the�shift.�The�total�investment�is�expectedto�be�around�USD�411.5�million.�The�Micra�will�reportedly�be�manufactured�atNissan’s�upcoming�facility�in�Oradagam�near�Chennai.Production�at�thecompany’s�Chennai�plant�is�likely�to�commence�in�May�2010.
• Harley-Davidson to enter Indian markets
It�has�been�reported�that�American�motorcycle�manufacturer�Harley-Davidson�isready�to�enter�Indian�markets,�with�plans�to�establish�a�local�dealer�network.Sales�are�expected�to�start�next�year.�The�company�has�reportedly�establishedan�Indian�subsidiary�in�Gurgaon,�Haryana.�
Harley�Davidson�is�reported�to�have�initially�been�granted�permission�tocommence�operations�in�India�in�2007�but�these�plans�were�allegedly�put�onhold�due�to�an�import�duty�of�over�100�percent.
• General Motors to manufacture small cars in India
General�Motors�is�reportedly�planning�to�manufacture�its�small�car,�M300,�inIndia,�from�its�production�facility�in�Talegaon�which�is�currently�being�set�up.�Theproduction�from�India�is�likely�to�cater�to�the�Asian�export�markets.�It�is�believedthat�General�Motors�intends�to�develop�future�models�at�its�R&D�facility�inBangalore.
• Ford India begins export of cars from Chennai
Ford�India�Private�Limited�plans�to�export�cars�in�bulk�from�Chennai.�Thecompany�is�expected�to�initially�look�into�exporting�small�cars�to�countries�inAfrica�and�the�Asia-Pacific�region.�It�recently�shipped�158�cars�to�Durban,�SouthAfrica.�It�has�been�reported�that�the�company�plans�to�export�more�models�ofits�cars,�in�particular�its�proposed�small�cars.
Page 4 of 18
Auto and Auto Components
Analyst: Ranjeet Javeri and Kudrat Puri©�2009�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.
“Given the rapid development ofIndia's economy and physicalinfrastructure, this is exactly theright time to bring the world'sgreatest motorcycles to one of theworld's largest motorcyclingnations” Matthew Levatich, President and COO, Harley-DavidsonMotor Company
(Source: The Times of India, August 27, 2009 , ‘Harley-Davidson ready for India launch; sales to start 2010’)
• L&T Financial service to focus on new business segment
L&T�Financial�Service�(LTF),�the�captive�financing�arm�of�L&T�is�planning�to�forayinto�a�new�business�segment.�The�company�is�planning�to�set�up�a�commercialbank�and�enter�into�segments�such�as�general�insurance�and�assetmanagement.�The�focus�on�the�new�business�segment�is�part�of�company’sstrategy�to�have�presence�across�the�entire�gamut�of�financial�services�in�India.The�company�is�planning�to�start�the�general�insurance�business,�independentlyby�setting�up�a�separate�entity,�suspending�the�earlier�claim�to�form�apartnership�with�the�Travellers�Group�of�USA.�The�company�is�raising�fundsthrough�the�issue�of�Non-Convertible�Debentures�(NCDs),�amounting�to�USD102�million,�to�support�its�expansion�plans.
• Edelweiss in talks with Tokio Marine for Joint Venture (JV)
Edelweiss�Capital�has�plans�to�enter�the�life�insurance�business�through�a�JVwith�Japanese�insurance�group�Tokio�Marine�Holdings.�The�Japanese�insureralready�has�presence�in�India�through�a�non-life�JV�with�fertilizer�co-operativeIFFCO.�According�to�industry�sources,�Edelweiss�has�also�received�proposalsfrom�overseas�companies�such�as�German�insurer�Ergo,�Nippon�Life�and�aMalaysian�life�insurer.�Tokio�Marine�Holdings�is�the�holding�company�for�thegroup’s�non-life,�life�and�financial�services�businesses�which�includes�assetmanagement,�investment�banking�and�real�estate�management.
• MetLife enters health insurance segment
MetLife�India�Insurance�Company�Ltd�(MetLife)�has�entered�into�the�Indianhealth�insurance�segment,�one�of�the�fastest�growing�insurance�sectors,�withthe�launch�of�'Met�Health�Care’.�The�new�segment�is�likely�to�offer�customers�adaily�cash�benefit�in�case�of�hospitalization�and�a�lump�sum�benefit�in�case�ofcritical�illness�or�accidental�and�permanent�disability.�Further,�the�customers�arenot�required�to�undergo�any�medical�tests�to�avail�the�plan.�
The�launch�of�'Met�Health�Care’�is�likely�to�complement�the�company’s�existingproducts�and�services.�It�has�been�launched�with�comprehensive�training�to�allfinancial�advisors�of�the�company�across�the�country�to�provide�needs-basedsolutions�to�its�customers.
• Reserve Bank of India (RBI) sets up financial stability unit
RBI�has�constituted�a�Financial�Stability�Unit�(FSU)�to�review�the�financialsituation�owing�to�the�current�economic�crisis.�The�unit�is�expected�to�preparefinancial�stability�reports�and�develop�a�database�of�key�variables�which�arelikely�to�impact�financial�stability�in�coordination�with�the�supervisory�wings�ofthe�Reserve�Bank.�The�unit�is�also�likely�to�develop�a�time�series�of�a�core�set�offinancial�indicators�and�conduct�systemic�stress�tests�to�assess�resilience�in�thetime�of�economic�downturn�and�develop�models�for�assessing�financial�stabilityin�due�course.
• Birla Sun Life has undergone structural revamp
Aditya�Birla�Group�life�insurance�business,�Birla�Sun�Life�Insurance,�a�jointventure�with�Canada’s�Sun�Life,�has�reorganized�its�operations.�The�companyhas�structured�its�business�into�eight�zonal�centers;�two�each�in�the�north,�thesouth�and�the�west,�headed�by�zonal�operations�manager.�The�operations�wereearlier�handled�directly�by�the�branches.�The�new�structure�is�expected�toreduce�cost�and�improve�the�efficiency�of�the�company.�
Page 5 of 18
Banking and Financial Services
Analyst: Kunal Jain and Ruchika Anand©�2009�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.
15
38
20
38
-12
8
28
5
22
36
2227
-10
11
24
7
- 20
- 10
0
1020
30
40
50
Credit Growth Deposit Growth
perc
ent
SCBs SB
Bank
of In
dia PNE
ICICI
Bank
HDFCBa
nkAxis
Bank
Kotak
Mah
indra
Bank
Credit and Deposit growth in
Q1 2009-2010 (y-o-y)
Source: CRISIL Research, August 24, 2009
• Middle Eastern hypermarket chain sets eyes on India
Emke�Group,�which�operates�the�biggest�hypermarket�chain�in�the�Middle�Eastunder�the�LuLu�and�Al�Falah�brands,�is�entering�the�lucrative�Indian�market�bydeveloping�the�biggest�shopping�mall�in�Kerala,�India.�The�mall�is�expected�tohave�an�area�of�about�two�million�square�feet�and�is�likely�to�open�in�July,�2011.Following�its�completion,�the�group�has�plans�to�develop�more�malls�acrossIndia.�The�Group�controls�roughly�a�third�of�the�UAE's�organised�retail�marketand�is�planning�to�invest�USD�1.2�billion�to�expand�its�network�of�75supermarkets�and�hypermarkets�to�100�within�the�next�three�years.�
• India’s FMCG major Godrej Consumer Products plans overseas
acquisitions
Godrej�Consumer�Products�(GCPL)�is�actively�scouting�for�acquisitions�in�China,Latin�America�and�the�Middle�East.�The�company�aims�to�scale�up�thecontribution�of�its�international�business�from�the�present�23�percent�to�50percent�of�GCPL’s�annual�revenue.�Godrej�is�eyeing�companies�that�have�asignificant�presence�in�the�hair�color�and�soaps�segment�in�their�local�markets.At�present,�GCPL�has�a�presence�in�the�UK,�South�Africa�and�Middle�East.�Withinternational�valuations�at�an�all-time�low�and�several�attractive�companies�nowavailable,�the�company�is�open�to�deals�valued�up�to�approximately�USD�200million.
• Whirlpool to invest USD 61.7 million in India
Whirlpool,�India�has�decided�to�completely�alter�its�business�strategy�for�thefiscal.�The�Indian�of�the�home�appliances�major,�the�Whirlpool�Corp�of�US,�plansto�increase�its�investment�on�product�development,�marketing,�sales�andservice�infrastructure.�Towards�this,�Whirlpool�plans�to�invest�around�USD�61.7million�in�India�over�the�next�three�years.�For�the�past�one�year,�the�company’sfocus�was�on�cost-control�and�maximizing�margins.�However,�this�year�thecompany�has�aggressive�growth�plans�and�has�revised�its�revenue�growthprojections�from�15�percent�to�more�than�20�percent�for�this�fiscal.�Thecompany�plans�to�roll�out�a�new�line�of�refrigerators,�microwave�ovens�andwashing�machines�and�also�foray�into�side-by-side�and�three-door�refrigeratorsegments.
• Dubai-based Landmark expands its Indian footprint
The�Landmark�Group�is�looking�to�invest�about�USD�41.1�million�to�expand�itsfootprint�in�India.�The�group�currently�operates�60-odd�stores�in�India�and�islooking�to�open�another�20-25�stores�over�the�next�12�months.�The�focus�islikely�to�be�on�the�group’s�departmental�store,�home�decor�and�value�apparelbrands.�The�group�aims�to�add�8�Lifestyle�stores,�2�Home�Centres,�11�Maxstores�and�5�Splash�stores�to�its�present�count�of�15�Lifestyle�stores,�9�HomeCentres,�19�Max�stores�and�3�Splash�stores.�The�retailer�is�looking�to�increaseits�presence�in�tier�I�and�tier�II�cities�as�it�is�targeting�the�middle�and�uppermiddle�class�segments�of�the�Indian�population.�Landmark�has�targeted�agrowth�rate�of�about�25�percent�in�India.
Page 6 of 18
Consumer Markets and Retail
©�2009�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.
Analyst: Sonia Topiwala
“India’s organized retail market isgrowing at the rate of 40 percentand is anticipated to grow at afaster pace over the next threeyears, especially in view of thefact that global players and Indiancorporate houses are entering thefray in a big way. At the currentgrowth rate it is expected to touchUSD 90 billion by 2010” (Source: Indian Retail Research 2009 Edition,Northbridge Capital Research)
• Park Hotels to add 4 more hotels in the country
Park�Hotels,�the�hotel�subsidiary�of�Apeejay�Surrendra�Group,�is�expected�toopen�4�more�hotels�in�Hyderabad,�Pune�and�Jaipur�besides�opening�its�secondhotel�in�Kolkata�in�the�next�3-4�years.�The�company’s�Hyderabad�hotel�isscheduled�to�open�this�year�followed�by�hotels�in�Pune,�Jaipur�and�Kolkata.These�expansion�plans�are�expected�to�raise�the�inventory�of�rooms�of�thisluxury�boutique�hotel�chain�from�834�rooms�to�1,700�rooms.�The�company�islikely�to�invest�USD�205.3�million�in�the�hotel�developments�at�Hyderabad�(USD65.7�million),�Pune�(USD�55.4�million),�Jaipur�and�Kolkata�(USD�102.7�million)property.�
• Premier Inn expanding their hotel network in India
Premier�Inn�India�Pvt.�Ltd,�a�joint�venture�company�between�UK's�Premier�InnHotel�group�and�Emaar-MGF�Private�Limited�is�planning�to�set�up�5�propertiesby�2013.�It�is�likely�to�invest�USD�191.4�million�to�develop�5�properties�with�aninventory�of�700�rooms�by�2013.�Given�the�increasing�demand�for�mid-markethotels�in�India�the�company�is�planning�to�expand�in�this�category.�It�hasidentified�locations�in�Bengaluru�and�New�Delhi�for�its�up�coming�properties.�TheJV�has�long-term�plans�to�set�up�80�hotels�across�India�with�an�inventory�of12,000�rooms,�in�the�next�12�years.
• EIH plans for nine more hotels in India and abroad
East�India�Hotels�Ltd�(EIH),�the�flagship�of�the�Oberoi�Group,�is�on�expansionspree�despite�a�demand�slowdown.�The�company’s�9�projects�(including�4overseas)�are�under�development.�The�company�is�looking�at�the�managementmodel�of�business�rather�than�owning�the�hotel.�Amongst�its�new�projectsTrident-�BKC�is�the�only�owned�hotel,�the�remaining�hotel�projects�are�undermanagement�contracts.�The�Bandra-Kurla�property�with�440�rooms�is�expectedto�open�shortly.�Its�252-room�Oberoi�hotel�at�Abu�Dhabi�is�scheduled�to�open�in2011�and�other�projects�are�in�the�planning�stage.�The�company�was�also�lookingat�setting�up�another�hotel�in�Kolkata.�It�is�identifying�the�locations�in�Kolkata,but�has�not�made�much�development.�Based�on�the�location�and�market�thecompany�is�likely�to�decide�on�the�hotel�brand�-�Trident�or�Oberoi�brand.
• Duet India Hotels to ink USD 45 million
Duet�India�Hotels�plans�to�invest�USD�45�million�in�the�Indian�hotel�industry.�ThisIndian�arm�of�UK-based�investment�group�Duet�has�acquired�the�assets�ofanother�UK�firm,�Dawnay�Day�Hotels,�for�USD�33�million�last�year�and�a�landparcel�in�Hyderabad�for�USD�12�million�for�a�proposed�hotel�of�220-rooms.�Thecompany’s�hotels�are�under�construction�in�Jaipur,�Pune,�Ahmedabad�and�Indorefor�developing�total�650�rooms�in�these�cities.�All�these�properties�would�becategorized�under�the�mid-market�hotel�segment.
Page 7 of 18
Analyst: Pallavi Phatak
Hospitality
©�2009�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.
“Although there is a demand for1.6 million rooms in India, thereare only 1,30,000 operationalrooms, of which only 25-30 percent are in the mid-marketsegment. The high demand in themid-priced segment is due to thelack of reasonably acceptablehotels and this demand willcontinue to rise as awarenesslevels of this model increase” Aradhana Lal, VP, Sales and Marketing, Lemon TreeHotels(Source: Deccan Chronicle, August 25, 2009, Newplayers in mid-market hotel segment)
• HCL acquires a data centre in Parsippany, NJ
HCL�Technologies�(HCL)�has�acquired�a�data�centre�in�Parsippany,�New�Jerseyand�plans�to�invest�about�USD�15�million�in�this�facility.�HCL�believes�that�thisacquisition�would�enable�it�to�increase�its�global�footprint�and�meet�growingcustomer�demand�for�end-to-end�services,�including�near-shore�services�andcloud�computing.�HCL�took�over�this�data�centre�from�a�Fortune�500�companyin�October�2008�and�then�upgraded�the�technology�and�service�landscape.�It�isfurther�upgrading�the�facility�to�a�next-generation�data�centre�by�deploying�bestavailable,�eco-friendly�technologies�from�leading�vendors�and�acquiringcertifications.�The�company�plans�to�hire�more�than�100�local�US�workers�forthis�data�centre.�
• Mphasis acquires AIG's captive unit
MphasiS,�a�Hewlett�Packard�(HP)-controlled�IT�and�BPO�company,�has�acquiredAIG�Systems�Solutions�(AIGSS),�the�India�IT�captive�unit�of�AmericanInternational�Group�for�an�undisclosed�sum.�Mphasis�had�a�long�termrelationship�with�AIG�as�a�customer�since�2006.�The�company�believes�that�thecaptive�arm�has�tremendous�capabilities�in�the�insurance�vertical�and�wouldstrengthen�its�existing�capabilities.�This�acquisition�is�in�line�with�the�trend�of�ITcaptives�being�taken�over�by�the�service�provider,�which�has�had�an�ongoingrelationship�with�the�parent�company.
• Vertex to re-establish India operations
Vertex,�one�of�the�largest�UK-based�BPO�firms�is�re-establishing�its�Indiaoperations.�The�company,�which�had�a�workforce�of�around�3,000�in�2003,�hadscaled�it�down�to�the�current�400�people�due�to�the�exit�of�two�of�its�majorclients,�one�of�them�being�a�major�UK-based�telecom�firm.�However,�thecompany�is�now�again�looking�at�strengthening�its�presence�in�the�country.�
• HCL partners with Optimation in New Zealand
HCL�Technologies�has�entered�into�an�agreement�with�New�Zealand-basedOptimation�to�offer�innovative�and�flexible�solutions�to�New�ZealandGovernment�and�customers.�The�new�partnership�would�combine�HCL's�globalscale�and�demonstrated�capability�in�delivering�high�quality�IT�services�withOptimation's�local�New�Zealand�expertise.�The�HCL-Optimation�partnershipwould�offer�customers�a�solution�mix�from�a�range�of�partners�including�SAP,Oracle,�Microsoft�and�EMC.�Services�would�include�business�transformation,remote�infrastructure�management,�business�process�outsourcing,�applicationdevelopment�&�maintenance,�testing,�document�management�and�businessprocess�management,�service-oriented�architecture�and�middleware�upgrades.
• Indian Education Sector’s IT Spend to reach USD 704 million by
2012
According�to�Springboard�Research,�the�Indian�education�sector�is�expected�toincrease�its�IT�spending�from�USD�356�million�in�2008�to�USD�704�million�by2012,�at�a�CAGR�of�19�percent.�The�sector�would�primarily�focus�on�areas�suchas�networking,�basic�infrastructure,�and�IT�security�solutions�implementation.The�study�also�states�that�the�wireless�LAN�(WLAN),�storage�area�network(SAN),�and�ERP�are�likely�to�be�the�three�most�popular�IT�solutions�adopted�byIndian�education�institutions.�
Page 8 of 18
Analyst: Parnika Patil
IT / ITeS
©�2009�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.
“Emerging markets includingIndia, Australia and Japan aregrowth engines for us. We arelargely focusing on government,telecom and defence utilities andare expecting a growth of at least50 percent in Indian market thisfinancial year” Amit Chatterjee, Managing director, ComputerAssociates (India) Technologies
(Source: The Financial Express, August 17, 2009, ‘CAeyes 50 percent growth in India operations’)
• Dainik Bhaskar plans for an Initial Public Offering
DB�Corp,�publisher�of�Dainik�Bhaskar,�has�filed�a�Draft�Red�Herring�Prospectuswith�the�Securities�and�Exchange�Board�of�India�for�an�initial�public�offering(IPO).�The�company�proposes�sale�of�up�to�24.78�million�equity�shares.�Thecompany�plans�to�utilize�the�proceeds�of�the�IPO�to�fund�its�expansion�plansand�repaying�debt.�Warburg�Pincus-affiliated�company�Cliffrose�Investments�Ltd.which�holds�7.14�percent�stake�in�the�company�has�an�option�of�making�a�pre-IPO�placement.�The�company�reported�a�consolidated�net�profit�of�USD�9.8million�in�FY�2009�down�37�percent�from�the�previous�year.
• Sun TV consolidates FM Radio stations
Sun�TV�Networks�Ltd,�has�re-branded�its�FM�radio�station�other�than�those�ofTamil�Nadu�and�Pondicherry�under�Red�FM�brand.�The�re-branding�is�expectedto�involve�38�FM�radio�stations�including�23�stations�of�South�Asia�FM,�14stations�of�Kal�Radio�and�1�station�of�Udaya�FM�Pvt�Ltd.�The�consolidation�hashelped�Red�FM�gain�a�pan�India�network.�Sun�TV�Network�has�48.9�percentstake�in�Red�FM,�which�operated�radio�stations�in�Mumbai,�Delhi�and�Kolkata.
• Prime Focus to invest in equipment rental division
Prime�Focus�plans�to�invest�USD�8.3�million�towards�expansion�of�its�equipmentrental�division.�To�head�its�equipment�rental�division,�the�company�hasappointed�cinematographer�Kamalakar�Rao�as�Chief�Technology�Officer.�Thecompany�also�has�a�new�facility�for�its�equipment�rental�division�in�Film�City.�Thestrategic�location�would�help�the�company�tap�a�larger�film�fraternity�and�ad�filmmakers.�The�new�facility�would�also�house�a�maintenance�department�toprovide�technical�support�with�rental�services.
• India TV to launch another 24x7 news channel
Rajat�Sharma-promoted,�Independent�News�Services�(INS),�is�expected�tolaunch�a�new�24x7�news�channel:�India�TV�Wiz.�The�channel�is�expected�to�be�abilingual�channel�in�Hindi�and�English�and�is�expected�to�launch�in�the�next�sixmonths.�The�channel�is�expected�to�be�simultaneously�launched�on�new�mediaand�mobile�platforms.�The�channel�could�also�be�available�on�INS's�digital�mediabusiness,�India�TV�Interactive.
• Discovery Networks gets approval to launch three channels
Discovery�Networks,�has�received�approval�from�Information�and�BroadcastMinistry�to�launch�three�new�English�channels�in�India.�The�channels�include:Discovery�Science,�Discovery�Turbo�and�Discovery�HD.�With�the�launch�of�thesechannels,�Discovery’s�channel�offering�would�extend�to�six�channels.�Discoverycurrently�broadcasts�Discovery�Channel,�Discovery�Travel�and�Living�and�AnimalPlant�in�India.�Discovery�Science�and�Discovery�Turbo�are�expected�to�belaunched�on�both�analog�and�digital�platforms,�while�Discovery�HD�on�digitalplatform�alone.�The�launch�of�these�channels�reflects�the�company’s�focus�inincreasing�the�reach�and�distribution�in�the�Indian�market.�
• Warburg Pincus plans to acquire stake in DB Corp’s radio business
Synergy�Media�Entertainment�(SME),�the�FM�Radio�broadcasting�arm�of�DBCorp,�has�received�approval�from�Foreign�Investment�Promotion�Board�to�getWarburg�Pincus�as�an�investment�partner.�Warburg�Pincus,�is�expected�toacquire�3.2�percent�stake�for�USD�0.3�million,�valuing�the�radio�business�at�USD9.8�million.�SME�operates�17�radio�stations�under�the�brand�My�FM.
Page 9 of 18
Media
Analyst: Mehul Desai©�2009�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 launch of three newnetworks reflects the company'sfocus on India and furthers ourstrategy of increasing our reachand distribution in key marketsaround the world” Tom Keaveny, Executive Vice President and ManagingDirector, Discovery Networks Asia-Pacific
(Source: BBC News, August 13, 2009, ‘ Discoverynetwork secures approval to launch three newchannels in India’)
• PM inaugurates Cairn’s Barmer oil fields
Cairn�India’s�Mangala�oil�fields�were�officially�inaugurated�by�the�Prime�Minister(PM)�Manmohan�Singh�on�the�August�29,�2009.�The�PM�has�dedicated�thesefields�to�the�nation.
With�this�the�oil�and�gas�sector�has�witnessed�yet�another�historic�event�whichhas�the�potential�to�change�the�dynamics�of�the�sector.�The�Mangala�oil�field�isexpected�to�touch�its�peak�production�of�125,000�barrels�per�day�(bpd)�in�thefirst�half�of�2010�whereas�the�aggregate�peak�production,�including�Bhagyamand�Aishwarya�fields�is�expected�to�be�175,000�bpd.�These�fields�would�helpmeet�20�percent�of�India’s�domestic�production�and�the�additional�oil�is�thusexpected�to�bring�in�the�required�relief�for�the�country.�However,�issuespertaining�to�its�cess�liability�and�the�crude�oil�pricing�concerns�still�prevail.�Cairnand�Oil�and�Natural�Gas�Corporation�(ONGC)�have�spent�USD�2�billion�on�theRajasthan�block�upto�now�and�plan�to�spend�another�USD�1.5�to�1.8�billion�in�thenext�two�years.
• The battle continues between the two brothers
The�on-going�row�between�Mukesh�Ambani�led�Reliance�Industries�Ltd.�(RIL)and�Anil�Ambani�led�Reliance�Natural�Resources�Ltd.�(RNRL)�continues�with�thelatter�releasing�advertisements�in�newspapers�and�alleging�that�RIL�isdeliberately�under�producing�in�order�to�create�an�artificial�scarcity�in�the�marketand�has�also�questioned�RIL’s�gas�field�capex.
RIL�on�the�other�hand�has�stated�that�customers�for�about�one-fourth�of�theinitial�output�were�yet�to�draw�gas�due�to�failure�at�their�ends.�Regarding�its�gasfield�capex,�RIL�stated�that�the�increase�in�its�capital�expenditure�was�due�tovarious�factors�such�as�increase�in�reserves�by�2.5�times,�doubling�of�its�peakproduction,�hike�in�the�charges�of�equipment�and�services�industry,�field�life�andothers.�In�addition,�RIL�also�termed�the�advertisements�as�malicious�and�ill-informed.
• Australia approves gas deal with India, China
Australia�has�approved�a�mammoth�energy�project�that�is�expected�to�supplynatural�gas�to�India�and�China.�The�Gorgon�liquefied�natural�gas�(LPG)�plant�offWestern�Australia�holds�more�than�40�trillion�cubic�feet�of�gas.�The�project�is�aJV�between�Chevron,�Shell�and�ExxonMobil,�which�has�signed�a�USD�41�billioncontract�with�PetroChina�of�China�and�USD�21�billion�contract�with�Petronet�ofIndia.
• Reliance Gas wins rights to retail gas in three cities
A�unit�of�RIL,�Reliance�Gas�has�won�rights�to�retail�Compressed�Natural�Gas(CNG)�to�automobiles�and�pipe�natural�gas�to�households�in�three�cities�inAndhra�Pradesh�and�Madhya�Pradesh.�Reliance�had�to�compete�with�the�JV�ofAdani�Energy�and�Indian�Oil�Corporation�Ltd.�(IOC)�in�Rajahmundry�in�AndhraPradesh�and�emerged�as�a�winner.�The�company�also�won�the�rights�for�Yannanin�Andhra�Pradesh�and�Shahdol�in�Madhya�Pradesh,�where�it�was�the�solebidder.
Page 10 of 18
Oil and Gas
Analyst: Sidharth Balakrishna and Suman Lala©�2009�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.
“Despite the increase in costs,Goldman Sachs' study of themajor E&P projects across theworld verifies that the finding anddevelopment costs of about USD 5per barrel of oil equivalent areamongst the lowest in the world” PMS Prasad, President and CEO (Petroleum), RelianceIndustries Ltd.
(Source: The Economic Times, August 24, 2009, ‘Gasrow: RIL wants ADAG's malicious ad campaign nippedin bud’)
• Fortis to acquire 10 Wockhardt hospitals, in line with its plan to
enhance its footprint in India
Wockhardt�Hospitals�has�agreed�to�sell�8�operating�hospitals�and�2�hospitalprojects�under�construction�(across�Mumbai,�Bengaluru,�and�Kolkata)�to�FortisHealthcare,�for�a�consideration�of�USD�187�million.�Post�this�acquisition,�Fortis’bed�capacity�is�expected�to�be�increased�by�1902�beds�to�~5180�beds�spreadover�38�hospitals,�thereby�strengthening�its�position�in�the�healthcare�businesssegment�in�Southern,�Eastern�and�Western�regions�of�India.�
Fortis�has�also�announced�its�plans�to�raise�around�USD�206�million�through�a2:5�rights�issue�of�shares.�The�funds�are�likely�to�be�utilized�primarily�forrepayment�of�debt,�setting�up�a�hospital�in�Gurgaon,�redemption�of�preferenceshares,�and�acquisitions.
Wockhardt�is�expected�to�use�the�funds�to�retire�its�debt�as�well�as�to�fund�itsexpansion�plans.�
• UNICEF awards contract to Panacea Biotec for supplying its
‘EasyFive’ pentavalent vaccine
Panacea�Biotec,�one�of�India’s�leading�biotechnology�companies�,�has�received�athree-year�contract�worth�USD�222.4�million�from�UNICEF�for�supplying�its‘EasyFive’�pentavalent�vaccine.�EasyFive�is�used�for�immunizing�children�againstfive�diseases�–�Diptheria,�Tetanus,�whole�cell�Pertussis,�Hepatitis-B,�andHemophilus�Influenza�Type�B.�
It�has�received�pre-qualification�by�WHO�for�other�two�combination�vaccines,EasyFour�and�Ecovac.�The�company�is�also�a�pre-qualified�supplier�of�Oral�PolioVaccine�and�Hepatitis-B�vaccines�to�UN�agencies.
• Indian pharmaceutical industry attracts USD 441 million FDI in 2007-09
According�to�the�Department�of�Pharmaceuticals,�the�Indian�pharmaceuticalindustry�received�around�USD�441�million�through�the�Foreign�DirectInvestment�(FDI)�route�during�the�period�April�2007�to�April�2009,�from�36countries.�Around�82�percent�of�the�total�investment�was�contributed�by�the�topfive�countries,�namely�Mauritius,�Singapore,�US,�UAE�and�Canada.�Mauritiusalone�accounted�for�56�percent�of�the�investments�flown�in.�There�were�around208�foreign�collaborators�for�drugs�and�pharmaceuticals�during�the�period.
• Ranbaxy ventures into the protein supplements market with the
launch of ‘Revitalite’
Ranbaxy�Laboratories,�one�of�India’s�leading�pharmaceutical�companies,�forayedinto�the�protein�supplements�market�through�the�launch�of�its�proteinsupplement�‘Revitalite’.�The�protein�supplements�market�in�India�is�estimated�tohave�been�growing�at�6�percent�annually�and�is�currently�valued�at�around�USD52�million.�This�foray�strengthens�Ranbaxy’s�foothold�in�the�nutritionalsupplement�market.
• Perrigo Company acquires 85 percent stake in Vedants Drugs
Perrigo�Company,�a�US-based�over-the-counter�pharmaceutical�productmanufacturer,�has�reportedly�purchased�an�85�percent�stake�in�Vedants�Drugsand�Fine�Chemicals,�a�Mumbai-based�contract�manufacturing�company,�for�USD12�million.�Perrigo�is�reportedly�planning�to�make�India�its�manufacturing�baseand�transfer�a�part�of�its�active�pharmaceutical�ingredients�production�fromIsrael�and�Germany�to�India.
Page 11 of 18
Pharma
Analyst: Nandita Kudchadkar and Parnika Dayal
©�2009�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 Indian generic industry iswell positioned to benefit from thestructural and macro-economicchanges affecting the healthcareindustry globally...” A report by Noble, a UK investment bank
(Source: Livemint, August 2, 2009, ‘USD 70 bn drugs togo off-patent, benefiting India: report’)
• Prime Minister to lay foundation stone for USD 1.2 billion power
equipment manufacturing unit proposed by NTPC
The�public�sector�giants�National�Thermal�Power�Corporation�(NTPC)�and�BharatHeavy�Electricals�Limited�(BHEL)�have�joined�hands�to�set�up�a�major�powerprojects�equipment�manufacturing�unit.�NTPC�–�BHEL�Power�Projects�Pvt.�Ltd,the�joint�venture�company,�incorporated�last�year�by�NTPC�and�BHEL,�aims�toset�up�a�green�field�unit�that�is�expected�to�manufacture�equipment�for�powerplants.�They�have�proposed�a�USD�1.2�billion�power�equipment�manufacturingunit�at�Mannavaram�in�Chittoor�district�of�Andhra�Pradesh.�The�project�isestimated�to�provide�6,000�jobs�directly�and�about�30,000�jobs�in�400�ancillaryunits.
• JSW Energy plans to hit the capital markets in the third week of
October to raise around USD 617.3 million by diluting 10 percent
equity stake
JSW�Energy�plans�to�raise�approximately�USD�617.3�million�in�the�third�week�ofOctober�by�diluting�10�percent�equity�stake.The�company�plans�to�deployapproximately�USD�439.3�million�from�the�proceeds�of�the�IPO�for�developingidentified�projects�aggregating�to�2,790�MW�over�the�next�four�years.�A�part�ofthe�funds�is�likely�to�be�used�for�setting�up�a�400�KV�transmission�line,�a�miningventure�and�to�service�debt.
JSW�Energy�is�the�third�power�firm�to�go�for�a�public�issue�this�year�after�state-run�NHPC�Limited�and�Adani�Power.�
• Reliance Power acquires Special Purpose Vehicle (SPV) to
implement Jharkhand's Tilaiya UMPP
The�Anil�Ambani-led�Reliance�Power�acquired�Jharkhand�Integrated�Power,�aSPV�floated�to�implement�the�4,000-MW�Tilaiya�Ultra�Mega�Power�Plant�project,from�Power�Finance�Corp�(PFC).�This�is�the�third�Ultra�Mega�Power�Plantacquired�by�the�company.
The�coal-based�thermal�power�plant�is�being�developed�in�Jharkhand�at�anestimated�cost�of�USD�4.1�billion.
• Petronet LNG agrees to arrange 2.2 million tonnes of liquefied
natural gas for NTPC plant - NTPC seeks gas for its Kayamkulam
power plant
Petronet�LNG�has�agreed�to�provide�2.2�million�tonnes�of�liquefied�natural�gas(LNG)�per�year�to�NTPC�Ltd.�NTPC�is�increasing�capacity�by�1950�MW�at�its�350megawatt�(MW)�Kayamkulam�power�plant�in�Kerala.�The�initial�contract�isexpected�to�be�signed�for�1.2�million�tonnes�a�year�on�a�firm�basis,�but�in�futurePetronet�is�also�expected�to�arrange�for�the�balance�amount.�
Earlier�in�the�month,�Petronet�also�inked�a�deal�with�Exxon�Mobil�Corp�to�buy�1.5million�tonnes�of�LNG�a�year�for�20�years�from�Australia's�Gorgon�project�to�bere-gassified�at�its�upcoming�Kochi�terminal�in�south�India.
Page 12 of 18
Power
Analyst: Sidharth Balakrishna and Sonam Gosalia©�2009�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: IDFC-SSKI Research, Enam Research,
Company Websites, Inudustry Sources
LNG: Existing and Proposed Capacity
MTPAExisting
Capacity Expansion
Commisioned
by
Petronet�LNG�-Dahej 10.0 - -
Petronet�LNG�-Kochi Nil� 2.5 FY�2011
Shell�Haziradebottlenecking 4.0 - -
Spice�Energy,GSPC�-�AdaniConsortium
Nil 7.5 FY�2012
Dabhol Nil 5.0 FY�2010
• Government to roll out USD 46.3 billion housing plan for slum
dwellers
The�Government�of�India�is�expected�to�roll�out�a�massive�plan�to�build�5�milliondwelling�units�in�400�towns�and�cities�under�the�programme�named�Rajiv�AwasYojana.�To�make�this�project�a�reality,�the�ministry�of�housing�and�urban�povertyhas�sought�an�allocation�of�USD�46.3�billion.�The�project�is�expected�to�free�upthousands�of�acres�of�Government�land�across�the�country�and�would�be�ofspecial�interest�to�real�estate�developers�to�undertake�this�slum�rehabilitationproject.
• Housing venture capital fund by LIC housing Finance
LIC�Housing�Finance�Ltd.�is�planning�to�float�a�real�estate�venture�capital�fund,which�will�be�primarily�owned�by�Life�Insurance�Corporation�and�its�associates.The�initial�corpus�size�is�expected�to�be�USD�103�million�and�the�fund�is�expectedto�invest�primararily�in�real�estate�developers�and�construction�companies.
• IFCI to expand presence in real estate business
IFCI�Infrastructure�Development�Ltd.,�the�real�estate�arm�of�state�ownedInfrastructure�Finance�Corporation�of�India�(IFCI)�is�likely�to�increase�itspresence�in�the�real�estate�business.�The�company,�which�launched�servicedapartment�project�in�Delhi,�is�expected�to�come�up�with�similar�projects�inLucknow,�Guwahati�&�Delhi.�A�total�of�2�two�million�sq.�ft�area�is�expected�to�bedeveloped�in�these�three�cities.
• Government offers 1 percent interest subsidy on housing loans and
also offers incentives to developers
In�a�move�that�may�help�real�estate�industry,�the�Government�of�Indiaannounced�1�percent�interest�subsidy�on�housing�loans�upto�USD�0.02�million.This�move�is�expected�to�benefit�the�consumers�especially�in�Tier�II�&�III�cities.Besides�that,�the�Government�has�also�offered�tax�holidays�to�developers�forprojects�approved�between�April�1,�2007,�and�March�31,�2008,�with�acompletion�deadline�on�or�before�March�31,�2012.�This�may�turn�out�to�be�anindirect�benefit�to�the�consumer,�provided�the�developer�passes�the�advantageto�the�buyer.
• 3C Company launches USD 309 million housing project in National
Capital Region (NCR)
Real�estate�firm�3C�Company�is�expected�to�launch�USD�309�million�worth�ofhousing�project�in�NCR.�The�project�would�be�funded�by�real�estate�privateequity�firm�Red�Fort�Capital,�which�already�invested�USD�30�million�on�thisproject.�The�project�is�likely�to�be�spread�over�40�acres�which�will�have�upto3,000�residential�units�and�is�expected�to�cost�USD�226�million�with�a�realizationvalue�of�approximately�USD�319�million.
• Merlin Launches Luxury Housing Project
Merlin�Group,�a�Kolkata-based�developer,�has�launched�a�luxury�housing�projectin�Kolkata.�The�project�is�said�to�comprise�of�two�G+3�towers�with�24�luxuryapartments�of�three�and�four�bedrooms.�The�three�bedroom�apartment�is�said�tohave�an�area�of�1,800�square�feet�and�the�four�bedroom�is�said�to�have�an�areaof�2706�square�feet.�The�project�is�designed�by�architect�Ritam�Sarkar�of�Sarkar&�Associates.
Page 13 of 18
Real Estate and SEZs
Analyst: Rajiv Parekh©�2009�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: Real Estate Newsletter, India Infoline,
August 14, 2009
Market Size of Housing Requirement by 2011
in Major Indian Cities
Cities
Housing
Requirements
(Units)
Area
Requirement
(million sq.ft.)
Market Size
(USD billion)
Mumbai 404673 324 13
Pune 134264 107 4
NCR 547434 438 18
Bengaluru 327694 262 11
Chennai 157471 126 5
Hyderabad 225555 180 7
Kolkata 265242 212 9
Total 2062333 1650 67
Page 14 of 18
Telecom
Analyst: Neha Dayal and Rishabh Chadha ©�2009�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.
• 3G and WiMax final reserve price announced
The�gridlock�over�the�reserve�price�for�the�3G�spectrum�and�WiMax�has�finallybeen�resolved.�The�Empowered�Group�of�Ministers�(EGoM)�headed�by�PranabMukherjee�fixed�the�reserve�price�for�the�3G�auction�at�INR�35�billion�and�forthe�WiMax�spectrum�at�INR�17.5�billion.�The�government�plans�to�implement�theauction�within�the�next�three�months�and�raise�close�to�INR�250�billion�throughthe�same.
• MNP rollout likely by December
The�Telecom�Regulatory�Authority�of�India�announced�that�it�intends�to�launchthe�MNP�service�by�December�01,�2009.�The�earlier�date�planned�wasSeptember�20,�2009.
• Bharti offers MTN USD 13.1 billion
Bharti�is�believed�to�have�offered�MTN�USD�13.1�billion�in�cash�for�the�USD�23billion�deal.�Earlier�Bharti�had�offered�to�pay�USD�13�billion�in�cash.�Thissweetener�is�believed�to�have�been�added�to�lure�the�MTN�investors�who�arenot�completely�convinced�about�the�deal�and�may�even�decide�to�wait�for�ahigher�price.
• Datacom and Tata Tele ink infrastructure sharing agreement
Datacom�solutions,�telecom�subsidiary�of�consumer�goods�giant�Videocon,�isbelieved�to�have�entered�into�a�tower�sharing�agreement�with�Tata�Teleservices.As�per�the�agreement,�Tata�Teleservices�Limited�(TTSL)�is�likely�to�provide�thetransmission�services�and�Wireless�Tata�Tele�Infoservices�Limited�(WTTIL),�thejoint�venture�between�TTSL�and�Quippo,�will�provide�the�passive�infrastructure�inthe�form�of�towers�and�shelters.�Videocon�has�licenses�to�operate�in�14�telecomcircles�and�plans�to�invest�INR�10�billion�on�towers�within�this�fiscal.�BothDatacom�and�TTSL�are�rolling�out�their�GSM�services�together�and�this�agreementis�likely�to�be�instrumental�in�helping�them�to�save�on�operating�costs.
• Reliance Communications inks infrastructure sharing pact with S Tel
Reliance�Communications�is�believed�to�have�signed�an�infrastructure�sharingagreement�with�S�Tel,�a�new�service�provider�who�has�licenses�to�roll�out�itsservices�in�six�circles.�The�circles�include�Orissa,�Bihar,�Himachal�Pradesh,�NorthEast,�Assam�and�Jammu�and�Kashmir.�The�agreement�is�understood�to�includetelecom�towers�sharing,�transmission�for�BTS�sites�and�fiber�backbone�forintercity�connectivity.
44
79
83
85
108
0 20 40 60 80 100 120
Idea Cellular
Vodafone Essar
Reliance
BSNL
Bharti Airtel
Subscriber Base (Millions)
Others17%
Idea Cellular9%
Vodafone Essar16%
Reliance17%
BSNL18%
Bharti Airtel23%
Top Telecom Operators, Subscriber Base and Market Share (July, 2009)
Source:�TRAI,�August�20,�2009
• Madhya Pradesh (MP) to Build Integrated Logistics Park
The�MP�Government,�as�a�part�of�its�initiative�to�make�the�state�a�warehousingand�logistics�hub,�is�planning�to�develop�an�integrated�logistics�hub.�The�MPWarehousing�and�Logistics�Corporation�(MPWLC)�has�currently�identifiedPawarkheda,�Jabalpur�and�Ratlam�as�the�locations�for�developing�the�logisticshub.�The�Government�is�planning�to�develop�this�hub�on�a�public�privateparticipation�(PPP)�basis�and�is�currently�talking�to�some�private�players�to�takethis�initiative�forward.�The�first�phase�is�said�to�be�developed�on�120�acres�ofland�and�is�expected�to�be�operational�in�next�18�months.�
• DHFL in JV with Redwood
Dewan�Housing�Finance�Corporation�(DHFL)�Venture�Capital�has�entered�into�a50:50�joint�venture�(JV)�with�Redwood�Group,�a�real�estate�firm,�to�raise�a�fundinorder�to�invest�in�Indian�logistics�and�warehousing�industry.�The�fund�is�said�tobe�targeting�to�raise�about�USD�150�to�200�million�from�international�investorsand�about�USD�31.4�to�41.8�million�from�the�local�market.
• LDA, ABG Ports to offer Logistics Services
Louis�Dreyfus�Armateurs�(LDA),�the�French�shipping�and�logistics�company,�andABG�Ports�Pvt.�Ltd.�have�formed�a�49:51�JV�to�offer�various�port�and�logisticesservices�to�various�customers�and�ports�in�India.�The�new�company�being�calledABG-LDA�is�expected�to�invest�about�USD�80�million�by�October�2009�forbuying�barges�and�cranes�for�operations.�The�company�is�projecting�earnings�ofabout�USD�37�to�62�million�in�the�current�year.�The�company�is�planning�to�offercustomized�barging�solutions�at�Haldia.
• India to Hold Road Show at Zurich
The�Indian�Government�is�planning�to�hold�a�road�show�at�Zurich,�financialcenter�of�Switzerland,�to�invite�bids�for�USD�20.68�billion�worth�road�projects�of14,395�kilometers�to�be�awarded�in�2009-10.�The�Government�is�also�planning�tovest�the�ownership�of�roads�with�National�Highways�Authority�of�India�(NHAI),which�in�turn�can�lease�them�out�to�private�developers�who�could�raise�loanagainst�this�property.�Currently,�the�roads�are�entrusted�with�the�authority�whichlicences�them�to�private�developers�who�cannot�provide�such�roads�as�securityto�avail�loans�from�banks�and�other�institutions.
• JSW to Develop Ports in India and Overseas
JSW�Group�is�planning�to�develop�ports�in�India�and�overseas�as�a�part�of�itsbackward�integration�process.�The�company�is�planning�to�develop�four�portsalong�the�Indian�coastline�and�one�each�in�Mozambique�and�Chile.�TheMozambique�port�is�expected�to�be�developed�in�a�51:49�JV�with�the�localGovernment�and�the�one�in�Chile�is�to�be�developed�independently�by�JSW.
• DCI to Buy Three Dredgers
Dredging�Corporation�of�India�(DCI),�the�Government�owned�dredging�company,is�planning�to�buy�three�dredgers�at�a�cost�of�about�USD�354�million.�Thecompany�is�planning�to�expand�its�fleet�based�on�the�upcoming�opportunity�of275�dredging�projects�under�the�national�maritime�development�programme(NMDP).�DCI�is�said�to�be�buying�the�dredgers�from�Holland-based�IHC�HollandBV.�The�company�is�looking�at�inducting�the�three�dredgers�to�its�fleet�by�2013.
Page 15 of 18
Transport and Logistics
Analyst: Nitin Dehadraya©�2009�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.
277.8
91.9131
106.4
440.6
130189 178.7
0
100
200
300
400
500
POL Coal Iron Ore Container
Mill
ion
tonn
es
2008 - 09E 2013 - 14P
Projected Commodity-wise traffic at
Indian Ports
Source: Indian Ports Association, Crisil Report on
Ports 2009.
Page 16 of 18
©�2009�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.
Reference material for preparing this document was takenfrom the following sources:
Note:1�USD=�48.6�INR
Foreword:
• Economic�Times,�'With�6.8%�rise,�July�IIP�backs�up�revival',�12�Sep�2009
• Steel�Guru,�'Macroeconomic�indicators�-�Indian�industrial�production�rises�for�7�straight�month',�13�Sep�2009
• Bloomberg,�India’s�Industrial�Production�Rises�for�Seventh�Month',�11�September,�2009
Auto
• The�Hindu�Business�Line,�-�Ashok�Leyland�signs�supply�agreement�with�WABCO�–�August�12,�2009
• The�Times�of�India��-�Nissan�to�shift�Micra�production�base�to�India,�August�28,�2009
• The�Times�of�India,�Harley-Davidson�to�enter�Indian�markets,�August�27,�2009
• Indian�Business�Insight��-�General�Motors�to�manufacture�small�car�in�India,�August�18,�2009�
• Business�Standard,�Ford�India�begins�export�of�cars�from�Chennai,�August�10,�2009
BFSI:
• Business�Standard,�L&T�Financial�service�to�focus�on�new�business�segment,�August�18,�2009�
• The�Economic�Times,�Edelweiss�in�talks�with�Tokio�Marine�for�Joint�Venture,�August�10,�2009�
• The�Financial�Express,�MetLife�enters�health�insurance�segment,�August�10,�2009�
• Livemint,�Reserve�Bank�of�India�(RBI)�sets�up�financial�stability�unit,�August�13,�2009�
• The�Economic�Times,�Birla�Sun�Life�has�undergone�structural�revamp,�August�27,�2009
CM:
• Rediff�Business,�Swiss�food�chain�sinks�its�teeth�into�India’s�grub�hub,�July�24,�2009�
• Datamonitor,�GCPL�to�expand�international�business�through�acquisitions,�August�06,�2009�
• Economic�Times,�Whirlpool�to�alter�its�India�biz�strategy,�August�13,�2009
• Fiber2fasion,�Landmark�Group�plans�expansion�of�store�count,�August�27,�2009
• Economic�Times,�Wipro�Consumer�Care�eyes�Africa�for�growth,�August�26,�2009
Hospitality:
• The�Economic�Times,�Park�may�invest�Rs�1k�crore�to�add�4�hotels,�August�10,�2009
• The�Hindu�Business�Line,�Premier�inn�plans�80�hotels,�August�10,�2009
• The�Times�of�India,�EIH�expansion�plan�bucks�slump,�August�24,�2009
• The�Economic�Times,�UK's�Duet�lines�up�$45�mn�for�India�hospitality�push,�August�10,�2009
IT:
• The�Economic�Times,�‘HCL�acquires�data�centre�in�Parsippany’�August�04,�2009
• The�Financial�Express,�‘Mphasis�acquires�AIG's�captive�unit’,�July�22,�2009
• The�Financial�Express,�Vertex�to�re-establish�India�operations,�August�11,�2009
• Deccan�Chronicle,�‘HCL�Tech�partners�New�Zealand�firm,�August�26,�2009
• Evalueserve-EmergingMarketsNOW,�‘Indian�Education�Sector�to�Hike�its�IT�Spend�to�USD�704�million�by�2012’,August�26,�2009
Media:
• Indiantelevision.com,�Dainik�Bhaskar�plans�public�float;�DNA�losses�at�Rs�1.5�bn�in�FY'08,�August�17,�2009�
• BBC�News,�Discovery�network�secures�approval�to�launch�three�new�channels�in�India,�August�13,�2009�
• Indiantelevision.com,�Prime�Focus�to�invest�USD�8.3�million�in�equipment�rental�division,�August�13,�2009�
• Indo-Asian�News�Service,�Rajat�Sharma�to�launch�another�24x7�news�channel,�August�12,�2009
• Indiantelevision.com,�Warburg�Pincus�to�take�3.2�percent�in�Dainik�Bhaskar’s�radio�arm�for�USD�0.3�million,�August18,�2009�
Page 17 of 18
©�2009�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.
Oil and Gas:
• The�Economic�Times,�PM�launches�Cairn�India's�oil�fields�in�Barmer,�29th�August,�2009
• The�Economic�Times,�RIL�denies�'gas�hoarding'�charges,�31st�August,�2009�and�Gas�row:�RIL�hits�back,�says�KGcost�among�world's�lowest,�25th�August�2009
• The�Economic�Times,�Australia�approves�huge�gas�deal�with�India,�China,�26th�August,�2009
Pharma:
• http://www.fortishealthcare.com,�Fortis�to�acquire�10�hospitals�from�Wockhardt,�August�24,�2009
• http://www.livemint.com,�Fortis�to�spend�Rs660�cr�on�hospitals,�pref-cap,�retiring�debt,�August�12�2009
• www.panacea-biotec.com,�EasyFive*�Injects�Cheer�for�Panacea�Biotec;�USD�222.37�million�Award�for�PanaceaBiotec�by�UNICEF,�August�19,�2009
• http://pharmaceuticals.gov.in,�Third�Round�Up�of�Developments�in�the�Pharmaceutical�Sector,�July�2009
• http://www.ranbaxy.com/,�Ranbaxy�launches�protein�supplement�–�‘Revitalite’�in�India,�August�12,�2009
• Business�Standard,�Perrigo�acquires�85�percent�in�Vedants�Drugs,�August�23,�2009
Power:
• The�Business�Line,�“NTPC-BHEL�unit�comes�to�AP�“,�August�30,�2009
• The�Business�Line,�“JSW�Energy�IPO�likely�in�3rd�week�of�Oct”,�August�25,�2009
• The�Economic�Times,�“Reliance�Power�buys�Jharkhand's�Tilaiya�firm”,�August�7,�2009
• Reuters�India,�“Petronet�to�arrange�LNG�for�NTPC�plant�–�officials”,�August�20,�2009
• The�Business�Line,�“Mahanadi�coal�for�Krishnapatnam�thermal�plant”,�August�15,�2009
Real Estate:
• The�Economic�Times,�‘Govt�to�roll�out�Rs�225k�cr�plan�to�house�slum�dwellers’,�August�12,�2009
• The�Economic�Times,�‘Life�Insurance�Corp�to�set�up�housing�venture�capital’,�August�24,�2009
• The�Times�of�India,�‘IFCI�to�expand�presence�in�real�estate�business’,�August�19,�2009
• The�Economic�Times,�‘1%�loan�subsidy�to�boost�affordable�housing�in�Tier�II�&�III�cities’,�August�09,�2009
• Equity�Bulls,�‘The�3C�Company�launches�India's�Largest�Green�Residential�Estate’,�August�06,�2009
Telecom:
• The�Hindu�Business�Line,�‘3G�and�WiMax�final�reserve�price�announced’,�August�31,�2009
• DNA�Business�Standard,�‘MNP�rollout�likely�by�December’,�August�12,�2009
• The�Financial�Express,�‘Bharti�offers�MTN�USD�13.1�billion’,�August�31,�2009
• The�Economic�Times,�‘Datacom�and�Tata�Tele�ink�infrastructure�sharing�agreement’,�August�17,�2009
• The�Economic�Times,�‘Reliance�Communications�inks�infrastructure�sharing�pact�with�S�Tel’,�August�29,�2009
Transport and Logistics:
• Economic�Times,�‘MP�plans�country's�largest�integrated�logistics�park’,�August�24,�2009
• Alassets,�‘DHFL�in�joint�venture�with�real�estate�investor�Redwood�for�Indian�PE�fund’,�August�10,�2009
• Economic�Times,�‘LDA,�ABG�Ports�team�up�to�offer�logistics�services�to�Indian�ports’,�August�5,�2009
• Silicon�India,�‘Govt�may�vest�ownership�of�roads�with�NHAI’,�August�26,�2009
• Reuters,�‘RPT-India�to�hold�road�show�for�$20.68�bln�road�projects’,�August�31,�2009
• Steelguru,�‘JSW�group�to�develop�ports�in�India�and�abroad’,�September�1,�2009
• Financial�Express,�‘DCI�to�buy�3�dredgers�for�INR�1,722�crore’,�August,�21,�2009
in.kpmg.com
©�2009�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.
Contact�us:
For further information about thisnewsletter, please contact:
Ramesh SrinivasHead - Consumer Marketse-Mail: [email protected]: +91 80 3980 6800
Abizer DiwanjiHead - Financial Servicese-Mail: [email protected]: +91 22 3983 5301
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Jai MavaniHead - Infrastructure & Governmente-Mail: [email protected]: +91 22 3983 5724
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