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Sectoral Snippets India Industry Information Issue 35 - September 2009 KPMG IN INDIA

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Page 1: SectorSnippets Issue 35:TP4 WhitePaper A4.QXD€¢ Park Hotels to add 4 more hotels in the country ParkHotels,thehotelsubsidiaryofApeejaySurrendraGroup,isexpectedto open4morehotelsinHyderabad,PuneandJaipurbesidesopeningitssecond

Sectoral SnippetsIndia Industry Information

Issue 35 - September 2009

KPMG IN INDIA

Page 2: SectorSnippets Issue 35:TP4 WhitePaper A4.QXD€¢ Park Hotels to add 4 more hotels in the country ParkHotels,thehotelsubsidiaryofApeejaySurrendraGroup,isexpectedto open4morehotelsinHyderabad,PuneandJaipurbesidesopeningitssecond

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.

Page 3: SectorSnippets Issue 35:TP4 WhitePaper A4.QXD€¢ Park Hotels to add 4 more hotels in the country ParkHotels,thehotelsubsidiaryofApeejaySurrendraGroup,isexpectedto open4morehotelsinHyderabad,PuneandJaipurbesidesopeningitssecond

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

Page 4: SectorSnippets Issue 35:TP4 WhitePaper A4.QXD€¢ Park Hotels to add 4 more hotels in the country ParkHotels,thehotelsubsidiaryofApeejaySurrendraGroup,isexpectedto open4morehotelsinHyderabad,PuneandJaipurbesidesopeningitssecond

• 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’)

Page 5: SectorSnippets Issue 35:TP4 WhitePaper A4.QXD€¢ Park Hotels to add 4 more hotels in the country ParkHotels,thehotelsubsidiaryofApeejaySurrendraGroup,isexpectedto open4morehotelsinHyderabad,PuneandJaipurbesidesopeningitssecond

• 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

Page 6: SectorSnippets Issue 35:TP4 WhitePaper A4.QXD€¢ Park Hotels to add 4 more hotels in the country ParkHotels,thehotelsubsidiaryofApeejaySurrendraGroup,isexpectedto open4morehotelsinHyderabad,PuneandJaipurbesidesopeningitssecond

• 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)

Page 7: SectorSnippets Issue 35:TP4 WhitePaper A4.QXD€¢ Park Hotels to add 4 more hotels in the country ParkHotels,thehotelsubsidiaryofApeejaySurrendraGroup,isexpectedto open4morehotelsinHyderabad,PuneandJaipurbesidesopeningitssecond

• 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)

Page 8: SectorSnippets Issue 35:TP4 WhitePaper A4.QXD€¢ Park Hotels to add 4 more hotels in the country ParkHotels,thehotelsubsidiaryofApeejaySurrendraGroup,isexpectedto open4morehotelsinHyderabad,PuneandJaipurbesidesopeningitssecond

• 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’)

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• 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’)

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• 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’)

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• 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’)

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• 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

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• 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

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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

Page 15: SectorSnippets Issue 35:TP4 WhitePaper A4.QXD€¢ Park Hotels to add 4 more hotels in the country ParkHotels,thehotelsubsidiaryofApeejaySurrendraGroup,isexpectedto open4morehotelsinHyderabad,PuneandJaipurbesidesopeningitssecond

• 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.

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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�

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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

Page 18: SectorSnippets Issue 35:TP4 WhitePaper A4.QXD€¢ Park Hotels to add 4 more hotels in the country ParkHotels,thehotelsubsidiaryofApeejaySurrendraGroup,isexpectedto open4morehotelsinHyderabad,PuneandJaipurbesidesopeningitssecond

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

Rajesh JainHead - Information, Communication &Entertainmente-Mail: [email protected]: +91 22 3983 5300

Jai MavaniHead - Infrastructure & Governmente-Mail: [email protected]: +91 22 3983 5724

Yezdi NagporewallaHead - Industrial Marketse-Mail: [email protected]: +91 22 3983 5101

Vikram UtamsinghHead - Private Equitye-Mail: [email protected]: +91 22 3983 5302

Research�Inputs�by�KPMG’s�IndiaResearch�Center

MumbaiKPMG House, Kamala Mills Compound448, Senapati Bapat MargLower ParelMumbai 400 013Tel: +91 22 3989 6000Fax: +91 22 3983 6000

DelhiDLF Building No. 10,8th Floor, Tower B,DLF Cyber City, Phase 2, Gurgaon 122 002Tel: +91 124 307 4000Fax: +91 124 254 9101

BangaloreSolitaire, 139/26, 3rd Floor,Inner Ring Road, Koramangala,Bangalore 560 071Tel: +91 80 3980 6000Fax: +91 80 3980 6999

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

KolkataInfinity Benchmark, Plot No. G-110th Floor, Block – EP & GP, Sector VSalt Lake City, Kolkata 700 091Tel: +91 33 44034000Fax: +91 33 44034199

Pune703, Godrej CastlemaineBund GardenPune 411 001Tel: +91 20 305 85764/65Fax: +91 20 305 85775

Kochi4/F, Palal TowersM. G. Road, Ravipuram,Kochi 682 016Tel: +91 484 309 4120Fax: +91 484 309 4121

KPMG�in�India