Post on 23-Feb-2022
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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 mknowledge@in.kpmg.com if you are interested in receiving this newsletter on a
regular basis, or wish to unsubscribe.
Table of Contents
1. Indian Economy 3
2. Auto and Auto Components 4
3. Banking and Insurance 5
4. Consumer Markets and Retail 6
5. IT / ITeS 7
6. Media 8
7. Oil and Gas 9
8. Pharma 10
9. Power 11
10.Real Estate and SEZs 12
11.Telecom 13
12.Transport and Logistics 14
Sectoral Snippets, Issue 18
Faced�with�a�fiscal�deficit�of�5.6�percent�in�theyear�2007-08,�rising�inflation�at�7�percent,continuing�high�oil�prices�and�soaring�foodprices,�the�Indian�economy�has�to�gear�up�toface�the�gamut�of�challenges�that�lie�ahead.Nonetheless,�many�expect�that�India�should�beable�to�maintain�a�healthy�momentum�despitethe�global�economic�downturn,�on�the�back�ofhealthy�domestic�demand,�considerable�foreignexchange�reserves�(USD�300�billion)�and�intra-regional�trade.
In�other�developments,�Queensland�(Australia)Premier�Anna�Bligh’s�recent�visit�to�India�isexpected�to�cement�bilateral�trade,�particularly�interms�of�climate�change�research�andtechnology.
We�hope�you�find�this�edition�of�SectoralSnippets�useful.
Regards,
Russell
Russell Parera
Chief Executive Officer
KPMG in India
©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
The�month�of�March�saw�the�key�Emerging�Markets�in�a�state�of�panic,�including
India.�After�two�to�three�years�of�sharp�gains�the�Indian�stock�market�has�fallen
by�over�20�percent.�The�sentiments�across�global�markets�have�been�extremely
weak�and�bearish.�A�potential�recession�in�the�U.S.�and�a�probable�decline�in�the
domestic�GDP�growth�have�been�the�main�contributors�to�the�uncertain
scenario.�
The�release�of�the�economic�data�indicates�a�decline�in�all�important�production
estimates.�The�industrial�growth�was�at�5.3�percent�this�January�as�compared�to
11.6�percent�same�time�last�year.�Manufacturing�industries�grew�at�5.9�percent
as�compared�to�12.35�percent�last�year.�Manufacturing�industries�account�for�80
percent�of�the�Index�of�Industrial�Production.�
Inflation�too�has�spiralled�to�7.00�percent,�much�beyond�the�Reserve�Bank�of
India's�(RBI)�comfort�level�of�5�percent.�The�sudden�spurt�in�inflation�has�been
attributed�to�a�surge�in�prices,�mainly�of�food,�fuel�and�metals.�To�contain�prices,
the�government�last�month�cut�import�duties�on�edible�oils�for�the�fifth�time�in
15�months,�and�banned�exports�of�wheat,�sugar,�rice�and�edible�oils.
Although,�India�now�has�added�domestic�concerns�in�addition�to�the�global
woes,�it�is�highly�doubtful�that�India�will�face�a�sustained�slowdown.�The�USD
906�billion�economy,�Asia’s�third-biggest,�is�expected�to�grow�around�8�percent�in
the�next�12�months,�the�weakest�since�2005.�The�nation,�therefore,�needs�to�be
ready�with�a�plan�to�face�any�uncertainties.�The�crucial�question�is�how�much�the
Indian�economy�will�be�impacted�by�the�impending�U.S.�recession,�which�only
time�will�tell.
Indian EconomyPage 3 of 15
Analyst: Asmita Deshmukh©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
"RBI is confident (on economicgrowth). In terms of growth andstability, India will continue to beone of the best-performingeconomies in the world in themonths ahead."Y. V. Reddy, Governor, RBI.(Source: March 31, 2008, The Times of India)
• Hinduja Group plans 51 percent stake in Valeo, a French auto part
manufacturer
The�Hinduja�Group,�which�owns�one�of�India’s�largest�bus�and�truck�brand
Ashok�Leyland,�are�reportedly�in�talks�with�French�auto�part�maker�Valeo�SA�for
a�51�percent�controlling�stake.�The�deal�size�is�expected�to�be�around�USD�1.6
billion.�Valeo�is�Europe’s�third�largest�auto�component�manufacturer.�
• Maruti Suzuki launched Swift sedan
Maruti�Suzuki�India�Limited�launched�its�Swift�Dzire�as�a�sedan�version�of�its
existing�hatchback�Swift.�Dzire�an�A3�segment�car�will�replace�the�discontinued
Esteem�model.�It�will�be�available�in�various�petrol�and�diesel�variants.�Prices
are�estimated�to�range�between�USD�11,250�for�the�base�model�rising�up�to
USD�16,800�for�the�top�end�diesel�version.�Dzire�will�roll�out�from�Maruti’s
existing�Manesar�plant.�Also�in�the�pipeline,�is�the�launch�of�A-Star,�a�concept
based�model�in�the�A2�segment�which�is�expected�to�be�in�October.
• Tata Motors signs a deal with Ford Motors to buy luxury brands
Jaguar and Land Rover
After�much�speculation,�Tata�Motors�has�finally�signed�a�deal�with�Ford�Motors
to�buy�its�luxury�brands�Jaguar�and�Land�Rover.�The�deal�was�blocked�at�USD
2.3�billion.�The�deal�is�not�likely�to�bring�any�significant�changes�to�the
employees'�terms�of�employment.�Ford�is�expected�to�contribute
approximately�USD�600�million�to�the�employee’s�pension�plans.
• Daimler gets approval for JV with Hero Group
Daimler�and�Hero�Group�Joint�Venture�(JV)�got�the�green�signal�from�the
government's�Foreign�Investment�Promotion�Board�(FIPB)�and�the�Cabinet
Committee�on�Economic�Affairs�(CCEA).�The�JV�is�expected�to�be�established
by�the�end�of�April�and�will�manufacture�light,�medium�and�heavy�commercial
vehicles�for�the�Indian�market.�The�vehicles�will�be�from�Daimler�Truck’s�existing
product�portfolio�which�will�be�tailored�to�suit�the�Indian�market.
• Volvo India to launch six car models
Swedish�auto�maker�Volvo�is�planning�to�launch�six�cars�in�India�in�phases.
Volvo�plans�to�launch�C30�hatchback,�V50�and�V70�station�wagons�(estates),
XC60�and�XC70�CUVs,�and�the�C70�convertible�models.�The�company�expects
to�sell�500�cars�in�2008.�Volvo�currently�has�dealers�in�Mumbai,�Delhi�and
Chandigarh�and�is�looking�to�appoint�dealers�in�major�cities�like�Ahmedabad,
Bangalore,�Chennai,�Jaipur,�Hyderabad,�Kochi,�Kolkata,�and�Jaipur.
• Piaggio launches two new cargo vehicles
Piaggio�Vehicles�Private�Limited�(PVPL),�a�wholly�owned�subsidiary�of�Piaggio
of�Italy,�has�announced�the�launch�of�two�new�three-wheeler�cargo�variants�—
Ape�Xtra�and�Ape�Xtra-LD�in�the�0.50�tonne�category�in�Chennai.�Ape�Xtra�is
priced�at�USD�3,300�(ex-showroom�Chennai)�while�the�Ape�Xtra-LD�will�cost
USD�3,400.�The�vehicles�will�be�manufactured�in�the�company’s�existing�plant
in�Pune�with�most�modern�facilities�with�a�modular�concept.�This�year,�the
company�hopes�to�sell�about�30,000�units�of�the�new�vehicles.
Page 4 of 15
Auto and Auto Components
Analyst: Rajiv Somani©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
Company PlantAdded
Capacity
Investment
(USD Mn)
Mahindra�&MahindraLtd
Chakan,Maharashtra 300000 1002.2
Tata�MotorsLtd Pune 600000 1503.3
GeneralMotors�India Talegaon 140000 300.0
MarutiSuzukiIndia�Ltd�
Manesar,Haryana� 200000 626.4
EicherMotors� Pithampur 60000 250.5
Fiat�IndiaAutomobilesLtd�
Ranjangaon 100000 586.5
Ford�India Chennai 150000 500.0
Cummins 3�plants�inPhaltan NA 212.9
BMW�India Chennai 1300 0.8
Capacity additions and Investment plans
announced in the month of March 2008
Source:�Compiled�from�various�media�reports
• Singapore's DBS to expand in India
Singapore-based�DBS�has�received�permission�from�the�Reserve�Bank�of�Indiato�set�up�eight�new�branches�and�expand�its�presence�in�the�India.�DBS,�whichcurrently�operates�two�branches�in�India,�is�active�in�Small�and�MediumEnterprises�(SMEs),�consumer,�corporate,�treasury�and�transaction�portfolios.DBS�has�plans�to�enter�into�areas�of�wholesale�banking,�corporate�lending,investment�advisory�and�wealth�management�services�in�India.�DBS’�move�toexpand�in�India�comes�from�the�recently�concluded�agreement�onComprehensive�Economic�Cooperation�Agreement�(CECA)�between�India�andSingapore.�In�a�reciprocal�gesture,�the�Singapore�government�has�given�theapproval�to�state-owned�State�Bank�of�India�to�open�branches�in�that�country.�
• IDFC buys Standard Chartered’s asset management business
London-headquartered�Standard�Chartered�Plc,�has�agreed�to�sell�its�Indianasset�management�arm�to�Infrastructure�Development�Finance�Company(IDFC)�for�a�cash�consideration�of�approximately�USD�205�million.�IDFC,�withoperations�in�the�project�financing�and�private�equity�space,�this�acquisition�isaimed�to�boost�its�fee�income�and�gives�them�headway�in�the�retail�financialmarket�space.�The�deal�between�IDFC�and�Standard�Chartered�is�subject�toregulatory�approvals.�There�has�been�a�huge�interest�among�internationalplayers�to�get�into�the�asset�management�business�in�India.
• Reliance Money to launch operations in Oman
Reliance�Money,�India’s�leading�broking�and�financial�products�distribution�firm,became�the�first�Indian�company�in-principle�to�receive�approval�for�setting�up�abranch�and�offering�investment�advice�in�Oman.�This�venture�will�help�thecompany�tap�a�large�number�of�Non�Resident�Indians�(NRIs)�and�Persons�ofIndian�origin�(PIOs)�residing�in�the�Middle�East.�Reliance�Money�will�initiallylaunch�its�broking�and�mutual�fund�distribution�services.�Reliance�Money�alsoplans�to�offer�portfolio�management�services�at�an�entry�level�of�as�low�as�USD50,000.�The�company�also�has�plans�to�enter�other�Gulf�countries�like�Bahrain,Kuwait�and�Qatar�in�the�next�6-12�months.
• Indian non-life insurance industry records 12 percent growth in FY
2008
The�Indian�general�(non-life)�insurance�industry�grew�12�percent�till�February�in2007-08�given�the�healthy�performance�by�private�players�including�RelianceGeneral,�which�continues�to�be�the�fastest�growing�insurer.�The�13�non-lifeinsurers�collected�USD�6.4�billion�in�premium�till�February�in�FY’08.�Inpercentage�terms,�9�private�sector�players�clocked�premium�growth�of�28percent,�while�the�public�sector�managed�to�increase�their�premiums�by�just�4percent.�Private�sector�players’�market�share�has�grown�to�about�40�percent�inFY’08�so�far�as�compared�to�the�public�sector’s�60�percent�share.
• RBI issues fresh norms for Basel-II
The�Reserve�Bank�of�India�has�come�out�with�fresh�guidelines�for�theSupervisory�Review�Process�(SRP)�and�Internal�Capital�Adequacy�AssessmentProcess�(ICAAP),�which�form�the�second�pillar�of�the�Basel-II�capital�adequacyframework.�Both�pertain�to�quantifying�capital�requirement�and�putting�in�placesound�risk�assessment�and�management�systems.�Foreign�banks�operating�inIndia�and�Indian�banks�with�international�presence�have�to�be�Basel-II-compliantby�March�2008�and�are�required�to�submit�their�ICAAP�plans�in�June�2008.�
Page 5 of 15
Banking and Insurance
Analyst: Kunal Jain©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
"Having successfully launched ouroperations in the UAE, we nowplan to offer cost-effective, qualityfinancial products and services toour clients in the Sultanate ofOman. This is a part of ourendeavour to reach out to thelarge NRIs and PIOs in the MiddleEast". Sudip Bandyopadhyay, Director and CEO,Reliance Money.(Source: Economic Times, 27 March 2008)
• Chinese firm Aokang Group forays into Indian footwear market
Leading�Chinese�firm�Aokang�Group�announced�its�foray�into�the�rapidly-growing�Indian�footwear�market.�Aokang�Group�will�invest�USD�75�million�toset�up�a�manufacturing�facility�and�launch�up�to�100�exclusive�stores�over�thenext�5�years.�Aokang�plans�to�make�India�one�of�its�manufacturing�hubs�toexport�to�Europe�and�U.S.�The�company�has�also�developed�plans�to�set�up�anR&D�centre�in�India.�The�Company�is�currently�looking�for�land�to�set�up�itsmanufacturing�unit�and�is�in�talks�with�various�state�governments.�
• Illycaffe enters Indian market to set up cafe chain
Premium�coffee�brand�Illycaffe�announced�the�launch�of�its�luxury�cafe�chainin�India.�The�company�has�partnered�with�the�Narang�Group,�a�distributor�ofhigh�end�beverages,�as�master�franchisee�for�this�venture.�The�cafes�willcarry�the�‘Espressamente�illy’�brand�name.�The�company�has�opened�over175�such�cafes�in�over�30�countries.�It�has�plans�to�open�its�firstEspressamente�illy�at�Bangalore�airport�followed�by�its�first�flagship�outlet�inMumbai�within�the�next�four�months.�Illycaffe�is�an�Italy-based�company,engaged�in�the�production�and�marketing�of�a�unique�blend�of�espressocoffee�globally.
• Franklin Templeton Investments picks up stake in Cafe Coffee Day
The�private�equity�arm�of�Franklin�Templeton�Investments,�Darby�OverseasInvestments�has�picked�up�an�undisclosed�stake�in�coffee�chain�Cafe�CoffeeDay�for�USD�25�million.�The�deal�was�through�Darby's�Asia�Mezzanine�Fund�II,which�invested�in�Bangalore-based�Amalgamated�Bean�Coffee�Trading�CompanyLtd.,�the�owners�of�Coffee�Day.�Coffee�Day�is�one�of�the�largest�integratedcoffee�players�in�India,�with�operations�across�the�coffee�value�chain,�fromprocurement�and�processing�to�retailing.�The�company�plans�to�deploy�funds�inexpanding�Coffee�Day's�presence�across�India�and�in�parts�of�Europe.
• Gucci plans to increase India presence
Leading�luxury�goods�maker�Gucci�is�looking�to�increase�its�presence�in�Indiaby�2010.�Gucci�plans�to�make�India�as�its�key�global�market�and�will�increase�itsnumber�of�stores�to�four�by�end�of�2008�and�eight�stores�by�end�of�2010.Besides�the�two�existing�outlets—one�each�in�Mumbai�and�Delhi—�thecompany�in�partnership�with�the�Mumbai-based�Murjani�Group�will�open�itsthird�store�in�Delhi�and�the�fourth�one�in�Bangalore�this�year.�Gucci’s�stores�inIndia�house�men's�and�women's�apparels,�handbags,�shoes,�watches,sunglasses,�jewellery,�small�leather�goods�and�gift�items�amongst�others.
• Luxury brands Canali, Brioni plan India expansion
Premium�Italian�menswear�brands�Brioni�and�Canali�are�firming�up�plans�tostrengthen�their�presence�in�India.�Brioni,�which�opened�its�first�store�inMumbai�in�2007�in�partnership�with�its�franchisee�Badasaab�Designs,�is�all�setto�launch�two�new�stores�in�2008.�On�similar�lines,�Canali,�which�currently�hastwo�franchise�outlets�with�Genesis�Colours,�plans�to�have�eight�by�2010.�TheIndian�luxury�market�is�expected�to�reach�USD�30�billion�by�2015.
Page 6 of 15
Consumer Markets and Retail
Analyst: Kunal Jain©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
"To become a part of one of thebiggest footwear markets in theworld, we will invest USD 75million to set up 70-100 exclusiveoutlets in India by 2012".Wang Zhentao - Chief Board and President,Aokang Group(Source: Economic Times, 24 March 2008)
• Mastek acquires U.S based Systems Task Group
Mumbai-based�IT�solutions�provider�Mastek�has�acquired�the�U.S.-basedSystems�Task�Group�(STG)�International�for�USD�29�million�in�an�all-cash�deal.As�per�the�terms�of�the�agreement,�Mastek�will�hold�100�percent�stake�in�STGand�expects�to�strengthen�its�presence�in�insurance�with�the�acquisition.�STGhas�about�350�employees�with�significant�property�and�casualty�insurancedomain�specialisation�and�a�robust�customer�base�that�includes�over�35�smalland�mid-sized�American�insurance�carriers.�
• TCS signs deal with ArvinMeritor
Tata�Consultancy�Services�(TCS)�has�signed�a�five-year,�multi-million�dollarcontract�with�U.S.�based�auto�components�maker�ArvinMeritor.�As�a�part�of�theagreement,�TCS�will�support�the�localisation�and�globalisation�efforts�ofArvinMeritor’s�engineering�capabilities�including�product�development�andsupport�for�specific�product�lines�in�the�Asia�Pacific�region.�TCS�plans�to�set�upa�global�engineering�centre�in�Pune�that�will�provide�a�broad�range�of�productengineering�services�to�cater�to�the�global�needs�of�ArvinMeritor�with�aspecific�focus�on�the�Asian�market.�
• Aegis acquires AOL’s India call centre operations
India-based�BPO�service�provider�Aegis,�an�Essar�Group�company,�has�acquiredglobal�web�service�company�American�On-Line’s�(AOL)�call�centre�operations�inBangalore.�Under�the�terms�of�this�agreement,�Aegis�will�provide�customerservice�and�technical�support�to�AOL�customers.�Aegis�expects�to�enhance�itsvoice�and�non-voice�offerings�in�the�technology�support�space�with�thisacquisition.�AOL’s�call�centre�operations�which�include�both�voice�and�non-voiceactivity�will�now�be�serviced�by�Aegis.
• Tech Mahindra bags contract from British Telecom
Pune-based�IT�solutions�provider�Tech�Mahindra�has�signed�USD�350-millionoutsourcing�deal�with�British�Telecom�(BT).�The�five�year�deal�is�to�provide�BTwith�application,�maintenance�and�support�services.�These�services�would�bedelivered�from�the�firm's�facilities�in�India.�Also�a�new�facility�is�being�setup�inthe�U.K.�to�monitor�BT's�core�business�processes.
• IBS buys U.S-based HBSi
India’s�IBS�Software�has�acquired�Hotel�Booking�Solutions�Incorporated�(HBSi)a�Atlanta�based�IT�solutions�provider�to�the�hospitality�industry,�in�all�cash�deal.With�this�acquisition,�IBS�enters�the�hospitality�sector�enhancing�its�existingtravel�and�cruise�line�of�business.�HBSi�has�prestigious�clients�like�Hyatt�Hotels,Fairmont�Hotels,�Elite�Island�Resorts�and�Intrawest.
Page 7 of 15
Analyst: Parnika Patil
IT / ITeS
©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
"India is an important market tous, besides launching newproducts, we will also enhanceour retail presence and after salesservice to become the no. 1 PCmaker in the country". Liu Jun, Senior Vice President and President(Consumer Business Group), Lenovo.(Source: The Economic Times, 13 March, 2008)
• Pyramid Saimira signs two international deals
India-based�Pyramid�Saimira�Theatre�Ltd.�(PSTL)�has�completed�twointernational�deals�this�month.�PSTL�has�forayed�into�the�Chinese�market�bysigning�an�agreement�with�The�China�Society�of�Music�Research�Board(CSMRB).�As�per�the�agreement,�PSTL�will�open�a�huge�theatre�chain�network,food�courts,�gaming�parlors�and�offer�other�entertainment�services�in�China.�Inanother�deal,�PSTL�has�entered�into�strategic�partnership�with�Britain-basedSpize�TV,�a�pan�European�Direct-To-Home�(DTH)�TV�platform,�for�offering�Asiancontent�to�viewers�in�Europe.
• UTV in news content pact with Disney-ABC
The�founder�group�of�UTV�Software�Communications�has�tied�up�with�Disney-ABC�International�Television�(Asia-Pacific),�the�international�TV�distribution�armof�Walt�Disney�Co.�to�source�ABC's�news�programming�for�its�business�newschannel�in�India.�UTVi,�the�new�English-language�business�news�channel�is�tobe�launched�this�month.�ABC�will�provide�UTV�with�content�on�the�currentevents�in�the�U.S.,�including�business�and�national�news�coverage,�and�UTVwill�provide�them�with�news�and�analyses�from�South�Asia,�particularly�India.
• 20th Century Fox plans JV with Star
Twentieth�Century�Fox�Film�Corporation,�one�of�the�leading�Hollywood�filmstudios�is�all�set�to�enter�the�Indian�film�industry�in�a�Joint�Venture�(JV)�withStar�India.�It�is�believed�that�20th�Century�Fox�is�reported�to�operate�as�a�full-fledged�film�production�company�and�make�Hindi�films�in�collaboration�withlocal�talent.
• Advertising magazine Adweek to enter India
America's�popular�advertising�industry�magazine�Adweek�may�soon�hit�thenewsstands�in�India.�The�30-year-old�weekly�magazine�that�covers�theadvertising,�marketing�and�media�industries�will�be�launched�through�alicensing�arrangement�with�Essar�Group’s�publishing�venture,�Paprika�Media.Adweek�will�be�the�second�international�magazine�brand�on�the�advertising�andmedia�industries�to�be�launched�in�India.�
• Reliance Entertainment to start its cinema chain in the U.S.
Reliance�Entertainment�plans�to�start�its�cinema�chain�in�the�U.S.�under�thebrand�name�‘Big’.�More�than�200�theatres�in�U.S.�will�screen�Hindi�as�well�asregional�films�from�India.�Over�the�last�one�year,�Reliance�Entertainment�hasacquired�over�200�cinema�halls�in�28�North�American�cities,�including�New�York,Los�Angeles,�Chicago,�Atlanta,�Detroit�and�Washington.�The�company�is�alsoforaying�into�broadcast�arena�in�India�with�launch�of�business�and�newschannels�through�its�companies,�Reliance�Big�TV�Entertainment�and�RelianceBig�TV�News.
Page 8 of 15
Media
Analyst: Ashwini Kulkarni©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
“Collaborating with UTVi is part ofa global strategy for us. We wantto distribute our news throughnew platforms, newtechnology...and above all to growour audiences internationally.We've been looking at India for awhile".Marcus Wilford, Vice President for InternationalDigital, ABC News Intercontinental Inc.(Source: Reuters News, 02 April, 2008)
• ONGC and Hinduja Group plan to develop gas fields in Iran
Oil�and�Natural�Gas�Corporation�(ONGC)�and�Hinduja�Group�are�reportedly�in
talks�to�develop�two�gas�fields�in�Iran.�The�Joint�Venture�(JV)�will�be�part�of
their�planned�joint�investment�of�USD�20�billion.�The�two�companies�are�also
investing�USD�8�billion�in�developing�onshore�South�Azadegan�oilfield�and
Phase-12�of�the�offshore�South�Pars�gas�field.�Both�the�companies�are�planning
to�rope�in�Naftiran�Intertrade�Co.�(NICO),�a�unit�of�Natural�Iranian�Oil
Corporation�at�an�investment�of�over�USD�10�billion.�The�agreement�is�expected
to�be�finalised�in�April.
• BPCL and GAIL sign a JV to market CNG in Kerala and Karnataka
Bharat�Petroleum�Corporation�(BPCL)�and�Gas�Authority�of�India�Limited�(GAIL)
have�signed�a�Memorandum�of�Understanding�(MoU)�to�market�CNG�in�Kerala
and�Karnataka�for�USD�100�million.�The�jointly�formed�business�will�be
marketed�under�the�name�of�God’s�Own�Gas�Company�(Go�Gas).�GAIL�and
BPCL�will�hold�22.5�percent�whereas�5�percent�will�be�held�by�Kerala
government�and�the�remaining�50�percent�will�be�held�by�strategic�investors,
public�and�financial�institutions.
• Petronas increases stake in Cairns India
Malaysian�state�owned�company�Petronas�has�increased�its�stake�in�Cairns
India�from�9.9�percent�to�12.7�percent.�Cairns�India�also�sold�2.6�percent�stake
to�Singapore-based�Orient�Global�Tamarind�Fund.�The�deals�were�carried
through�private�placement�route�and�were�valued�~�USD�635�million.�The
receipts�from�this�deal�are�planned�to�be�utilised�in�Cairns’�future�investment
plans.�
• CPIL forms a JV with U.S.-based Energtek Inc.
Confidence�Petroleum�India�Limited�(CPIL),�manufacturers�of�LPG�and�CNG
cylinders�has�formed�a�50:50�JV�with�U.S.-based�Energtek�Inc.,�which�is�one�of
the�world�leaders�in�natural�gas�and�absorbed�natural�gas�technology.�In�the
first�phase�of�the�venture,�CPIL�will�invest�USD�25�million�in�Primecyl�LLC�a
subsidiary�of�Energtek;�post�that�Confi�Energtek�Asia�Ltd.�will�be�formed�as�a
fully�owned�subsidiary�of�Primecyl�LLC�to�carry�on�the�business�in�India�and
South�East�Asia.
• ONGC plans to set up a new unit with an investment of USD 3.1
billion
ONGC�has�announced�plans�to�set�up�a�new�dual�cracker�petrochemical
complex�at�Dahej.�The�expected�investment�for�this�arrangement�is
approximately�USD�3.1�billion.�The�proposed�complex�will�have�the�capacity�to
produce�1.1�million�tonnes�of�ethylene�and�360,000�tonnes�of�propylene�per
annum.�The�complex�is�expected�to�be�operational�by�December�2011�or
January�2012.
Page 9 of 15
Oil and Gas
Analyst: Rajiv Parekh©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
“We are keen to get India toAfrica in a big way because wesee Indian technology and qualityas being superior”.Felix Mutati, Minister of Commerce, Trade andindustry, Zambia.(Source: Business Standard, 21 March 2008)
• Aurobindo Pharma acquires an Italian generic company
Aurobindo�Pharma,�an�Indian�pharmaceutical�company,�has�entered�into�astrategic�deal�to�acquire�Intellectual�Property�&�Marketing�Authorizations,�withTAD�Italy,�a�generics�company.�This�acquisition�will�give�Aurobindo�access�to�70products�and�enhance�its�presence�in�the�Italian�generics�market.�Aurobindohas�already�filed�22�products�for�registration�in�Italy.�
As�a�part�of�the�deal,�Aurobindo�has�also�acquired�OTC�brands�-�Mapooro�andCarmiooro�from�TAD.�It�also�plans�to�shift�TAD’s�product�manufacturing�to�itsown�facilities.�This�is�Aurobindo’s�third�acquisition�in�Europe.
• Suven Life Sciences enters into a second drug discovery
collaboration with Eli Lilly
Suven�Life�Sciences,�an�Indian�biopharmaceutical�company,�has�entered�into�itssecond�drug�discovery�pact�with�Eli�Lilly�and�Company,�a�global�pharmaceuticalcompany,�to�collaborate�on�the�pre-clinical�research�of�molecules�in�the�CentralNervous�System�disorders�(CNS)�therapeutic�segment.�Suven�will�conductdiscovery�activities�related�to�the�identification�and�selection�of�clinical�candidatesin�association�with�Eli�Lilly.��
Lilly�will�pay�Suven�a�research�funding�and�potential�discovery�and�developmentmilestone�payments�ranging�from�USD�19-23�million�per�candidate,�as�well�aspotential�royalties�on�net�sales�of�any�products�upon�their�successfulcommercialisation.
.• Dr. Reddy’s signs a drug discovery pact with 7TM Pharma
Dr.�Reddy’s�Laboratories,�one�of�India’s�leading�pharmaceutical�companies,�hasentered�into�a�drug�discovery�agreement�with�7TM�Pharma,�a�biotech�companyfocusing�on�discovery�and�development�of�new�drugs�targeting�7TM�receptors.Both�the�companies�will�collaborate�to�discover�clinical�candidates�for�pre-selected�targets�in�the�metabolic�disorders�segment.�Both�companies�willjointly�develop�these�candidates�from�the�pre-clinical�stage�up�to�Phase�IIa(proof-of-concept).�Beyond�this�stage,�they�may�consider�out-licensing�thecandidate�for�further�development�and�commercialisation�or�co-developing�andcommercialising�it.�
• MedPlus launches Integrated Health Centres in India
MedPlus�Health�Services,�an�Indian�chain�of�pharmacies,�is�launchingIntegrated�Health�Centres�in�India.�In�these�centres,�it�will�integrate�familyclinic,�diagnostic�lab�and�pharmacy�under�one�roof.�It�plans�to�set�up�about�10centres�in�Hyderabad�in�the�first�phase,�followed�by�Bangalore,�Chennai�andPune.�Currently,�MedPlus�has�a�presence�in�four�key�states�and�with�300pharmacy�outlets.
• U.S.-based StemCyte is setting up an Umbilical Cord Blood (UCB)
bank at Ahmedabad
StemCyte,�Inc,�U.S.-based�stem�cell�transplantation�and�therapeutics�companyhas�entered�into�an�agreement�with�Apollo�Hospitals�and�CadilaPharmaceuticals,�to�set�up�a�public�and�private�Umbilical�Cord�Blood�(UCB)bank�at�Ahmedabad�at�an�estimated�investment�of�USD�16�million.�This�UCBbank�will�process�and�store�umbilical�cord�blood�units�that�will�be�used�fortreating�patients�globally.�
Page 10 of 15
Pharma
Analyst: Nandita Kudchadkar©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
"We have been impressed withSuven's growth in capabilities andcommitment to our importanteffort. Together we will partner toaccelerate the delivery ofinnovative medicines in thiscomplex field".Dr. William W. Chin, M.D., Vice President ofdiscovery research and clinical investigation, Lilly(commenting on the Suven-Eli Lilly drug discoverycollaboration).(Source: Company Press Release, 12 March, 2008)
• Haryana to invest USD 6 bn in power sector in 11th Plan
The�Haryana�Government�has�prepared�a�mega�proposal�of�USD�6�bn�toaugment�power�generation�and�strengthen�its�distribution�system.�Out�of�this,USD�2.5�bn�would�be�spent�on�power�generation,�while�USD�1.9�bn�isearmarked�for�transmission�and�USD�1.6�bn�for�strengthening�the�distributionsystem.�To�further�strengthen�transmission�and�distribution,�the�state�hasdeveloped�a�detailed�plan�to�construct�255�new�sub-stations,�augmentingexisting�ones�and�construct�associated�transmission�lines�at�an�estimated�costof�USD�1�bn.
• KEC International bags USD 120.73 mn order from Saudi co.
KEC�International�has�entered�into�a�contract�valued�at�USD�120.73�mn�withSaudi�Electric�Company�to�construct�380�KV�transmission�line�on�turnkey�basis.The�scope�of�work�includes�designing,�engineering,�procurement,�supply,delivery,�constructing,�installing,�testing�and�commissioning�a�new�380�KV�D/COHL.�The�total�line�route�length�is�268�kms.
• Indiabulls bags contract to set up 1,600-MW power project
Indiabulls�Power�Services,�a�wholly�owned�subsidiary�of�Indiabulls�Real�Estate,has�bagged�a�contract�to�develop�1,600�MW�coal�based�power�project�inChhattisgarh,�outbidding�close�contenders�GMR�Group�and�Sterlite�Industries.The�company�had�placed�the�lowest�bid�of�81�paise�per�unit,�while�GMR�andSterlite�had�put�in�bids�of�88�paise�and�89�paise�per�unit�respectively.�Of�thetotal�power�to�be�generated�from�the�project,�65�percent�would�be�supplied�tothe�host�state�at�a�tariff�of�81�paise�per�unit.�The�company�is�free�to�sell�thebalance�35�percent�to�private�consumers�and�industries.
• PFC, RITES ink JV for coal import
Power�Finance�Corporation�(PFC)�and�technical�advisory�wing�of�railways�–RITES,�signed�a�memorandum�of�understanding�to�jointly�import�coal�fromcountries,�including�Africa.�The�partnership�will�bring�together�the�financespecialisation�of�PFC�and�engineering,�design�development�and�consultancyexperience�of�RITES�required�for�making�inroads�into�the�coal�business.�As�perthe�tie-up,�RITES,�besides�being�a�technical�partner,�would�identify�countrieswhere�the�possibility�of�owning�coal�mines�exists�and�excavation�andtransportation�of�coal�is�feasible�for�importing�coal�to�India
Page 11 of 15
Power
Analyst: Rajiv Parekh©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
Source:�Central�Electricity�Authority
Programme / Achievement in capacity
addition (MW) during Feb 08
• Shriram Properties to invest in affordable housing
Shriram�Properties�limited,�the�Bangalore�based�real�estate�company,�is
planning�to�invest�about�USD�125�million�(INR�500�crore)�to�develop�affordable
housing�projects�across�India�over�the�next�two�to�three�years.�The�first�project
with�an�investment�of�USD�25�million�(INR�100�crore)�will�be�located�in
Chennai.�The�company�expects�to�sell�apartments�in�the�sub�USD�75,000�(INR
30�lakh)�category.�The�project�would�have�2.2�million�square�feet�development
on�a�35�acre�plot.�There�would�be�1700�residential�units�priced�between�USD
45,000�to�USD�57,500�(INR�18-23�lakh).�The�company�plans�to�use�the�similar
model�across�all�its�projects.�Eighty�percent�of�the�project�cost�would�be�met
through�pre-sales.
• 'Yoo by Starck' enters India
'Yoo�by�Starck',�a�European�design-focused�real�estate�development�company,
has�entered�India�and�is�developing�its�first�project�in�Pune.�The�company�is
designing�a�residential�condominial�along�with�Panchshil�Realty,�a�Pune-based
real�estate�company��with�an�investment�of�USD�375�million�(INR�1500�crore).
The�project�will�be�developed�on�a�21�acre�plot�and�the�first�phase�will�have�six
30-story-towers�and�will�be�launched�in�October�2008.�Yoo�plans�to�expand�its
operations�in�Gurgaon,�Goa,�Bangalore�and�Mumbai�with�an�investment�of
approximately�USD�450�million�(INR�1800�crore)�in�next�4�to�5�years.�The
company�is�known�for�design�marketing�and�branding�development�and�has
presence�in�21�countries.�Yoo�is�presently�constructing�41projects�around�the
globe�with�an�approximate�cost�of�USD�10�billion�(INR�40,000�crore).
• Vakil Housing forays in Tamil Nadu
Vakil�Housing�Development�Corporation�(VHDC),�a�Bangalore-based�real�estate
company�has�forayed�in�the�Chennai�real�estate�market�by�launching�a�luxury
villa�project�at�Hosur.�The�project�will�be�developed�on�a�28.5�acre�plot�and
would�have�300�villas�on�plots�ranging�from�1500�square�feet�to�3300�square
feet.�The�villas�will�be�priced�between�USD�87,500�to�USD�1,12,500�(INR�33
lakh�to�45�lakh).
• Al Chemist to invest USD 1.25 billion
Al�Chemist�Realty�Ltd.,�a�Mumbai-based�real�estate�company,�is�planning�to
invest�about�USD�1.25�billion�to�develop�its�land�bank�of�10,600�acres,�over�the
next�7-10�years.�The�company�plans�to�develop�integrated�townships,�resorts,
hotels�and�restaurants�on�its�land�bank.�This�land�bank�is�spread�mainly�in�the
northern�states�and�in�other�regions�of�India.
• Primary Real Estate plans USD 500 million fund
Primary�Real�Estate�Advisors�Pvt.�Ltd,�an�Indian�fund�management�company,
is�planning�to�launch�a�USD�500�million�fund�in�the�second�half�of�2008.�The
company�plans�to�invest�in�various�real�estate�projects�in�the�Indian�market.
Page 12 of 15
Real Estate and SEZs
Analyst: Nitin Dehadraya ©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
"India and China are probably thebiggest real estate markets in theworld now. As a concept, ’brandedhomes’ is fairly unknown in India.Yoo by Starck finds India as anattractive country to design anddevelop real estate projects".John Hitchcox , Chairman, Yoo By Starck. (Source: Business Standard, 3 March, 2008)
• Virgin Group launches Virgin Mobile in India
Virgin�Group,�a�U.K.-based�diversified�holding�company�has�tied-up�with�TataTeleservices�Ltd.�(TTSL),�an�Indian�telecom�service�provider�company�to�launchVirgin�Mobile�in�India.�In�a�franchisee�agreement,�TTSL�will�sell�the�VirginMobile�brand�and�its�services�and�will�pay�royalty�for�every�customer.�TheVirgin–Tata�alliance�hopes�to�break�even�in�3�years�with�a�customer�base�of�5million.��
• Tech Mahindra signs a deal with British Telecom
Tech�Mahindra,�won�a�5�year�contract�worth�USD�350�million�with�BritishTelecom�Group�to�provide�communication�solutions.�Under�the�terms�andconditions�of�the�contract,�Tech�Mahindra,�will�provide�application�support�andmaintenance�services�for�their�business�software�solutions�and�open�sourcesoftware�platforms.�The�services�would�be�provided�from�India�and�a�new�unitin�U.K.�would�be�setup�to�monitor�the�core�business�processes.�In�December2006,�the�company�had�already�made�a�USD�1�billion�dollar�deal�with�BritishTelecom.�
• Canadian communications company wins USD 100 million
contract from BSNL
Bharat�Sanchar�Nigam�Ltd�(BSNL),�has�awarded�a�contract�to�Canadiancommunications�company�Nortel�Networks,�for�USD�100�million.�BSNL�islooking�at�expanding�its�GSM�network�in�southern�India�and�is�expected�to�becompleted�towards�the�end�of�2008.�The�contract�will�help�BSNL�build�on�itsexisting�network�investment�and�extend�mobile�services�to�new�subscribers.���
• Bubble Motion receives USD 14 million investment
Bubble�Motion�a�voice�SMS�provider,�has�received�USD�14�million�investmentfrom�its�existing�investors�Sequoia�Capital�US,�Sequoia�Capital�India�and�newinvestors�Comcast�Interactive�and�NCD�Investors.�The�company�plans�to�utilisethe�funds�to�expand�the�BubbleTalk�platform�and�secure�new�operatorpartnerships�around�the�world.����
• Tano Capital invests USD 12.45 million in Icomm
Tano�Capital,�an�alternative�asset�management�firm,�invested�USD�12.45�millionin�Icomm�Telecommunications�through�purchase�of�equity�stake�from�existingstakeholders.�Icomm,�is�one�of�the�largest�manufacturer�and�turnkey�solutionprovider�of�telecom�equipment�and�telecom�infrastructure�in�India.�Tano�Capitalmakes�private�equity�investments�in�growing�private�companies�in�India�andChina.
• Bharti to provide mobile services in Guernsey
Airtel,�promoted�by�the�Bharti�Group,�has�launched�its�mobile�services�inGuernsey�in�Europe's�Channel�Islands�through�its�subsidiary�company,Guernsey�Airtel.�The�services�will�be�provided�under�the�brand�name�of�Airtel�–Vodafone.��
Page 13 of 15
Telecom
Analyst: Mehul Desai©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
"India represents an enormousopportunity for Nortel in thecarrier space, with its consistentlyhigh growth rates and increasinglymobile population". Richard Lowe, President, Nortel (CarrierNetworks). (Source: Asia Pulse, 26 March, 2008)
• Government plans to develop six multi-modal airport hubs
The�government�is�planning�to�develop�multi-modal�hubs�in�six�metros�thatwould�not�only�cater�to�commercial�airlines�but�will�also�have�cargo�andMaintenance,�Repair�and�Overhaul�(MRO)�facilities.�The�cities�identified�for�theproposed�hubs�are�Amritsar,�Ahmedabad,�Hyderabad,�Thiruvanantapuram,Kolkata�and�Guwahati.�Though�the�ministry�is�yet�to�set�a�time-frame�underwhich�the�proposed�hubs�will�be�developed,�talks�have�been�initiated�for�apublic-private�partnership�for�developing�these�hubs.�These�multi-modal�hubswould�be�similar�to�the�one�at�Nagpur,�which�is�being�developed�as�a�cargo�andMRO�hub;�and�would�act�as�centres�of�growth�and�give�the�aviation�industry�alarger�footprint.
• Jindal Stainless to enter power, logistics sectors
Jindal�Stainless�Ltd,�India's�largest�stainless�steel�producer�is�setting�up�aseparate�firm�to�enter�the�infrastructure�sector.�It�will�reportedly�start�byentering�logistics�sector�with�its�own�fleet�of�trucks�and�then�proceed�to�enterthe�power�sector.�The�new�firm�will�be�known�as�Jindal�Infrastructure�&�UtilityLtd.
• DP World to strengthen its presence in Indian cargo traffic across
Indian Ocean
DP�World�is�strengthening�its�presence�in�India�by�investing�USD�500m�in�twogreenfield�projects�at�Kulpi�in�West�Bengal�and�Vallarpadam�in�Kerala.�DP�Worldis�developing�a�container�terminal�at�Vallarpadam,�within�the�Cochin�Port�Trustadministration,�a�multi-product�special�economic�zone�spread�over�1,040hectares�and�a�greenfield�container�terminal�on�the�east�bank�of�river�Hooghlyin�West�Bengal.
• Gujarat government plans SPV for Alang shipyard
The�Gujarat�government�is�planning�to�set�up�a�Special�Purpose�Vehicle�(SPV)to�develop,�maintain�and�operate�the�Alang�ship�breaking�yard�on�a�public-private�partnership�basis.�The�SPV�would�be�formed�after�IL&FS�Ecomartsubmits�its�report�to�the�Gujarat�government.�IL&FS�Ecomart�has�reportedlysigned�an�agreement�with�the�Gujarat�Maritime�Board�to�prepare�acomprehensive�master�plan�for�Alang�Shipyard.�
IL&FS�would�come�out�with�a�development�plan�that�would�convert�Alang�intoa�commercially�successful�recycling�ship�yard.�Alang�would�be�compliant�withinternational�performance�standards�and�promoted�as�a�green�recycling�facility.�
• ABG to set up third shipyard in Gujarat; to raise USD 200 mn
ABG�Shipyard�will�be�setting�up�a�third�shipyard�in�Gujarat�and�is�exploringoptions�to�raise�USD�200�million�for�capacity�expansion.�The�new�shipyardwould�be�an�integrated�one�that�can�make�ships�up�to�a�maximum�length�of350�metres.�The�proposed�shipyard�would�be�built�over�200�acres,�the�biggestfor�ABG.�The�company's�other�shipyards�are�in�Surat�and�Dahej�in�Gujarat.�Theshipyard�in�Surat�is�spread�over�35�acres�and�would�be�expanded�to�another�20acres.�The�Dahej�shipyard�is�spread�over�150�acres.�
Page 14 of 15
Transport and Logistics
Analyst: Preeti Sitaram©�2008�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.
"Our third shipyard will come inGujarat. We are exploring variousoptions, including private equity toraise USD 200 million". Dhananjay Datar, CFO, ABG Shipyard. (Source: Economic times, 6 April, 2008)
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The�information�contained�herein�is�of�a�general�nature�and�is�not�intended�to�address�the�circumstances�of�any�particular�individualor�entity.�Although�we�endeavor�to�provide�accurate�and�timely�information,�there�can�be�no�guarantee�that�such�information�isaccurate�as�of�the�date�it�is�received�or�that�it�will�continue�to�be�accurate�in�the�future.�No�one�should�act�on�such�informationwithout�appropriate�professional�advice�after�a�thorough�examination�of�the�particular�situation.
Reference material for preparing this document is
taken from following sources:
Asia Pulse
Business India
Business Standard
Business Today
Central Statistical Organisation (CSO)
Confederation of Indian Industries (CII)
Dow Jones International News
Factiva
Financial Express
Hindustan Times
India Infoline
Indian Brand Equity Foundation (IBEF)
Indian Business Insight
Infraline
India Today
Mergerstat
NASSCOM
Oil Asia Magazine
Petrobazar
Petromin News
Pharma Biz
Press Trust of India
RBI
Reuters News
The Asian Age
The Economic Times
The Financial Times
The Hindu Business Line
The Namibian
The Statesman
Times of India
Voice & Data Magazine
Xinhua News Agency
Antara News
Travers Smith
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Research Inputs by KPMG’s India Research Center