SECTOR UPDATES - IBEF · ONGC Videsh Ltd ten-fold, to be able to look for oil and gas operations...

SECTOR UPDATES May 2011

2

Auto and auto components Airports

Banking

Biotechnology

Electrical equipment

Engineering

Entertainment

FMCG

Gas

Healthcare

Innovations and patents

Contents … (1/2)


3

Insurance

IT & ITeS

Power

Pharmaceuticals

Real estate

Retail

Steel

Textiles & apparels

Telecom

Tourism & hospitality

Contents … (2/2)


4

Auto and auto components … (1/2)

Sector Updates May 2011

AUTO AND AUTO COMPONENTS

• Mercedes-Benz, the German premium car maker, is planning to launch its A & B class of cars in the Indian market within the next two-three years. The company is also considering assembling these cars locally, which would help it to price its cars competitively as well as increase sales volume.

• Nissan Motor plans to double production capacity to four lakh units annually at its plant in Oragadam, near Chennai, formed in partnership with Renault. This capacity expansion plan comes on heels with the company’s growth prospects in the Indian market.

• Tata Motors launched two light commercial vehicles (LCV), Magic Iris, a five-seater diesel car, and micro truck Ace Zip, the smallest truck in the Tata Motor’s portfolio, to increase its presence in the LCV market.

• In 2011, French car maker Renault plans to source components worth EUR 80 million from India for its overseas operations, which is reflective of its intention to make India the hub for its activities.

• Ford Motor Company is planning to expand its engine manufacturing facility in Chennai at an estimated investment of USD 72 million to increase its production capacity to 330,000 units annually from the current 250,000, which will increase the firm’s sales and export growth in India.

• Hyundai Motors India Ltd (HMIL) is planning to introduce a new car in November this year.

• With an aim to increase its presence in the Indian market, German luxury car maker Audi plans to launch A3 sports sedan. The company has started conducting a market study to gauge consumer response towards the car.

5

Auto and auto components … (2/2)


AUTO AND AUTO COMPONENTS

• Skoda Auto plans to bring to the Indian market a mini-sports utility vehicle (SUV) that is expected to be priced below INR 10 lakh.

• Japanese auto company Honda plans to set up its third two-wheeler manufacturing facility at Narsapuram in Karnataka.

• Marking its presence in India, Italian supercar maker Ferrari opened its first showroom in the national capital. Its models California, 458 Italia, 599 GTB and four-door FF are now available for bookings.

• Renault re-enters the Indian market with its premium sedan Fluence. The car’s diesel variant is priced at INR 1.29 million (ex-showroom, Delhi) and the fully-loaded petrol version is priced at INR 1.44 million.

6

Airports


AIRPORTS

• With private equity funding worth INR 125 crore, Air Works India Engineering is planning to acquire companies and build new facilities. This investment has come from US-based New Enterprise Associates and London-based Elephant Capital for a minority stake.

• Wipro Infrastructure Engineering, a division of Wipro Ltd, has signed an agreement with Spanish company CESA (Compania Espanola De Sistemas Aeronauticos S.A), a subsidiary of the global aerospace and defence corporation EADS, to manufacture components for aerospace and defence sectors in India.

• The National Civil Aircraft Development Project is set to be launched by January 2012, with a total estimated investment worth INR 8,300 crore.

7

Banking … (1/2)


BANKING

• The State Bank of Mysore (SBM) has proposed to raise around INR 500 crore in 2011-12 by issuing Tier-II bonds to support its future business growth.

• Venture capital (VC) firm IDG Ventures India has invested USD 5 million (INR 22.15 crore) in Agile Financial Technologies, a banking software product company in Mumbai offering 12 products in areas such as banking, insurance and micro-finance, among others. This fund is likely to be used by Agile for expansion, acquisition and make its product portfolio more robust.

• ING Life India, a subsidiary of ING Group, has tied up with Visakhapatnam District Central Co-op Bank. This tie-up will help ING Life India to offer its insurance products and services to the bank’s customers; while on the other hand, the bank will offer a news insurance-related service to its customers.

• A Reserve Bank of India (RBI) appointed working group headed by RBI Deputy Governor, Ms Shyamala Gopinath has suggested that a holding company model should be followed by large financial groups irrespective of their having a bank or not.

• Siemens Financial Services Private Ltd (SFSPL) will be the name of Siemens’ non-banking finance company (NBFC) in India. RBI has issued a certificate of registration to Siemens’ NBFC arm to operate in the country.

• RBI is exploring ways to make the Centre for Advanced Financial Research and Learning (CAFRAL), headed by its former deputy governor Usha Thorat, as a premier research organisation dealing in banking and financial sectors and cater to policy makers.

8

Banking … (2/2)


BANKING

• RBI has introduced changes to ease overseas investment norms, whereby Indian companies will be allowed to restructure balance sheets of its overseas joint ventures (JV) as well as wholly-owned subsidiaries.

• Tata Consultancy Services (TCS) has launched TCS Bancs Treasury 5.0, a treasury solution to facilitate front, mid- and back-offices in banks. It is a well-integrated, multi-entity and multi-currency solution.

• Equifax Credit Information Services Private Ltd (ECIS)—a JV between Equifax and six Indian financial institutions Bank of Baroda, Bank of India, Kotak Mahindra Prime Ltd, Religare Finvest, Sundaram Finance Ltd and Union Bank of India—has set up a microfinance credit bureau. Through this microfinance credit bureau, consumers can record their credit history and get funding.

9

Biotechnology


BIOTECHNOLOGY

• The Indian biotechnology industry is expected to be worth USD 10 billion by 2015. This will be facilitated by emerging opportunities across several verticals such as biopharma, agri-biotechnology and industrial biotechnology, among others.

10

Electrical equipment


ELECTRICAL EQUIPMENT

• Lighting Science Group, a US-based light emitting diode (LED) manufacturer, is looking to foray into the Indian market by September this year. According to industry insiders, it intends to get into a JV, where it will hold the majority stake, with an Indian LED manufacturing company. Lighting Science Group plans to acquire 20 per cent share of the domestic LED market over three years.

• With an aim to light rural India, BPL Techno Vision, a lighting solutions company, has launched its rechargeable LED lantern ‘BPL Chirag’. These lights have been launched in Uttar Pradesh at the initial stage.

• Indian equipment major Bharat Heavy Electricals Ltd (BHEL) has successfully manufactured and tested India's first turbo generator of 600 mega watt (MW) rating, which will be used in the upcoming North Chennai Thermal Power Project of the Tamil Nadu Electricity Board (TNEB).

• Germany-based electrical support infrastructure company, OBO Bettermann, is planning to invest INR 150 crore, in two phases, to establish a manufacturing facility at Oragadam, near Chennai.

11

Engineering


ENGINEERING

• Wipro Limited has signed an agreement to acquire an 80 per cent stake in RKM Equipamentos Hidráulicos, one of the top four manufacturers of hydraulic cylinders in Brazil. Post-acquisition, RKM would become a part of Wipro’s infrastructure engineering division.

• Having acquired Aircon Engineering Services, a Kolkata-based company, Yash Birla Group is now looking to make its presence felt in the infrastructure space. The new company will be known as Birla Aircon.

• With an aim to manufacture components for aerospace and defence sectors, Wipro Infrastructure Engineering, a subsidiary of Wipro Limited, has signed an agreement with Spanish company CESA (Compania Espanola De Sistemas Aeronauticos S.A) a subsidiary of EADS, a global aerospace and defence corporation.

12

Entertainment


ENTERTAINMENT

• In order to increase its presence in India, Hollywood studios are increasingly tying up with Bollywood production and distribution houses to market their products. For example, to distribute films, a tie-up took place between Studio 18 and Paramount Pictures while UTV Motion Pictures will be co-producing and distributing Disney films in India.

• Endorsing the Telecom Regulatory Authority of India (Trai) recommendation, the Ministry of Information and Broadcasting has decided to increase foreign direct investment (FDI) ceiling for direct to home TV, Internet protocol TV and teleport from 49 to 74 per cent.

• In order to start two theme-based channels, Reliance Broadcast Network (RBN) has formed an equal JV with Luxembourg-based RTL Group SA.

• Social networking site WAYN.com (Where are you now), having a subscriber base of 17 million globally and about 3.4 million in India, plans to open an office in India by the second half of 2011 to be headquartered in Mumbai.

13

FMCG


FMCG

• Japanese electronic major Panasonic is looking to record sales revenues worth around USD 2 billion (about INR 8,900 crore) from India by next year. In this regard, it is planning to manufacture products that appeal to Indian consumers as well as increase its marketing spend.

14

Gas


GAS

• The Ministry of Petroleum and Natural Gas is examining a plan to increase the financial powers of ONGC Videsh Ltd ten-fold, to be able to look for oil and gas operations and reserves abroad.

• Gujarat State Petroleum Corporation (GSPC) is set to commence its project, worth USD 1.7 billion, to drill and develop the KG-8 gas discovery at the Western part of the KG-OSN-2001/3 offshore block (now renamed as Deendayal). The project is likely to produce 5.7-8.6 million standard cubic metre of natural gas daily from 15 production wells to be drilled in five years.

• Gujarat State Petroleum Corporation (GSPC) has awarded Larsen & Toubro (L&T) an offshore process platform contract, worth INR 1,450 crore (USD 317.5 million), in KG Basin. This contract was awarded under international competitive bidding to meet GSPC’s production target of hydrocarbon by July 2013.

• Srei Infrastructure promoted Quippo Oil & Gas Infrastructure Limited (QOGIL) plans to start oil and gas exploration at Cambay Basin in Gujarat this fiscal. Notably, two years back QOGIL was awarded an oil block, (NELP VII Round) for exploration and production in Cambay basin.

• France-based Cryolor SA’s subsidiary Cryolor Asia Pacific has inaugurated its manufacturing facility at Melmaruvathur, with an investment of INR 45 crore. Spread across 15-acre plot, the plant will manufacture gas containers with capacities of 10,000 to 60,000 litres.

15

Healthcare


HEALTHCARE

• Dabur India has formed an agreement with Ajanta Pharma to acquire the latter’s energiser brand 30-plus, through which the former seeks to increase its presence in the over-the-counter (OTC) space.

• Reliance Industries is keen to capitalise on the growing demand for hygiene and healthcare products for which it is looking to invest up to USD 12 billion in the chemicals business.

• Dr Reddy’s Labs (DRL) is keen to acquire Doktor Mom, owned by Mumbai-based JB Chemicals & Pharmaceuticals that is one of the largest-selling OTC range of drugs in Russia & the Commonwealth of Independent States (CIS).

• Marking a first of its kind development, Glenmark Pharma has entered into a licensing agreement with global major Sanofi to develop and commercialise a monoclonal antibody GBR 500, which is used to treat chronic autoimmune disorders.

• With an aim to conduct research in the area of health sciences, Apollo Hospitals Enterprise Ltd and University College London (UCL) signed a memorandum of understanding (MoU).

• Apollo Hospitals, an Indian healthcare major, has signed the first MoU with the Ministry of Health, Tanzania, for public-private partnership (PPP) in the health sector.

16

Innovations and patents


INNOVATIONS AND PATENTS

• Eighteen collaborative projects involving Australian and Indian scientists have been awarded AED 5 million (USD 5.3 million) under the Australia-India Strategic Research Fund, with matching funding provided by the Government of India.

• Wipro Technologies, in collaboration with Belgian research institute IMEC, will set up a high-end nanotechnology research and development (R&D) centre in Bengaluru to develop next generation intelligence systems.

• The International Institute of Information Technology Bangalore (IIIT-B) will set up a semiconductor lab in Bengaluru, based on a PPP model at an estimated investment of INR 27 crore, for which it has received an approval from the Karnataka Cabinet. Besides the Central and State governments, the private partner will invest INR 9.75 crore in the project.

• To promote skill development in the country, India has signed two memoranda of understanding (MoUs) with Germany; the first one between National Skill Development Corporation (NSDC) and iMOVE and the second one between ILF&S Cluster Development Initiative Ltd and Handwerkskammer Rhein-Main.

17

Insurance


INSURANCE

• Over two per cent additional stake in BHEL has been acquired by Life Insurance Corporation for INR 2,205 crore. Post-acquisition, LIC, with 9 per cent shares, ranks second to government, holding 67.72 per cent, while ICICI Prudential Life holds 1.4 per cent and the remaining held by foreign institutional investors and public.

• Targeting the micro, small and medium enterprises (MSME) segment and rural market, United India Insurance Company, a government-run general insurance, is looking to acquire business worth INR 8,000 crore in the current financial year.

• To offer its entire range of services including new business application processing, policy servicing request processing, claim intimation processing and document collection, among others, IndiaFirst Life Insurance, a JV between Bank of Baroda and Andhra Bank along with UK’s leading risk, wealth and investment company Legal & General, inaugurated its first Financial Planning Centre (FPC) in Chennai.

• Insurance Regulatory & Development Authority (Irda) has registered Tokio Life Insurance Company Limited, a JV between the Edelweiss Group and Tokio Marine, to conduct its business as a life insurer.

• In order to enter India’s health insurance sector, Cigna Corporation, a US-based health insurance major is looking to tie-up with an Indian company to better understand the domestic market and get access to the local partner’s distribution network.

18

IT & ITeS


IT & ITeS

• Global consultancy and technology giant, Accenture, whose employee base in India is expected to touch 70,000 by August this year–the highest in any one country–consider India as the heart of the company, said its CEO, Pierre Nanterme on a visit to Bengaluru. With 30,000 employees, the US ranks second. Across the globe, Accenture has close to 215,000 people.

• Infosys Technologies has plans to treble its operations in China. Towards that end, Chairman NR Narayana Murthy laid the foundation of a new campus in Shanghai recently. "China has demonstrated an extraordinary pace of growth. Such growth cannot be sustained unless it is backed up by scalable, easily maintainable, easily available and easily usable information systems. That is where we believe that there is opportunity for us in China for us," he said.

• Sequoia Capital and IDG Ventures India have funded Bengaluru-based Sourcebit to the tune of USD 10 million. "We are interested in the mobile sector and Sourcebits is promising because we are dealing with innovative technology and a democratic setup," says Shailendra Singh, Managing Director, Sequoia Capital.

19

Power


POWER

• The Cabinet Committee on Infrastructure has approved Neyveli Lignite Corporation's INR 5,907.11-crore lignite-based thermal power project in Tamil Nadu. Neyveli will be setting up two units of 500 MW each in the Indian state of Tamil Nadu at an estimated cost of INR 5,907.11 crore. Power generated from these plants will be supplied to the southern States.

• Adani Power is targetting to double its generation capacity to 3,960 MW in the current fiscal. With this aim it is implementing 16,500 MW of power generation projects across the country. This includes a 4,620 MW project at Mundra in Gujarat and a 3,300 MW project at Tiroda in Maharashtra.

• According to a recent KPMG report, India will add 67,000 MW of solar generation capacity by 2022, aided by technical breakthroughs and economies of scale. The present trends indicate that the prospects are very bright for solar power to be equal to conventional electricity any time after 2017, according to a senior official from the Ministry of New and Renewable Energy.

20

Pharmaceuticals


PHARMACEUTICALS

• Sun Pharma plans to spend 6 per cent of its sales in the current fiscal on R&D. The R&D spend would be across Sun, its US-based subsidiary Caraco and Israeli drug-maker Taro, which was acquired in September 2010. Sun Pharma clocked net sales of INR 5,721 crore for the year ended March 2011, with a consolidated research expense of about INR 331 crore, or 5.8 per cent of income.

• Johnson & Johnson (J&J) in a deal, being struck through J&J’s wholly-owned Cilag GmbH International,

is working to acquire over-the-counter Russian brands of Mumbai-based JB Chemicals & Pharmaceuticals (JBCPL) for about US$260 million. The deal is expected to close by June 2011. Bank of America and Merrill Lynch advised JBCPL on the deal.

• Doktor Mom is owned by Mumbai-based JB Chemicals & Pharmaceuticals. With annual sales of INR 200 crore, it is the company’s largest OTC brand.

21

Real estate


REAL ESTATE

• Patel Realty India Ltd plans to launch 3-3.5 million sq ft of projects valued around INR 300 crore in this financial year. The company, which is a subsidiary of Mumbai-based Patel Engineering Group, currently has about 1,100 acres of land in various parts of the country. The company is already constructing on around 7 million sq ft of real estate space.

• Phadnis Group is planning to invest INR 800 crore in sectors such as real estate, hospitality and infrastructure over the next three years. The group will develop 25 hotel properties across the country over the next 10 years. It is also developing infrastructure projects worth INR 800 crore including hospitals and roads. Apart from hotels, the group is planning to set up a 2 MW solar power plant in Maharashtra’s Beed district.

22

Retail


RETAIL

• To expand its presence across the country, especially in tier-II and tier-III cities, Ahmedabad-based Timbor Home Limited is planning to set up 20 company-owed large format furniture retailing stores. Timbor Home Limited is planning to enter the capital market to raise funds. It plans to do so with an initial public offering (IPO) of 3.69 million shares in the price-band of INR 54-63 per share.

• Many consumer durables marketers are taking to e-commerce to boost sales. Two companies–Mumbai –based Vijay Sales and Chennai-based Viveks–will start e-commerce operations this year. Vijay Sales, a multi-brand retailer, began operations in Mumbai in 1967. Last fiscal its turnover was INR 1,250 crore. The company feels it can garner 10-15 per cent of total sales through e-commerce in the next few years.

• Jyothy Laboratories has bought Henkel AG's majority stake in its Indian subsidiary for INR 617 crore. Jyothi is best known for its Ujala fabric whitener. The deal includes Henkel's portfolio comprising Henko and Chek detergents, Fa deodorant and Pril dish cleaner and rights to the multinational's future launches.

• Bengaluru-based Arvind Ltd is planning to open 100 stores across the country by end 2011-12. The company currently has 8 stores in the country. Sanjay Lalbhai, chairman and managing director, Arvind Ltd said, "We have already launched these stores in Andhra Pradesh. With the first store in Gujarat being launched, we are planning to add 92 more stores this year to hit the 100 stores mark."

23

Steel


STEEL

• The Steel Authority of India Ltd (SAIL) plans to have captive cargo handling facilities on the east coast. In this regard, the company is looking for investments, including equity participation, for construction of a new port or berths, terminals or creation of any similar facility to cope with the projected rise in its import of dry bulk cargo. With this aim, SAIL is on a look out for companies that would provide complete logistics solutions.

• Mumbai-based Essar Steel is expanding its capacity to 10 million tonne (mt). The Ruia family-backed company is close to completing its 13,500-crore expansion programme that will more than double its capacity to 10 mt. It is also expanding its service centres, according to its CEO.

24

Textiles & apparels


TEXTILES & APPARELS

• The S P Oswal Group has plans to invest in its units in Madhya Pradesh (MP). It will make a combined investment of INR 1,200 crore in its three units, besides a new sew thread unit which will be set up at an investment of INR 110 crore. In MP, the group has units in Mandideep, Satlapur and Budni near Bhopal. The unit at Stalapur, known as Vardhaman Yarns is the largest in terms of spinning capacity. The group has applied for various concessions and tax exemptions from the state government in accordance with the industrial promotion policy.

25

Telecom


TELECOM

• Aircel, a 74:26 JV between Maxis Berhad of Malaysia and the Apollo Hospitals Group, has launched iPhone 4 from the Apple’s stable in Hyderabad. The 16GB Apple iPhone 4 will retail for INR 34,500, and the 32GB version for INR 40,900. The phone has two cameras.

• Alta-Xintong Solar Tech Pvt Ltd has launched DC solar power systems for power telecom towers in India. The company is a JV between Bengaluru-based Alta Energy Technologies Pvt Ltd and Chinese solar system solution provider XinTong. The recently-launched system would enable operators to run their new tower through solar power. Currently, out of the total 300,000 telecom sites in the country, around 30,000 towers are in off-grid rural locations, and run on diesel power.

• To bridge the digital divide, the telecom department plans to invite bids from mobile phone companies, fixed-line operators and ISP. The telecom department has decided to put up only one slot for bidding in each of the 22 circles, so only one private telecom player will roll out a wireless broadband network in each zone. The second slot is reserved for state-owned BSNL.

26

Tourism & hospitality


TOURISM & HOSPITALITY

• As part of its expansion plans, The Claridges Hotels & Resorts has acquired a property in Bharatpur, Rajasthan. The acquired property is a 100-year-old fort, the Lohagarh Fort. The company currently owns and operates three hotels under the Claridges brand.

• India joins the global league of cruise line clubs with the acquisition of the country’s first cruise ship, AMET Majesty, registered in Chennai with an Indian flag.The Chennai-based AMET Shipping Pvt Ltd of the AMET Group invested INR 100 crore in procuring the 35-year-old cruise vessel Arberia from a Greek owner.

• The Golden Tulip Hospitality, Hyatt, Marriott, Carlson Hospitality, Starwood and Best Western are among several hotels that are looking to expand their business by tapping into the growing market of pilgrimage tourism. They are looking to acquire properties in temple towns such as Haridwar, Tirupati, Ajmer , Amritsar and Katra-Vaishnodevi and Madurai. It is estimated that Tirumala Tirupati Devasthanams receives 50,000-70,000 pilgrims each day, even though the city has accommodation for only about 22,000 people by way of dharamsalas, hotels and guest houses.

SECTOR UPDATES - IBEF · ONGC Videsh Ltd ten-fold, to be able to look for oil and gas operations...

Documents

Transcript of SECTOR UPDATES - IBEF · ONGC Videsh Ltd ten-fold, to be able to look for oil and gas operations...