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Green miracle powers revision of 2005-06 GDP growth figures
First-half estimates for current fiscal likely to change. The
government revised the gross domestic product (GDP) growth rate
for 2005-06 from 8.4 per cent to 9 per cent, mainly to account
for a 54 per cent revision in agricultural growth from 3.9 to 6
per cent, in its quick estimates for the fiscal. Union Finance
Minister said, “The revised figures augur well for 2006-07,
although I must caution that we will have to see its impact on
growth figures this year.” A higher GDP base for 2005-06 could
lower the 9.1 per cent growth estimates for the first half of
2006-07. Also notable is an increase in the estimates for
savings from 31.1 per cent of GDP to 32.4 per cent. Gross
capital formation also improved from 30.2 per cent to 32.2 per
cent during the period.
Tata Steel in global arena with Corus win
After seven and a half hours of intense bidding, Tata Steel
emerged victorious in the battle for Corus Group, quoting 608
pence a share, about a third higher than its first offer in
October last year. The jubilation was marred as the stock
market, amid fears that Tata Steel may have overpaid, beat the
stock down 11 per cent on the Bombay Stock Exchange. Besides,
global rating agency Standard & Poor’s put its BBB long-term
corporate credit rating on credit watch with negative
implications. Meanwhile, CSN gained 6.2 per cent in Sao Paulo
and Corus climbed 7 per cent in London. Tata will pay $12.15
billion in cash for the Anglo-Dutch steelmaker, making it the
largest acquisition by an Indian company and the second largest
in the industry after Mittal Steel’s $38.3 billion acquisition
of Arcelor.
PC sales hit a high note at 3 million units in H1, financial year 2007
Fuelled by a strong demand in telecom, banking and financial
sectors and a drop in PC prices due to the onslaught of new
technologies, India’s computer sales, desktops and notebooks
combined, touched 2.96 million units in the first half of fiscal
2007, a growth of 19% over the same period the previous year.
The buoyant buying sentiment is likely to continue in the second
half, pushing PC sales for the full year 2006-07 to 6.5 million
units, about 30% jump over five million units sold in 2005-06.
The forecast includes 5.6 million units of desktop sales, and
0.9 million units of notebook sales. This will take India’s
total installed base for computers to 20 million.
Government for 100 per cent FDI in higher education
The government backed 100 per cent foreign direct investment (FDI)
in higher education in India, saying that the same national
rules will apply to foreign universities wishing to set up bases
in the country and hinted that it could also include mandatory
reservations for certain sections. "The government has proposed
100 per cent FDI in higher education in all institutions,"
Higher Education Secretary said, while alluding to India's World
Trade Organisation commitments made in 2003. He said this at the
Editors' Conference on Social Sector Issues when he was asked to
clarify whether the government was considering a cap of 50 per
cent FDI in higher education. The Group of Ministers (GoM),
headed by Human Resource Development Minister, will be mapping
out the rules and regulations that will govern foreign
universities setting up their campuses in India. The GoM will
submit its recommendations soon. Although the government has
supported 100 per cent FDI, in practice stringent regulations
would ensure that foreign universities collaborate with a local
partner and only prestigious and well-known universities will be
allowed in, reliable sources said.
Birla buys US based metal major for US$ 6 billion
Kumar Mangalam Birla-controlled Hindalco Industries, the
country’s largest aluminium producer, announced the acquisition
of Atlanta-based Novelis for an enterprise value of nearly $6
billion in cash, which will help it gain large customers like
Coca-Cola, Ford and General Motors. Codenamed Red Socks, the
deal envisages a payment of $44.93 per share, which is 16.5 per
cent more than its last closing prices, to Novelis shareholders,
amounting to a total of $3.5 billion. In addition, Hindalco will
take on its books Novelis’ debt of $2.4 billion. The
acquisition, which requires approval of 66 per cent of Novelis’
shareholders, is expected to be completed by the second quarter
of 2007. The Novelis board has recommended the offer to its
shareholders, largely financial institutions. “The acquisition
will catapult the group into the Fortune 500 league, three years
ahead of the target. The combination of Hindalco and Novelis
will establish a global integrated aluminium producer,” Birla
said.
India
zooms past China
India has emerged as the most favoured private equity
destination attracting $1,239.22 million worth investments in
January, surpassing Asian giants like China and Japan, a study
says. India ranks top in terms of PE investments in
January-February and has left behind Asian giants like China
with $ 609 million and Japan with USD 980 million, according to
a report by Asian Venture Capital Journal (AVCJ). The report, on
Asia-Pacific emerging as the most attractive region for
investment said, the total Asian private equity capital under
management rose by almost 30 per cent in 2006 to $158 billion as
compared to $122 billion in 2005.
Italian companies in India: Italia Marittima
Italia Marittima, which was earlier known as Lloyd Triestino,
started its shipping services to the port at Mumbai (Maharashtra)
in 1870 and is one of the oldest shipping companies operating
from India. It enjoys the unique distinction of being the first
foreign shipping company to be permitted by the Government of
India to open its own Branch Office in Mumbai in 1949. The
company started its Indian operations in the bulk cargo and
passenger service segments and migrated later to container
services. Lloyd Triestino or Italia Marittima S.p.A (acronym
ITS), offers services from Mumbai's Jawaharlal Nehru Port Trust
(JNPT) and Nhava Sheva International Container Terminal to the
Mediterranean, Europe Australia and US East Coast via Colombo
and to Australia via Singapore. The Mumbai Branch Office
directly looks after the traffic generated to and from Mumbai
and Nhava Sheva ports. It also offers services to/from inland
container depots (ICDs) at New Delhi, Ahmedabad (Gujarat),
Hyderabad (Andhra Pradesh), Bangalore (Karnataka) and Coimbatore
(Tamil Nadu) through its agents, Patvolk, a division of Forbes
Gokak Limited.
Indian banks storm loan syndication abroad
With the best of India Inc flocking to overseas loan markets for
funds, Indian banks have started following their top customers.
For the first time, two Indian lenders — ICICI Bank and State
Bank of India — figure among the top five in the league tables
for loan syndication. With this, Indian banks have stormed one
more bastion of foreign banks which have led loan syndication
tables for years. In 2006, French bank Calyon emerged as the
number one bank for loan syndication with 31 deals of $1.23
billion. ICICI Bank and SBI emerged as the number three with 13
deals ($1.01 billion) and number five with 17 deals ($951
million), respectively, according to `basis point’ — a journal
that tracks syndication deals. However, these deals also include
loans to corporates and financial institutions. “In 2004, we
were barely there. In 2005, we were number four,” says Chanda
Kochhar, deputy managing director ICICI Bank. “We build up this
capacity in the last couple of years and are today the largest
in overseas loan syndication to Indian corporates.” She pointed
out that a large chunk of business from the banking industry was
not available to ICICI Bank since ICICI Bank itself was the
biggest issuer of debt among Indian banks in 2006.
India, Italy to double trade by 2009
Indian and Italian firms signed several joint venture
agreements, as the two countries aimed to more than double
bilateral trade by 2009. The two countries set a target of $10
billion in bilateral trade by 2009, up from $4.4 billion in
2005/06. Italy is India's fourth-largest trading partner in the
European Union. Cooperation between Indian and Italian firms
covers areas including apparel and luxury goods, automobiles and
finance. Italian Prime Minister Romano Prodi led a 500-member
business delegation to India's financial hub, Mumbai, the
largest to visit India so far.
India drives global business confidence to 5-year high
Dynamism in emerging markets, mainly India, has driven the
global business confidence to a five-year-high, a survey by the
Economist Intelligence Unit (EIU) says. The EIU’s fifth annual
CEO briefing survey found that nine out of 10 top global
executives rated business prospects during the next three years
as "good" or "very good". The main drivers behind the optimism
among global business executives were the bustling emerging
markets especially — India and China. In the survey, a majority
of the 1,006 executives from around the world are planning to
invest more in developing countries than in developed economies.
One of the key findings of the survey shows that India is more
upbeat than China. Respondents from India are abuzz with
optimism for the years ahead, with 98 per cent of them seeing
"good" or "very good" business prospects.
India on world radar for investments
India's robust economic growth has put the country on the world
radar for attracting investments from global investors, Commerce
and Industry Minister said. 'India is on the world radar as
never before, thanks to the current robust economic growth. No
investor wants surprises, but they want improvements. And that
is what we promise to deliver,' the Minister told about 750
business delegates from 26 countries participating in the
three-day CII partnership summit. 'The time for surprises is
over. Now, we shall give you constant improvement and
betterment.' Asserting there could not have been a better time
to engage with India, he said the reforms process was being
widened and deepened to provide opportunities to businesses from
the world over. 'The foreign direct investment (FDI) regime is
getting progressively liberalised. The regulatory mechanisms are
being strengthened and overseas investments in key areas of
infrastructure are being made most welcome,' the minister
pointed out.
US$ 650 million FDI cleared
The Cabinet Committee on Economic Affairs (CCEA) cleared a
$500million foreign direct investment proposal by
Indonesia-based Salim and Ciputra groups-promoted New Kolkata
International Development Private Ltd. The investment will be
for setting up infrastructure projects, including special
economic zones, in Left-ruled West Bengal. Finance Minister said
the CCEA approved the proposal as it involved FDI inflows worth
more than Rs 6000 million. “The exact nature of investment would
depend on the agreement between the investors and the state
government,” Minister said. He added that the project, which has
been approved on the recommendations of the Foreign Investment
Promotion Board, would also involve an Indian equity partner,
with the Salim Group holding 40% stake in the joint venture
company.
US$ 60 billion IT exports by 2010 in sight
The ebullient results of software biggies in the last quarter
have triggered a buzz that the target of $60 billion worth of
software exports by 2009-10, dubbed ambitious when first talked
of by Nasscom, is well within reach. Software exports stood at
$23.6 billion in 2005-06. Over 90 per cent of the revenue comes
from exports. The results assume more significance in the last
quarter (ended December 31, 2006) because the billing days were
lower compared with other quarters and rupee appreciation was to
the order of 2-3 per cent, which ate into profitability.
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Forbes
2007 Indian billionaires
By sheer numbers, Indians
topped the list of richest people in Asia of whom Forbes placed
Lakshmi Mittal, Mukesh Ambani and Anil Ambani in the ultra elite
global top 20. The combined wealth of Indian billionaires,
including familiar names like Azim Premji, K P Singh, Sunil
Mittal, Shashi and Ravi Ruia, Pallonji Mistry and Adi Godrej,
swelled to USD 191 billion. Mukesh Ambani and his brother Anil
Ambani breached into the top 20 richest list with a net worth of
USD 20.1 billion and USD 18.2 billion respectively. Forbes
ranked Lakshmi Mittal, whose steel empire has earned him USD 32
billion, the fifth richest person on the planet.
India
emerging as new business destination
India is emerging as the new destination for American business
after China with several states planning to send trade missions
to take advantage of its "fast-growing market". Governors from
Virginia and Iowa have been there, and Minnesota, California and
Utah are lining up gubernatorial visits for this year, according
to Michael Taylor of the US-India Business Alliance that helped
organise the earlier missions. Minnesota's Republican Governor
is planning to lead a 30-member trade mission to India Oct 20-27
with stops in New Delhi, Bangalore and Mumbai. "We view this as
a tremendous opportunity to better acquaint Minnesota with India
and better acquaint India with Minnesota," said Pawlenty
announcing the trip to a country that now makes up a tiny
fraction of Minnesota's roughly $14 billion in annual
manufactured exports.
IT services exports touch US$ 24 billion
India's
exports of IT services, BPO and electronic hardware are
estimated to have touched $23.6 billion during the first nine
months of the current financial year. Software and ITeS exports
accounted for more than 90% of the overall kitty. Electronic
hardware exports have logged a growth rate of 38.8% at $2.1
billion during April-December financial year 2007, compared to
$1.5 billion grossed in the corresponding period of the previous
year. IT software and IT-enabled services (ITeS) exports, which
enjoy a lion’s share of the high-tech export booty, registered
$21.5 billion during the period, a growth of 28.2% over the
year-ago period.
German companies in India: Carl Bechem Lubricants
In
India, Carl Bechem manufactures and markets high performance
speciality lubricants (speciality lubricants constitute around 5
per cent of the overall US$ 18.2 billion lubricants market),
metal working fluids, open gear lubricants and food and
pharmaceutical grade lubricants. With India's manufacturing
sector growing at an average annual rate of 6 percent per year
in the 14 years between 1990-91 and 2003-04, Carl Bechem
products have enjoyed a high demand market. The company expects
to grow to a size of US$ 11.25 million over the next 5 years.
Japanese companies in India: Stanley Electric
Stanley Electric Company, a manufacturer of vehicle lighting and
illumination products, holds a 19 per cent share in Lumax
Industries, which makes automobile lights and gear shifters.
With more than 60 per cent of the market share in Indian
automobile lighting business, the company has been a major
beneficiary of the significant growth in the auto sector.
Further, the company is expected to benefit as higher number of
vehicles being launched will directly benefit the company.
Economy set to grow at 9.2 per cent
Continued buoyancy in manufacturing and services will see the
Indian economy grow 9.2 per cent in 2006-07, making it the
second consecutive year that the economy has grown at this rate,
according to advance estimates of national income from the
government’s Central Statistical Organisation (CSO). These
numbers come a week after the government revised 2005-06 GDP
growth from 8.4 per cent to 9 per cent. They surpass initial CSO
estimates of 8.1 per cent and Reserve Bank’s revised estimates
of 8.5-9 per cent. This is also the fastest growth since 1989.
FDI inflow may double in 2007
Inflows of foreign direct investment (FDI) into India have
increased significantly during the current financial year,
according to the Minister of Commerce and Industry. The inflows
are likely to be more than double the amount recorded in 2006,
said Minister while presiding over the meeting of the
parliamentary consultative committee. FDI equity inflows during
April 2006 to November 2006 were $7.2 billion, which is the
highest ever for equity capital since economic liberalisation.
Minister said that monthly inflows this fiscal crossed $1
billion during July, October and November 2006. The higher
inflows as well as the new credit rating reflected growing
investor confidence in India, the Minister added. According to
him, FDI inflows by the end of this fiscal would reach $12
billion. This means an unparalleled growth of 120% over the
previous year.
Genpact plans India's largest IPO in US
India's largest BPO company has finalised its IPO plans in the
US markets. Genpact will raise between $500-$600 million. This
will be the largest IPO by an Indian company in the US. Economic
Times had earlier reported that Genpact was planning an IPO. Now
it is confirmed that the company is going ahead with its plan
for a listing its shares on the New York Stock Exchange. Genpact
officials refused to comment. Pramod Bhasin, CEO of Genpact,
refused to talk on the issue at all. Genpact board has already
approved the issue and merchant bankers Morgan Stanley and
Goldman Sachs have been appointed for the issue. The public
issue is important as Genpact is the largest BPO company from
India, and the issue will fulfil the huge demand for Indian BPO
shares in the US market. The issue will also affect the
valuations and demand for two other Indian BPO firms that went
public last year — WNS got listed on NYSE, and EXL Services, got
listed on Nasdaq. Both WNS and EXL saw a huge demand for their
shares when they went public, even after the issue, they command
very high valuations.
Global airplane makers bullish on Indian skies
With the central government poised to hold a mega conference
with the states on developing around 300 unutilised airstrips
across the country, airplane makers are raising the projections
for jets required for regional connectivity. Apart from the big
boys - the US-based Boeing and Europe’s Airbus - Embraer
(Brazil), Bombardier (Canada), Sukhoi (Russia), ATR (France) and
BAE System (UK) are gearing up to tap the emerging regional jet
market in the country. Union Civil Aviation Minister Praful
Patel said the opening up of unused airstrips would boost
greater regional connectivity and for that India would require
at least 1,500-2,000 airplanes over the next 10 years.
Rolls-Royce in pact with IISc for 'greener' engines
British aerospace major Rolls-Royce has tied up with the Indian
Institute of Science (IISc), Bangalore, and Imperial College of
the UK to work alongside in a new research project to develop
alloys for use in 'greener' aircraft engines. Speaking to
reporters, British High Commissioner to India, said, the
research programme was part of the UK-India Education and
Research Initiative (UKIERI) Award that encouraged links between
the our two countries. "The research will help make products
that are both environment-friendly and built for aircraft of the
future," he said.
'Sunil Mittal Asia's Businessman of Year'
India's Sunil Mittal has been adjudged Asia's Businessman of the
Year by US magazine Fortune for steering his telecom business in
the world's fastest growing wireless market. In a lead article
in its latest issue, Fortune said after establishing Bharti
Airtel as India's number one mobile service provider, Mittal is
now forging his "most audacious" foreign partnership yet. "In
November, he announced that Bharti will team with Wal-Mart to
transform India's under-developed retail market," the report
said. The magazine said it was an easy choice to declare Mittal
as Asia's top leader for his business acumen and some crucial
agreements he has signed in recently.
India
emerges fourth-biggest M&A target
While domestic corporate giants such as Tatas, Ambani and
Ranbaxy are continuously looking abroad for mergers and
acquisitions, India has emerged as the fourth-biggest target in
the Asia-Pacific IT space with deals worth over 3.5 billion
dollars in 2006. Total merger and acquisition activities in
Asia-Pacific technology sector totalled 35.1 billion dollars in
2006. Indian companies were target in deals worth 10 per cent of
the total value, data compiled by global financial information
provider Dealogic shows. Taiwan was the most targeted nation
with deals worth 12.2 billion dollars through 76 transactions,
followed by Japan with seven billion dollars in 441 deals and
China with 5.1 billion dollars in 275 deals, Dealogic data
shows. According to global consultancy major Grant Thorton,
total number of M&A deals in the Indian IT space had reached 50
in the first ten months of 2006 itself, resulting in total
volume of 1.47 billion dollars. In contrast, there had been only
22 M&A deals in 2005 in the Indian IT space with a total value
of 244 million dollars.
Citi Property to invest US$ 120 million in luxury hotels
The New York-based Citigroup Property Investors (CPI) will
invest up to $120 million in Bangalore-based Nitesh Estates'
luxury hotels. Chairman of the Nitesh Group, confirmed that
Citigroup Properties would partner with Nitesh Estates on its
forthcoming hotel properties but declined to give details.
Sources close to the development said CPI has already committed
itself to 30 per cent stake in the group's recently announced
$100 million five-star hotel property on Bangalore's Residency
Road. CPI, which is among the biggest private equity investors
in the Indian real estate, will take up a similar stake in
forthcoming properties, sources said. Nitesh group is planning
to build four more hotels in Goa, Chennai, Hyderabad and Kochi.
The group is believed to have acquired land in Goa and is in the
process of acquiring land in other locations. CPI has already
invested close to $250 million in India and has plans of
investing a further $500 million. Of this, around 40 per cent is
expected to be invested in hotels and service apartments. The
Nitesh group had earlier received an infusion of $100 million
from a Singapore-based fund for its luxury residential property
in Bangalore.
UK's Caparo plans US$ 195.4 million India spread
Caparo, the
UK-based speciality steel and engineering group headed by Lord
Swaraj Paul — the Labour peer — plans to spend over £100 million
on acquisitions and greenfield projects in India. Having
completed two acquisitions in India, Caparo has initiated the
process to set up eight manufacturing facilities. “I’ve been
saying for 25 years that India is going to be a big
manufacturing country and it is now coming true,” Lord Paul told
Economic Times.Caparo plans to invest its cash in India over the
next 3 to 4 years in building up to eight new plants, over and
above the four it already operates in the country. The aim is to
expand Caparo’s sales in India from £25 million last year to
£130 million in 2008 and, in the process, boost employment in
its India plants. Caparo’s new facilities are coming up in
Chennai, Pitampur, Bawal, Noida and Gurgaon.
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