18
Sectoral Snippets India Industry Information Issue 30 - April 2009 KPMG IN INDIA

SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

Embed Size (px)

Citation preview

Page 1: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

Sectoral SnippetsIndia Industry Information

Issue 30 - April 2009

KPMG IN INDIA

Page 2: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

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 30

As�India�prepares�for�the�forthcomingparliamentary�elections—scheduled�to�takeplace�later�this�month�and�in�the�next—businesses�are�hopeful�for�political�stability�anda�continuation�of�economic�reforms�to�drivegrowth�in�the�year�ahead.��

The�Committee�on�Financial�Sector�Assessment(CFSA)�also�recently�released�its�assessmentreport�of�the�Indian�financial�sector,�concludingthat�while�it�believed�the�financial�system�issound,�there�are�issues�that�need�to�beaddressed.�The�concerns�listed�include�fundingconstraints�for�NBFCs,�corporate�governance�inthe�co-operative�sector,�lack�of�accurate�data�toassess�household�indebtedness,�etc.�The�CFSAwas�constituted�to�perform�a�detailed,�in-depthassessment�of�the�Indian�financial�sector,�by�theIndian�Government�in�consultation�with�RBI�in2006,�after�India�participated�in�World�Bank�andIMF’s�financial�sector�assessment�program�in2001.�

I�hope�this�you�find�this�edition�of�SectoralSnippets�useful�and�informative.

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 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

While�it�was�less�than�a�year�ago�that�India�witnessed�inflation�touching�13-year

high,�policymakers�are�now�worried�about�the�country�heading�into�deflation�as

Asia's�third-largest�economy�is�likely�to�log�a�growth�of�less�than�7�percent�this

fiscal.�

The�year-on-year�change�in�the�Wholesale�Price�Inflation�(WPI)�which�is�now�at

0.27�percent;�is�expected�to�slip�into�negative�territory�in�the�coming�weeks.

Although�the�Reserve�Bank�of�India�(RBI)�uses�the�WPI�as�its�preferred�measure

of�inflation�since�it�has�a�broader�basket�of�goods,�negative�growth�may�not�have

any�major�impact�on�demand�as�the�Consumer�Price�Index�(CPI)�is�still�hovering

around�9�percent.�Thus,�retail�prices�continue�to�remain�at�comparatively�higher

levels.�Therefore,�consumers�are�yet�to�reap�the�benefits�of�lower�inflation.

However,�bearing�in�mind�the�current�economic�scenario,�deflation�may�also�be�a

result�of�low�money�supply�and�credit�in�addition�to�a�curb�in�spending�by

households,�industry�or�the�Government.�

Accordingly,�with�the�intention�to�maintain�aggregate�demand�in�the�economy,

India’s�central�bank�is�likely�to�announce�further�rate�cuts�in�addition�to�the

Government’s�stimulus�measures�which�may�further�boost�spending.�Thus,�to

spur�consumer�demand,�interest�rates�need�to�come�down.�However,�the

Government�needs�to�ensure�not�only�rate�cuts�but�adequate�flow�of�credit�in

the�system.�Increased�fiscal�expenditures�by�the�Government�are�likely�to�ensure

adequate�liquidity�in�the�system.�Doing�so�is�expected�to�aid�gradual�phasing�out

of�the�recessionary�trends�in�the�demand�and�consumption�patterns.

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.

“More than cutting rates, ensuringthe flow of credit is important. Ifcredit does not flow then anyamount of interest rate cuts willnot help. We have room for cuts,but cuts should be only a part ofthe plan. The main objectiveshould be credit flow, which is nothappening now.” Subir Gokarn, Chief Economist - Asia-Pacific, S&P

(Source: DNA, ‘It’s disinflation, not deflation, we arefacing right now’, March 22 2009)

Page 4: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

• Peugeot plans to re-enter Indian market

Post�its�2001�pull�out�from�the�Joint�Venture�(JV),�a�European�automaker�PSA

Peugeot�Citroen,�is�planning�on�a�re-entry�in�the�Indian�market.�It�is�currently

searching�for�a�greenfield�manufacturing�location�in�Tamil�Nadu�and�Andhra

Pradesh.�The�firm�had�opened�an�office�in�Chennai�in�October�2008.�It�plans�to

introduce�the�307�hatchback�and�C5�sedan�in�India.�As�per�media�reports,

Peugeot�has�already�held�meetings�with�Andhra�Pradesh�and�Tamil�Nadu

Government�to�discuss�the�investment�opportunities.

• Temsa Global to enter Indian bus market

Turkish�commercial�vehicle�maker,�Temsa�Global�is�looking�to�enter�the�Indian

bus�market.�The�firm�has�already�undertaken�a�feasibility�study�on�the

commercial�potential�to�set-up�an�integrated�bus�manufacturing�facility�in�India

and�may�consider�forming�a�JV�with�a�local�company.�The�company�plans�to

make�India�as�the�manufacturing�base�for�Asian�markets�and�also�develop�a

sourcing�base�for�automotive�components�for�its�global�manufacturing

operations.�Temsa�Global�is�also�looking�for�local�component�vendors�for�major

components�like�gears,�engines,�seats,�glass,�axles�and�metal�parts.�It�plans�to

introduce�its�long-distance�inter-city�coaches�under�the�Safari�brand�for�the

urban�markets.�

• Mahindra & Mahindra in talks to form a JV with Lockheed Martin

and BAE

Mahindra�&�Mahindra�(M&M)�is�reported�to�be�in�talks�with�Lockheed�Martin

and�BAE�for�a�naval�business�JV.�It�is�looking�at�the�defense�sector�as�a

strategic�business�interest�and�is�looking�to�grow�this�business�through�global

partnerships.�It�has�already�tied�up�with�BAE�for�a�land�systems-specific�JV.

Earlier�the�company�had�spun�off�its�land�and�naval�businesses�into�wholly-

owned�subsidiaries�of�Mahindra�Defense�Systems,�its�defense�business

vertical.�It�plans�to�offer�26�percent�stake�in�both�subsidiaries�to�global

partners.�It�aims�to�take�its�land�systems�business�to�USD�388�million�by�2015.�

• MRP Autorub enters into JV with MDI

MRP�Autorub�Private�Limited�(MRP),�a�Chennai�based�rubber�extrusion�and

molding�manufacturer�has�entered�into�a�JV�with�Molded�Dimensions�Inc

(MDI),�a�US-based�company�manufacturing�rubber�and�plastic�molded�and

extruded�parts.�The�JV�is�primarily�to�set�up�a�cost�competitive�manufacturing

base.�The�JV�would�have�India�as�the�manufacturing�hub�and�would�sell�to

customers�in�India,�USA,�Europe,�Australia,�Middle�East�and�South�America.

MDI�is�expected�to�initially�hold�26�percent�stake�in�the�company�and�would

have�the�option�to�increase�the�equity�up�to�49�percent�within�a�period�of�5

years.�

Page 4 of 18

Auto and Auto Components

Analyst: Rajiv Somani©�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.

“This is an exciting opportunity and is thefirst step in BAE Systems’ plans to growlong term businesses in India in multiplesectors across the breadth and depth ofthe company’s global capabilities in land,sea, air and security.”

Ian King, Chief Executive, BAE Systems

(Source: Economic Times, ‘M&M in Defense JV TalksWith Lockheed Martin, BAE’, March 04, 2009)

Page 5: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

• IDBI Fortis to invest USD 48 million for expansion

IDBI�Fortis�Life�Insurance�plans�to�infuse�further�capital�of�approximately�USD

48�million�from�its�shareholders,�namely�IDBI�Bank,�Federal�Bank�and�Fortis.

The�contribution�of�each�of�the�shareholders�is�expected�to�be�in�proportion�to

their�shareholding�in�the�venture.�The�new�capital�infusion�is�likely�to�help�IDBI

Fortis�towards�expanding�operations�and�in�meeting�solvency�requirements.

The�company�has�plans�to�set�up�100�branches�across�the�country.�IDBI�Fortis

also�sells�its�products�through�more�than�1,100�branches�of�IDBI�and�Federal

Bank.�

IDBI�Fortis�commenced�its�operations�in�March�2008�with�an�initial�capital�of

USD�50�million.�

• Aviva plans to venture into mutual fund business

Aviva�India�plans�to�establish�asset�management�business�in�India,�as�part�of

its�expansion�strategy�in�Asia�Pacific�and�India.�Aviva�is�looking�at�various

options�for�venturing�into�the�asset�management�business,�including

greenfield,�acquisition,�or�alliance.��

Private�sector�life�insurer�Aviva�India�is�a�JV�between�Aviva�and�Dabur.�A

majority�of�life�insurance�players�in�India�have�asset�management�arms,

including�ICICI�Prudential,�Reliance�Mutual�Fund,�HDFC�Mutual�Fund�and�SBI

Mutual�Fund.

• SBI ties-up with Diebold for ATM expansion

India’s�leading�public�sector�bank,�State�Bank�of�India�(SBI),�has�tied�up�with

Diebold�for�the�largest�automated�teller�machines�(ATM)�expansion�in�the

country.�Post�expansion,�SBI’s�total�ATM�network�is�likely�to�grow�to�12,000.

Under�the�terms�of�the�contract,�Diebold�plans�to�provide�ATM�site�preparation

and�managed�services.�Diebold,�a�global�leader�in�integrated�financial�self-

service�delivery,�plans�to�supply�SBI�with�its�full-function�model�D450�ATM,

which�is�specially�designed�for�the�Indian�market.�

The�RBI�has�recently�issued�guidelines�for�free�use�of�third-party�bank�ATMs

from�April�1,�2009.�Considering�that�banks�charge�an�inter-change�fee�for

providing�the�ATM�facility�to�the�customers�of�other�banks,�this�move�is�expected

to�benefit�larger�players�such�as�State�Bank�of�India,�ICICI�Bank,�HDFC�Bank�and

Axis�Bank,�as�they�have�well�expanded�ATM�networks�across�the�country.

• IIFL seeks permission to launch AMC arm in Singapore

Leading�financial�services�provider,�India�Infoline�Limited�(IIFL),�is�seeking

license�for�brokerage�and�investment�banking�services�in�Singapore�in

collaboration�with�Deutsche�Bank.�The�company�expects�its�operations�to

commence�within�next�6�to�12�months.�IIFL�already�has�an�office�in�Singapore.�

IIFL�is�also�planning�to�float�an�Asset�Management�Company�(AMC)�with�a

focus�on�non-brokerage�business.�Currently,�brokering�revenues�account�for

about�60�percent�for�the�group’s�revenue.�IIFL�also�offers�services�like�wealth

management,�insurance�brokering�and�investment�banking.�

Page 5 of 18

Banking and Financial Services

Analyst: Kunal Jain©�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.

“As part of our expansion strategyin Asia Pacific and keeping inmind the opportunity Indiapresents, we would like to explorethe potential for establishingasset management business inIndia.” Pablo Isla, Deputy Chairman and Chief Executive,

Inditex

(Source: Mint, ‘Aviva plans to foray into mutual fundbusiness’, March 05, 2009)

Page 6: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

• KPMG on India’s retail industry

KPMG’s�recent�report�on�India’s�retail�industry�highlighted�the�current�andfuture�scenario�of�India’s�retail�market.�The�report�presented�a�fine�picture�ofIndian�companies’�strategic�actions�to�cope�with�the�current�economic�stress.According�to�the�report,�some�of�the�future�trends�in�Indian�retailing�includeincreased�focus�on�value�retail�and�food�retailing,�more�concentration�towardsTier�II�and�Tier�III�cities�and�increased�investments�in�supply�chain�efficiencies.The�study�also�emphasized�that�the�long�term�outlook�for�retail�in�Indiacontinues�to�be�attractive�and�prospects�for�expansion�are�still�appealing.�

• DKNY enters India through DLF Brands

Donna�Karan�International,�part�of�the�luxury�goods�group,�LVMH,�signed�anagreement�with�DLF�Brands,�the�retail�arm�of�real�estate�major�DLF�Group,�toset�up�DKNY�stores�in�India.�The�alliance�was�formed�to�bring�the�two�brands—�Donna�Karan�New�York�and�DKNY�—�to�India.�Three�DKNY�freestandingstores�are�expected�to�be�set�up�in�India�to�showcase�the�DKNY�ready-to-wearand�accessories�collections.�Other�Donna�Karan�New�York�and�DKNYfreestanding�stores�are�expected�to�be�launched�in�Delhi�soon.�DKNY�has�along-term�vision�on�the�potential�of�the�Indian�market�and�plans�to�fullyleverage�on�the�next�big�destination�for�luxury.�It�recently�forayed�into�SouthKorea�and�Mainland�China.�

DKNY�also�plans�to�form�a�JV�with�S�Kumars�Nationwide�(SKNL),�an�Indiantextiles�and�apparels�firm,�where�SKNL�can�be�the�sole�supplier�of�rawmaterials�to�most�of�DKNY’s�retail�outlets.

• Tata Tea in a consolidation, transformational and acquisitive phase

Tata�Tea,�the�beverage�arm�of�India’s�Tata�Group,�is�in�a�transformational�andconsolidation�phase.�The�company�announced�its�foray�into�the�branded�colddrink�market.�This�move�is�significant�for�Tata�Tea,�which�has�been�steadilytransforming�itself�from�a�primarily�tea�company�to�a�beverages�companyfocusing�on�wellness�and�health.�The�company�is�also�looking�at�consolidatingall�of�its�beverages�businesses�such�as�tea,�water�and�soft�drinks�under�asingle�entity�to�simplify�operational�issues,�reduce�costs�and�raise�funds�forfurther�expansion.�

The�company�is�also�in�an�acquisitive�phase.�Its�overseas�unit,�along�with�theEuropean�Bank�for�Reconstruction�and�Development�(EBRD),�is�likely�to�acquire51�percent�in�a�firm�named�Grand,�a�Russian�branding,�packaging�anddistribution�company�and�a�well�known�Russian�player�in�the�coffee�and�teasegment.�The�acquisition�is�likely�to�be�completed�in�the�first�half�of�2009�andis�expected�to�help�Tata�Tea�strengthen�its�presence�in�the�Russian�market.

• Swedish Company taps India’s wellness product market

Oriflame,�a�Swedish�cosmetics�company,�is�set�to�launch�a�range�of�wellnessproducts�in�India�to�cater�to�high-income�groups.�The�company�plans�to�importthese�products�from�China�and�Sweden�initially�and,�based�on�market�demand,plans�to�manufacture�these�products�in�India�at�a�later�stage.�The�company�hasalready�launched�these�products�in�Europe�and�the�rising�health�awarenessamong�Indians�prompted�it�to�bring�these�products�to�India.�Since�1996,Oriflame�has�invested�around�USD�50�million�in�India.�This�includes�theinvestment�to�set�up�a�manufacturing�unit�in�Noida.

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.

“India is fast becoming a majorfashion hub and the next bigdestination for luxury.” Kelvin Coyle, DLF Brands, Managing Director

(Source: Business Standard, ‘DLF arm to launch DonnaKaran stores in India’, March 27, 2009)

Analyst: Sonia Topiwala

Page 7: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

• WelcomHeritage plans to pick up stake in group property

WelcomHeritage,�part�of�the�ITC’s�hospitality�division,�which�operates�a�chainof�heritage�hotels�on�franchise�model�is�looking�at�acquiring�stake�in�some�ofthe�properties�owned�by�the�group.�WelcomHeritage,�a�JV�between�ITC�andthe�erstwhile�Maharaja�of�Jodhpur,�Gaj�Singh,�has�a�total�of�64�propertiesacross�India.�Currently,�the�company�receives�around�5-8�percent�of�theproperties’�revenues�as�fees�for�services�like�marketing�and�branding�at�aglobal�level,�consultancy�in�restoration�related�work�and�assistance�in�sales.However,�now�the�company�is�seeking�for�equity�investments�which�areexpected�to�give�them�a�profit�sharing�in�the�property�instead�of�the�franchiseefee.�It�is�currently�approaching�some�property�owners�in�Uttar�Pradesh,�MadhyaPradesh,�West�Bengal,�North�East�and�Uttaranchal�for�JV�partnership.�

The�company�is�looking�at�picking�up�stakes�instead�of�complete�buy-outs.�Itaims�to�have�70�properties�by�end�of�March�2010�and�expanding�its�presence�inSouth�India�and�North�Eastern�states.

• The Leela Group opens its first Northern Indian property

The�Leela�Group,�one�of�the�leisure�and�business�hotel�group�in�India�hasopened�its�Gurgaon�property,�The�Leela�Kempinski.�This�is�the�first�property�ofthe�group�in�Northern�India.�The�320-�room�property�has�an�outdoor�pool,�afitness�center,�yoga�and�aerobic�studios,�a�beauty�salon�and�a�large�spa.�Itplans�to�offer�ballrooms,�boardrooms�and�meeting�rooms,�and�a�businesscentre.�Leela’s�Gurgaon�property�is�likely�to�be�managed�by�the�AmbienceGroup.

• Sarovar group's five-star hotel to operate by 2012

Sarovar�Hotels�&�Resorts'�five-star�hotel�property�is�expected�to�come�up�inBhubaneswar.�The�company�is�likely�to�invest�about�USD�13.4�million�for�thedevelopment�of�this�property.�The�company�is�opening�a�hotel�in�Bhubaneswarconsidering�the�increased�demand�for�quality�accommodation�for�both�businessand�leisure�travelers.�The�hotel�is�scheduled�to�be�operational�by�2012.Bhubaneswar�is�likely�to�be�the�fourth�hotel�property�of�Sarovar�Hotels�&Resorts�in�the�Eastern�region.�It�has�properties�in�Kolkata�(Peerless�Inn),Gangtok�(The�Royal�Plaza)�and�Durgapur�(Peerless�Sarovar�Portico).�Anotherproperty�is�expected�to�open�in�the�Nayapalli�area�on�the�Kolkata-Chennainational�highway�which�is�likely�to�have�150�rooms.�The�hotel�chain�also�plansto�set�up�new�hotels�in�other�locations�of�Eastern�India�like�Siliguri,�Guwahatiand�Tezpur�(Assam).

• Marriott to open 6 properties in 2009

Marriott�International�Inc,�a�US-based�hotel�management�company�plans�to�addminimum�of�6�more�properties�in�its�portfolio�of�6�hotels�in�India�by�end�of2009.�Being�a�management�company,�Marriot�has�tie�ups�with�real�estatedevelopers�and�partners�for�development�of�a�hotel�property.�The�six�newproperties�are�likely�to�be�opened�under�the�brand�name�Courtyard�in�Pune,Gurgaon,�Hyderabad,�Mumbai�and�Ahmedabad,�and�Marriott�ConferenceCentres�in�Pune.

Also,�JW�Marriott�Hotels�&�Resorts�at�Bangalore�is�expected�to�start�towardsthe�end�of�2009�and�early�2010.�The�group's�14�Courtyard�hotels,�8-9�JWMarriott�Hotels�&�Resorts�and�a�few�Marriott�Executive�Apartments�are�undervarious�stages�of�development�in�India.

The�group�also�plans�to�launch�its�6th�brand�in�India,�the�luxury�Ritz-Carltonbrand,�by�end�of�2010.

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.

Note: ARRs – Average Room Revenue

Source: CRISIL Monthly Report, March 25, 2009

Page 8: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

• HCL bags IT service contract with National Insurance Corporation

HCL�Technologies�has�signed�a�7�year,�USD�75.4�million�IT�services�contract

with�one�of�India's�leading�general�insurance�firm�National�Insurance�Company

(NIC).�As�per�the�terms�of�the�contract,�HCL�is�to�be�responsible�for�setting�up

and�managing�a�new�enterprise-wide�IT�landscape�for�NIC.�The�contract�is�for

business�process�re-engineering,�application�blueprinting�and�roll-out�of�19

applications,�systems�integration�and�management�services�across�over�1,034

branches�of�NIC.�It�also�involves�the�physical�hosting�of�data�centers�and

provisioning�of�business�continuity�services.

• Infosys Wins USD 100 million contract from Telstra

Infosys�Technologies�has�bagged�~�USD�80-�100�million�multi-year�outsourcing

contract�from�Australia-based�Telstra.�It�is�second�win�for�Infosys�in�Australia,

after�Rio�Tinto�had�earlier�selected�it�over�Accenture�for�a�USD�50�million

application�development�deal.�Telstra�has�undertaken�a�vendor�consolidation

exercise�to�reduce�its�IT�service�providers�from�four�--�EDS,�IBM,�Infosys�and

Satyam�--�to�two�as�a�part�of�its�transformation�strategy.�Analysts�believe�that

Telstra�has�chosen�Infosys�over�the�others�due�to�its�track�record�with�British

Telecom�and�the�front-end�capabilities�it�gained�with�the�acquisition�of�Expert

Information�Services.

• DiacriTech acquires US-based LaurelTech

Chennai-based�Knowledge�process�outsourcing�(KPO)�company�DiacriTech(DT)

has�acquired�US-based�e-publishing�outsourcing�firm�LaurelTech�Integrated

Publishing�Solutions,�for�an�undisclosed�sum.�With�this�acquisition,�the

company�expects�to�work�in�a�hybrid�onshore/offshore�model,�capable�of

delivering�design,�editorial�and�project�management�capabilities�in�the�US.�DT

has�a�headcount�of�700�people�across�facilities�in�Chennai,�Madurai�and

Kottayam.�The�company�is�believed�to�be�looking�for�more�acquisitions�in�the

US�and�Europe.��

• TCS signs deal with Infineon Technologies

Tata�Consultancy�Services�(TCS),�a�leading�Indian�IT�services�provider�has�won

a�multi-year�contract�with�Germany-based�Infineon�Technologies�AG,�one�of�the

leading�semiconductor�manufacturers.�The�contract�is�to�operate�and�maintain

solutions�within�the�Infineon’s�Supply�Chain�Management�(SCM)�landscape.

With�this�deal,�Infineon�expects�to�optimize�its�operations�in�the�area�of�SCM

Planning�to�achieve�efficiency.�

• India PC Market Shipments Drop in 2008

According�to�IDC's�India�Quarterly�PC�Tracker�2008,�the�desktop�PC�shipments

in�India�have�dropped�by�10.1�percent�for�the�calendar�year�2008,�while

notebook�PC�shipments�have�recorded�a�growth�of�31.5�percent�on�a�year-on-

year�basis.�India’s�Client�PC�(Desktop�+�Notebooks)�shipments�were�1.56

million�units,�a�drop�of�22.7�percent�over�Q4�2007.�Hewlett�Packard�retained�its

market�leadership�with�15.6�percent�market�share,�followed�by�Dell�and�HCL.

RBI’s�move�to�relax�credit�and�expenditures�planned�for�infrastructure,�public

sector,�e-governance�and�development�projects�are�expected�to�revive�the

industry.

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.

Source: IDC, India Quarterly PC Tracker 2008, 4Q

2008 March 26, 2009

Note: 1 USD = INR 52.09

Page 9: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

• PVR partners with Thailand's Major Cineplex

Indian�entertainment�firm�PVR�Limited�announced�a�foray�into�the�fashion

bowling�business�in�a�JV�with�Thailand-based�Major�Cineplex�Group�and�has

plans�to�invest�USD�19.6�million�over�the�next�3�years�to�open�500�bowling

lanes�across�India.�The�two�companies�have�entered�into�a�51:49�JV�to�bring

the�global�fashion�bowling�brand�'Blu-O'�into�the�country.�The�company�plans�to

focus�on�metros�and�Tier�I�cities�for�opening�the�bowling�lanes.�

• Sony forays into regional TV with buy of Bengali movie channel

Sony�has�made�a�foray�into�the�regional�broadcasting�space�through�the

acquisition�route.�Sony�Pictures�Television�International�(SPTI)�has�acquired

Channel�8,�a�Bengali�movie�channel,�for�an�undisclosed�amount.�The�channel�is

expected�to�be�under�the�management�of�SPTI's�international�networks�group.

Kolkata-based�Channel�8,�also�known�as�Bangla�Entertainment�(BEPL),�was

launched�in�March�2008�and�has�licensed�a�library�of�Bengali�films�and

telefilms.�Channel�8�is�currently�available�throughout�West�Bengal,�Tripura�and

some�parts�of�Assam�and�Orissa.�SPTI�already�has�television�networks

business�in�India,�Multi�Screen�Media�Private�Limited,�which�includes�the�Hindi-

language�channels�Sony�Entertainment�Television�(SET),�Max,�Sab�and�English-

channel�Pix.�SPTI's�AXN�and�Animax�channels�also�air�in�India.

• Turner, Warner Brothers to launch channel

Turner�and�Warner�Brothers�have�launched�a�new�English�entertainment

channel�WB�showcasing�movies�and�serials�which�is�expected�go�on�air�from

March�15.�The�channel�‘WB’�is�targeted�at�the�upwardly�mobile,�15�to�45-year-

old�global�citizens�residing�in�India.�WB�is�expected�to�be�distributed�by�Zee-

Turner�and�could�be�a�pay�channel�after�an�initial�free-to-air�window.�It�is�also

expected�to�be�on�the�DTH�platforms,�which�serve�the�same�audience�it�is

targeting.�

• Prices of home video rights fall 40 percent in past 6 months

The�prices�of�home�video�rights�of�movies�(one�of�the�key�revenue�streams�for

producers�and�distributors)�have�dropped�30-40�percent�in�the�past�6�months.

Home-video�rights�which�are�sold�for�a�period�of�3-5�years�along�with�satellite

rights�for�the�movies�contribute�about�20-25�percent�of�the�overall�revenue�of

the�film.�Commenting�on�the�situation,�Mr.�Hiren�Gada,�Director�of�Shemaroo

Entertainment�said�that�the�home�video�entertainment�firms�are�also�getting

into�revenue�sharing�deals�with�production�houses�to�de-risk�their�business

model�and�expanding�the�period�of�home�video�rights.��

• Compact Disc arm to set up gaming publishing studio

Compact�Disc�India’s�subsidiary�Laser�Infomedia�is�planning�to�set�up�a�gaming

publishing�and�development�studio�in�Jaipur,�Rajasthan�with�an�approximate

investment�of�USD�20�million.�Rajasthan�State�Industrial�and�Investment

Corporation�had�recently�allotted�the�company�13,000�square�meters�of

industrial�land�at�Export�Promotion�Industrial�Park�(EPIP)�Sitapur�in�Jaipur.

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.

“This is part of our effort to evolvePVR from a film entertainmentcompany to a retail entertainmentplayer with a focus to enhancethe out of home entertainmentexperience for our patrons.” Ajay Bijli, Chairman and Managing Director PVR Ltd.

(Source: Asia Pulse, ‘India's PVR, Thailand's MajorCineplex to Open 500 Bowling Lanes’, March 12, 2009)

Page 10: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

• Reliance enters into GSPA with 12 fertiliser companies

Reliance�Industries�Limited�(RIL)�has�formally�entered�into�gas�sale�and

purchase�agreements�(GSPA)�with�12�fertilizer�firms.�Some�of�the�companies

that�signed�the�agreement�with�RIL�for�buying�the�gas�are�Indian�Farmers

Fertiliser�Cooperative�(IFFCO),�Krishak�Bharti�Cooperative�(KRIBHCO),�Tata

Chemicals�and�Indo�Gulf�Fertiliser.�As�per�the�contract,�RIL�is�expected�to�sell

gas�to�the�companies�at�USD�4.2�per�million�British�thermal�unit�(mmBtu).�The

agreement�may�result�in�annual�fertiliser�subsidy�savings�of�USD�600�million.

• GAIL likely to form a new company

Gas�Authority�of�India�Ltd.�(GAIL)�is�expected�to�split�its�marketing�business

into�a�separate�entity�with�effect�from�April.�GAIL�India�is�expected�to�continue

to�be�a�gas�transmission�company�whereas�GAIL�Gas�Ltd.�(GSL),�the�new

entity,�is�likely�to�carry�out�the�marketing�business�of�the�company.�GSL�is�also

expected�to�be�listed�shortly�on�the�bourses.�The�policy�guidelines�introduced

by�the�Petroleum�and�Natural�Gas�Regulatory�Board�(PNGRB),�requires�splitting

of�a�company’s�gas�transportation�and�marketing�and�trading�activities,�in�order

to�restrain�integrated�companies�to�cross-subsidise�its�activities.

• Reliance raises its marketing margin

Reliance�Industries�has�raised�its�marketing�margin�by�25�percent�from�the

current�0.12�mmBtu�to�0.15�mmBtu.�This�rate�is�to�be�charged�over�and�above

the�USD�4.2�mmBtu�base�gas�price.�However,�RIL’s�margin�is�lower�when

compared�to�state-run�GAIL.�The�increase�in�price�is�due�to�the�additional�risk

of�‘ship�or�pay’�under�which�a�company�has�to�transport�the�committed

volumes�or�pay�for�the�gas.

• Shell to tie up with Reliance

Shell�India�is�expected�to�tie�up�with�RIL�in�order�to�sell�its�line�of�automobile

lubricants�in�India.�The�lubes�are�expected�to�be�available�across�all�Reliance

petrol�pumps�once�the�company�decides�to�reopen�them.�The�company�feels

that�the�market�for�performance�lubricants�is�showing�signs�of�improvement

and�this�would�be�the�right�time�to�capture�the�market.�Besides�this,�the�firm

feels�that�Reliance’s�petrol�pumps�may�be�able�to�provide�good�visibility�and

reach�for�Shell’s�products.

• BRPL merges with IOC

State-refiner�Indian�Oil�Corporation�Ltd.�(IOC)�has�merged�Bongaigaon�Refinery

Petrochemicals�Ltd.�(BRPL)�with�itself.�The�swap�ratio�has�been�decided�at�4:

37�i.e.�4�shares�to�be�given�for�every�37�shares�of�BRPL�held.�The�merger�took

place�after�the�Government�decided�to�sell�its�stake�in�BRPL�to�IOC,�which

already�held�a�74�percent�holding�in�it.

• Reliance resumes and shuts its crude oil production

Reliance�Industries�had�recommenced�its�crude�oil�production�from�their

Krishna�Godavari�(KG)�basin�which�had�stopped�in�the�month�of�December�due

to�an�equipment�failure.�On�restarting�its�production,�the�field�pumped�about

5,000�barrels�a�day�(bpd).�The�firm�however�shut�down�its�production�for�a

period�of�45�days�in�order�to�connect�more�oil�wells�so�as�to�raise�its�output�to

approximately�10,000-12,000�bpd.

Page 10 of 18

Oil and Gas

Analyst: 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.

“Our lubricant line is going to beavailable with Reliance petrolpumps across the country as andwhen they open. We have a tie-up.”M Balachandran, Vice President, Marketing, Shell India(Source: Infraline, ‘Shell to tie up with RelianceIndustries to sell its line of automobile lubricants inIndia’, March 20, 2009)

Note: 1 USD = INR 52.09

Page 11: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

• Lupin acquires majority stake in Multicare Pharmaceuticals

Philippines, Inc

Lupin�Limited,�an�Indian�pharmaceutical�company,�has�acquired�51�percent

stake�in�Philippines-based�Multicare�Pharmaceuticals�Philippines,�Inc�a�branded

generics�player�in�Women’s�health�and�Child�care�segments.�With�this

acquisition,�Lupin�has�made�its�entry�in�the�Philippines�market�estimated�at

USD�2.5�billion.�Through�this�acquisition,�Multicare�is�expected�to�be�able�to

leverage�on�Lupin’s�product�portfolio,�while�Lupin�is�expected�to�benefit�from

Multicare’s�supply�chain.�Multicare�reported�revenues�of�USD�6�million�for�year

ending�December�2008.�

• Zydus Cadila enters into a drug discovery and development

agreement with Eli Lilly

Zydus�Cadila,�one�of�India’s�leading�pharmaceutical�companies,�has�entered�into�a

new�drug�discovery�and�development�collaboration�agreement�with�Eli�Lilly�and

Company.�This�research�collaboration�which�focuses�on�the�cardiovascular

diseases�segment�may�extend�up�to�a�period�of�six�years.�Zydus�is�expected�to

commence�the�drug�discovery,�lead�identification�and�optimization�activities�and

carry�out�preclinical�studies�and�clinical�trials�up�to�Phase�II�Human�Proof-of-

Concept.�Eli�Lilly�is�expected�to�provide�chemical�starting�points�and�bring�in�its

experience�and�provide�feedback�regarding�toxicology,�ADME,�chemistry,�biology,

clinical�and�regulatory�aspects�that�can�help�increase�the�productivity�of�the

programme�and�the�probability�of�its�success.�

• Avesthagen enters into a JV with Chilean biotech company

Avesthagen�Limited,�an�Indian�integrated�systems�biology�platform�company,

has�entered�into�a�JV�with�Uxmal�SA,�a�Chile-based�biotechnology�company,�to

develop�new�bioactives�and�tissue�culture�on�the�bioinformatics�platform�based

on�Latin�America’s�medicinal�plants.�Avesthagen�also�plans�to�market�bioactives

in�Latin�America.�To�begin�with,�Avesthagen�is�expected�to�own�75�percent

stake,�while�Uxmal�the�balance�25�percent.�Avesthagen�is�expected�to�bring�in

technology�support�and�R&D�experience�in�the�JV.��

• Aurobindo Pharma enters into licensing agreements with Pfizer for

finished dosage drugs

Aurobindo�Pharma�Ltd.,�an�Indian�manufacturer�of�generic�pharmaceuticals�and

Active�Pharmaceutical�Ingredients,�has�entered�into�licensing�and�supply

agreements�with�Pfizer�Inc.,�for�several�finished�dosage�products�(generic�pills

and�injectible�medicines).�According�to�this�agreement,�Aurobindo�is�expected

to�manufacture�the�products�while�Pfizer�is�expected�to�market�them�targeting

the�US�and�European�markets.�This�agreement�is�likely�to�facilitate�Pfizer�in

expanding�its�Established�Products�Business�Unit,�its�division�which�focuses�on

commercialization�of�drugs�which�have�lost�market�exclusivity�and�have�gone

offpatent.�

Page 11 of 18

Pharma

Analyst: Nandita Kudchadkar & Dhruti Parikh

©�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.

“India is already recognised for itsgeneric medicines. The fundwould now help companies focuson specific areas of research likeNew Chemical Entities (NCEs),process and life cycle R&D, bio-similars and holistic medicine.”Ram Vilas Paswan, Chemicals and Fertilizers Minister(Source: http://www.eatg.org/, Commenting on theproposed investment (over USD 1 billion) over the next5 years in promoting innovation, a proposal drawn upby the Ministry of Chemicals and Fertilizers andawaiting the approval of Prime Minister, March 3,2009)

Page 12: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

• BHEL Bags USD 66 million contract from NPCIL

State-owned�Bharat�Heavy�Electricals�Limited�(BHEL)�has�bagged�USD�66million�contract�from�Nuclear�Power�Corporation�of�India�(NPCIL)�tomanufacture�steam�generators�for�its�atomic�power�plant�in�Gujarat.�As�per�thecontract,�BHEL�plans�to�supply�4�steam�generators�of�700�MWe�(megawattelectric)�which�is�expected�to�be�used�in�primary�cycle�of�nuclear�power�plants.BHEL�is�expected�to�carry�designing,�manufacturing,�and�testing�according�toAmerican�Society�of�Mechanical�Engineers�(ASME�Sec�III�Standards).

• Kalpataru bags USD 72 million order from Power Grid

Kalpataru�Power�Transmission�has�received�an�order�worth�USD�72�million�fromPower�Grid�Corporation�of�India�Limited�(PGCIL)�for�supply�of�powertransmission�equipment�to�the�Sasan�ultra�mega�power�project.�As�per�theorder,�Kalpataru�plans�to�supply�and�erect�transmission�towers�for�413�km�andalso�provide�765�KV�transmission�lines�between�Silwar-Satna�and�Satna-Binasection.�The�project�is�expected�to�be�completed�within�27�months.

• RTPL to invest USD 345 million for 1500 km transmission line

Anil�Ambani�controlled�Reliance�Power�Transmission�Limited;�a�wholly-ownedsubsidiary�of�Reliance�Infrastructure�plans�to�invest�USD�345�million�to�set�up�a1500�km�transmission�line�that�is�expected�to�pass�through�Maharashtra,Madhya�Pradesh,�Gujarat�and�Karnataka.�The�project�is�expected�to�evacuatesurplus�power�from�Eastern�states�to�demand�centers�of�Western�region�withexpected�completion�by�2010.

• Award of coal-to-liquid projects

The�Central�Government�has�awarded�two�separate�coal�blocks�in�Orissa�toJindal�Steel�&�Power�(JSPL)�and�a�JV�between�Tata�Group�and�South�Africa’sSasol�to�build�coal-to-liquid�plants.�According�to�Government�estimates,�boththe�projects�are�expected�to�produce�about�80,000�barrels�of�crude�oil�a�dayand�would�cost�USD�8�billion�each.

• CERC enforcing grid discipline by restructuring UI regime

The�Central�Electricity�Regulatory�Commission�(CERC)�has�notified�newregulations�on�unscheduled�interchange�(UI)�for�electricity�grid�operations�toenforce�grid�discipline�and�to�rationalize�the�UI�rates�for�entities�who�abide�bythe�specified�grid�operation�parameters.�CERC�has�also�restructured�the�UI�ratevector,�wherein�now�there�is�a�differential�between�rates�applicable�tooverdrawal�and�under�drawl�as�against�the�schedule.

Page 12 of 18

Power

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.

Note: 1 USD = INR 52.09

Page 13: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

• Foreign Investments in Real Estate Locked for Three Years

The�Foreign�Investment�Promotion�Board�(FIPB)�has�issued�a�new�ruling�that

foreign�investors�in�Indian�real�estate�cannot�sell�their�stakes�to�another�foreign

investor�before�three�years�are�completed.�The�provision�that�currently�exempts

non-residents�investors�to�transfer�their�investments�to�other�investors�has

now�been�cancelled.�The�FDI�policy�till�now�had�a�lock-in�of�three�years�only�for

foreign�investment�in�real�estate.

• Lodha to Develop Township

Lodha�Group,�an�Indian�Real�Estate�developer�has�planned�to�develop�a

township�in�Dombivli�near�Mumbai�with�an�investment�of�about�USD�185

million.�The�township�is�to�be�built�on�125�acres�and�comprise�of�6300�housing

units.�The�apartments�are�to�be�priced�between�USD�24,000�and�USD�48,000

(INR�12�to�24�lakh).�

• Orange Realty to Get Foreign Investment

The�cabinet�committee�on�economic�affairs�(CCEA)�has�accepted�a�proposal�of

Orange�Realty�to�get�in�foreign�investment�of�USD�400�million.�An�investment

company�by�the�name�IRVO-III�is�said�to�be�investing�in�Orange�Realty.

• Hampton Showcases Indian Realty Projects in London

Hampton�International,�a�global�real�estate�consultant,�showcased�12�Indian

residential�projects�in�London�worth�about�USD�800�million�in�order�to�attract

NRIs�and�people�of�Indian�origin.�The�projects�that�were�displayed�included

villas,�plots�and�apartments�by�Emaar�MGF,�Collage�Group,�Expat�Property�and

Ansal�Buildwell�in�the�price�range�of�USD�60,000�to�USD�200,000.�Some�of�the

properties�include�Commonwealth�Games�Village�in�Delhi,�Palm�Drive�in

Gurgaon,�and�Mohali�Hills�and�Mall�of�Jalandhar.

• Omaxe Launches USD 50 million Residential Project

Omaxe�Ltd,�a�real�estate�developer,�has�launched�a�residential�project�in

Vrindavan,�in�Uttar�Pradesh.�The�project,�to�be�called�Omaxe�Eternity,�is�to�be

built�on�a�52�acre�area�and�consist�of�residential�flats�and�independent�plots.

The�project�is�expected�to�cost�about�USD�50�million.

Page 13 of 18

Real Estate and SEZs

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.

“The market is still pretty tough.In the last 4-5 months, investorsand customers adopted a wait andwatch policy, thereby deferringtheir purchase decisions. But nowpeople are coming back again.” Shruti Gupta, Country Head (India) HamptonInternational(Source: DNA, ‘Hamptons Showcase USD 800 millionIndian Realty Projects in London’, March 20, 2009)

Page 14: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

Page 14 of 18

Telecom

Analyst: Neha 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.

• CDMA players allowed to launch GSM services

The�telecom�tribunal�has�upheld�the�government’s�decision�to�allow�CDMA

companies�to�launch�GSM�services.�The�tribunal�has�also�stated�that�GSM

players�are�not�entitled�to�radio�frequencies�beyond�6.2MHz.�

• TRAI reports Bharti network as most congested

As�per�a�TRAI�press�release,�Bharti�Airtel’s�network�is�the�most�congested

among�all�pan-India�operators,�with�Tata�Teleservices�being�the�least�congested.

TRAI�has�also�stated�that�the�overall�network�congestion�is�improving.�The

number�of�PoIs�having�congestion�has�decreased�from�129�in�September�2008

to�66�in�December�2008.�

• Vodafone plans to hive-off telecom infrastructure business

Vodafone’s�Indian�arm�is�likely�to�put�all�its�towers�and�mobile�infrastructure

assets�into�a�new�company�called�Ortus�Infratel�and�Holdings�Pvt.�Ltd.�Ortus�is

also�likely�to�hold�Vodafone�Essar’s�42�percent�stake�in�Indus.�

• TRAI regulation to reduce domestic termination charges by 33

percent

TRAI�has�issued�the�“Telecommunications�Interconnection�Usage�Charges

(Tenth�Amendment)�Regulations”,�to�be�effective�from�April�01,�2009.

Termination�charge�for�all�domestic�calls�has�been�reduced�to�0.4�cents�per

minute.�Termination�charge�for�incoming�international�calls�has�been�increased

to�0.8�cents�per�minute�with�the�expectation�that�the�service�providers�will

pass�this�benefit�to�customers�in�the�form�of�lower�tariffs�for�outgoing

international�calls.�The�ceiling�of�1.3�cents�per�minute�has�been�retained�for�the

carriage�of�domestic�long�distance�calls�to�encourage�national�long�distance

operators�to�expand�into�rural�areas.

• Gartner predicts flat handset sales in 2009

Weak�market�sentiments�and�consumer�caution�is�likely�to�cause�handset�sales

in�India�to�remain�flat�through�2009,�predicts�Gartner.�The�year�2008�saw

around�124�million�handsets�sold�in�India,�up�from�98�million�in�2007.�However,

2009�sales�are�expected�to�be�around�125�million�units.�Consumers�purchasing

high-end�phones�are�likely�to�be�driven�by�need�rather�than�desire�and�are

expected�to�look�for�‘value�for�money’�phones.

Top Telecom Operators, Subscriber Base and Market

Share (February, 2009)

Source:�TRAI,�March�19,�2009

Page 15: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

• Shipping firm Mercator bags rig from Keppels for USD 192 million

Shipping�company�Mercator�Lines�has�acquired�a�rig�from�Singapore-based

shipyard�Keppels�FELS�for�USD�192�million.�The�company,�through�its

Singapore�subsidiary�Mercator�Offshore,�has�taken�delivery�of�the�jack-up�rig,

Mercator�Lines.�The�rig�has�the�capability�to�work�at�a�depth�of�350�feet�under

water�and�has�a�drilling�capability�of�30,000�feet.

• Apeejay acquires 67,359 deadweight tonnage gearless Panamax

Apeejay�Shipping�Ltd,�an�Apeejay�Surrendra�Group�company,�acquired�67,359

Deadweight�Tonnage�(DWT)�gearless�Panamax�of�Japanese�make�for�an

undisclosed�amount.�The�ship�is�expected�to�be�renamed�as�‘APJ�Mahalaxmi’.

This�is�in�line�with�Apeejay�Shipping’s�target�to�become�1�million�DWT

company�offering�total�sea�logistics�solutions�by�2010.�The�expansion�plans�of

Apeejay�Shipping�is�also�as�per�schedule�with�‘APJ�Kais’�the�first�of�the�3

geared�Supramaxes�that�the�company�has�ordered�from�China’s�Cosco

Shipyard�Group�which�is�expected�to�join�by�April�2009.�

• Arshiya Rail plans to raise USD 19 million via PE route

Arshiya�rail�Infrastructure,�a�container�rail�service�provider,�has�initiated

discussions�with�PE�players�to�raise�around�USD�19�million�by�divesting�15-18

percent�stake.�The�funds�are�likely�to�be�utilized�to�part-finance�the�second-

phase�expansion�of�the�container�railway�infrastructure�project.�A�total�of�30

rakes�are�likely�be�built�in�the�just-begun�first�phase�and�45�rakes�are�expected

to�be�added�in�the�second�phase�at�an�estimated�investment�of�USD�307

million.�

• Qatar Airways plans expansion in India

Doha-based�air-carrier,�Qatar�Airways,�plans�to�expand�its�operations�in�India

with�new�routes.�The�expansion�in�India�should�see�new�routes�of�Goa�and

Amritsar.�The�two�new�routes-Amritsar�and�Goa�are�expected�to�increase�Qatar

Airways’�Indian�capacity�from�9�to�11�destinations.�The�expansion�is�part�of�the

airlines�ongoing�growth�strategy,�which�entails�a�long�term�commitment�to

develop�its�route�infrastructure�as�new�aircraft�join�the�fleet�at�an�average

delivery�rate�of�one�a�month.

• Mahindra Logistics plans USD 192 million investments

Mahindra�Logistics,�the�100-percent�subsidiary�of�Mahindra�&�Mahindra,�plans

investment�of�USD�192�million�over�the�next�3-4�years.�The�company�plans�to

kick�off�with�an�investment�of�USD�726�million�over�the�next�18-24�months.�The

money�would�be�primarily�utilized�for�modern�warehouses.�Currently,�it�has�6.5

million�feet�of�warehousing�space�and�plans�to�add�2.7�million�square�feet�in

the�next�few�months.�

Page 15 of 18

Transport and Logistics

Analyst: Ashish Punjabi©�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.

*Note:�Container�traffic�at�12�major�ports

Source:�Bloomberg,�March�30,�2009

Note: 1 USD = INR 52.09

Page 16: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

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 is takenfrom following sources:

• Prime�Minister’s�Economic�Advisory�Council,�eac.gov.in,�March�2009

• DNA,�It’s�disinflation,�not�deflation,�we�are�facing�right�now,�March�22�2009

• Business�Standard,�Peugeot�Scouts�for�Plant�Location�in�India,�February�23,�2009;�Auto�Business�News,�Peugeotplans�to�re-enter�Indian�market,�February�23,2009;�The�Press�Trust�of�India�Limited,�Peugeot�Citroen�scouts�forgreenfield�plant�in�AP,�TN,�February�22,�2009

• The�Economic�Times,�Temsa�Global�to�enter�Indian�bus�market,�February�27,�2009

• The�Economic�Times,�M&M�in�Defense�JV�Talks�With�Lockheed�Martin,�BAE,�March�04,�2009

• United�News�of�India,�MRP�Autorub�enters�into�JV�with�MDI,�March�12,�2009

• Financial�Express,�Vibgyor�group�to�invest�USD�125�million�to�set�up�a�2-wheeler�unit�in�Bengal,�March�13,�2009

• Business�Standard,�IDBI�Fortis�to�infuse�USD�48�million�for�expansion,�March�17,�2009

• Live�Mint,�Aviva�plans�to�foray�into�mutual�fund�business,�March�05,�2009

• The�Hindu�Business�Line,�SBI�ties�up�with�Diebold�for�ATM�expansion,�March�09,�2009

• Business�Standard,�New�ATM�regime�spells�more�revenue�for�big�players,�March�27,�2009

• The�Economic�Times,�IIFL�seeks�license�in�Singapore,�offers�structured�products,�March�17,�2009�

• KPMG,�India�Retail�Report-Time�to�change�lanes,�March�2009

• Business�standard,�DLF�arm�to�launch�Donna�Karan�stores�in�India,�March�27,�2009

• Reuters,�Tata�Tea�acquires�stake�in�Russian�beverages�maker�Grand,�March�26,�2009�and�IBEF,�Tata�Tea�brewsconsolidation�plan,�March�24�2009

• Business�Week,�Oriflame�to�launch�wellness�products�in�India,March�29,�2009

• Financial�Express,�WelcomHeritage�Plans�to�Pick�up�Stake�in�Group�Property,�March�18,�2009

• TravelDailyNews,�The�Leela�Group�Opens�its�First�Northern�Indian�Property,�March�20,�2009

• Business�Standard,�Sarovar�Group's�Five-Star�Hotel�to�Operate�by�2012,�March�17,�2009

• Financial�Express,�Marriott�to�Open�Six�Properties�in�2009,�March�09,�2009

• The�Hindu�Business�Line�,�HCL�Tech�inks�deal�with�National�Insurance,�March�04,�2009

• The�Economic�Times,�Infosys�bags�USD�100�million�outsourcing�contract,�March�24,�2009

• The�Economic�Times,�Diacritech�buys�US-based�KPO�firm,�March�18,�2009

• TCS�Press�Release,�TCS�enters�into�a�long-term�engagement�with�Infineon�Technologies�AG,�March�10,�2009

• IDC,�India�Quarterly�PC�Tracker�2008,�4Q�2008�March�26,�2009

• Asia�Pulse,�India's�PVR,�Thailand's�Major�Cineplex�to�Open�500�Bowling�Lanes,�March�12,�2009

• Dow�Jones�International�News,�Sony�Pictures�Entertainment�Division�Buys�Bengali�Film�Channel,�March�5,�2009

• ENP�News�Wire,�Turner�and�Warner�Bros.�Entertainment�to�Entertain�India�with�the�Launch�of�a�New�Channel:�WB,March�6,�2009

• Economic�Times,�Prices�of�Home�Video�Rights�Fall�40�percent�in�Past�6�Months,�March�2,�2009�

• Indiantelevision.com,�Compact�Disc�arm�to�set�up�gaming�publishing�studio�in�Jaipur,�March�23,�2009�

• Indiantelevision.com,�Reliance�ADAG�floats�TV�production�division,�March�21,�2009

• Economic�Times,�RIL�inks�KG�gas�sale-purchase�contracts�with�12�fertiliser�cos,�March�28,�2009

• Economic�Times,�GAIL�to�be�split;�new�co�to�be�listed,�March�26,�2009

• Economic�Times,�RIL�to�charge�higher�margin�on�KG-D6�gas,�March�23,�2009

• Infraline�News�Update,�Shell�to�tie�up�with�Reliance�Industries�to�sell�its�line�of�automobile�lubricants�in�India,March�20,�2009

• Economic�Times,�IOC�gets�govt�nod�for�merging�BRPL�with�itself,�March�25,�2009

• Livemint,�Reliance�resumes�crude�oil�production�from�KG-D6,�March�12,�2009;�Business�Standard,�RIL�shuts�downcrude�oil�production�at�KG-DG�for�45�days,�March�30,�2009

• Economic�Times,�GAIL�plans�to�invest�USD�192�million�in�CNG�stations,�March�24,�2009

• Economic�Times,�Chennai�Petro�inks�MoU�with�TII�to�implement�integrity�pact,�March�27,�2009

• Company�Press�Release,�http://www.lupinworld.com/march2609.htm,�March�26,�2009

Page 17: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

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.

• Company�Press�Release,�http://www.zyduscadila.com/press/PressNote30-03-09.pdf,�March�30,�2009

• Financial�Express,�Avesthagen�in�global�foray�with�Chilean�JV,�March�21,�2009

• RTT�News,�Aurobindo�Pharma�Inks�Marketing�Deal�With�Pfizer�For�Finished�Dosage�Products,�March�3,�2009�

• The�Economic�Times,�BHEL�bags�USD�66�million�contract�from�NPCIL,�March�27,�2009

• The�Economic�Times,�Kalpataru�bags�orders�of�USD�72�million�from�Power�Grid,�March�04,�2009

• The�Economic�Times,�R-ADAG�co�to�invest�USD�345�million�for�1,500-km�power�link,�March�12,�2009

• The�Hindu�Business�Line,�Tata-Sasol,�JSPL�get�blocks�for�coal-to-liquid�projects,�March�04,�2009

• The�Financial�Express,�CERC�restructures�UI�regime�to�enforce�grid�discipline,�March�31,�2009

• Express�estates,�FIPB�locks�real�estate�investment�for�3�years,�March�30,�2009

• Mint�and�Business�Standard,�Lodha�Group�To�Develop�USD�185-Million�Township�In�Mumbai,�March�19,�2009

• Deccan�Herald,�The�Hindu,�Government�Allows�Multi-Crore�Foreign�Investment�In�Orange�Realty,�March�19,�2009

• DNA,�Hamptons�Showcase�INR�4,000�Crore�Indian�Realty�Projects�In�London,�March�20,�2009�

• The�Tribune,�Omaxe�Launches�INR�250�Crore�Project,�March�28,�2009

• The�Economic�Times,�CDMA�cos�can�now�offer�GSM�services,�April�01,�2009

• The�Economic�Times,�Bharti�network�most�congested:�Trai�report,�March�31,�2009

• The�Economic�Times,�With�Ortus,�Vodafone�joins�infrastructure�hive-off�club,�March�21,�2009

• TRAI�Press�Release,�March�09,�2009

• The�Financial�Express,�Handset�sales�expected�to�be�flat�in�India�in�09:�Gartner,�March�04,�2009

• Economic�Times,�Shipping�co�Mercator�acquires�rig�from�Singapore�firm�for�USD�192�million,�March�16�2009

• Economic�Times,�Apeejay�Shipping�acquires�67,359�DWT�gearless�Panamax,�March�24,�2009

• Economic�Times,�Arshiya�Rail�takes�PE�route�to�raise�USD�19�million,�March�9,�2009

• Economic�Times,�Qatar�Airways�unveils�expansion�plans�for�India,�March�12,�2009

• The�Hindu�Business�Line,�Mahindra�Logistics�phases�out�USD�192�million�investment�plan��March�02,�2009

• The�Economic�Times,�‘CDMA�cos�can�now�offer�GSM�services’,�April�01,�2009

• The�Economic�Times,�‘Bharti�network�most�congested:�Trai�report’,�March�31,�2009

• The�Economic�Times,�‘With�Ortus,�Vodafone�joins�infrastructure�hive-off�club’,�March�21,�2009

• TRAI�Press�Release,�March�09,�2009

• The�Financial�Express,�‘Handset�sales�expected�to�be�flat�in�India�in�09:�Gartner’,�March�04,�2009

Page 18: SectorSnippets Issue 30:TP4 WhitePaper A4.QXD 2 of 18 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought

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.

KPMG�in�India

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

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

BangaloreSolitaire139/26, 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

Contact�us:

For further information about thisnewsletter, please contact:

Ramesh SrnivasHead - 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