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Sectoral Snippets India Industry Information Issue 38 - December 2009 KPMG IN INDIA

SectorSnippets Issue 38:TP4 WhitePaper A4.QXD€¦ · Issue 38 - December 2009 KPMG IN INDIA. Page 2 of 19 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused,

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Page 1: SectorSnippets Issue 38:TP4 WhitePaper A4.QXD€¦ · Issue 38 - December 2009 KPMG IN INDIA. Page 2 of 19 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused,

Sectoral SnippetsIndia Industry Information

Issue 38 - December 2009

KPMG IN INDIA

Page 2: SectorSnippets Issue 38:TP4 WhitePaper A4.QXD€¦ · Issue 38 - December 2009 KPMG IN INDIA. Page 2 of 19 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused,

Page 2 of 19

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 38

As�2009�draws�to�a�close,�all�eyes�are�now�onthe�sustainability�of�the�stimulus-supportedgrowth�of�the�Indian�economy�in�the�year�ahead.The�past�year�witnessed�some�relatively�robustperformances�in�industry�and�service�sectors,increased�government�expenditure,�modest�farmgrowth,�and�strong�investments.�However,�risinginflation,�hiked�interest�rates�and�the�strength�ofthe�rupee�against�the�US�dollar�are�all�triggerswhich�could�play�a�key�role�in�determiningwhether�the�government�places�inflationcontainment�or�economic�growth�on�top�of�itsagenda,�going�forward.��

In�other�developments,�Indian�PM�ManmohanSingh�recently�wrapped�up�a�visit�to�Russiaduring�which�the�two�countries�signed�sixdocuments,�two�of�which�pertain�to�civil�nuclearand�defense�cooperation,�further�consolidatingthe�countries’�strategic�and�bilateral�relations.�

Best�wishes�through�the�holiday�season�and�for2010.

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 38:TP4 WhitePaper A4.QXD€¦ · Issue 38 - December 2009 KPMG IN INDIA. Page 2 of 19 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused,

As�some�parts�of�the�world�rebound�from�the�downturn,�India�is�said�to�be�one�of

the�countries�leading�the�global�recovery�rally.�India’s�economy�grew�by�7.9

percent�in�the�September�quarter,�accelerating�from�the�6.1�percent�recorded�in

the�preceding�quarter.�Companies�in�the�region�are�likely�to�witness�significant

improvement�in�their�position�by�early�next�year.�According�to�analysts,�this�can

be�attributed�to�a�boost�in�domestic�demand�and�private�investment,�with�the

growth�in�the�Index�of�Industrial�Production�(IIP)�expected�to�continue.�

A�large�portion�of�this�growth�was�fueled�by�Government�stimulus�packages�and

a�cut�in�key�policy�rates.�However,�the�Reserve�Bank�of�India�is�now�indicating�a

shift�towards�a�tighter�monetary�policy�regime�through�a�recent�increase�in

statutory�liquidity�ratio�and�winding�up�some�re-financing�facilities.�The

Government�would�still�pursue�its�focus�on�economic�reforms,�especially�those

aimed�to�bring�the�deficit�under�control�while�ensuring�strong�expansion�in

investment�in�infrastructure.�

In�tune�with�industrial�growth,�the�Indian�capital�markets�have�also�shown

positive�signs�of�revival.�The�recent�Dubai�debt�crisis�is�expected�to�have�minimal

direct�impact�on�the�Indian�market�in�the�long�term.�According�to�analysts,�this

endurance�can�largely�be�attributed�to:

1)�The�amount�involved�being�relatively�small

2)�The�exposure�of�the�Indian�banking�system�to�the�Dubai�financial�system�from

the�point�of�view�of�direct�foreign�investment�or�FII�is�limited

Despite�good�performance�in�a�few�key�areas�for�growth,�experts�predict�that

agricultural�GDP�and�a�continuous�decline�in�exports�since�September�2008�are

likely�to�pose�concerns.�Agricultural�output�might�contract�sharply�in�the�last

quarter�of�the�year�2009-2010�as�a�result�of�bad�monsoons.��Also,�spawning�from

shortfalls�in�agricultural�output,�the�economy�is�expected�to�witness�a�rise�in

inflation,�both�for�retail�and�wholesale�prices,�with�figures�for�both�to�touch�7

percent�in�2012.�

As�a�step�towards�diluting�the�impact�of�bad�monsoons,�the�Government�is

focusing�on�innovation�in�agriculture.�Other�priority�areas�for�next�year�include

bringing�back�economic�growth�to�its�previous�highs�of�9�percent�per�annum,

through�continued�efforts�to�maintain�the�growth�in�domestic�demand�and

achieve�substantial�increase�in�infrastructure�investment.�

Indian EconomyPage 3 of 19

Analyst: Asmita Deshmukh, Nishtha Satyam©�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.

7.9

6.15.85.8

7.87.88.6

0123456789

10

March qtr'08

June qtr'08

Sept qtr'08

Dec qtr'08

Mar qtr'09

Jun qtr'09

Sept qtr'09

% C

hang

e Y-

o-Y

India GDP at Factor Cost

Source:�EIU,�November�30,�2009

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• Ducati to enter Indian premium bike segment

Italian�sports�bike�manufacturing�company�Ducati�Motor�Holdings�reportedlyopened�its�first�showroom�in�India�in�early�November,�in�partnership�withPrecision�Motor�India�Private�Limited.�The�company�is�expected�to�open�sixmore�showrooms�in�other�major�Indian�cities,�and�reportedly�aims�to�sell�atleast100�bikes�in�its�first�year�of�operation�in�India.�The�range�of�bikes�to�be�retailedin�India�is�likely�to�reportedly�be�priced�between�USD�20,500�and�USD�92,000.

• Michelin to set up USD 856 million plant in Chennai

Tyre�manufacturing�giant�Michelin�Group�has�reportedly�announced�plans�to�setup�a�truck�and�bus�radial�manufacturing�plant�near�Chennai,�entailing�aninvestment�of�nearly�USD�856�million.�The�company�has�reportedly�signed�aMemorandum�of�Understanding�with�the�Tamil�Nadu�government�to�this�effect.The�facility�is�expected�to�be�spread�across�290�acres�and�provide�localemployment�to�1,500�workers.�The�plant,�which�is�expected�to�be�operational�in2012,�is�to�focus�on�supply�to�the�Indian�market.

• Apollo Tyres to hike capacity by 50 percent

Indian�tyre�manufacturer�Apollo�Tyres�has�reported�announced�plans�to�augmentproduction�capacity�by�over�50�percent�in�India.�The�company’s�productioncapacity�is�to�reach�around�1600�tonnes�a�day�(from�its�current�daily�capacity�of950-1000)�once�its�Chennai�plant�reaches�terminal�capacity�in�the�first�quarter�of2010.�The�Chennai�plant�is�anticipated�to�be�operational�by�early�December.Apollo�Tyres�reportedly�plans�to�supply�half�of�the�Chennai�plant’s�output�toOEMs�and�the�remaining�to�the�aftermarket.

• Toyota India in plans to set up engine manufacturing plant

Toyota�Kirloskar�Motor�Private�Limited�is�reportedly�in�plans�to�set�up�an�engineand�transmission�plant�in�India.�The�plant�is�expected�to�be�built�at�thecompany’s�upcoming�second�manufacturing�facility�in�Bangalore,�for�which�thefirm�has�reportedly�announced�an�investment�of�USD�685�million.�Setting�up�ofthis�unit�in�India�is�expected�to�help�Toyota�increase�the�localization�levels�of�itsvehicles�as�well�as�reduce�manufacturing�costs.

• Volkswagen India to launch first SUV in India in December, Polo

hatchback next year

European�auto�major�Volkswagen�AG�is�reportedly�on�course�to�launch�theTouareg,�its�first�sports�utility�vehicle�for�the�Indian�market�by�early�Decemberthis�year.�The�SUV�is�reportedly�to�be�built�on�the�Porsche’s�Cayenne�platform,and�imported�as�a�completely�built�unit�(CBU).�It�is�expected�that�the�SUV�willbe�retailed�at�above�USD�64,000.

Volkswagen�has�reportedly�also�reiterated�its�intention�to�launch�the�Indianversion�of�its�international�bestselling�hatchback�model,�the�Polo;�the�car�isexpected�to�be�launched�in�India�in�2010.

Page 4 of 19

Auto and Auto Components

Analyst: Ranjeet Javeri and Kudrat Puri©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

“We believe that the Indianmarket will be interesting anddevelop faster than any othermarket” Cristiano Silei, Vice-President (Sales), Ducati Motor Holding

(Source: DNA India, Ducati plans to sell 100 bikes byDec next year, November 2, 2009)

Page 5: SectorSnippets Issue 38:TP4 WhitePaper A4.QXD€¦ · Issue 38 - December 2009 KPMG IN INDIA. Page 2 of 19 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused,

• RBI plans to increase the timeline for NPA Provisioning

The�Reserve�Bank�of�India�(RBI)�plans�to�give�banks�more�time�for�non-performing�assets�(NPA)�provisioning,�as�it�intends�to�extend�the�timeline�forNPAs�from�September�2010�to�March�2011.�As�per�the�Second�Quarter�Reviewof�Monetary�Policy�2010,�RBI�had�announced�that�the�banks�should�haveminimum�provision�coverage�of�70�percent�for�NPAs�by�September�2010,�whichwas�likely�to�impact�the�profitability�of�the�banks.�The�extension�might�allowbanks�to�step�up�gradually�their�provision�coverage,�thereby�reducing�the�impacton�profits.

According�to�credit�ratings�agency�CRISIL,��out�of�the�35�banks�rated�by�them,11�banks�have�provision�coverage�of�less�than�50�percent�and�about�16�haveprovision�coverage�of�between�50�percent�and�70�percent.

• HDFC acquires Credila Financial Services

To�foray�into�the�education�loan�segment,�Housing�Development�and�FinanceCorporation�(HDFC)�has�acquired�a�41�percent�stake�in�education�loan�providerCredila�Financial�Services�for�a�consideration�of�around�USD�2.1�million.�Thebank�has�acquired�the�stake�from�Merrill�Lynch,�which�was�an�initial�investor�inthe�company.�The�acquisition�will�enable�the�bank�to�enter�into�a�specializedmarket,�which�is�estimated�at�over�USD�6.4�billion.�The�Indian,�education�loanmarket�is�a�large�opportunity,�as�it�is�growing�at�a�rate�of�25-30�per�cent�peryear.

• PNB plans to acquire Dana Bank

Punjab�National�Bank�(PNB),�one�of�India’s�leading�public�sector�banks,�isplanning�to�acquire�a�majority�stake�in�Kazakhstan-based�Dana�Bank�for�aconsideration�of�around�USD�18�–�20�million�during�the�current�fiscal�year.�Theacquisition�will�enable�PNB�to�expand�its�business�in�the�overseas�market�bypenetrating�into�the�CIS�(Commonwealth�of�Independent�States)�countries.��

PNB�has�already�received�the�permission�from�Reserve�Bank�of�India,�India’scentral�bank,�approval�to�set�up�a�subsidiary�in�Vancouver.�Dana�bank�has�fivebranches�with�a�total�business�size�of�USD�60�million.

• SBI is planning to foray into wealth management business

State�Bank�of�India�(SBI),�India’s�largest�commercial�bank�by�balance�sheet�size,is�planning�to�foray�into�the�wealth�management�business�and�financial�planningservices�by�leveraging�its�extensive�branch�network.�The�bank�plans�to�targetmiddle�income�group�and�earn�additional�fee�income�through�the�business.�Itplans�to�employ�financial�planners�to�approach�account�holders�with�over�USD10,000�in�their�account.�

Page 5 of 19

Banking and Financial Services

Analyst: Kunal Jain and Ruchika Anand©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

11%16%

25%

54%

-14%

9%

18%20%25%

29%21%

-11%

12% 12%

-20%

0%

20%

40%

60%

SCBs SBI Bank ofBaroda

BOI ICICI Bank HDFC Bank Axis Bank

Credit Growth Deposit Growth

Credit to Deposit Growth in Q2 2009 – 10

(y-o-y)

Source:�CRISIL�Research,�Quarterly�Update�onIndustry�Performance,�Q2�2009�–10�

Page 6: SectorSnippets Issue 38:TP4 WhitePaper A4.QXD€¦ · Issue 38 - December 2009 KPMG IN INDIA. Page 2 of 19 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused,

• Pantaloon Retail in search of prospective acquisitions

Pantaloon�Retail,�one�of�the�largest�retailers�in�India,�is�in�search�for�potentialacquisitions�to�develop�its�food�business.�As�reported�by�the�company,�it�islooking�to�acquire�small�companies�and�has�been�in�discussion�with�variouscompanies�in�the�food�business.�However,�company�has�refused�to�provide�anyfurther�information�on�account�of�the�talks�being�very�premature.�

• Shoppers Stop sketches three year expansion plan

Shoppers�Stop,�one�amongst�India’s�largest�organized�retailers,�has�sketched�athree�year�expansion�plan�with�an�aim�to�increase�it�store�count�by�15�with�aninvestment�of�approximately�USD�54�million.�The�investment�is�expected�to�befunded�through�internal�accruals.�The�new�stores�are�likely�to�add�about�1�millionsquare�feet�of�space�and�expand�the�company’s�footprint�in�5�new�cities.�Thefive�new�cities�are�expected�to�be�the�tier-II�cites�like�Amritsar,�Ahmedabad,Mangalore,�Mysore�and�Vijaywada.�The�company�is�also�looking�to�open�a�fewnew�stores�in�Delhi�and�Mumbai�as�they�cumulatively�account�for�a�little�morethan�60�percent�of�the�company’s�total�sales.�The�company�recently�tied�up�forretailing�with�Mustang,�a�German�jeanswear�and�lifestyle�brand.

• GS Home Shopping in contract with TV18 HSN Holdings Ltd.

GS�Home�Shopping�Inc.,�a�South�Korean�TV�shopping�channel,�has�reportedlysigned�a�contract�with�India’s�TV18�HSN�Holdings�Ltd.�to�enter�into�the�Indianmarket.�As�per�the�reports,�the�contract�signed�entitles�GS�Home�Shopping�tobuy�a�15�percent�stake�in�the�holding�company�of�an�Indian�cable�TV�shoppingchannel�for�USD�18.4�million.�

• Bharti Wal-Mart to open 40 new stores

Bharti�Wal-Mart,�an�equal�joint�venture�between�Bharti�Group�and�Wal-Mart,�hasreported�to�expand�its�operations�in�India�by�opening�40�new�cash�and�carrystores�in�the�next�few�years.�Wal-Mart�opened�its�first�store�in�May�2009�inAmritsar�under�the�name�“Best�Price�Modern�Wholesale”�and�had�initiallyplanned�to�open�15-20�stores�in�three�years�and�employ�around�5,000�people.

• Reliance Footprints plans to open 10 stores in one year

Reliance�Footprints,�a�concept�store�by�Reliance�Retail�Limited�(100�percentsubsidiary�of�Reliance�Industries�Limited)�for�footwear,�handbags�andaccessories�has�planned�to�open�10�new�stores�in�the�financial�year�2009-10.The�company�currently�operates�through�15�stores�and�retails�various�brands.The�branded�products�account�for�85�percent�of�the�total�sales�whereas�thebalance�15�percent�is�through�private�labels.�The�company�plans�to�add�15-20stores�every�year�for�the�next�three�years�and�expand�its�operations�in�50�cities.

Page 6 of 19

Consumer Markets and Retail

©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

Analyst: Rajiv Somani

“I had a meeting with the Wal-Mart chairman. They are verymuch satisfied with the results inIndia. I was informed by Wal-MartCEO that they are looking atopening more stores. He gave thefigure of 40 more across thecountry in immediate future” Anand Sharma, Commerce and Industry Chief, India (Source: Datamonitor News and Comments, BhartiWal-Mart to open 40 new stores in India, November12, 2009)

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• Gateway Hotel to expand through management contracts

Indian�Hotels�have�launched�its�third�property�in�Rajastan�(Jodhpur)�under�thebrand�‘Gateway�Hotel’.�It�already�has�presence�in�Jaipur�and�Jaisalmer�inRajastan.�Currently,�the�brand�has�20�properties�in�its�portfolio�out�of�which�19have�been�migrated�from�Taj�Group�to�this�brand�as�a�part�of�the�re-brandingstrategy.�Additionally,�it�has�13�up-coming�hotel�projects�which�are�at�variousconstruction�stages.�All�these�13�properties�are�likely�to�be�operated�throughthe�management�contract�arrangement.�The�Gateway�Hotel�Jodhpur�is�the�firstproperty�which�is�operating�under�management�contract.�It�is�looking�for�moreproperties�with�minimum�room�capacity�of�150�rooms�for�its�managementcontracts.�The�brand’s�focus�is�to�expand�in�the�metros,�Tier-II�and�Tier-III�cities.�

• Oberoi expending its footprints in Middle East and SE Asian

markets

With�the�improving�global�economic�conditions�‘Trident’�(Oberoi�Group)�plans�torevive�its�overseas�expansion�strategy.�The�Oberoi�Group�plans�to�expend�itsTrident�brand�in�South�East�Asian�and�Middle�East�markets�next�year.�It�is�alsocoming�up�with�new�Trident�hotel�in�North�Mumbai�in�December.�The�group,which�owns�most�of�its�hotels,�is�actively�looking�at�management�contracts�forits�five-star�brand.�

• Marriott aggressively expanding in India

Marriott�International�plans�to�add�26�new�hotels�in�India.�It�is�expected�to�add6,000�rooms�to�its�existing�inventory�of�2,000�rooms.�It�has�planned�the�launchof�its�three�‘Courtyard’�hotels�in�November�2009�followed�by�the�launch�ofanother�eight�hotels�in�2010.�The�company’s�15�other�projects�are�indevelopment�stage.�

• Middle East hotels Jumeirah and Rotana plan to expand in India

Middle�East�hotels�Jumeirah�and�Rotana�are�eying�the�Indian�hotel�market�forexpansion.�Jumeirah�sees�the�Indian�hospitality�industry�as�a�future�growthmarket.�To�continue�growth�of�its�global�brand�presence�Rotana�is�also�lookingto�negotiate�with�property�owners�to�establish�its�brand�in�India.

• IHC to set up hotel in Bangalore

India�Hospitality�Corporation�is�likely�to�raise�funds�worth�USD�212�million�forexpansion�of�its�hotel�business.�The�company�is�planning�to�expand�in�tier�IIcities.�It�is�looking�for�both�organic�and�inorganic�growth�paths�to�expand�itspresence�in�the�country.�The�company�has�signed�an�agreement�to�manage�10hotels�with�a�realty�firm�Entertainment�World�Developers�Pvt�Ltd.�These�hotelsare�expected�to�come�up�by�2011.�The�firm�has�already�invested�USD�4.2�millionin�the�hotel�business�through�its�wholly-owned�subsidiary,�Gordon�HouseEstates.�The�company�currently�operates�its�hotel�chain�under�the�brand'Gordon�House'�and,�has�three�hotel�properties�in�the�country,�two�in�Mumbaiand�one�in�Pune.�

Page 7 of 19

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.

“We are seeing ARRs gettingcorrected across the country. Wewill continue to see this trendduring such times. By March 2010,we expect occupancy to go upagain” Akshay Kulkarni, Executive Director (South Asia) forCushman and Wakefield - Hospitality(Source: Business Standard, Bangalore may faceoversupply of luxury rooms, November 14, 2009)

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• HCL Technologies bags deal from UK-based Equitable Life

Assurance Society

HCL�Technologies�has�signed�a�multi-year�deal�worth�about�USD�200�millionwith�UK-based�insurance�firm�Equitable�Life�Assurance�Society�(ELA).�As�perthe�terms�of�the�deal,�HCL�would�provide�complete�solutions,�including�policyadministration,�finance,�actuarial�services,�IT�operational�support�and�call�centerservices�to�ELA.��The�deal�has�been�signed�with�HCL�Insurance�BusinessServices,�HCL’s�UK-based�life�and�pensions�administration�business�arm.

• Indian ESO sector to reach USD 50 billion by 2020

According�to�a�study�conducted�by�Booz�&�company,�India's�EngineeringServices�Outsourcing�(ESO)�sector�is�likely�to�reach�USD�50�billion�by�2020,�andgenerate�employment�of�25-30�million.�Cost�arbitrage�and�availability�of�skilledprofessionals�in�the�country�might�be�a�major�driving�force�behind�this�increase.The�study�further�states�that�half�of�these�ESO�revenues�are�likely�to�comefrom�US�while�Europe�would�contribute�40�percent�and�the�rest�would�be�fromJapan.�

• Infosys acquires McCamish Systems

Infosys�Technologies�has�acquired�Atlanta-based�McCamish�Systems�LLC,�abusiness�process�solutions�provider.�The�acquisition�is�likely�to�add�about�USD7-8�million�revenues�to�Infosys’s�revenues�in�March�quarter.�The�upfrontconsideration�for�the�deal�is�USD�38�million�with�up�to�an�additional�USD�20million�payable�to�the�sellers�if�McCamish�Systems�achieves�certain�financialtargets�in�the�future.�With�this�acquisition,�Infosys�expects�to�enhance�itscapability�to�deliver�end-to-end�business�solutions�for�the�insurance�andfinancial�services�industries�and�to�contribute�positively�to�strategy�of�growingnon-linear�revenue.�On�the�other�hand,�McCamish�believes�that�the�mergerwould�enable�it�to�service�larger�portfolios�of�transactions�for�clients�and�expandinto�global�markets.�Also�,�the�deal�would�establish�Infosys�as�a�key�player�inproviding�business�platform�services.

• Wipro opens second facility in China

Wipro�Ltd.,�one�of�the�major�software�service�providers�in�India,�has�opened�itssecond�facility�in�China�at�Chengdu�to�provide�IT�and�back-office�services�to�itsglobal�clients.�This�facility�has�started�operations�with�100�staff,�and�thecompany�plans�to�increase�the�headcount�to�1,000�people.�Wipro�already�has�afacility�in�Shanghai.

• KPIT Cummins acquires Sparta Consulting

Pune-based��IT�service�provider�KPIT�Cummins�(KPIT)�Infosystems�Ltd,�hasacquired��Sparta�Consulting�(Sparta)�for�about�USD�38�million.�Founded�in�2007by�Paul�Freudenberg�and�Lokesh�Sikaria,�California–based�Sparta�provides�highend�SAP�solutions.�It�mainly�operates�in�California�with�a�unit�in�India�located�atNoida.�KPIT�believes�that�this�acquisition�would�strengthen�its�business�modelto�focus�on�select�industries�and�achieve�market�leadership.�The�move�isexpected�to�result�in�greater�efficiencies�and�increased�market�share�for�KPIT.�

Page 8 of 19

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.

“The Indian offshore industry isgrowing on the back of improvingdemand and continuedadvantages of India as an offshoredestination. India-centric suppliersare investing in deliverycapabilities and setting up newcenters” A survey by Everest's Market Vista: Q3 2009 (Source: The Economic Times, Indian offshore industrysaw increased momentum in Q3, November 5, 2009)

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• Scripps Networks acquires controlling stake in NDTV Lifestyle

US-based�Scripps�Networks�Interactive�has�acquired�69�percent�stake�in�NDTVGroup’s�lifestyle�programming�subsidiary�NDTV�Lifestyle.�The�transaction�isexpected�to�be�completed�by�the�end�of�first�quarter�of�2010.�Scripps�NetworksInteractive�is�the�lifestyle-oriented�content�developer�for�television�and�theInternet.�NDTV�Group,�in�a�separate�transaction�repurchased�USD�100�millionstep�up�coupon�bonds�due�in�2012.�This�sets�NDTV�free�from�the�restrictiveclause�and�allows�the�company�to�look�for�investors�for�its�different�verticals.�

• PVR acquires DT Cinemas and dilutes 10 percent stake to Cineplex

PVR�Cinemas�has�acquired�the�exhibition�business�of�DT�Cinemas�Ltd,�asubsidiary�of�DLF,�in�a�cash-cum-stock�deal.�According�to�the�structure�of�thedeal,�the�company�is�expected�to�pay�a�cash�component�of�USD�4.3�million�andallot�2.55�million�shares�representing�9.1�percent�of�the�fully�diluted�paid-upshare�capital�of�PVR�to�DT�Cinemas.�With�this�acquisition,�the�total�number�ofproperties�would�move�up�to�28�with�134�screens�from�24�properties�and�108screens.

The�company�would�also�dilute�10�percent�equity�stake�to�Cineplex,�a�Thailand-based�cinema�company�for�approximately�USD�9�million.

• Dish TV raise USD 100 million through global depository receipts

Apollo�Management,�US-based�asset�management�firm�is�planning�to�acquire11�percent�stake�in�Dish�TV,�direct-to-home�(DTH)�service�provider.�Dish�TV�israising�the�funds�through�issue�of�global�depository�receipts�(GDR)�to�acquirenew�subscribers.�With�a�subscriber�base�of�approximately�6�million,�Dish�TV�isIndia’s�largest�DTH�operator.���

• Union Cabinet gives approval to digitize Cable TV

Union�Cabinet�has�given�its�approval�for�the�Headend�in�the�Sky�(HITS)�policywhich�is�aimed�at�digitizing�cable�TV�operations�through�out�the�country.�Thecabinet�has�also�approved�74�percent�Foreign�Dir�ect�Investment�(FDI)�in�theHITS�segment�and�49�percent�for�cable�TV�operators.�However,�ForeignInvestment�Promotion�Board’s�approval�would�be�required�for�FDI�over�49percent.�Information�and�Broadcast�ministry�has�four�pending�applications�forHITS�services�and�hopes�the�service�providers�to�roll-out�services�within�a�year.

• Dar Capital firm is highest bidder for IPL theatrical rights

Entertainment�and�Sports�Direct�(ESD),�promoted�by�investment�advisory�andprivate�equity�firm�Dar�Capital�Group,�has�emerged�as�the�highest�bidder�withUSD�70.4�million�for�the�Indian�Premier�League's�(IPL)�theatrical�rights.�The�deal,from�2010�to�2019,�is�expected�to�give�ESD�exclusive�exhibition�rights�foraudiences�in�cinema�halls,�water-borne�vessels,�buses,�trains,�hotels�and�otherpublic�venues.�There�were�two�bids�received�for�the�theatrical�rights�tenderfrom�Triplecom�Media�and�ESD.�However,�ESD�bid�is�subject�to�final�approvalfrom�the�IPL�Governing�Council.��

Page 9 of 19

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.

“We firmly believe that the IPL is asuperior sporting event that hastransformed the very landscape of cricketglobally. Together with our partners UFOMoviez and Valuable Media, we areconfident of bringing about a radicaltransformation in the way the sport ofcricket is viewed and enjoyed by fansacross the world. We believe that thereare significant untapped businessopportunities that are being addressed bythis association that will create a globalbenchmark” Arun Rangachari, Director, ESD

(Source: IndianTelevision.com, Dar Capital firm ishighest bidder with USD 70.4 million for IPL theatricalrights, November 12, 2009)

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• Oman Oil to further invest in Bina Refinery

Oman�Oil�Company�(OOC)�is�likely�to�invest�an�additional�approx.�USD�244million�(INR�1,220�crore)�in�the�USD�2.4�billion�Bina�refinery�project.�The�projectis�being�implemented�by�Bharat�Oman�Refineries�Ltd.�(BORL)�in�MadhyaPradesh.�This�infusion�of�funds�is�likely�to�increase�OOC’s�stake�from�thecurrent�2�to�26�percent.�BORL�is�a�joint�venture�(JV)�company�of�BharatPetroleum�Corporation�Ltd.�(BPCL)�and�OOC.�It�was�formed�in�1993�but�OOChad�frozen�its�investments�following�inordinate�delays�in�the�implementation�ofthe�refinery�project.

• EGOM decides to allocate another 50 MMSCMD of KG-D6 gas

The�Empowered�Group�of�Ministers�(EGOM)�has�decided�to�allocate�another�50million�metric�standard�cubic�meters�per�day�(MMSCMD)�of�Krishna�Godavari(KG)�D6�gas�to�industrial�consumers.�Of�the�50�mmscmd,�20�mmscmd�is�likelyto�be�allocated�on�firm�basis�to�industrial�consumers�in�power,�fertilisers,�steel,petrochemicals,�refineries�and�city�gas�distribution�and�the�remaining�30mmscmd�is�likely�to�be�allocated�on�a�fall�back�basis.�The�additional�allocation�isexpected�to�increase�the�overall�customer�base�for�supply�of�gas�therebyavoiding�frequent�changes�in�the�production�level�from�the�block.�

• BPCL, Videocon-led consortium finds more oil in Brazil

A�consortium�of�Bharat�PetroResources,�Videocon�Industries�and�AnadarkoPetroleum�Corporation�has�discovered�additional�oil��in�their�Wahoo�2�well�block.The�Wahoo�2�well�is�located�in�block�BM-C-30,�5�miles�to�the�north�from�theoriginal�Wahoo�discovery�well,�which�hit�over�195�feet�of�net�oil�pay�in�Octoberlast�year.�Anadarko�Petroleum�is�the�operator�of�block�BM-C-30�and�holds�a�30percent�stake.�US-based�Devon�Energy�Corporation�and�IBV�Brazil�Petroleo�–�ajoint�venture�(JV)�between�Videocon�and�Bharat�PetroResources�(BPCL’soverseas�exploration�and�production�firm)�hold�25�percent�interest�each�in�theblock�BM-C-30�whereas�South�Korea's�SK�Energy�holds�the�remaining�20percent.

• Mangala oil field's output touches 20,000 barrel oil per day mark

Oil�production�from�Rajasthan's�prolific�Mangala�field�has�touched�the�mark�of20,000�barrels�per�day.�Earlier�Cairn�India�(Cairn)�had�successfully�tested�thefirst�horizontal�production�well�at�this�oil�field�at�a�record�test�production�rate�ofmore�than�11,500�barrels�of�oil�per�day.�According�to�news�reports,�36development�wells�were�drilled,�of�which�26�have�been�completed.�Cairn�hasalso�concluded�an�initial�agreement�to�supply�crude�oil�from�the�Mangala�field�toReliance�Industries�Limited�(RIL)�in�Jamnagar,�Gujarat.

Page 10 of 19

Oil and Gas

Analyst: Sidharth Balakrishna and Suman Lala©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

SectorFirm

allotments

Fallback

allotments

Existing Assets

Power�(including�plantsto�be�commissioned�in2009-10)�-beyond�18MMSCMD�earmarkedearlier

12.07(+0.875)* 12

Non-Urea�subsidized 0.178� -

Fertilisers

Steel�(only�for�feedstock) 0.44 -

Petrochemicals�(only�forfeedstock) 1.918 -

Refineries 5 6

CGD�projects�(forindustrial�&�commercialsectors)

2

Captive�power�plants 10

Total19.606

(+ 0.875)*30

*�For�4�power�plants�of�AP�at�75�percent�PLF,�subjectto�verification�by�MoP�III.

Allocation of 50 MMSCMD additional gas to

various priority sectors

Source: Infraline, EGOM finalizes allocation of another 50

MMSCMD of KG-D6 gas to industrial

consumers, November 12, 2009

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• Ranbaxy launches generic version of blockbuster drug ’Valtrex’

with 180-day exclusivity

Ranbaxy�Laboratories�Limited,�one�of�India’s�leading�pharmaceutical�companies,has�reportedly�launched�the�generic�version�of�GlaxoSmithKline�Plc’s�(GSK)�anti-herpes�drug�Valtrex�(valacyclovir)�in�the�US.�The�company�was�granted�180-dayexclusivity�for�the�drug�in�2007.�The�drug,�believed�to�be�launched�on�November25,�2009,�is�available�in�the�form�of�500mg�and�1g�tablets.�Valtrex�had�sales�ofaround�USD�2.2�billion�in�the�US�in�2008.�Ranbaxy�manufactured�valacyclovirfrom�the�production�facility�of�its�US�subsidiary�Ohm�Laboratories.�

• Draft bill finalized to set up NCHRH; MCI, PCI, dental, nursing

councils likely to be abolished

The�draft�bill�to�set�up�the�National�Council�for�Human�Resource�in�Health�(NCHRH)has�reportedly�been�finalized.�NCHRH�is�expected�to�be�formed�as�an�overarchingregulatory�body�to�help�in�determining�and�regulating�the�standards�for�medicaleducation�in�India.�This�move�expects�to�aid�India�in�bridging�the�gaps�in�healthcaremanpower�and�resources.�This�Council�is�likely�to�replace�the�existing�medical,dental,�nursing�and�pharma�councils�in�India.�The�health�ministry�has�opened�thefinalized�draft�bill�for�public�scrutiny.

• Ecron Acunova enters into alliance with Tokyo CRO

Ecron�Acunova,�a�Bangalore-based�contract�research�organization,�and�Japan-based�Tokyo�CRO�Inc.�have�reportedly�joined�hands�to�extend�their�network�ofservices�and�facilitate�clinical�trials�in�expanded�geographies.�While�EcronAcunova�is�likely�to�get�the�opportunity�to�tap�the�Japanese,�Chinese�andKorean�markets�where�Tokyo�CRO�has�established�its�presence,�Tokyo�CRO�isexpected�to�leverage�on�the�alliance�to�expand�into�India,�Europe�and�the�US.

• Jubilant forms a JV for developing new drugs

Jubilant�Organosys�Limited,�an�Indian�pharmaceutical�company,�has�reportedlyformed�a�Joint�Venture�(JV)�with�the�University�of�Alabama�at�Birmingham�andUS-based�Southern�Research�Institute.�The�JV�is�expected�to�look�intodeveloping�new�drugs�especially�in�areas�of�oncology,�metabolic�and�otherinfectious�diseases.�The�agreement�includes�the�discovery�and�the�developmentof�the�most�promising�biological�targets�by�the�three�entities.

• Intas and Orbus Pharma sign a non-binding offer agreement

Intas�Pharmaceutical�Limited,�an�Indian�healthcare�company�and�Orbus�PharmaInc.,�a�Canadian�pharmaceutical�major,�have�reportedly�signed�a�non-bindingoffer�for�the�sale�of�the�product�rights�of�the�latter’s�‘Metoprolol�Succinate’�forthe�continental�European�region�and�any�other�territories�(except�the�US).Metoprolol�Succinate�can�be�used�alone�or�in�combination�with�other�drugs�inthe�treatment�of�high�blood�pressure.�The�transaction�is�expected�to�be�closedby�January�2010.

Page 11 of 19

Pharma

Analyst: Nandita Kudchadkar and Parnika Dayal

©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

“To overcome the acute shortage and

uneven distribution of human resources inpublic health delivery system, the Ministryof Health & Family Welfare aims atoverhauling the current regulatoryframework. Toward this end, it is proposedto set up a National Council for HumanResources in Health as an overarchingregulatory body to achieve the objective ofenhancing the supply of skilled personnel

in the health sector” Task Force for setting up of the National Council forHuman Resources in Health

(Source: Report of the Task Force for setting up of theNational Council for Human Resources in Health,Ministry of Health and Family Welfare, Government ofIndia, 2009)

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• NTPC diversifies into hydro power

State�owned�National�Thermal�Power�Corporation�(NTPC)�is�diversifying�intohydro�power�to�become�an�integrated�energy�utility�with�a�diversified�fuel�mix.�Ithas�set�a�target�to�generate�9000�megawatt�(MW)�of�hydroelectricity�by�2017,�ofwhich�2000�MW�are�expected�to�be�generated�from�Uttarakhand�and�HimachalPradesh.�The�hydro�projects�planned�in�Uttarakhand�are�520MW�TapovanVishnugad,�600MW�Loharinag�Pala,�171MW�Lata�Tapovan�and�261MW�RupsiaBhagar�Bara�while�the�one�in�Himachal�Pradesh�is�800MW�Koldam�project.�

The�USD�1402�billion�Tapovan�Vishnugad�project�is�expected�to�becommissioned�by�December,�2011�six�months�ahead�of�schedule.

• PFC enters into a JV to promote energy efficiency projects

Power�Finance�Corporation�(PFC)�has�entered�into�a�Joint�Venture�(JV)�withNational�Thermal�Power�Corporation�Ltd,�Power�Grid�Corporation�of�India�Ltdand�Rural�Electrification�Corp�Ltd�and�set�up�a�company,�Energy�EfficiencyServices�Ltd�(EESL),�to�promote�projects�involving�energy�efficiency,conservation�and�climate�change.�The�venture�with�each�partner�holding�anequal�share,�has�been�set�up�with�an�equity�contribution�of�approximately�USD89�billion.�It�plans�to�promote�energy-efficiency�projects�such�as�Bachat�LampYojana,�Agricultural�Demand�Side�Management�and�Municipal�Demand�SideManagement�and�targets�a�revenue�of�USD�327�billion.

• Cabinet approves National Solar Mission

The�Cabinet�recently�approved�the�Jawaharlal�Nehru�National�Solar�Mission�toreduce�the�dependence�on�fossil�fuels.�The�mission,�with�an�initial�investment�ofUSD�2027�billion,�is�planned�to�be�implemented�in�three�phases�and�aims�toprovide�20,000�MW�to�the�national�grid�by�2022.�

The�Government�has�appointed�NTPC�Vidyut�Vyapar�Nigam�Ltd�as�the�nodalagency�for�reaching�power�purchase�agreements�which�would�sell�the�powerbought�from�solar�project�developers�to�State�utilities.�This�would�be�thencredited�against�the�compulsory�renewable�energy�purchase�targets�set�by�therespective�State�Electricity�Regulatory�Commissions.

• BHEL enters into a JV to set up thermal power plant

Bharat�Heavy�Electricals�Limited�(BHEL)�entered�into�a�Joint�Venture�(JV)�withMadhya�Pradesh�Power�Generation�Company�Limited�to�set�up�a�1600�MWpower�plant�at�Khandwa�in�Madhya�Pradesh.�The�plant,�with�an�equal�share�heldby�both�the�partners�initially,�would�be�equipped�with�supercritical�technologyfor�lower�coal�consumption�and�lower�emissions.�The�stakes�would�be�laterdiluted�to�26�percent�each,�with�the�rest�held�by�financial�institutions�and�otherpartners.

BHEL�has�also�entered�into�joint�ventures�with�the�southern�states�of�TamilNadu�and�Karnataka�to�set�up�and�operate�supercritical�thermal�power�plants.

Page 12 of 19

Power

Analyst: Sidharth Balakrishna and Neha Saraf©�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.

“Currently wind power generationin the country stands at about10,500 MW. We will double thiscapacity by 2022 and try to tripleit” Farooq Abdullah, Minister for New and Renewable

Energy

(Source: The Economic Times, Govt to double windpower generation by 2022, November 27, 2009)

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• SEBI eases norms for raising funds

The�capital�market�regulator,�Securities�and�Exchange�Board�of�India�(SEBI)�haseased�norms�for�security,�or�the�asset�cover,�required�for�issuing�securedbonds.�The�move�is�expected�to�benefit�housing�finance�companies,�whichusually�issue�partly�secured�debt�securities,�faced�problems�in�raising�funds,�ascompanies�usually�sold�debentures�with�an�underlying�security�that�was�onlyworth�a�fraction�of�the�amount�raised.

• DIPP proposes relaxation of FDI norms for realty

The�Department�of�Industrial�Policy�and�Promotion�(DIPP)�has�proposed�furtherrelaxation�of�FDI�norms�for�the�real�estate�sector.�Presently,�a�three�year�lock-inperiod�is�required�an�original�investment�made�into�the�integrated�townshipdevelopment�and�other�construction�development�projects.�Considering�theintensity�of�the�FDI�inflows�in�the�real�estate�sector,�the�department�wants�toremove�the�condition�of�minimum�period�for�the�repatriation�of�the�originalinvestment.�The�proposal�is�currently�being�discussed�with�various�otherministries.

• RMZ takes first steps in residential real estate market

Real�estate�developer�RMZ�Corp.,�which�has�over�the�years�specialized�incommercial�property�development,�is�planning�to�have�its�presence�in�theresidential�segment�by�2010.�By�2011-12,�the�company�expects�to�have�50:50commercial�and�residential�portfolio�mix.�In�the�first�phase�the�company�isplanning�to�develop�row�houses�and�apartments�in�Hyderabad�and�Bangalore,while�in�the�second�phase�of�the�rollout,�the�firm�plans�to�kick�off�projects�inKochi�and�Chennai.��

• Brigade Group joins the queue for affordable housing projects

Bangalore�based�real�estate�developer�Brigade�is�planning�to�leverage�thechanging�market�scenario�with�the�launch�of�affordable�housing�projects�totalingup�to�10,000�units�in�the�city�by�FY2010-11.�The�firm�also�has�plans�to�launchaffordable�housing�projects�in�Mysore,�Chennai,�Hyderabad�and�Mangalore.�Thecompany�is�in�talks�with�various�banks�to�raise�the�required�funds�for�itsaffordable�venture.�

• Low rentals boost commercial estate sales

According�to�top�builders,�the�correction�in�the�commercial�realty�rates�inmetros�by�20�to�40�percent�is�expected�to�improve�the�sales�by�50�percent�inQ3�and�Q4�of�2009-10.�Large�builders�in�various�metros�are�tapping�thisopportunity�by�offering�ready-to-possess�offices,�shops�and�commercial�plots�at15-20�percent�discount.���

Page 13 of 19

Real Estate and SEZs

Analyst: Rajiv Parekh©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

Source: Real Estate Developers, Goldman

Sachs, October 26, 2009

415 423

53131

233 199 224 205 194337

233357

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822

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200

400

600

800

1000

1200

1400

Jul-0

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-08

Nov

-08

Dec

-08

Jan-

09

Feb-

09

Mar

-09

Apr-0

9

May

-09

Jun-

09

Jul-0

9

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09

Squa

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e t( 0

00s)

Mumbai Total Absorption

Monthly Commercial Absorption (Mumbai)

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Page 14 of 19

Telecom

Analyst: Neha Dayal and Rishabh Chadha ©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

• Reliance Communication cuts SMS tariff to one paisa

Reliance�Communication�has�further�augmented�the�tariff�wars�by�announcing�anew�plan�which�allows�users�to�SMS�at�one�paisa�and�has�also�launchedanother�plan�allowing�users�to�send�unlimited�text�messages�for�USD�0.02�(INR1)�per�day�and�capping�the�number�of�messages�per�month�under�this�plan�to15,000.���

• Successful bidders to use 3G spectrum after June, 2010

DoT�has�announced�that�the�successful�bidders�for�the�3G�auctions,�scheduledto�be�held�in�January�2010,�will�likely�be�able�to�utilize�the�spectrum�only�afterJune,�2010.�This�is�due�to�the�fact�that�the�armed�forces�would�require�a�fewmonths�to�shift�operations.

• TRAI recommends porting charge of USD 0.41 (INR 19)

The�Telecom�Regulatory�Authority�of�India�has�stated�that�mobile�users�optingfor�Mobile�Number�Portability�(MNP)�will�have�to�pay�USD�0.41�(INR�19)�or�lessto�avail�the�service.�With�an�estimated�25�percent�of�users�likely�to�opt�for�MNP,this�is�likely�to�serve�as�a�catalyst�for�operators�to�introduce�new�incentives�andschemes�to�attract�and�retain�customers.

• Essar takes 51 percent stake in Uganda, Congo telcos

The�Essar�Group,�led�by�the�Ruias’�is�set�to�acquire�a�51�percent�stake�in�DhabiGroup’s�telecom�operation�in�Uganda�and�Congo�for�USD�150�million.�Essar�islikely�to�invest�this�amount�in�Warid�Telecom�in�Uganda�and�Congo�to�enhancenetwork�quality�and�is�likely�to�eventually�take�over�the�majority�stake�in�boththese�companies.�

• Over 500 million telecom users in India

The�Indian�Telecom�industry�has�surpassed�the�target�of�500�million�mobile�andlandline�subscribers.�The�target�has�been�achieved�almost�a�year�in�advance.�Atthe�end�of�October,�the�number�of�mobile�users�stood�at�488.4�million�and�thenumber�of�fixed�line�users�stood�at�37.25�million.

Operator

Wireless Net Adds

('000s)

Sept '09 Oct '09

Tata�Teleservices 4,006.8� 3,867.7�

Vodafone�Essar 1,971.6� 2,980.2�

Bharti�Airtel 2,514.9� 2,702.1�

Reliance 2,005.0� 2,096.5�

Aircel 1,313.1� 2,018.2�

Idea�Cellular 1,395.9� 1,900.5�

BSNL 1,452.2� 675.2�

Sistema�Shyam 228.4� 335.8�

MTNL 17.3 58.2�

Loop�Telecom�(BPL) 77.6 50.1�

HFCL (0.6) (13.6)

Total 14,982.3� 16,671.0�

Others2%

Aircel6%

Tata Teleservices10%

Idea Cellular11%

BSNL12%

Vodafone Essar

Reliance18%

Bharti Airtel23%

Wireless Net Additions (Sept-Oct, 2009)

Wireless Net Additions (Sept-Oct, 2009)

Source: TRAI Press Release, November 21, 2009 and November 04, 2009

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• Kakinada forms JV with Sembawang

Kakinada�Seaports�Ltd�has�formed�a�joint�venture�(JV)�with�SembawangShipyard,�a�wholly�owned�subsidiary�of�Sembcorp�Marine�Ltd.,�to�set�up�amarine�and�offshore�facility�on�the�eastern�coast�of�India.�The�two�companiesare�looking�at�tapping�the�oil�exploration�and�shipping�activities�in�the�regionespecially�the�repair�and�reconstruction�activities�of�offshore�vessels.Sembawang�is�planning�to�invest�about�USD�375�million�in�phases�and�isexpecting�to�achieve�a�financial�closure�in�the�coming�three�months.�The�JV�isplanning�to�get�business�from�companies�who�send�their�vessels�to�Singaporefor�repair�and�maintenance�and�help�these�clients�to�save�around�20-30�percenton�the�costs�involved.�The�facility�is�expected�to�be�constructed�over�a�period�on3-5�years�and�offer�services�like�new�buildings,�conversions,�repairs�andservicing�of�offshore�vessels�and�ships,�building�of�offshore�modules�andequipment.

• Kingfisher to raise USD 600 million

Kingfisher�Airlines�is�planning�to�raise�about�USD�600�million�funds�to�pay�off�itsdebt�and�strengthen�the�company’s�financial�position.�The�shareholders�haveapproved�a�USD�100�million�rights�issue�and�USD�100�million�Global�DepositoryReceipts)�GDR�issue.�The�company�is�said�to�be�in�talks�with�various�privateequity�funds�to�raise�about�USD�400�million�funds.

• Foreign airlines can add more flights in India

The�Directorate�General�of�Civil�Aviation�(DGCA)�has�issued�new�guidelines�forforeign�airlines�to�operate�flights�to�India.�As�per�the�new�guidelines,�foreignairlines�can�operate�additional�capacity�of�up�to�10�percent�of�their�entitlementsduring�high�air�traffic.�The�guidelines�also�have�withdrawn�the�right�of�Air�India,India’s�national�carrier,�to�issue�a�No-Objection�Certificate�(NOC)�to�clear�theextra�flights�which�fall�under�bilateral�entitlements.�This�means�foreign�airlinescan�now�operate�larger�aircraft�or�operate�additional�flights�during�the�peakseason�and�cater�to�the�increased�demand.

• Blackstone invests USD 350 million in Gateway Rail

Blackstone�Group,�the�US�based�private�equity�has�acquired�a�37.5�percentstake�in�Gateway�Rail,�a�subsidiary�of�Gateway�Distriparks,�through�compulsoryconvertible�bonds.�Blackstone�is�said�to�have�invested�about�USD�350�million�forthe�stake.�

• TVS Logistics acquires Multipart Holding

TVS�Logistics�Services�Ltd.�has�acquired�Multipart�Holding,�UK-based�logisticsupply�chain�company.�Through�this�acquisition�the�company�is�planning�toexpand�its�operations�in�the�defense�and�utility�services.�The�company�is�lookingat�more�such�acquisitions�in�the�US�and�the�European�regions�to�expand�itspresence�globally.�It�also�plans�to�enter�the�South�American�and�Chinesemarkets�by�the�year�2010.�

Page 15 of 19

Transport and Logistics

Analyst: Nitin Dehadraya©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

“Transportation & logisticsindustry in India is in very flexibleposition and there are a lot ofopportunities that are yet to beexplored. Analyzing the industry'sgrowth and structure, we believewe can bring major significantchanges in Indian markets. Wehope should there changes aredone, it will increase the GDP to aconsiderable growth” A Bhowmik, Managing Director, Duetsche LogisticsGroup(Source: Supplychain.cn, Deutsche Logistics invest US$150 mn in India, November 23, 2009)

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Page 16 of 19

©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

Reference material for preparing this document was takenfrom the following sources:

Note:1�USD=�46.7�INR

Sources

Foreword:

• Moneycontrol.com,�Indian�banks�pass�with�flying�colours�in�RBI�report,�Oct�22,�2009

• Bloomberg.com,�India�Faces�‘Challenge’�Timing�Monetary�Stimulus�Exit,�Nov.�10,�2009�

• Reuters,�RPT-POLL-India's�Sept�industrial�output�seen�up�7.3�pct�y/y,�Nov�12,�2009

Economy:

• Livemint,�Second�Quarter�GDP�at�7.9�%,�November�30,�2009�

• International�Monetary�Fund�

• The�Economic�Times,�No�Need�for�Panic:�FM�on�Dubai�Crisis,�November�29,�2009�

• Economy:�Overview�and�Outlook,�Crisil�Research�

• Livemint,�OECD�Expects�India�to�Grow�at�7.3%�in�2010,�November�25,�2009

• ThaiIndian�News,�Stimulus�to�Continue�till�Robust�Recovery�Takes�Place:�Mukherjee,�November�10,�2009

Auto

• CarTradeIndia,�Ducati�to�sell�100�bikes�next�year,�November�09,�2009

• The�Times�of�India,�Super�bike�maker�Ducati�sets�shop,�November�01,�2009

• Hindustan�Times,�Rs�4,000-cr�Michelin�plant�in�Tamil�Nadu,�November�16,�2009

• Company�press�release,�Michelin�group�commits�Rs.4000�crore�for�a�manufacturing�plant�in�India,�November�27,2009

• Business�Standard,�Apollo�Tyres�to�up�capacity�by�50�percent,�November�12,�2009

• The�Financial�Express,�Toyota�to�set�up�engine,�transmission�plant�in�India,�November�24,�2009

• Wheels�Unplugged,�VW�India�to�roll�out�its�first�SUV�Touareg�by�early�Dec�’09,�November�13,�2009

BFSI:

• The�Hindu�Business�Line,�Reserve�Bank�of�India�(RBI)�may�increase�the�timeline�for�NPA�Provisioning,�November26,�2009��

• Economic�Times,�State�Bank�of�India�is�planning�to�foray�into�wealth�management�business,�November,�3,�2009

• Economic�Times,�Punjab�National�bank�plans�to�acquire�Dana�Bank,�November�24,�2009�

• Financial�Express,�HDFC�acquires�Credila�Financial�Services,�November�13,�2009�

• Business�Standard,�Indian�Public�Sector�Banks�planning�for�overseas�expansion,�November�26,�2009�

CM:

• Just-food.com,�Pantaloon�on�acquisition�hunt,�November�20,�2009

• Hindustan�Times,�Shoppers�Stop�to�invest�USD�54�million�to�open�15�stores,�November�17,�2009

• Asia�Pulse,�s�Korea’s�GS�Home�Shopping�to�make�inroads�into�India,�November�16,�2009

• Hindustan�Times,�Bharti�for�40�cash�&�carry�stores�in�India,�November�9,�2009

• ATSHOA,�Reliance�on�its�footprints,�October�31,�2009

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Page 17 of 19

©�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.

Hospitality:

• The�Times�of�India,�Taj’s�Gateway�Hotel�checks�into�Jodhpur,�November�10,�2009

• The�Economic�Times,�Trident's�Middle�East,�SE�Asian�foray�next�year,�November�10,�2009

• Hindustan�Times,�Marriott�to�add�26�new�hotels�in�India,�November�03,�2009

• Middle�East�Tourism�and�Hospitality,�November�04,�2009

• The�Statesman,�IHC�plans�Rs�1000�crore�fund,�November�06,�2009

IT:

• The�Economic�Times,�‘HCL�Technologies�bags�USD�200�million�deal�from�UK�firm’,�November�24,�2009

• The�Economic�Times�‘Indian�ESO�to�touch�USD�50�billion�by�2020’�November�18,�2009

• Khandwala�Securities,�‘Infosys�Technologies’,�November�12,�2009

• The�Economic�Times�‘Wipro�launches�second�facility�in�China’,�November�26,�2009

• Business�Standard��‘KPIT�Cummins�buys�Sparta�for�INR�180�crore,�October�31,�2009

Media:

• IndianTelevision.com,�Scripps�Networks�takes�controlling�stake�in�NDTV�Lifestyle,�November�19,�2009�

• ICICI�Report,�PVR�Limited:�What’s�Changed,�November�16,�2009�

• Economic�Times,�US'�Apollo�Management�to�acquire�11%�in�Dish�TV�for�USD�100�million,�November�24,�2009�

• Indian�Express,�Cabinet�nod�to�digitize�cable�TV,�November�13,�2009�

• IndianTelevision.com,�Dar�Capital�firm�is�highest�bidder�with�USD�70.4�million�for�IPL�theatrical�rights,�November12,�2009

Oil and Gas:

• Hindustan�Times,�Oman�Oil�Company�to�invest�INR�1,220�crore�in�Bina�refinery,�November�15,�2009�

• Infraline,�EGOM�finalizes�allocation�of�another�50�MMSCMD�of�KG-D6�gas�to�industrial�consumers,�November�12,2009

• Business�Standard,�BPCL,�Videocon-led�consortium�finds�more�oil�in�Brazil,�November�24,�2009

• Infraline,�Bharat�Petroleum's�overseas�exploration�and�production�business�receives�a�shot-in-the-arm�with�asubstantial�discovery�of�oil�in�Brazil,�November�24,�2009�

• The�Financial�Express,�Mangala�oil�field's�output�touches�20k�barrel�oil�per�day�mark,�November�14,�2009�

• The�Economic�Times,�RIL�to�join�hunt�for�shale�gas,�November�16,�2009

Pharma:

• Livemint,�Ranbaxy�launches�generic�version�of�Valtrex�in�US,�November�27,�2009

• Business�Standard,�Ranbaxy�launches�GSK's�blockbuster�drug�in�US,�November�27,�2009

• The�Times�of�India,�Goodbye�MCI?�Bill�on�health�edu�watchdog�ready,�November�16,�2009

• BioSpectrum,�Ecron�Acunova,�Tokyo�CRO�form�strategic�alliance,�November�12,�2009

• Business�Standard,�Jubilant�inks�JV�with�UAB,�Southern�Research�Institute,�November�24,�2009

• Company�Press�Release,�Orbus�Pharma�Signs�Non-Binding�Offer�For�Sale�Of�Metoprolol�Succinate�Product�RightsFor�Europe�And�Any�Other�Territories�Except�United�States,�November�18,�2009

Power:

• The�Telegraph,�NTPC�aims�big�in�hydel�power,�November�23,�2009

• The�Hindu�Business�Line,�PFC�venture�with�power�PSUs,�November�19,�2009

• The�Hindu�Business�Line,�Cabinet�clears�national�solar�mission,�November�19,�2009

• The�Economic�Times,�BHEL�to�set�up�power�plant�in�central�India,�November�18,�2009

• The�Economic�Times,�Govt�to�double�wind�power�generation�by�2022,�November�27,�2009

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Page 18 of 19

©�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.

Real Estate:

• Indian�Express,�Sebi�eases�norms�for�raising�funds,�November�28,�2009

• Business�Standard,�DIPP�proposes�further�relaxation�of�FDI�for�realty,�October�30,�2009

• DNA�Money,�RMZ�keys�into�residential�real�estate�market,�November�03,�2009

• DNA�Money,�Brigade’s�Rs�2,000-cr�plan�for�value�housing,�November�18,�2009

• Indian�Realty�News,�Low�rentals�boost�commercial�real�estate�sales,�November�28,�2009

Telecom:

• The�Hindu�Business�Line,�RCom�cuts�SMS�tariff�to�one�paise,�November�27,�2009

• Business�Standard,�3G�spectrum�winners�can�use�it�only�after�June,�November�21,�2009

• Business�Standard,�Cell�users�can�change�telcos�for�Rs�19�only,�November�21,�2009

• Business�Standard,�Essar�takes�51%�stake�in�Uganda,�Congo�telcos,�November�16,�2009

• The�Economic�Times,�Telcos�surpass�500�mn�user�base�target�a�year�in�advance,�November�05,�2009;�TRAI�(PressRelease�No.�78�/2009),�November�21,�2009

• Business�Standard,�DoT�relents,�to�seek�TRAI�view�on�uniform�license�fee,�November�04,�2009

Transport and Logistics:

• DNA,�Kakinada�Seaports,�Sembavang�in�JV,�November�27,�2009

• Business�Standard,�Kingfisher�to�raise�$600�m,�mostly�to�pay�off�debt,�November�10,�2009

• Business.rediff.com,�Foreign�airlines�can�add�more�flights�in�India,�November�13,�2009

• Financial�Express,�Blackstone’s�Rs�300-cr�push�for�Gateway�Rail,�November�10,�2009

• The�Hindu�Business�Line,�TVS�Logistics�acquires�UK�co�Multipart�Holding,�November�11,�2009

• Supplychain.cn,�Deutsche�Logistics�invest�US$�150�mn�in�India,�November�23,�2009

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in.kpmg.com

©�2009�KPMG,�an�Indian�Partnership�and�a�member�firmof�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.All�rights�reserved.KPMG�and�the�KPMG�logo�are�registered�trademarks�ofKPMG�International,�a�Swiss�cooperative.

The�information�contained�herein�is�of�a�general�nature�and�is�not�intended�to�address�the�circumstances�of�any�particular�individualor�entity.�Although�we�endeavour�to�provide�accurate�and�timely�information,�there�can�be�no�guarantee�that�such�information�isaccurate�as�of�the�date�it�is�received�or�that�it�will�continue�to�be�accurate�in�the�future.�No�one�should�act�on�such�informationwithout�appropriate�professional�advice�after�a�thorough�examination�of�the�particular�situation.

Contact�us:

For further information about thisnewsletter, please contact:

Ramesh SrinivasHead - Consumer Marketse-Mail: [email protected]: +91 80 3065 4300

Abizer DiwanjiHead - Financial Servicese-Mail: [email protected]: +91 22 3090 2380

Rajesh JainHead - Information, Communication &Entertainmente-Mail: [email protected]: +91 22 3090 2370

Jai MavaniHead - Infrastructure & Governmente-Mail: [email protected]: +91 22 3090 1920

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

Vikram UtamsinghHead - Private Equitye-Mail: [email protected]: +91 22 3090 2320

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

MumbaiLodha Excelus, Apollo Mills Compound, N.M. Joshi Marg, MahalaxmiMumbai 400 011Tel: +91 22 3989 6000Fax: +91 22 3983 6000

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

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

ChennaiNo.10 Mahatma Gandhi RoadNungambakkamChennai 600 034Tel: +91 44 3914 5000Fax: +91 44 3914 5999

Hyderabad8-2-618/2Reliance Humsafar, 4th FloorRoad No.11, Banjara HillsHyderabad - 500 034Tel: +91 40 3046 5000Fax: +91 40 3046 5299

KolkataInfinity Benchmark, Plot No. G-110th Floor, Block – EP & GP, Sector VSalt Lake City, Kolkata 700 091Tel: +91 33 4403 4000Fax: +91 33 4403 4199

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

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

KPMG�in�India