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Sectoral SnippetsIndia Industry Information
Issue 39 - January 2010
KPMG IN INDIA
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 39
The�Indian�economy�weathered�the�globalfinancial�crisis�in�a�relatively�prudent�manner�lastyear,�supported�by�two�decades�of�strongfundamentals,�revealing�the�strong�base�andmaturity�of�India’s�banking�system�and�financialmarkets.�In�the�wake�of�the�new�year,�the�Indianeconomy�gears�up�to�take�on�challenges�such�ashigh�inflation�especially�in�food�prices,�fiscalimbalances�and�the�impact�of�an�insufficientmonsoon.�Another�key�issue�on�the�policymaker’s�agenda�is�when�and�more�importantlyhow,�to�carry�out�the�reversal�of�the�measuresundertaken�to�counter�the�impact�of�the�globalfinancial�situation,�as�the�timing�and�manner�ofthe�same�is�bound�to�have�considerablerepercussions.��
Going�forward,�analysts�are�positive�on�theoutlook�for�the�economy�this�year�with�positiveindicators�such�as�an�increase�in�industrialoutput.�From�recent�news�it�would�seem�thatthe�GST�implementation�date�will�be�delayedbeyond�April�2011.
I�hope�you�find�this�edition�of�the�Snippetsinformative�and�useful.
Regards,Russell
Russell Parera
Chief Executive Officer
KPMG in India
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
As�India�has�emerged�strong�from�the�recession,�the�last�month�of�the�year
continued�to�post�an�upward�trend�in�growth.�The�Indian�Prime�Minister's
economic�panel�stated�that�the�growth�projection�of�6.5�percent�for�2009�will�be
revised�upward�on�the�back�of�the�high�growth�of�7.9�percent�in�the�quarter�of�the
fiscal.�Overall,�the�last�quarter�of�the�year�that�went�by,�witnessed�growth�in
many�key�areas�painting�a�glorious�picture�of�India’s�rebound.�Mineral�production
in�the�last�quarter�grew�by�8.25�percent�(as�of�October�2009)�while�the
manufacturing�sector�witnessed�growth�for�the�first�time�in�December�(2009)
since�October�(2009)�with�activity�reaching�its�highest�since�May�(2009)�on
account�of�the�sharp�rises�in�the�inflow�of�work�and�output.�
The�other�areas�that�witnessed�growth�and�consequently�showcased�India’s
steady�recovery,�included�the�growth�in�exports.�The�country’s�exports�grew�for
the�first�time�in�14�months�ending�November�2009.�Overseas�shipments
increased�by�18.2�percent�to�USD�13.2�billion�in�November�from�a�year�earlier
after�sliding�to�an�average�of�21�percent�per�month�since�October�2008.�On�the
other�hand,�imports�fell�by�2.6�percent�to�USD�22.8�billion�in�November,�resulting
in�a�decrease�in�trade�deficit.�
Furthermore,�experts�predict�that�2010�is�likely�to�be�marked�by�a�positive
domestic�outlook�fuelled�by�continued�growth�in�key�areas.�The�Prime�Minister's
economic�adviser�C.�Rangarajan�stated�that�the�economy�will�expand�by�8
percent�in�2010-11�supported�by�an�expected�improvement�in�agricultural�input.�A
large�portion�of�this�growth�can�be�attributed�to�the�growing�domestic�demand
and�the�high�levels�of�private�investment.�However,�the�downside�of�high�liquidity
in�the�system�is�rising�inflation.�India's�annual�wholesale�inflation�rose�to�4.78
percent�in�November�2009,�compared�with�1.34�percent�rise�in�October�2009.
Consequently,�the�current�fiscal�year�might�witness�a�reversal�of�the
expansionary�monetary�policy�with�the�repo�rate�forecast�to�stand�at�6�percent�by
the�end�of�2010�and�at�6.75�percent�by�the�end�of�2011.
Overall,�a�common�view�among�experts�is�that�if�supported�by�fiscal�and
monetary�intervention�in�the�right�direction,�2010�is�likely�to�be�a�year�of
expansion�and�distinct�improvement�in�growth�for�India.�
Indian EconomyPage 3 of 19
Analyst: Asmita Deshmukh, Nishtha Satyam
Indicators 2010F 2011F
Nominal GDP (USD
Billion)*1,541.9 1,800.6
Real�GDP�Growth* 6.8 7.8
GDP�Per�Capita 1300 1500
Inflation�Rate�(WPI)*** 2% 5%
Source: *EIU , *** Planning Commission
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
• Volkswagen AG launches Beetle in India
Global�auto�major�Volkswagen�AG�reportedly�launched�its�hatchback�model,�theBeetle,�in�India.�Positioned�as�a�luxury�hatchback,�the�Beetle�is�expected�to�bepriced�at�about�USD�42716�ex-showroom�in�Delhi.�The�company�is�expected�toimport�this�model�as�a�completely�built�unit�(CBU)�from�Mexico,�attracting�aduty�of�over�100�percent.�It�has�been�reported�that�there�were�over�170�advancebookings�for�the�iconic�Volkswagen�model.�The�Beetle�is�anticipated�to�helppopularize�the�Volkswagen�brand�in�India.
• M&M to consolidate auto parts businesses under Systech
Indian�vehicle�maker�Mahindra�and�Mahindra�Ltd�plans�to�consolidate�its�autocomponents�businesses�into�a�single�entity�under�the�Systech�brand.�Theconsolidation�is�believed�to�result�in�significant�cost�reduction�for�the�companyas�well�as�rationalization�of�its�widespread�marketing�operations.�MahindraGroup�firms�such�as�Mahindra�Forgings,�Mahindra�Composites,�MahindraGears,�Mahindra�Castings,�Mahindra�Ugine�would�reportedly�be�clubbedtogether�under�the�Systech�brand.
• Michelin to manufacture tyres in India
French�tyre�manufacturer�Michelin�plans�to�set�up�a�production�facility�in�TamilNadu�to�manufacture�tyres�for�commercial�vehicles.�The�company�is�estimated�toinvest�USD�859.2�million�and�is�expected�to�start�its�operations�by�2012.�Michelinhas�reportedly�signed�a�Memorandum�of�Understanding�with�the�Tamil�Nadugovernment�for�the�plant’s�construction�in�the�Tiruvallur�district.�The�company�islikely�to�hire�1500�workers�from�the�local�population.
• Fuji Heavy Industries to launch models in India
Fuji�Heavy�Industries�Ltd�plans�to�foray�into�the�Indian�car�market�in�2011,�withthe�launch�of�its�models�including�its�flagship�Legacy�sedan.�The�company�isalso�likely�to�mull�launching�its�Forester�sports�utility�vehicle�in�India.�Fuji�hasreportedly�received�inquiries�from�Indian�sales�offices�and�trading�companies,and�is�expected�to�choose�a�partner�for�its�Indian�operations�soon.
Page 4 of 19
Auto and Auto Components
Analyst: Ranjeet Javeri and Kudrat Puri
“India is a strategic market for theVolkswagen Group and holdsenormous potential for it” Prof. Dr. Jochem Heizman, Member, Board of Management, Volkswagen AG
(Source: Wheels Unplugged, Volkswagen commencesproduction of its first made-in-India car Polo, December12, 2009)
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
• Kotak ties up with Russia's top I-bank for M&A advisory services in
CIS, Africa
Kotak�Mahindra�Bank,�investment�banking�subsidiary�Kotak�Investment�hasentered�into�an�alliance�with�Renaissance�Capital(a�part�of�the�RenaissanceGroup),�one�of�the�leading�investment�bank�in�Russia,�Central�Asia,�EasternEurope�and�Africa.�The�alliance�is�likely�to�enable�the�bank�to�engage�in�cross-border�M&A�advisory�services�in�Commonwealth�of�Independent�States�(CIS)countries�and�Africa�by�leveraging�Renaissance�Capital�experience�in�thesemarkets.�
As�per�industry�sources,�many�Indian�companies�are�exploring�opportunities�forbuy-outs�in�oil�&�gas�and�natural�resources�across�the�African�region�and�CIScountries.�Similarly,�Russian�firms�and�other�companies�from�CIS�are�alsolooking�at�the�Indian�market�for�an�expansion�in�the�metals�segment.�Both�thecompanies�can�take�advantage�of�the�interest�shown�by�other�players.
• Indiabulls plans to foray into infra financing business segment
Indiabulls�Financial�Services�Ltd.�(IBFSL)�is�planning�to�venture�into�theinfrastructure�and�construction�equipment�financing�space,�primarily�to�capitalizeon�the�growing�need�of�infrastructure�projects.�The�company�is�planning�todisburse�about�USD�1.7�billion�in�the�coming�year�and�also�plans�to�launch�autoloans�products�and�scale�up�its�commercial�vehicle�finance�business.�
Further,�it�is�planning�to�venture�into�the�financing�businesses�through�a�wholly-owned�subsidiary�Indiabulls�Infrastructure�Credit�Ltd�(IICL),�which�hasreceived�the�nonbanking�finance�company�(NBFC)�license�from�the�ReserveBank�of�India�(RBI).�
• ICICI Bank plans to raise capital through Tier I and Tier II bonds
ICICI�Bank,�is�planning�to�raise�USD�860�million�capital�through�the�issue�ofUpper�Tier-II�and�Tier-I�perpetual�bonds.�The�bank�is�planning�to�issue�Upper�Tier-II�bonds�and�Tier-I�hybrid�bond�for�USD�430�each.�The�capital�is�likely�to�enablethe�bank�to�support�its�business�growth.�
As�per�credit�rating�agency�CRISIL,�ICICI�Bank�is�considered�as�one�of�the�highlycapitalized�banks�with�an�overall�capital�adequacy�ratio�(CAR)�of�17.7�percent�andTier-I�CAR�of�13.3�percent�as�on�September�30,�2009.�
• OBC plans open offices in Hong Kong and Africa
Oriental�Bank�of�Commerce�(OBC),�one�of�the�leading�public�sector�banks,expects�to�open�more�foreign�offices,�as�a�part�of�its�efforts�to�expand�its�globalfootprint.�The�bank�is�in�the�process�of�seeking�RBI’s�permission�for�moreoverseas�offices�preferably�in�Hong�Kong.�The�bank�believes�that�a�full-servicebranch�in�Hong�Kong�provides�business�opportunity�in�terms�of�trade�financingto�Indian�corporates.�In�addition,�the�bank�is�also�exploring�opportunites�inAfrica.
Page 5 of 19
Banking and Financial Services
Analyst: Kunal Jain and Ruchika Anand
Credit Growth
Source:�RBI,�India�Infoline�Research�
USD billionDecember
4, 2009
YOY
(percent)
Bank Credit 633.0 10.5
–�Food�Credit� 9.7 -13
–�Non-food�Credit� 623.3 11
Deposits 911.3 18.3
–�Demand�Deposits� 113.9 19.4
–�Time�Deposits�� 797.4 18.2
Investments 300.3 25.6
Credit�–�deposit�ratio(percent)� 69.5 (491.8)�bps
Investment�–�depositratio�(percent) 33 190.8�bps
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
• Indian consumer goods company Marico acquires a Colgate Palmolive
brand
Indian�consumer�goods�major�Marico�has�bought�Colgate�Palmolive’s�hair�carebrand,�Code�10,�to�push�its�revenue�growth�in�the�South-East�Asian�markets�andstrengthen�its�position�to�fight�future�competition�in�India.�The�acquisition�isestimated�to�be�about�USD�5.4�million�as�per�industry�sources�and�also�involvesgetting�intellectual�property�rights�related�to�the�brand�from�Colgate-Palmolive.�Theacquisition�of�Code�10�is�likely�to�bring�a�strong�consumer�equity�in�Marico’sportfolio�and�the�brand�is�expected�to�serve�as�a�platform�to�the�South-East�Asianmarket.�Code�10�is�the�third-largest�selling�brand�in�Malaysia.
• Marks and Spencer aims to expand in India
The�British�retailer,�Marks�&�Spencer,�is�looking�at�scaling�up�its�India�operationsand�plans�to�open�at�least�50�more�outlets�in�the�country�over�the�next�few�years.The�company,�which�is�present�in�India�through�a�joint�venture�(JV)�with�RelianceRetail,�is�also�looking�at�increasing�its�product�range�in�the�country.
• Gucci to enter Indian retail through single brand stores
Italian�designer�goods�maker�Gucci�can�now�go�ahead�with�its�plans�to�enter�theIndian�retail�market�through�single�brand�stores�with�the�government�allowing�it�topick�up�a�majority�stake�in�its�Indian�franchisee�Luxury�Goods�Retail.�Thegovernment�has�cleared�a�proposal�by�Luxury�Goods�Retail�for�foreign�equityparticipation�of�51�percent�by�Gucci�Group�NV,�Netherlands�with�an�investment�ofUSD�0.2�million�for�retailing�Gucci�brands�in�the�country.�Luxury�Goods�Retailcurrently�sells�products�under�the�Gucci�brand�in�India�under�a�franchiseagreement.�The�company�currently�has�two�stores�located�in�Delhi�and�Mumbai.�
• South African Café forays into India
South�African�premium�cocktail-�bar�chain�News�Cafe�plans�to�invest�up�to�USD21.5�million�over�the�next�5�years�to�expand�operations�in�India.�The�company,which�recently�ventured�into�India�under�a�master�franchise�agreement�withHyderabad-based�Numbersonly�Hospitality�plans�to�open�20�outlets�across�India�inthe�next�5�years.�The�café�has�just�opened�its�first�Indian�restaurant�at�Delhi,�whichalso�marks�its�first�foray�outside�the�African�continent.�It�plans�to�open�four�morecafes�in�India�in�2010.�The�investment�is�likely�to�come�from�the�franchise�operator,Numbersonly�Hospitality�and�the�franchise�arrangement�could�be�extended�forother�South�Asian�countries�and�Mauritius�in�the�future.�
• India’s diversified conglomerate, Essar group acquires electronics store X-Cite
Essar�group�has�entered�into�the�consumer�durables�and�IT�products�businessthrough�the�acquisition�of�X-Cite,�the�chain�of�large�format�electronics�stores�ofImpact�Retail,�a�franchisee�of�Kuwait's�Alghanim�Industries�for�an�undisclosed�sum.Essar�is�expected�to�scale�up�the�number�of�retail�outlets�to�2,500�by�fiscal�2011from�the�existing�1,300�stores.�The�consumer�durables�and�IT�market�is�currentlygrowing�at�15�percent�and�Essar�is�aiming�around�10�percent�of�market�share�in�thenext�5�years.�Essar-promoted�cellular�retail�chain�The�MobileStore�is�expected�totake�over�the�seven�stores�of�Impact�Retail's�X-Cite�across�Delhi,�Gurgaon,Bangalore,�Hyderabad,�Pune�and�Ahmedabad,�spanning�over�95,000�sq�ft.�ImpactRetail,�a�franchisee�of�Kuwait-based�Alghanim�Industries,�entered�India�last�year.�
Page 6 of 19
Consumer Markets and Retail
Analyst: Sonia Topiwala
“Marks & Spencer believes Indiaoffers significant expansionopportunities and the potential ishuge with a wider range ofproducts, bigger M&S stores anda better brand experience overall” Nandini Sethuraman, Head of Marketing, Marks &Spencer Reliance India Pvt Ltd Head (Source: The Economic Times, Marks & Spencer toscale up India operations, December 14, 2009)
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
• Bharat Hotels forays into budget segment
Bharat�Hotels�which�owns�and�operates�hotels�under�the�brand�name�‘The�Lalit’plans�to�expand�its�footprint�in�the�economy�segment.�The�company�is�likely�toinvest�USD�491.5�million�to�set�up�a�number�of�luxury�and�mid-market�hotelsacross�business�and�leisure�destinations�in�India�and�abroad.�Looking�at�thebudget�segment’s�impressive�growth�over�the�last�few�years�the�company�mayhave�an�economy�brand�in�the�next�2-3�years.�
• Videocon checks into hospitality sector
Videocon�group�is�making�an�entry�into�the�hospitality�business.�It�plans�to�setup�a�hotel�as�a�part�of�its�upcoming�USD�~192�million�IT�Park�at�Salt�Lake,�WestBengal.�The�hotel�is�likely�to�cater�to�the�IT�and�ITeS�companies�in�this�proposedmixed�use�development.�Considering�the�success�of�this�project,�the�group�islikely�to�explore�the�expansion�opportunities�in�the�hospitality�business�acrossthe�country.�The�company�is�negotiating�with�a�number�of�international�hotelchains�for�a�possible�tie-up�with�its�upcoming�property.�
• Zuri to set up hotels in India and Kenya
Zuri�Hospitality�India�plans�to�invest�USD�85.5�million�to�develop�two�newhotels.�The�company�is�likely�to�set�up�a�new�property�near�BangaloreInternational�Airport.�The�other�property�is�expected�to�come�up�at�Nairobi�inKenya.�The�company�has�raised�around�30�percent�of�the�funds�required�for�thenew�projects�from�private�investors�in�West�Asia,�while�the�rest�has�been�raisedfrom�nationalized�banks.�Currently,�it�has�four�five-star�properties�in�India.�Thehospitality�firm�is�also�exploring�the�management�route�to�expand�its�hotelsbusiness.�
• Sahara Hospitality to set up seven more hotels
Sahara�Hospitality�Ltd.�is�likely�to�set�up�seven�properties�across�India�by�end-2012.�It�is�likely�to�add�over�1,000�rooms�to�its�portfolio.�The�company�isexploring�the�option�of�acquiring�some�existing�properties�and�is�also�looking�atGreenfield�projects�for�expansion.�Hotel�Sahara�Star,�is�the�only�premiumproperty�owned�by�Sahara�Hospitality�which�has�an�inventory�of�223�rooms.
Page 7 of 19
Analyst: Pallavi Phatak
Hospitality
“We expect recovery to take placein the hotel business by the lastquarter of 2010 and in the next18-24 months we expect thedemand to outstrip supply” Rajeev Menon, Area Vice-President, MarriottInternational (India, Pakistan, Maldives and Malaysia)(Source: Business Standard, Marriott to Open 18 Hotelsin India, December 23, 2009)
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
• HCL Axon bags deal with GSK
HCL�Technologies�has�signed�a�multi-year�deal�worth�about�USD�200�millionwith�a�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.
• IBM gets USD 82 million deal from Digicable
IBM�has�bagged�a�10-year�outsourcing�contract�from�Digicable,�a�cable�andbroadband�distribution�player�in�India.�The�USD�82�million�deal�is�to�support�theintegration�of�Digicable’s�digital�media�content�delivery�and�value�addedservices�application�by�providing�IT�infrastructure�services�network,�supportapplication�maintenance�services�and�security�services.�Prior�to�this,�IBM�hasalready�signed�deals�with�media�and�entertainment�companies�like�Star�TV,�SunTV�and�Tata�Sky.
• Interglobe opens BPO centre in Manila
Gurgaon-based�BPO�services�firm�InterGlobe�Technologies�(IGT)�has�launchedits�BPO�delivery�center�in�Manila,�Philippines�with�an�initial�outlay�of�USD�2.3million.�The�400-seater�unit�has�already�hired�350�people�and�may�further�recruit650�people�with�an�additional�investment�for�the�same.
• HCL Tech bags multi-million pound deal from News Corp arm
HCL�Technologies�has�signed�a�5-year�multi-million�pound�deal�with�NewsInternational,�(NI)�a�UK�arm�of�global�media�firm�News�Corporation.�The�deal�isto�provide�software�services�in�terms�of�technology�infrastructure�managementand�transformation.�As�per�the�agreement,�HCL�would�manage�NI’s�data�centreand�network�environments�thereby�reducing�its�operational�costs�andincreasing�technology�process�standardisation.
• Wipro in deal with Telefonica O2 Germany
Wipro�Technologies�has�signed�a�deal�with�a�Germany-based�Telefonica�O2Germany�(TOG)�for�an�undisclosed�amount.�As�per�the�deal,�Wipro�wouldprovide�testing�services�and�solutions�like�test�analysis,�management�andexecution,�deployment,�integration�and�implementation�management�services.
• Indian IT market to double to USD 13 billion by 2013
According�to�a�study�conducted�by�Springboard�Research,�Indian�IT�servicesmarket�is�expected�to�touch�USD�13�billion�by�2013.�The�domestic�market�isexpected�to�grow�at�an�average�of�nearly�19�percent�annually�from�USD�5.7billion�in�March�2008.�The�study�further�states�that�infrastructure�managementservices�(IMS)�are�expected�to�reach�USD�7.2�billion�in�2013�with�53�percentmarket�share,�and�a�CAGR�of�18.1�percent�from�2008-13.�However,�applicationsservices�with�a�growth�rate�of�19.6�percent�are�expected�to�remain�the�fastestgrowing�market�segment.�In�terms�of�verticals,�banking,�financial�services�&insurance�is�likely�to�lead�the�market�with�about�21�percent�of�the�market�share.
Page 8 of 19
Analyst: Yesha Mehta
IT/ITeS
“We are exiting 2009 with somelevel of optimism, as the demandenvironment appears to beimproving compared with lastyear. Customers will spend ontransformational engagements —both in terms of demandgeneration for their business andcost transformation” Suresh Vaswani, Joint CEO of Wipro Technologies,India’s third-largest IT company.(Source: Business Standard, Analysts more optimisticabout IT services companies, December 31, 2009)
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
• Reliance Mediaworks to set up a joint venture with In-Three
Reliance�Mediaworks�formerly�known�as�Adlabs�Films�has�entered�in�a�jointventure�with�US-based�In-Three.�The�JV�would�set�up�a�studio�for�converting�2Dmovies�into�3D�in�India.�The�studio�would�primarily�focus�on�Hollywood�titlesand�content�from�global�clients�of�In-Three�and�not�Indian�content.�The�JV�isexpected�to�do�15-25�feature�film�projects�in�a�year�with�the�first�projectexpected�to�commence�in�early�2010.
• MSM to launch a sports channel
Broadcast�network�Multi�Screen�Media�(MSM)�is�expected�to�launch�a�newsports�channel�to�cash�in�on�the�popularity�of�its�exclusively-owned�property,�theIndian�Premier�League�(IPL).�According�to�the�Chief�Operating�Officer,�N�PSingh,�the�channel�is�expected�to�be�launched�in�the�next�6-9�months�as�thenetwork�is�acquiring�other�sporting�events.�Besides�IPL,�the�network�hasbroadcast�rights�for�New�Zealand�Cricket�series�and�FA�cup.�In�India,�sportschannels�gross�approximately�USD�320-340�million�annually�in�advertisingrevenues,�but�however,�their�share�in�overall�television�viewship�has�shrunkfrom�4.8�percent�in�2004�to�2.7�percent�currently.�MSM�runs�a�diversifiedbouquet�of�channels,�including�Sony�Entertainment�Television,�SAB�TV,�Set�Maxand�Channel�8.
• Digicable increases stake in CableComm
Digicable�Network�has�increased�its�stake�in�Kolkata-based�multi-systemoperator�(MSO)�CableComm�from�51�percent�to�80�percent.�In�2008,�Digicablehad�invested�USD�6.4�million�for�a�51�percent�stake.�DigiCableComm�Services,as�the�company�is�now�known�has�presence�in�14�out�of�18�districts�in�WestBengal�and�is�expected�to�launch�broadband�services.�DigiCableComm,�hadplans�to�expand�its�services�in�neighboring�states�like�Orissa,�has�decided�not�topursue�inter-state�ambitions�for�now�and�focus�on�digitizing�and�strengtheningits�foothold�in�Kolkata�Metropolitan�Area.�
• Indian console gaming market to reach USD 123 million in 2010
According�to�a�study�by�research�firm�eTech�Group,�console-based�gamingmarket�in�India�is�expected�to�reach�USD�123�million�by�2010.�The�consolegaming�market�is�expected�to�grow�at�41�percent�from�INR�86.5�million�in�2009.On�the�other�hand,�mobile�gaming�industry�which�is�currently�valued�at�USD61.8�million�is�expected�to�grow�to�USD�173.5�million�in�2010.�The�report�alsohighlights�that�low�broadband�speed�and�price�sensitivity�are�posed�as�majorbarriers�to�the�growth�of�the�industry.�
• Sri Adhikari Brothers plans to launch regional channels
Sri�Adhikari�Brothers�plans�to�launch�regional�entertainment�channels�for�whichit�is�expected�to�raise�USD�21.6�million�through�issue�of�securities.�The�companyhas�also�approved�the�offering�and�issue�of�up�to�2.92�million�warrants�to�thepromoter�group.�The�company�launched�Hindi�views�channel�Janmat,�which�waslater�changed�into�Hindi�news�channel�Live�India.�It�has�also�entered�into�theMarathi�entertainment�arena�with�Mi�Marathi.�Sri�Adhikari�Bros�sold�51�percentstake�in�both�the�channels�to�property�developer�HDIL�group.
Page 9 of 19
Media
Analyst: Mehul Desai
“The only property that has takenoff well in India is cricket, butthere is potential for many othersporting events. Therefore, to thatextent, Sony has an advantage”Shashi Sinha, CEO, Lodestar Universal
(Source: Financial Express, MSM to launch a sportschannel, December 23, 2009)
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
• Spanish and Malaysian firms join hands with Indian firms to bid for
oil projects in Venezuela
Spain’s�Repsol�YPF�SA�and�Malaysia’s�Petronas�have�joined�hands�with�ONGCVidesh�Ltd�(OVL),�the�overseas�investment�arm�of�Oil�and�Natural�GasCorporation,�along�with�Indian�Oil�Corporation�(IOC)�and�Oil�India�Ltd�(OIL)�to�bidfor�the�Carabobo�project�in�Venezuela’s�Orinoco�oil�belt.�A�maximum�of�40�percent�stake�is�being�offered�by�Venezuela�for�the�development�of�this�acreage,with�the�rest�being�held�by�Petroleos�de�Venezuela�SA,�(PdVSA),�Venezuela’sstate�oil�company.�Repsol�and�Petronas�together�are�expected�to�hold�25�percent,�OVL�10.1�per�cent�while�IOC�and�OIL�2.45�per�cent�each.�
Mukesh�Ambani’s�Reliance�Industries�Ltd.�(RIL)�was�earlier�expected�to�worktogether�with�the�Indian�companies�and�was�to�equally�divide�32-33�percentstake�with�OVL,�the�rest�being�shared�by�IOC�and�OIL.�It�was,�however,replaced�by�the�Spanish�and�Malaysian�firms.
• Fertilizer industry steps up campaign for increased gas allocation
The�demand�for�gas�from�user�industries�like�fertilizers,�power,�glass�andceramic�sector�is�increasing�in�line�with�the�increased�gas�production�from�RIL’sKG�Basin,�along�with�possible�future�production�from�ONGC�and�GSPC�blocks.Gas�demand�within�the�country�currently�stands�at�196�million�standard�cubicmeters�a�day�(mmscmd),�and�is�expected�to�touch�280�mmscmd�by�2011-12.
Besides�increased�gas�allocation,�the�fertilizer�industry�is�requesting�for�twoamendments,�change�of�gas�transmission�methodology�from�the�existing�slabbasis�to�a�distance�basis�and�that�of�the�gas�allotment�system�from�the�existingvolume�basis�to�energy�basis.
The�fertilizer�industry�has�requested�for�an�increased�gas�allocation�onarguments�of�food�security�as�the�demand�for�food�is�expected�to�touch�300million�tonnes�by�the�end�of�the�next�Plan�Period�from�the�current�220�milliontonnes.�GAIL,�which�currently�has�about�11,000�km�of�pipelines�capable�oftransporting�275�mmscmd�of�gas�across�the�country,�is�planning�to�expand�itspipeline�infrastructure�by�2011-12�on�prospects�of�increasing�gas�availability.
• Design capacity of KG D6 facilities successfully tested
Mukesh�Ambani’s�RIL,�which�currently�produces�about�60�mmscmd�of�gas�fromtwo�of�the�18�gas�discoveries�in�the�KG�D6�block,�successfully�tested�thedesign�capacity�of�the�KG�D6�deepwater�gas�production�facilities�and�hasachieved�a�flow�rate�of�80�mmscmd�as�envisaged.�These�volumes�weredelivered�to�Reliance�Gas�Transportation�Infrastructure�Ltd�(RGTIL).�The�D6�fieldhas�produced�over�8.5�billion�cubic�meters�of�gas�since�it�commencedproduction�in�April�2009.
The�KG�D6�gas�has�impacted�various�aspects�of�the�country's�economy�besidescontributing�to�India’s�critical�industrial�sectors.�The�Index�of�IndustrialProduction�(IIP)�figures�reflected�double�digit�growth�in�the�mining�sector�in�thelast�two�quarters�owing�to�the�KG�D6�gas�contribution.�Besides�this,�a�growth�ofabout�30�per�cent�was�achieved�in�gas-based�power�generation�in�the�countryfrom�April�to�November,�leading�to�a�reduction�in�power�deficit�in�the�sameperiod.Compared�to�the�world�average�of�9-10�years�for�similar�deepwaterproduction�facilities,�RIL�started�gas�production�in�KG�D6�in�six�and�a�half�yearsfrom�discovery.
Page 10 of 19
Oil and Gas
Analyst: Sidharth Balakrishna and Neha Saraf
“Urea imports are making a denton the country's economy andhence it is imperative to step upfertiliser production to help Indiaachieve food security” Mr R.S. Nanda, Director and COO of NagarjunaFertiliser and Chemicals Ltd.
(Source: The Hindu Business Line, Fertiliser industryseeks more gas allocation, December 24, 2009)
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
• Hospira enters into agreement to acquire Orchid Chemicals’
generic injectable business
Hospira,�Inc.,�a�US-based�global�specialty�pharmaceutical�and�medicationdelivery�company,�has�inked�an�agreement�with�Orchid�Chemicals�&Pharmaceuticals�Limited,�an�Indian�pharmaceutical�company,�to�acquire�thelatter’s�generic�injectable�finished-dosage�form�pharmaceuticals�business.�Theconsideration�for�the�same�is�reported�to�be�around�USD�400�million.
The�acquisition�is�expected�to�involve�Orchid�Chemicals’�beta-lactum�antibioticsmanufacturing�complex,�the�pharmaceutical�research�and�development�facilityat�Irungattukottai,�Chennai�as�well�as�the�generic�injectable�product�portfolio�andpipeline.�
Besides�this,�Hospira�and�Orchid�Chemicals�have�also�entered�into�an�exclusiveagreement�for�the�supply�of�active�pharmaceutical�ingredients�(API)�by�OrchidChemicals�for�the�acquired�injectable�pharmaceuticals�business.
• Dishman Pharma forms JV in Saudi Arabia for API production
Dishman�Pharmaceuticals�and�Chemicals�Limited,�a�leading�contractmanufacturing�organization�in�India,�has�reportedly�formed�a�Joint�Venture�(JV)company�with�three�partners�for�manufacturing�APIs�in�Saudi�Arabia.�WhileDishman�Pharma�has�a�30�percent�stake�in�the�venture,�its�partners�Arab�Companyfor�Drug�Industries�and�Medical�Appliances�(ACDIMA),�Spimaco,�and�the�CapitalAdvisory�Group�hold�the�remaining�stake.�The�JV�company�has�been�offered�a�USD55�million�soft�loan�for�15�years�by�the�Saudi�Industrial�Development�Fund.
• Intas Pharma enters into partnership with US-based Amarillo
Biosciences
Intas�Pharmaceuticals�Limited,�an�Indian�pharmaceutical�company,�hasreportedly�entered�into�a�strategic�partnership�with�US-based�biotechnologyfirm�Amarillo�Biosciences,�Inc.
Under�the�agreement,�Intas�is�expected�to�sponsor�clinical�trials�of�AmarilloBiosciences’�orally�administered�interferon-alpha�lozenges�which�are�used�tocombat�influenza�viruses�such�as�the�H1N1�virus.�Amarillo�Biosciences�isexpected�to�receive�a�royalty�from�Intas�Pharma�on�the�net�sales�once�themarketing�approval�is�received�in�India.
• Ranbaxy to market Daiichi Sankyo’s anti-hypertensive product in
six African countries
Ranbaxy�Laboratories�Limited�and�Daiichi�Sankyo�Company�Limited�announcedthat�the�former�will�likely�market�the�latter’s�lmesartan�Medoxomil,�an�anti-hypertensive,�in�six�African�countries�—�Kenya,�Nigeria,�Tanzania,�Uganda,Mozambique,�and�Zambia�—�under�the�brand�name�Olvance™.�The�twocompanies�have�been�seeking�to�leverage�synergies�through�their�hybridbusiness�model�and�had�recently�explored�similar�collaborations�in�Mexico�andRomania.
Page 11 of 19
Pharma
Analyst: Nandita Kudchadkar and Parnika Dayal
“The Indian pharmaceutical industry,now over one lakh crore (USD 20billion) industry, has showntremendous progress in terms ofinfrastructure development,technology base creation and a widerange of products. The country nowranks third worldwide by volume and14th by value thereby accounting foraround 10 percent of the world'sproduction by volume and 1.5percent by value” Srikant Kumar Jena, Minister of State in the Chemicalsand Fertilisers Ministry
(Source: The Economic Times, India's drug industry isover Rs one lakh crore, December 3, 2009)
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
• Reliance Power commences power generation from Rosa Power
Plant
Anil�Dhirubhai�Ambani�Group�(ADAG)’s�Reliance�Power�commenced�generationfrom�its�1200�Mw�coal-based�Rosa�power�plant�in�Shahjahanpur�district�of�Uttarradesh.�The�project�(comprising�of�two�stages�of�600�Mw�each)�commissioned300�Mw�capacity�of�the�first�phase�(consisting�of�two�units)�four�months�beforeschedule.�The�entire�plant�is�expected�to�be�fully�operational�by�the�end�of�theEleventh�Plan�by�March�2012.�
The�company�has�entered�into�a�long-term�contract,�valid�for�the�entire�plant�lifeof�25�years,�with�Central�Coalfield�Limited�(CCL)�in�Jharkhand�for�fuel.�Further,the�fly�ash�produced�at�the�plant�is�to�be�utilized�in�a�cement�unit�run�by�ADAG.The�company�has�entered�into�a�Purchasing�Power�Agreement�to�supply�entire600�Mw�of�first�phase�to�UP�Power�Corporation�Limited�(UPPCL)�along�with�anadditional�300�Mw�of�the�second�phase.�The�balance�300�Mw�is�expected�to�besold�on�a�merchant�basis�to�outside�consumers.
The�project�is�expected�to�start�commercial�operations�in�a�few�months�afterthe�completion�of�the�trial�run.
• India and Bhutan enter into Power MoUs
India�and�Bhutan�have�entered�into�seven�Memorandum�of�Agreements�(MoUs)to�tap�Bhutan’s�power�potential�and�meet�India’s�need�for�it.�Besidespreparation�of�detailed�project�reports�for�Amochhu�(620�Mw),�Kuvi-Gongi�(1800Mw),�Kholongchhu�(486�Mw)�and�Chamkarchu-I�(670�Mw)�projects,�theagreements�also�include�setting�up�a�master�plan�for�a�national�transmissiongrid�in�Bhutan.�As�per�the�agreements,�India�is�now�eligible�to�import�additional10,000�Mw�hydro�power�from�Bhutan�by�2020.
Bhutan,�with�hydro�power�capacity�of�30,000�Mw,�requires�only�about�500�Mwand�already�exports�1000�Mw�of�power�to�India�out�of�its�total�generation�ofabout�1,500�Mw.
• Ultra Mega Power Projects resolve land issues
The�two�Ultra�Mega�Power�Projects�in�Tamil�Nadu�and�Orissa�respectively�areexpected�to�soon�issue�‘Requests’�for�Qualifications.�Both�the�projects,�each�of~�4,000�Mw�capacities,�were�earlier�delayed�for�several�months�due�to�landacquisition�problems.�The�project�at�Cheyyur,�Tamil�Nadu�is�expected�to�bebased�on�imported�coal�and�provide�electricity�to�the�state�and�neighbouringones,�while�the�one�at�Bedabahal�in�Sundergarh�district,�Orissa,�has�been�allocated�coal�blocks�at�Meenakshi,�Meenakshi�B�and�Meenakshi�dipside.
These�projects�are�expected�to�be�attractive�to�both�domestic�and�internationalplayers�since�the�power�ministry�has�relaxed�a�few�norms�recently�and�has�alsoallowed�the�sale�of�surplus�coal�from�captive�mines�and�power�beyond�4,000Mw�at�competitive�rates.
Page 12 of 19
Power
Analyst: Sidharth Balakrishna and Neha Saraf
“Rosa project would be the largestprivate sector investment in UPwith investment outlay over Rs6000 crore. It will add around 20percent to the existing generatingcapacity of the state and willgreatly contribute to the reducingpower deficit” J P Chalasani, CEO, Reliance Power
(Source: The Economic Times, Phase I of Rosa plantgoes onstream, December 29, 2009)
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
• Maharashtra State Government to mobilize USD 1084 million
through increase in ready reckoner rates
The�Maharashtra�State�Government�increased�market�value�of�real�estate�by�10-20�percent�in�its�ready�reckoner�2010.�Ready�reckoner�is�a�guide�for�the�marketprice�of�residential�and�commercial�properties,�based�on�which�the�stamp�dutyand�registration�fee�for�their�sale�and�purchase�are�calculated.�This�move�isexpected�to�raise�the�sale�price�of�finished�property�due�to�a�rise�in�the�cost�ofland.
• Gujarat Government announces new residential township policy
Recently�Gujarat�Government�announced�“Regulations�for�Residential�Townships–�2009”.�Under�the�regulations,�all�private�developers�who�can�be�an�individual,�aregistered�cooperative�society,�an�association,�a�firm,�a�joint�venture,�aninstitution�or�a�company�will�have�to�purchase�at�least�40�hectares�of�land�tobuild�a�residential�township�in�the�areas�falling�under�the�urban�developmentauthorities�of�Ahmedabad,�Surat,�Vadodara,�Rajkot,�Gandhinagar,�Bhavnagar�andJamnagar.�In�the�case�of�other�towns�and�relevant�urban�authorities,�thedevelopers�will�need�to�purchase�minimum�20�hectares�of�land�for�suchtownships.�The�regulation�allows�maximum�Floor�Space�Index�(FSI)�at�1.5.Besides�the�permissible�1.0�FSI,�the�additional�0.5�FSI�will�be�allowed�on�thepayment�of�charges�based�on�jantri�rates.
• DIPP to scan FDI use in realty
The�Department�of�Industrial�Policy�and�Promotion�(DIPP)�has�set�up�amonitoring�cell�to�investigate�the�end-use�of�foreign�funds�raised�by�realty�firms.The�objective�is�to�ascertain�diversion�of�money�in�banned�areas�like�agriculturalland�etc.�Under�current�regulations,�Foreign�Direct�Investment�(FDI)�is�banned�inagriculture�and�agriculture-related�activities.�However,�100�percent�FDI�isallowed�for�integrated�townships�and�housing�development�projects.
• Falcon Realty planning to expand in Bihar
Gurgaon-based,�Falcon�Realty�Services�is�planning�to�build�affordable,�eco-friendly�housing�projects�in�Bihar�after�receiving�positive�response�for�suchprojects�in�National�Capital�Region�(NCR).�The�company�is�likely�to�target�Patna,Muzaffarpur�and�Purnia�for�its�projects.�The�company�has�already�identified�landfor�these�ventures�and�is�holding�talks�with�the�state�authorities�for�acquisitionof�200�acre�for�each�of�the�three�projects.�The�estimated�cost�of�the�projects�isUSD�64�million.
• Returning NRIs boost demand for residential property
According�to�World�Bank�report�on�Migration�and�Development�Relief,�anestimated�25�million�non-resident�Indians�(NRIs)�living�in�130�countries�have�sofar�remitted�USD�52�billion�followed�by�China�and�Mexico.�A�substantial�portionof�the�NRI�investment�was�directed�towards�Indian�real�estate.�Southern�citiesin�particular�Bangalore,�Chennai�and�Hyderabad�are�driving�the�demand�thoughminimal�level�demand�exists�for�other�cities�as�well.�Most�of�the�NRIs�keen�toinvest�in�real�estate�back�home�are�looking�for�home�loans�as�they�are�unable�toget�loans�locally�due�to�the�current�tight�liquidity�situation�across�US.�
Page 13 of 19
Real Estate and SEZs
Analyst: Rajiv Parekh
Note:�Top�six�cities�include�-�Mumbai,�NCR,�Bangalore,Chennai,�Hyderabad�and�Pune
Source:�Industry�Update,�Nomura,�11�November�2009
9.7
11.9
7.1
3.8
5.46.4
13.1
1QCY08 2QCY08 3QCY08 4QCY08 1QCY09 2QCY09 3QCY09
Revival
Fresh Demand Trends for Top Six Cities -
Commercial Office Space
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
Page 14 of 19
Telecom
Analyst: Neha Dayal and Rishabh Chadha
• MNP by March 2010
The�government�has�announced�that�it�will�introduce�Mobile�Number�Portabilityon�March�31,�2010�all�across�the�country.�There�has�been�a�three�month�delay�incase�of�the�metros�where�MNP�was�to�be�launched�by�December�31,�2009.The�delay�was�caused�because�some�of�the�operators�were�not�prepared�toimplement�MNP,�especially�the�state-owned�operators,�BSNL�and�MTNL.Another�reason�for�the�delay�was�that�Telecordia,�which�owns�74�percent�stakein�MNP�Interconnection,�one�of�the�companies�responsible�for�theimplementation�of�MNP�in�India,�is�said�to�have�implemented�MNP�in�Pakistanas�well.�This�raised�security�concerns�for�the�Home�Ministry.���
• DoT to impose USD 28.35 million penalty on telcos
DoT�has�imposed�a�combined�penalty�of�USD�28.35�million�on�some�of�themajor�telecom�operators,�for�failure�of�rolling�out�services�on�time.�These�havebeen�imposed�in�the�form�of�liquidated�damages.�Amongst�the�offendersincluded�are�Airtel�(USD�6.06�million),�Reliance�(USD�4.26�million),�TataTeleservices�(USD�6.06million),�Tata�Teleservices�Maharashtra�(USD�0.80�million)and�Aircel�(USD�6.23�million).�On�the�other�hand�players�like�BSNL,�MTNL�andVodafone�have�not�been�imposed�with�a�fine.�
• 3G auctions to start on February 13, 2010
The�long�awaited�3G�auctions�have�been�delayed�again�and�are�scheduled�totake�place�on�February�15,�2010.�The�delay�has�been�caused�because�DoT�wasnot�able�to�finalize�the�details�of�the�Notice�Inviting�Applications.�The�process�islikely�to�take�another�five�weeks�post�the�Notice�Inviting�Applications.�DoT�hasset�January�10,�2010�as�the�date�for�issuing�the�Notice�Inviting�Applications.These�applications�will�be�accepted�only�uptill�January�25�and�the�mock�auctionwill�be�held�on�February�10�and�the�final�auctions�on�February�13.�Thegovernment�has�announced�that�it�will�be�auctioning�four�slots�of�the�spectruminspite�of�there�being�a�spectrum�crunch�and�has�also�announced�that�thespectrum�will�be�allotted�to�all�players�in�August�2010�to�ensure�a�level�playingfield.
• GTL to buy Aircel’s Towers
GTL�Infrastructure,�a�company�that�lease�out�towers�to�telecom�operatorsannounced�that�it�has�agreed�to�buy�out�Aircel’s�tower�business�for�an�amount�ofUSD�859�million�in�an�all�cash�deal.�As�per�the�deal,�GTL�will�add�17,500�of�Aircel’sexisting�towers�to�its�portfolio�and�later�an�additional�20,000�which�are�in�theprocess�of�being�setup.�The�deal�value�however�is�USD�1.83�billion�as�GTL�will�alsobe�taking�a�debt�of�USD�858�million�existing�in�the�books�of�Aircel.�GTL�will�beacquiring�the�related�broadband�infrastructure�as�well.
• Average urban teledensity crosses 100 percent mark
The�latest�figures�revealed�by�DoT�indicate�that�the�average�urban�teledensityacross�the�country�has�breached�the�100�percent�mark.�This�implies�that�all�themetros,�towns�and�cities�which�have�been�demarcated�by�the�government�asurban�have�as�many�mobile�connections�as�people.�This�figure�was�hoveringaround�60�percent�in�March�2008.�
“Going forward, the rural sectorwill be a prime focus area as theindustry spreads its reach into theentrails of bucolic India on theback of customised applicationsthat not just add to the quality oflife, but to livelihoods, too” Anil Sardanai, MD, Tata Teleservices
(Source: The Financial Express, The Rural Consumer,December 31, 2009)
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
• RIICO to develop logistic park
The�Rajasthan�State�Industrial�and�Investment�Corporation�Limited�(RIICO)�hassigned�an�MoU�with�Container�Corporation�of�India�Limited�(Concor)�to�set�up�amulti-model�logistic�park�(MMLP)�in�the�state�with�an�investment�of�about�USD74.75�million.�The�logistics�park�is�to�be�developed�on�an�area�of�250�acres�andis�expected�to�be�completed�in�about�36�months.�RIICO�is�looking�at�this�projectin�order�to�benefit�from�the�Delhi-Mumbai�Industrial�Corridor�of�which�40percent�is�to�pass�through�Rajasthan.
• Mahindra Invests in Aerospace
Mahindra�Systech,�the�component�arm�of�Mahindra�&�Mahindra,�along�withKotak�Private�Equity�has�acquired�75.1�percent�stake�in�Aerostaff�Australia�(AA)and�Gippsland�Aeronautics�(GA),�Australia-based�aerospace�companies.�AA�is�inthe�business�of��manufacturing�high�precision�close-tolerance�aircraftcomponents�and�assemblies�for�companies�such�as�Boeing�and�Airbus,�whileGA�manufactures�2-20�seater�aircraft�and�turboprop�engines.�The�company�isplanning�to�set�up�a�plant�at�Mallur�with�the�help�of�AA�to�manufacturecomponents�and�to�sell�in�the�Indian�market�and�AA�and�GA.�
• Aegis Logistics acquires Shell Gas (LPG) India
Aegis�logistics�has�acquired�LPG�business�of�Shell�Gas�India.�The�acquisition�isexpected�to�give�Aegis�a�in�the�industrial�and�commercial�segments�and�anentry�into�the�cylinder�market.�Shell�Gas�currently�own�a�terminal�at�PipavavPort�and�a�filling�plant�at�Kheda�which�would�now�be�under�Aegis’�control.
• Policy on Ground Handling Deferred
The�airport�ground�handling�policy�which�was�expected�to�be�effective�fromJanuary�1,�2009�has�been�deferred�again�by�the�Civil�Aviation�Ministry.�As�perthe�proposed�policy�the�private�carriers�would�not�be�allowed�to�carry�out�theirown�ground�handling�activites�at�Mumbai,�Delhi,�Chennai,�Bangalore,Hyderabad�and�Kolkata�airports�and�have�to�be�handled�only�by�subsidiaries�ofAir�India,�airport�operators�and�service�providers,�selected�through�competitivebidding�at�the�airports.�The�policy�is�being�opposed�by�private�carriers�on�theconcern�that�at�least�10,000�employees�could�become�jobless�and�also�have�toincur�higher�costs�if�these�activities�are�given�to�new�handlers.�
• DIESL plans foray into SE Asia in next six months
Drive�India�Enterprise�Solutions�(DIESL),�a�Tata�group�company�providinglogistics�services,�is�planning�to�enter�the�South-East�Asian�market�in�the�nextsix-months.�It�is�also�planning�to�acquire�mid-sized�logistics�firms�as�a�part�oftheir�business�expansion�plans.�It�is�also�expected�to�expand�its�business�inChina,�the�US�and�Africa.�
Page 15 of 19
Transport and Logistics
Analyst: Nitin Dehadraya
“The year 2009 has been aneventful and tumultuous year forthe civil aviation sectorworldwide. We can drawsatisfaction from the fact that theworst is over. Things are turningfor the better, which is borne outby the rebound in air traffic figuresfrom October onwards” Praful Patel, Civil Aviation Minister - India(Source:Times of India, Worst over for global aviationindustry: Praful Patel, December 29, 2009)
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
Page 16 of 19
Reference material for preparing this document was takenfrom the following sources:
Note:1�USD=�46.6�INR
Sources
Foreword:
• The�Economic�Times,�The�three�positives�for�Indian�economy,�January�3,�2010.
• The�Economic�Times,�Industrial�output�at�2-year�high,�January�13,�2010.
Economy:
• The�Economic�Times,�Economy�to�Grow�8�Percent�in�FY�11:�Adviser�Says,�January�2,�2010
• The�Economic�Times,�Food�Inflation�at�11�Year�High,�Veggies�Cool,�January�1,�2010
• The�Economic�Times,�Food�Price�Index�Up�19.83%�Y/Y�on�December�19,�December�31,�2009
• Asia�Pulse,�India�5%�GDP�Forecast�for�2009-10�May�be�Revised�Upward,�December�01,�2009
• LiveMint,�India’s�Exports�Up�after�14�Months,�Grow�18.2%�in�Nov,�January�1,�2010,
• The�Economic�Times,�Mineral�Sector�Grows�by�Over�8�Percent�in�Oct�2009,�January�4,�2010�
Auto
• Business�Line,�Mitsubishi�drives�away�from�Eicher�Motors,�December�4,�2009
• Auto�Business�News,�VW�and�Suzuki�to�develop�hybrid�and�electric�car�in�India,�December�31,�2009
• Auto�Business�News,�Volvo�Bus�India�to�launch�hybrid�buses�in�India,�December�29,�2009
• Dow�Jones�International�News,�Fuji�Heavy�Industries�To�Enter�India�Car�Market�2011�–�Report,�December�3,�2009
BFSI:
• The�Economic�Times,�Kotak�ties�up�with�Russia's�top�I-bank�for�M&A�advisory�services�in�CIS,�Africa,�December�16,2009�
• Economic�Times,�Indiabulls�is�planning�to�foray�into�infra�financing�business�segment,�December�18,�2009�
• Business�Standard,�ICICI�Bank�planning�to�raise�capital�through�Tier�I�and�Tier�II�bonds,�December�26,�2009
• Financial�Express,�OBC�plans�open�offices�in�Hong�Kong,�Africa,�December�20,�2009�
• Business�Standard,�DCB�is�planning�to�foray�into�wealth�management�space,�December�10,�2009
CM:
• Times�of�India,�Marico�acquires�Colgate-Palmolive's�'Code�10'�brand,�January�04,�2010
• The�Economic�Times,�Marks�&�Spencer�to�scale�up�India�operations,�December�14,�2009
• Financial�Express,�Gucci�can�open�single-brand�stores�in�India,�December�04,�2009
• Fnbnews.com,�South�Africa’s�News�Café�sets�shop�in�India,�December�23,�2009
• The�Economic�Times,�Essar’s�telco�retail�arm�acquires�X-Cite,�December�09,�2009
Hospitality:
• Business�Standard,�Lalit�Suri�Group�plans�foray�into�economy�segment,�December�28,�2009�
• The�Economic�Times,�Videocon�to�enter�hospitality�biz,�set�up�hotel�at�Salt�Lake,�December�26,�2009
• The�Economic�Times,�Zuri�plans�to�build�two�hotels,�invest�Rs�400�crore,�December�11,�2009
• Business�Standard,�Sahara�Hospitality�to�build�1000�rooms,�December�01,�2009�
• The�Statesman,�IHC�plans�Rs�1000�crore�fund,�November�06,�2009
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
Page 17 of 19
IT:
• The�Hindu�Business�Line�,�HCL�Axon�services�for�GlaxoSmithKline,�December�18,�2009
• Hindustan�Times,�IBM�bags�INR�380-cr�deal�from�Digicable,�December�22,�2009
• The�Financial�Express,�Interglobe�opens�BPO�centre�in�Manila,�hires�350,�December�30,�2009
• The�Economic�Times,�HCL�Tech�bags�5-year�multi�million�pound�deal�from�News�Corp�arm,�December�8,�2009
• The�Economic�Times,�Wipro�to�provide�testing�services�to�Telefonica�O2�Germany,�December�18,�2009
• The�Economic�Times,�IT�services�market�set�to�double�by�2013:�Report,�December�24,�2009
Media:
• MediaNama.com,�Reliance�MediaWorks�To�Set�Up�JV�With�In-Three,�December�08,�2009�
• IndianTelevision.com,�Sri�Adhikari�Bros�plans�to�launch�regional�channels,�December�12,�2009�
• IndianTelevision.com,�Digicable�to�up�its�stake�in�CableComm�to�80,�December�26,�2009
• Financial�Express,�MSM�to�launch�a�sports�channel,�December�23,�2009
• Asia�Pulse,�Indian�Console�Gaming�Market�To�Touch�US$122�mn�In�2010,�December�23,�2009
Oil and Gas:
• The�Hindu�Business�Line,�OVL�to�bid�with�Repsol,�Petronas�for�Venezuelan�fields,�December�22,�2009
• The�Hindu�Business�Line,�Fertiliser�industry�seeks�more�gas�allocation,�December�24,�2009
• Business�Standard,�RIL�tests�peak�output�capacity�of�KG�fields,�December�28,�2009
Pharma:
• Company�Website,�Hospira�to�Acquire�Orchid's�Generic�Injectable�Pharmaceuticals�Business,�December�15,�2009
• Business�Standard,�Dishman�pharma�forms�JV�to�make�API�in�Saudi�Arabia,�December�10,�2009
• in-pharmatechnologist.com,�Dishman�partners�for�Saudi�API�making�JV,�December�17,�2009
• Business�Standard,�Intas�Pharma�ties�up�with�US�company,�December�2,�2009
• Company�Press�Release,�Daiichi�Sankyo�to�leverage�Ranbaxy’s�presence�in�Africa�for�marketing�and�distribution,December�21,�2009
Power:
• Business�Standard,�1,200-Mw�Rosa�project�starts�in�UP,�December�29,�2009
• The�Economic�Times,�Indo-Bhutan�power�MoU,�December�24,�2009
• The�Telegraph,�Big�power�projects�on�track,�December�29,�2009
• The�Economic�Times,�Power�plants�may�get�to�sell�unallocated�output,�December�23,�2009
Real Estate:
• Business�Standard,�Maha�realty�to�cost�more�with�new�ready�reckoner,�January�02,�2010
• DNA�India,�Realtors�mull�pulling�back�from�townships,�December�05,�2009
• The�Financial�Express,�DIPP�to�scan�FDI�end-use�in�realty,�December�18,�2009
• The�Financial�Express,�After�NCR,�Falcon�Realty�sets�sights�on�Bihar,�December�26,�2009
• The�Economic�Times,�Returning�NRIs�boost�demand�for�residential�property,�December�09,�2009
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
Page 18 of 19
Telecom:
• Financial�Chronicle,�Mobile�number�portability�by�March�2010,�December�31,�2009;�Business�Standard,�MNP�to�bedelayed;�DoT�calls�meeting�tomorrow,�December�16,�2009�and�The�Economic�Times,�Number�portability�hits�homeministry�hurdle,�December�17,�2009
• Business�Standard,�DoT�to�impose�Rs�132-cr�penalty�on�telcos,�December�31,�2009
• The�Hindu�Business�Line,�3G�spectrum�auctions�likely�from�Feb�13,�December�31,�2009;�Business�Standard,�3Gauction�may�start�by�Feb�end�or�March�1st�week,�December�28,�2009
• The�Economic�Times,�GTL�to�buy�Aircel's�towers,�December�24,�2009
• The�Economic�Times,�Average�urban�teledensity�crosses�100%�mark,�December�12,�2009
Transport and Logistics:
• Economic�Times,�‘RIICO�inks�pact�with�Concor�for�logistic�park’,�December�24,�2009
• DNA,�‘Mahindra�buys�two�Aussie�aero�cos’,�December�16,�2009
• Economic�Times,�‘Aegis�Logistics�acquires�Shell�Gas�(LPG)�India’�December�21,�2009
• Livemint,�‘Policy�on�ground�handling�being�deferred�again’,�December�30,�2009
• The�Hindu�Business�Line,�DIESL�plans�foray�into�SE�Asia�in�next�six�months,�Dec�20,�2009
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms
affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.
in.kpmg.com
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
©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�ofthe�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International�Cooperative�(“KPMGInternational”),�a�Swiss�entity.�All�rights�reserved.
KPMG�and�the�KPMG�logo�are�registered�trademarks�ofKPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity
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or�entity.�Although�we�endeavour�to�provide�accurate�and�timely�information,�there�can�be�no�guarantee�that�such�information�is
accurate�as�of�the�date�it�is�received�or�that�it�will�continue�to�be�accurate�in�the�future.�No�one�should�act�on�such�information
without�appropriate�professional�advice�after�a�thorough�examination�of�the�particular�situation.
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