December 24, 2009
Indicators Current Last Week You have to have confidence in your ability, and then be tough enough to follow through.
Sensex 17,231 16,720
Indian consumers more optimistic than six months ago: survey
Nifty 5,178 4,988
Forex Reserves N/A US$285.74 bn The Indian consumers continued to be optimistic slightly more than what they
Food Inflation 18.65% 19.95% were six months ago. As per the latest MasterCard Worldwide Index of
Consumer Confidence survey, the Indian consumers are more optimistic than
Exchange Rates six months ago (68.0) and a year ago (63.9). Both Mumbai (79.1 vs. 61.7)
Currency Current Last Week and Chennai (95.2 vs. 61.3) consumers have become more optimistic than
US$1 Rs. 46.76 Rs. 46.85 they were six months ago, while New Delhi (49.4 vs. 79.3) has experienced a
€1 Rs. 67.13 Rs. 67.36 dip in consumer confidence score. As per the survey, the consumers across
£1 Rs. 74.7833 Rs. 75.7846 Asia/Pacific, Middle East and Africa markets are approaching the next six
JP¥ 100 Rs. 51.21 Rs. 52.28
months with optimism. As the global economy recovers, 21 of the 24 markets
Christmas waves a magic wand over this polled reflected positive consumer sentiment looking ahead, including Vietnam
world, and behold, everything is softer and (90.3), Nigeria (89.4), Qatar (89.2), UAE (86.1) and China (85). Developed
more beautiful…!!! markets in the region have seen a quick recovery in consumer confidence. UAE
leapt up in confidence with the largest Index score increase of the markets last
surveyed six months ago (29.6 to 86.1). Sharp improvements were also
evident for Singapore with a strongly optimistic Index score of 79.4, up from a
pessimistic 31.2 in previous survey.
Advance tax kitty swells 20% during Apr-Dec
The corporate advance tax collections have exceeded 20% growth in the first
nine months of FY10, while the direct tax collections from top 100 corporates
have registered 30% rise over the same period last year. Automobiles,
consumer goods and metals have led the pack of industries which paid highest
Global Economic News taxes in Q3FY10. Advance tax payments by industries increased to Rs. 1.13
• The US GDP rises at 2.2% (revised) in Q3CY09, lakh crore from Rs. 0.94 lakh crore in the year-ago period. Among the major
while the UK GDP fell 0.2% QoQ in Q3CY09.
companies, SBI paid an Rs. 46.95 bn advance tax till Dec’09, as against Rs.
• In US, personal income increased by 0.4%, while
the personal spending rose by 0.5% in Nov’09. 39.23 bn in the year-ago period, while ONGC paid Rs. 37.13 bn (Rs. 41.23 bn)
• The existing home sales in the US rose 7.4% to a and RIL paid Rs. 23.05 bn (Rs. 14.75 bn). Other top payers include: SAIL (Rs.
seasonally adjusted annual rate of 6.54 mn units
in Nov’09 from a revised 6.09 mn in Oct’09 22.63 bn), Maruti Udyog (Rs. 7.57 bn) and Bajaj Auto (Rs. 5.4 bn). Meanwhile,
• Industrial production in Singapore slumped 8.2% the Government expects the direct tax collections for the current fiscal to well
YoY in Nov’09
• French consumer spending on manufactured exceed the budget target of Rs. 3.7 lakh crore.
goods dropped 0.1% MoM in Nov’09: INSEE
• The National Bank of Poland has retained the
Exit from fiscal deficit will be the key to India’s growth: ICRIER
reference rate at 3.5% on an annual basis Asserting that India’s limited contraction following the global economic crisis
• The US new home sales fell 11.3% to an annual
rate of 355,000 in Nov’09 was due to rapid monetary response and pre-crisis government expenditures,
• Germany's import price index fell 5% YoY in Nov Dr. Shankar Acharya, Honorary Professor and Board Member, Indian Council
• The Philippine Balance of Payment showed a
surplus of US$1.1 bn in Q3CY09
for Research on International Economic Relations (ICRIER) stressed that exit
from high fiscal deficit will have to be prioritized to resume high growth.
Global Corporate News Speaking at a session on ‘Rising to the Global Economic Challenge: Lessons
• Ford Motor is nearing a deal to sell its Volvo unit
to China-based Zhejiang Geely Holding Group
Learnt’, organized by Aspen Institute India, Dr. Acharya said that India has
• Citigroup has paid $20 bn TARP fund through a benefited from global growth and must not resort to avoiding globalization.
combination of stock and debt offerings
• 3Com Corporation has $19.99 mn profit in Q2, as
Although the world economy may not revert to earlier rapid growth, India can
against $12.87 mn profit in Q2 last year leverage opportunities through reducing fiscal deficit, curbing inflow of ‘hot
• Navistar has posted $86 mn profit in Q4, as money’, and prudently managing capital account convertibility and financial
against $343 mn in Q4 last year. It would set up
an R&D facility to support diesel-power system liberalization. Dr Rajiv Kumar, Director and Chief Executive, ICRIER,
components emphasized that the world must not resort to protectionism to protect national
• ConAgra Foods has posted $239.7 mn profit in Q2,
as against $168.4 mn profit in Q2 last year interests. He suggested that contracting global demand could be propped up
• Sanofi-aventis has agreed to acquire Chattem for by meeting huge infrastructure needs in Asia through an Asian Investment
about $1.9 bn in cash
• Red Hat has posted of $16.4 mn profit in Q3, as Bank. India should also take the lead on South Asian regional economic
against $24.3 mn profit in Q3 last year integration and infrastructure development, he added.
• Nortel has sought court approval to sell certain
assets of its Carrier VoIP & Application Solutions Japanese PM to visit India from Dec 27
biz to Genband for US$82 mn.
• Jabil Circuit has posted $28.3 mn profit in Q1, as Japanese Prime Minister Yukio Hatoyama will undertake his first visit to India
against $275.9 mn loss in Q1 last year this week for talks with his Indian counterpart Dr. Manmohan Singh on
• Walgreen has posted $489 mn profit in Q1, as counter-terrorism measures, a free trade agreement and climate issues. He
against $408 mn profit in Q1 last year
will also undertake a trip to the country's financial hub Mumbai before
returning to Japan in the early morning of December 30. The plan for his visit
Asim Mohapatra took time to be finalized due to extended consultations on the compilation of
Japan's fiscal 2010 budget.
Bridging the Information Gap in Corporate Landscape
1. Economy 03
2. Infrastructure 04-05
3. Sectors 06-14
A. IT & ITeS 06
B. Telecom 07
C. Auto & Auto Ancillaries 08
D. Banking & Financial Services 09
E. Pharma & Healthcare 10
F. Steel, Metals & Minerals 11-12
G. Miscellaneous 13-14
4. Ratings, Buy-backs & Open Offers 15-16
5. M&As 17
6. Insurance & Mutual Funds 18
7. Ensuing Events 19
8. Global 20-25
• Global Economy 20-21
• Global Business 22-25
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Weekly Newsletter 2
Bridging the Information Gap in Corporate Landscape
ADB to provide US$850 mn loan to India for infra project, khadi restructuring program
The Government of India has signed two loan agreements worth US$850 mn with the Asian Development
Bank (ADB) for second India infrastructure project financing facility, and Khadi restructuring and
development program. The ADB will provide a $700 mn loan – to be released in three tranches – (first
tranche will be US$210 mn) to India Infrastructure Finance Company (IIFCL) to support the Government’s
infrastructure development agenda through enhancing the availability of the long-term funds for
infrastructure financing. IIFCL will provide funds to private sector entities at commercial terms with over 20-
year maturity for infrastructure projects in PPP mode. This facility will enable IIFCL to further the ongoing
work of IIFCL in supporting the PPP projects. The period of utilization of this loan will be 5 years for three
tranches. The ADB will also provide $150 mn in four tranches over three years for the restructure and
development of Khadi industry. The first tranche will be US$30 mn. Ministry of Micro, Small & Medium
Enterprises (MSME) will be the Executing Agency and KVIC will be Implementing Agency. The external
financial assistance from ADB to and Khadi & Village Industries Commission (KVIC) will be utilized for
implementing a comprehensive Khadi Reform Programme to revitalize the sector through a series of policy,
legal and institutional framework. A US$2 mn Technical Assistance will also be provided to support the
implementation of the program.
Services sector growth gains momentum during Apr-Oct’09: CII survey
Services Sector Growth gains momentum in the Apr-Oct’09 period confirming that there has been a
significant improvement in growth rates of various services sectors in Apr-Oct’09 period, compared to Apr-
Oct’08 and Apr-Sept’09 over Apr-Sept’08, reveals the CII Services sectors survey. The CII survey points out
that around 12% of the sectors covered have registered excellent growth rate more than 20% in Apr-Oct’09
period compared to 12.5% in Apr-Oct’08 period. The positive and higher growth trend has also been
confirmed by the fact that the share of the sectors registering high growth rate of 10 to 20 % has increased
to 30.30% in Apr-Oct’09 from 24.20% in Apr-Oct’08. Though the share of the sectors recording moderate
growth rate of 0 to 10% has declined slightly from 51.52% to 48.5%, the share of the sectors recording
negative growth rate has also declined to 9 % in Apr-Oct’09 from 12% in Apr-Oct’08 which reflect signs of
improvement and growth. Out of 33 sectors covered during Apr-Oct’09 over Apr-Oct’08, Wireless
subscribers, Assets under management fall under excellent growth category of more than 20%, Exchange
earnings from foreign tourists, Franchising, Life Insurance Premium, Housing Finance Education and
Training Services, Retail Trade, Organized Retail Trade fall under high growth category of 10-20%, Railway
Revenue earning Freight traffic, Railway Passenger Traffic, International Air Passenger Traffic , Domestic Air
Passenger Traffic, Construction, IT/Software/Software services, Media & Entertainment fall under fall under
moderate growth between 0 to 10 %, revealed the CII Survey. However, the sectors according to the CII
survey which have shown negative growth are: Wire line subscribers, International Air freight Traffic, foreign
tourist arrivals are still in the negative territory. The CII survey is based on responses from more than 350
service related industry associations, organizations, and companies in both the private and public sector.
India to unveil strategy for low carbon emission soon
With a view to combating threats of climate change, India will soon unveil a detailed roadmap for a low-
carbon growth strategy, said the Union Environment Minister, Jairam Ramesh. “Post-Copenhagen, our
priority will be to cut emission intensity by 20-25% by 2020 on 2005 levels which is not only eminently
feasible but which can also be improved upon the benefit of our own people,” he added. In this direction, the
Planning Commission has been asked to constitute a committee of experts to prepare a detailed a road-map
for low carbon growth, which will submit the report within next three or four months to be implemented in
the 12th five year plan, the Minister added.
Trade receivables engine for e-discounting launched
The Union Finance Secretary, Ashok Chawla has launched an e-platform ‘NTREES’, an acronym for Trade
Receivables Engine for E-discounting. Promoted by SIDBI & NSE, NTREES will facilitate discounting of MSME
bills on their supplies to large purchaser companies. NTREES provides a qualitative approach to addressing
their needs and he expressed his hope that this will take off and become an optimum framework and
institutional mechanism. In the next phase, as more and more banks adopt this platform, the platform could
also emerge as a price discovery mechanism.
The Union Finance Minister, Pranab Mukherjee said that the economy could grow by 7.5 to 8% during the current financial year,
though price rise and fiscal consolidation remained areas of concern.
After reaching a 10 year high of near 20%, food inflation fell 1.2% for the week ended December 12. The prices of wheat, rice and
fruits & vegetables declined significantly. There was also decline in prices of Bajra (4%), Condiments & Spices, Tea, Masur Dal and
maize (each). However, the prices of Moong Dal (2%) and Jwar (1 %) have moved up.
The Centre is preparing a roadmap to take the disinvestment process forward over the next two years.
The Central Government is taking steps to control the inflation of prices of food articles, said Planning Commission Deputy Chairman,
Montek Singh Ahluwalia.
Weekly Newsletter 3
Bridging the Information Gap in Corporate Landscape
RIL announces third successive gas discovery in Krishna Basin
Reliance Industries (RIL) has announced its third successive gas discovery in the exploration
block KG-DWN-2003/1 (KG-V-D3) of NELP-V. The deepwater block KG-DWN-2003/1 is located in
the Krishna basin, about 45 kms off the coast in the Bay of Bengal. The block covers an area of
3,288 square kms. RIL holds a 90% participating interest and Hardy Exploration & Production India holds
the rest. The well KGV-D3-R1, the third in this block was drilled at a water depth of 1,982 m and to a total
measured depth of 4,113 m. Three reservoir zones were encountered at Miocene Level having gross
thickness of 4, 23 and 16 meters. The potential of these were evaluated through a wire-line based
technology called Reservoir Characterization Imager. The discovery has been notified to Government of
India and Directorate General of Hydrocarbons. The potential commerciality of the discovery is being
ascertained through more data gathering and analysis.
Nava Bharat Singapore acquires 65% equity stake in Maamba Collieries
Nava Bharat (Singapore) – a subsidiary of Nava Bharat Ventures – has signed a share sale and
purchase agreement (SPA) for acquiring 65% equity stake in Maamba Collieries (MCL) with The
Government of the Republic of Zambia holding the Golden Share, acting through the Minister of
Finance and ZCCM-IH (ZCCM), holding 100% of the paid up equity capital of MCL. A group of
individuals (Zambian Consortium) joined NBS to form Nava Bharat Consortium (Nava Bharat).
The acquisition entails in the initial cost of acquisition of about US$26 mn by Nava Bharat, to be paid upon
completion. Nava Bharat and ZCCM are committed to optimize the mine operations to obtain positive cash
flows soon and to establish a 2X150 MW power plant by utilizing low grade coal from the coal mine which
has mincable reserves of about 65 mn MT's of washed high grade coal and an equivalent quantum of low
grade coal for use as the feed stock for the proposed 300 MW power plant, The overall integrated project
entails capital outlay of about US$550 mn to be funded by non-recourse project debt and equity. Nava
Bharat's share of equity for this integrated project is about US$108 mn and that of ZCCM is about US$57
mn. Nava Bharat expects that its proposed investment in the coal mine and a mine mouth 300 MW power
plant in an emerging economy like Zambia is in line with its focused growth approach in power sector with
JSPL to build coal gasification based MIDREX DRI plant at Angul
Jindal Steel & Power has announced that it will build a 1.8 MTPA coal gasification based
MIDREX Direct Reduction Plant at Angul in Orissa. The new MIDREX Module will pair
commercially available gasification technology from Lurgi GmbH of Germany, together with
a 7.15 meter MIDREX Shaft Furnace to produce direct reduced iron for use in meltshop applications. This will
be the first time a Lurgi gasifier will be paired will a MIDREX Furnace; the new installation will use
indigenous coal and iron ore. The new MIDREX Plant will have the flexibility to produce both cold and hot
DRI for a new Greenfield meltshop to be supplied by SMS Siemag AG of Germany and will use a hot
transport conveyor similar to that installed at Hadeed Module E in Saudi Arabia. This commercially proven
system is supplied by AUMUND Fördertechnik of Germany. The Angul MIDREX Plant will utilize syngas
produced in the gasification plant to produce high quality DRI for melting in an EAF. Coal gasification is the
process that converts coal to Synthesis gas by partial oxidation using oxygen and superheated steam as the
reactants. The synthesis gas mainly consists of carbon monoxide, hydrogen and methane which will be
utilized as a reducing agent for the iron oxide to produce DRI in the MIDREX Shaft Furnace.
Maharashtra announces Rs. 100 bn Vidarbha package
Maharashtra Chief Minister Ashok Chavan has announced a financial package of Rs. 100 bn to carry out
various developmental works in Vidarbha region, assuring to implement it within three years. Making the
announcement on the floor of the house amidst thumping of desks from treasury benches, Chavan said a
major portion of Rs. 30.94 bn would be spent on completion of 20 pending water conservation projects
during the year 2009 and 2010. They include Lower Vena (Nagpur), Purna and Chandrabhaga (Amravati),
Utawali (Buldhana), Khadakpurna (Buldana), Gosikhurd (Bhandara) and 21 other minor projects. By
completing these projects 57,577 hectares of land will be irrigated by Jun’10.
The Union Minister for Petroleum & Natural Gas, Murli Deora has requested Prime Minister to issue over Rs. 208.7 bn
worth of bonds to state-run firms to make up for losses they incurred on fuel sales.
Under the Coal Fired Generation Rehabilitation Project, the Government of India has signed a loan agreement of US$180 mn with
the World Bank for renovation and modernization of coal-fired generating units located in Haryana, Maharashtra and West Bengal.
NHPC has invited pre qualification bids from consultants/JVs/consortiums through international competitive bidding for stage design,
construction, planning, design & engineering and project management for the 3,000 MW Dibang multipurpose project located in
lower Dibang valley of Arunachal Pradesh.
Adani Group is reportedly looking at increasing the area of its multi product Special Economic Zone (SEZ) at Mundra, which is
notified over 6,472.86 hectares. Mundra Port & SEZ has already approached the Board of Approval (BoA) for SEZs seeking its
permission for addition of land to its SEZ. The developer has requested for addition of 2,008.41 hectares of land to the already
notified SEZ. If the government approves the request, the area of this SEZ would be 8,481.27 hectares.
Weekly Newsletter 4
Bridging the Information Gap in Corporate Landscape
Rajasthan Govt to buy 1,200 MW from Adani Power
Adani Power Rajasthan, a 100% subsidiary of Adani Power (APL), has been awarded Letter of Intent (LoI) by
Rajasthan Rajya Vidhyut Utpadan Nigam (RRVPNL) for purchase of up to 1,200 MW of power on long-term
basis. With this, the total long-term power selling arrangement firmed up by APL comes to 5,900 MW. As
may be recalled, APL already has PPA of 2000 MWs with Gujarat Urja Vikas Nigam (GUVNL), 1,424 MW with
Haryana Utilities and 1320 MW with Maharashtra Utilities through its subsidiary viz. Adani Power
Maharashtra (APML). In a matter of distinction of APL to have won all these bids under Case - I competitive
bidding. Case - I bids are the ones where the developer takes the full responsibility for project development
and commits to supply power through competitive bidding process from the pre-decided date. APL is the
only power company in the country with PPAs of nearly 6,000 MW under Case - I bidding. Having won the
bid, APL has accomplished one more milestone for its 1,320 MW power plant at Kawai in Rajasthan. The
project execution has already commenced and 75% of debt is already tied-up.
LG Electronics forays into SMB segment; eyes 10% market share
LG Electronics India has announced its foray into the SMB segment for office solutions. The Company will
invest Rs. 2 bn over the next three years in IT business as it forays into the small and medium businesses
(SMB) segment. LG Electronics India is targeting revenues of Rs. 2 bn by December next year, from the
SMB vertical. The Company is aiming to capture 10% market of the $400 mn opportunity from the SMB
segment for office solutions. The product line will comprise of electronics, appliances and computing
solutions such as network monitors, digital signage, projectors, surveillance security, water purifiers, air
conditioners, refrigerators & microwave ovens etc. According to Company, the addressable market for the
SMB segment in India is over 35 mn with 70% of these preferring to have a one-stop buying for office
equipments. With the launch of SMB solutions, LG Electronics India aims to support the Indian B2B segment
with our collective offering.
J&K Govt signs MoU with Reserve Bank of India
The Government of Jammu & Kashmir and the Reserve Bank of India (RBI) have signed a Memorandum of
Understanding (MoU) with regard to Urban Co-operative Banks in the state. Consequent upon of this, a
State level Task Force on Urban Co-operative Banks (TAFCUB) has been constituted for J&K. Arnab Roy,
Regional Director for J&K, RBI, is the Chairman of the TAFCUB and GN Sufi, Registrar of Co-op Societies,
Government of J&K is its Co-Chairman. As part of its developmental role, the RBI would also be assessing
the training, computerization needs of the Urban Co-operative Banks in J&K with the objective of upgrading
their human resources skills and technological infrastructure so that they improve their operational efficiency
and quality of management information systems.
Kribhco to modernize Hazira plant
Krishak Bharati Cooperative (KRIBHCO) has decided to modernize its ammonia and urea manufacturing
plant in Surat at an estimated Rs. 13.01 bn and raise production capacity through technology transfer from
the US and Italy. As per the plan, technology for the plant would be transferred from US-based Kellogg
Borwn Root, a global engineering, construction and services firm, while an Italian firm Saipem would provide
the technology for the urea plant. The modernization programme would be completed by Sept’11. The
Company has proposed to enhance its production capacity of Ammonia from the current levels of 10.03 lakh
MT annually to 12.47 lakh MT and that of its Urea plant from 17.29 lakh MT to 21.94 lakh MT. The Company
has projected to reduce energy consumption post the modernization of its plant.
The Unique Identification Authority of India (UIDAI) would start issuing the 16-digit unique numbers from Feb’11 and plans to cover
600-mn population over the next five year.
ONGC has replaced Reliance Industries (RIL) with Repsol YPF SA, and Malaysia's Petronas to bid for Venezuelan oil blocks next month. ONGC
Videsh is likely to bid for the massive Carabobo project in Venezuela's Orinoco heavy oil belt with Repsol, Petronas, Indian Oil and Oil India.
ONGC has raised Rs. 19.7 bn through a issue of bonds to refinance the debt its overseas investment arm had taken to buy UK-based Imperial
BHEL has secured a repeat order worth Rs. 6.4 bn from Adhunik Power and Natural Resources (APNRL) for the main plant package of the
second new-rating unit of 270 MW at its upcoming Greenfield thermal power project in Jharkhand.
The Board of Directors of Vijay Shanthi Builders has approved the draft scheme of amalgamation of High End Homes with the Company,
subject to necessary approvals. Its Board has also approved the exchange ratio of one share of the Company to be issued for every three
shares held in High End Homes.
Finolex Industries, Ratnagiri has won the First Prize in petrochemical sector for the National Energy Conservation Award -2009 by the
Ministry of Power.
Gail (India) has received the Rajiv Gandhi National Quality Award as the best performer among the large scale manufacturing industry. Its
Board of Directors has approved payment of 20% interim dividend (Rs. 2 per equity share of Rs. 10 each) for FY10.
KEC International has won an order worth Rs. 4.01 bn in Abu Dhabi, while Shriram EPC along with its subsidiaries has received orders
amounting to Rs. 1.56 bn, PBA Infrastructure has secured a contract worth Rs. 145.01 crore, Patels Airtemp India has received an order
worth Rs. 2.86 crore, and Tantia Constructions in JV with EDCL has received a project worth Rs. 19.51 crore from Eastern Railway.
Diamond Cables has raised Rs. 300 mn from Tata Capital as long-term working capital loan. These funds will be used to augment Company's
core working capital requirements. Further the Company said that it is having outstanding orders of worth Rs. 11 bn in hand.
The Board of Directors of JMDE Packaging & Realties has the proposal to subdivide the equity shares of Rs. 10 each into shares of Rs. 1
each. It has also the proposal to issue further shares to the existing shareholders of the Company on Rights Basis 2 shares for every one
shares held by the shareholders.
Weekly Newsletter 5
Bridging the Information Gap in Corporate Landscape
IT & ITeS
Include additional electronics products in focus product scheme: CII
With a view to leveraging the export opportunity for faster growth of Information Communication
Technology & Electronics (ICTE) manufacturing industry in the country, Confederation of Indian Industry
(CII) has recommended inclusion of additional products within the ambit of Focus Product Scheme. The
initiative is expected to help in increasing the exports from this sector which have remained sluggish at the
level of 18-20% of the production during the last few years, said CII. Focus Product Scheme is amongst the
several measures announced by the government through Foreign Trade Policy 2009-14 for promotion of
exports. The objective of this scheme is to incentivise export of such products which have high export
intensity/employment potential, so as to offset infrastructure inefficiencies and other associated costs
involved in marketing of the notified products. Under the scheme, exports of notified products shall be
entitled for Duty Credit scrip equivalent to 2 % of FOB value of exports (in free foreign exchange) for
exports made from 27.8.2009 onwards. However, presently only 15 products from the ICTE sector have
been notified. The CII said that the exports from the electronics and IT hardware industry need to be
incentivised for overcoming the inherent disadvantages. The industry body sought to include several ICTE
products – wireline telephone sets, CTVs, Power Supplies, Unpopulated PCBs, transistor/diodes), audio
products, CD/DVDs, USB, Micro SD cards etc. – having high exports/export potential.
L&T Infotech, Savvion in pact to provide BPM solutions
L&T Infotech has entered into a strategic partnership with Savvion to provide Business Process Management
(BPM) solutions. These will be in the areas of business process modeling, implementation and integration
solutions and services to its clientele. Savvion is a leading business process management company. The BPM
market-size figure is estimated to reach $2.6 billion globally by 2011. The partnership expands upon L&T
Infotech's Business-to-IT Connect that provides cutting-edge solutions and services to clients across multiple
continents. Savvion Business Process Management Systems (BPMS) enable organizations to operate more
competitively and cost-efficiently. With Savvion BPM, organizations are able to become more efficient, gain
better visibility into their operations and more agility to respond to changing business conditions quickly.
BPM is a management approach focused on aligning all aspects of an organisation with the needs and wants
of clients. It is a holistic management approach that promotes business efficiency and effectiveness while
striving for innovation, flexibility, and integration with technology.
HCL launches new ME series laptops including 3G ready model
HCL Infosystems has unveiled a new range of ME series laptops including HCL ME 06 which is a 3G capable
device. The laptops are available in red, blue and black colours and are energy star 5.0 certified. Another
new model HCL ME 45 is equipped with multi touch gesture touch-pad allowing user to expand, shrink &
rotate the picture through the movement of figures on touch-pad. Some of the other features include “Split
Me” which allows users to share their data without worrying about the size of the file, “Lock Me” that
prevents data theft from the system, “Secure Me” which can be used lock any application installed on the
PC, “Encrypt Me” which allows users to encrypt their data and avoid unauthorized access of the data thereby
providing assurance against data theft. HCL ME 06 is available for Rs. 19,990, while the HCL ME 45
notebook is available for Rs. 39,990.
Swift Trade… Novellsys launches business solution for equipment trading organizations
Chennai-based Microsoft dynamics gold certified partner, Novellsys has announced the official launch of its
Business Solution for equipment trading organization christened as “Swift Trade”. Swift Trade is a
comprehensive business solution engineered for organizations that are into the business of equipment
trading. Swift Trade offers an affordable license based solution based on Microsoft Technology and thus
caters to Small and Medium sized trading organizations. This solution is an outcome of Novellsys' experience
in providing solutions to such organizations. Equipment trading is $5 bn business in India and 60% of this
market is controlled by SMEs, whose turnover ranges from Rs. 5 crore to Rs. 50 crore. There are several
equipments that are resold in India starting from household equipments like Fridge, Grinder, and Air-
Conditioner to equipment that has application in large industries like Generators, Machines etc.
Mahindra Satyam has been certified by SAP AG as a provider of solution implementation based on the Run SAP methodology..
IBM has signed a 10-year strategic outsourcing agreement with cable and broadband distribution player Digicable, with an initial
outlay of Rs. 380 crore. As part of this agreement, IBM will support the integration of Digicable's digital media content delivery and
value added services applications with its core business technologies and processes.
Polaris Software Lab has announced that Bank Sohar, Oman has signed up Intellect GUB 10.0 Debt Management solution, a
comprehensive debt receivables management product from the Intellect suite. The solution will enable Bank Sohar, Oman's fast
growing Bank, to control receivables and minimize delinquent accounts.
Micro Technologies India has announced the launch of a mobile phone-operated device, Micro Jai Kisan, which can be used to
manage pump sets remotely.
Guangdong Rural Credit Union (GDRCU) has successfully gone live with TCS BaNCS Core Banking solution.
The Board of Directors of Compuage Infocom shall meet on December 28, 2009 to consider the proposal for acquiring 80% stake
in ADIT E-Commerce to make the latter as the subsidiary of the former.
The shareholders of Usha Martin Infotech have approved capital restructuring of the company for foray into the education sector
and focusing on learning solutions.
Weekly Newsletter 6
Bridging the Information Gap in Corporate Landscape
Consider 11-digit mobile numbers for new series: AUSPI
Association of Unified Telecom Service Providers of India (AUSPI) has asked the Government to consider
introduction of 11-digit numbering scheme for mobile operators to take care of the crunch of numbers due
to the growing list of users. It said 11-digit numbering scheme would cause minimum disturbance for
subscribers through pre-fixing '9' on all existing mobile numbers. National Numbering Plan, 2003 which was
formulated with a projected forecast of about 50% teledensity by the year 2030 has not met the numbering
requirement. To address the immediate problem of mobile numbers, the government as national numbering
administrator had taken certain decisions like use of level '8' and '95' for mobile number. AUSPI said if the
Government starts looking for alternative levels like 7 to meet the mobile number demand for the next 3 to
4 years, it should drop that proposal as level '7' is disruptive and likely to cause more inconvenience for
3G services pose challenge for Indian telecom operators: ICRA
The third Generation (3G) mobile telephony services have been introduced in over 100 countries worldwide,
accounting for around 870 mn subscribers as on Aug’09. In India, with the auction of the 3G spectrum
expected to be held in Jan’10, telecom operators are expected to launch 3G services shortly. Although the
introduction of 3G services is expected to benefit Indian telecom operators in the long-term, they would
have to overcome several challenges in the short term. The implementation of 3G services would require
significant investments in 3G spectrum fees and in the establishment of the 3G network and infrastructure.
Though, the Empowered Group of Ministers has fixed a reserve price of Rs. 35 bn for pan-Indian operations,
the actual price paid by telecom operators could be higher especially in the Metros and Category-A circles.
ICRA expects the funding requirements of telecom operators to increase in the short-term on account of
investments in 3G spectrum fees and in building 3G network and infrastructure. This is expected to lead to
greater reliance on debt and pressure on return indicators in the short-term. The operating costs in terms of
marketing expenses would also be high even as larger handset subsidies would have to be offered to
customers to ensure increased adoption of 3G services. In addition, as for any new service, 3G services
would also require investment in development of new service platforms and successful marketing. Further,
ICRA expects competition to be higher in the initial years, given that all telecom operators would strive to
acquire customers. Thus, telecom operators are expected to incur significant expenditure on marketing of
3G services in the initial years.
Nova Navigator… Tata Tele, Novatium launch cloud computing-based wireless broadband service
Tata Teleservices (TTSL) in tie-up with Novatium Solutions has launched cloud computing-based wireless
broadband service called ‘Nova Navigator’. Cloud computing is changing the rules of the game by offering
virtual Internet and data access. Coupled with Tata Photon Plus, a mobile broadband service, the consumer
would be now mobile with access to his data powered by Nova Navigator and high speed Internet access at
the convenience of his home or office. Terming the offering as an obsolescence-proof computing service, the
combine claims that the new services is supported by a zero maintenance access device and is easy to Plug
and Play at home or office. The services include comprehensive computing experience with special emphasis
on internet, gaming, digital entertainment, online education, telephony, and business productivity. With
enhanced features such as 3G support, it has the technical superiority to match up with all software
advancement such as plug and play printer support, faster browsing and multi-media amongst others.
The Govt has announced that the auction for 3G mobile spectrum would commence as per schedule from January 14, 2010 and
allotment would be made to four private players simultaneously by Aug’10. The Govt is estimating to generate Rs. 250 bn from
sale of 3G spectrum, allowing five operators, including state-run BSNL/MTNL. The Govt has fixed a reserve price of Rs. 35 bn
for 3G spectrum and Rs. 17.5 bn for the Wimax services.
Kavveri Telecom Infrastructure – the subsidiary of Kavveri Telecom Products – has signed a long term agreement for ten years on BOL
basis with fifth operator, who is one of the major pan-India cellular operators, for the in-building wireless solutions.
Tata Teleservices has added added 3,329,215 new subscribers in Nov’09 from its CDMA (Tata Indicom) and GSM operations (Tata DoCoMo)
Vodafone Essar has launched special tariff vouchers priced at Rs. 28 and Rs. 77 for its prepaid subscribers in Andhra Pradesh. The vouchers
offer free local and national SMS with the Rs. 28 voucher offering 3,000 local and national SMS with 10 days validity and the Rs. 77 voucher
offering 10,000 local and national SMS with 30 days validity.
Uninor has announced the launch of its services in the Orissa circle taking its footprint to 8 circles and 9 states in India.
Rel Com has managed to rope in 2.8 mn new subscribers in Nov’09 for its mobile services offered on GSM and CDMA platform. CARE has
assigned a “PR1+” rating to Rel Com’s short-term debt CP/NCD having tenure up to one year.
S Tel has launched its GSM-based mobile services in Orissa circle. The Company is aiming for 1 mn subscriber base in Orissa by the end of
2010. The Company is offering one paisa per second plan and 49 paise per minute plan for prospective subscribers.
Teracom has bagged an order worth Rs. 40 crore from BSNL towards supplying 3G data cards supporting data speeds of 3.6-7.2 Mbps.
Valiant Communications has formed a 100% Wholly Owned Subsidiary i.e. Valiant Communications FZE." in UAE, to promote market and
provide pre and post sales support to customers of Valiant Communications Ltd, at international level.
Nokia has launched Nokia 5530 Xpress-Music touch-phone in the Indian market for Rs 14.029. The company also launched a new model
Nokia 5230 touch-phone for Rs 9.389. The phone is 3G compatible.
Micromax has partnered with MTV to market co-branded handsets in the Indian market. The first model of the series is the MTV X360 priced
at Rs. 4,999. The model has an 8GB expandable memory, dual SIM, GPRS, multi format music support.
Weekly Newsletter 7
Bridging the Information Gap in Corporate Landscape
AUTO & AUTO ANCILLARIES
Honda to unveil new small car concept at Auto Expo
Japanese auto maker Honda said it will hold the world premiere of the concept model of a new small car
which Honda is currently developing especially for India and other emerging at the Auto Expo here next
month. In addition to the New Small Concept, the Company will exhibit the CR-Z Concept 2009, a concept
model for a new hybrid model, which was unveiled for the first time at the Tokyo Motor Show in October this
year. The Company will also present an engine section that highlights the advances made by Honda in
engine technology, along with the refreshed range of vehicles that it currently sells in India, including
sedans City 1.5 V, Civic, Accord V6 and SUV CR-V.
TVS Motor launches new 4-stroke engine CNG auto rickshaw
TVS Motor has launched its new 200 cc, 4-stroke engine CNG auto rickshaw -'TVS King ZS' - priced at Rs.
1.24 lakh (ex-showroom Delhi). TVS' three-wheeler facility at Hosur has an installed capacity of one lakh
units annually and Srinivasan said it is looking at increasing the capacity utilization of the plant. The
Company is planning to launch diesel auto-rickshaws as part of its strategy to grow in the domestic market.
The Company is also exploring to venture into new markets like Bangladesh, Mexico, Peru and Guatemala.
The diesel three-wheeler will target the semi-urban and rural markets, he said without disclosing further
details. TVS Motor is also planning to increase its dealership network in the three-wheeler segment to 110
outlets by March 2010, from 70 at present.
Maruti to launch new family car Eeco at Auto Expo; sees 20% sales growth in FY10
India’s largest carmaker, Maruti Suzuki India will launch a new family car 'Eeco' with a 1,200cc petrol engine
in the under-Rs 4 lakh segment, at the upcoming Auto Expo in New Delhi. The vehicle, which has been
specifically designed for the domestic market, will comply with Bharat Stage IV emission norms. The Eeco
was under development out for the past three years and developed by a team of Maruti Suzuki engineers.
The Eeco will come with a three-row and two-row seating arrangements with seating capacities of five and
seven passengers, respectively. According to industry sources, the car will be under C segment and is likely
to be priced below Rs. 4 lakh. When contacted, Maruti Suzuki Managing Executive Officer (Engineering) IV
Rao said: "The new car represents the growing expertise of our engineers to conceive, design and produce
vehicles here. This is also in line with parent Suzuki Corp's vision of turning India into a global hub for small
car research and development." The Auto Expo 2010 begins early next month in the capital. Maruti Suzuki
India expects its sales to grow by about 20% in FY10.
M&M-Yueda Group JV to invest in Engine R&D centre, mfg plant
Mahindra & Mahindra (M&M) has announced that its JVC with Yueda Group, Mahindra Yueda (Yancheng)
Tractor Company (MYYTCL), would set up a R&D centre, manufacturing plant for engines and make
investments to modernize production facilities for tractors at the MYYTCL new plant site at Yancheng, China.
The total investment is approximately US$40 mn, out of which the engine R&D centre and manufacturing
plant will have an investment of US$18 mn. This investment in the engine plant will provide reliable and fuel
efficient engines for the China market, thus creating additional value for the customer and a competitive
strategic advantage for Mahindra Tractors in China. The modernization of tractor plant will improve
productivity and quality and consolidate the Yancheng manufacturing operations. MYYTCL’s effort to set up a
R&D centre and engine facility and develop the tractor plant at the new industrial zone has been encouraged
and supported by the Yancheng Government.
Tata Motors is reportedly working on hybrid city buses aimed at providing eco-friendly transportation solutions for Indian cities.
Ceekay Daikin has announced that the lock out at companies Aurangabad factory has been withdrawn on December 18, 2009 as
mutually agreed between worker and management and normal work in factory started from the December 19, 2009.
The Board of Directors of MRF has recommended 190% final dividend i.e. Rs. 19 per equity share of Rs. 10 each.
JK Tyre is reportedly exploring possibilities to acquire a company in the South East Asian region.
Toyota Motor Corporation, which is coming out with a compact car by Dec’10 in India, will produce 70,000 units in the first year.
The compact car would be 70% indigenous, except for the engine which will be imported from Japan.
Bajaj Auto is eyeing 1 mn sales a year from the Pulsar brand in the next fiscal with the launch of the Pulsar 135 LS.
Weekly Newsletter 8
Bridging the Information Gap in Corporate Landscape
BANKING & FINANCIAL SERVICES
CitiHome One… Citibank launches universal mortgage product
Citibank has announced the launch of CitiHome One, a one-of-a-kind mortgage product that will enable
customers to get a home loan facility as a combination of a conventional term loan and a credit line.
CitiHome One is the first universal mortgage product to be available in the market. With CitiHome One,
customers will enjoy a dual advantage of interest savings on their home loans by utilizing surplus funds and
the flexibility to structure repayments as per their convenience. Subject to an overall limit, customers can
self-determine the amount they wish to take as credit line with the balance being structured as a term loan.
Customers of the new CitiHome One loan account will be automatically enrolled into a new feature-rich
current account facility. This account, where the credit line is set, will serve as an umbrella account and will
allow customers to consolidate all their banking requirements into a single CitiHome One Account
relationship, beginning with financing the purchase of their dream home to deploying surplus funds for
saving interest on the home loan, drawing down from this available credit line to finance all future needs,
and managing their wealth whilst enjoying the entire bouquet of premium banking privileges. Citibank also
unveiled the CitiHome One variant for loans against property. CitiHome One customers can take a maximum
of Rs.5 crore under the loan facility. The credit line can extend up to 30 per cent of the total facility or Rs.1
Crore, whichever is lower. The loan will be subject to a variable interest rate linked to the Citibank Mortgage
Prime Lending Rate¹. The term loan component has standard loan tenure of up to 20 years, while the credit
line is subject to a maximum tenure of 10 years, post which customers can either make a one-time
repayment, or convert the credit line into a term loan and pay back through EMIs.
IndusInd Bank opens its first solar-powered ATM in Mumbai
IndusInd Bank has inaugurated Mumbai’s first solar-powered ATM as part of its Green Office Project
campaign ‘Hum aur Hariyali’. It also unveiled a ‘Green Office Manual A Guide to Sustainable Practices’,
prepared in association with the Centre for Environmental Research and Education (CERE). IndusInd Bank
has a comprehensive plan to reduce its carbon footprint. Some of the initiatives being undertaken under this
plan are solar-powered ATMs, thin computing, e-archiving, e-learning, e-waste management, paperless fax,
energy conservation, CNG cars and also supporting finance programs with incentives to go green. The new
solar ATM replaces the use of conventional energy for 8 hours per day with eco friendly and renewable solar
energy. The energy saved will be 1980 kW hrs every year and will be accompanied by a simultaneous
reduction in CO2 emissions by 1942 Kgs. The uniqueness of this solar ATM is the ability to store and
transmit power on demand (incase of power failure) or need (time basis). In terms of costs, the savings will
be substantial, approximately Rs. 20,000 per year in case of a commercial user with grid power supply. And
in areas with erratic power supply the solar will replace diesel generators and translate into savings as high
as Rs. 40,200 every year.
SBI Card partners with Aditya Birla Group to launch co-branded credit cards
The Aditya Birla Group and SBI Card, today announced a partnership to offer co-branded credit cards to all
customers of the Aditya Birla Group companies. The Aditya Birla Group-SBI co-branded credit cards will be
available to over 28 mn customers of Aditya Birla Group companies i.e. Aditya Birla Retail, Aditya Birla
Financial Services Group (which includes Birla Sun Life Insurance and Birla Sun Life MF), IDEA and Madura
Garments. The initiative will be led by the financial services arm of the Aditya Birla Group i.e. Aditya Birla
Financial Services. The card will be made available across more than 2000 retail outlets of Aditya Birla Group
Dhanalakshmi Bank is aiming for a total business of Rs. 120 bn and plans to hire 300 more personnel to take its total headcount
to 4,000 by FY10. The Bank expects to increase its deposits to Rs. 70 bn and advances to Rs. 53 bn by then from the present Rs. 57
bn and Rs. 43 bn, respectively.
Religare Capital Markets (RCML) – the investment banking arm of Religare Enterprises – has been recognized for excellence in deal-
making at the 8th Annual M&A awards announced in New York recently. The international award recognized RCML's excellence in deal
making for the Ranbaxy-Daiichi deal in the healthcare / life sciences category (US$100 mn and above). The M&A Advisor's 8th Annual
Awards Gala honored major landmark deals in the period September 2008 to August 2009.
Indiabulls Financial Services has announced that the Company and Sogecap, the life insurance subsidiary of Societe Generale of
France, have mutually agreed not to pursue the life insurance JV in India, for which they have entered into a JV agreement in April,
2008. The Company has earlier received Reserve Bank of India's (RBI) nod to hold up to 74% in its life insurance venture, which has
already received the R1 approval from IRDA. The Company will pursue its insurance venture.
Devine Impex has announced that its subsidiary company i.e. Tiara Jewels has taken over the running business of Nikka Mal Babu
Ram engaged in the jewellery business.
SE Investments has announced that the Securities of the Company have been delisted from the Utter Pradesh Stock Exchange Ltd.
BOSS Securities has announced that the name of the Company has been changed to Jyothi Infraventures with effect from
December 15, 2009.
BoI is set to become the latest entrant in the home loan rate war by offering 8% fixed rate for the first two years. The Bank is
planning to offer 8% fixed rate for loans up to Rs. 30 lakh and is expected to come with an announcement by the end of this month.
Punjab National Bank may raise up to Rs. 70 bn through Tier-II bonds to fund growth plans, and the funds would be raised
depending on the requirement.
Andhra Bank has raised Rs. 2.8 bn Upper Tier-II Bonds at an annual coupon of 8.7%, which was fully subscribed on the date of
opening of the Issue. The Bank has also raised Rs. 3.2 bn of Subordinated Debt Bonds - Lower Tier-II Bonds.
Weekly Newsletter 9
Bridging the Information Gap in Corporate Landscape
PHARMA & HEALTHCARE
Accord priority status to healthcare to enhance healthcare delivery in India: CII
According to Confederation of Indian Industry (CII), India’s healthcare infrastructure is
inadequate to meet the needs of delivery of healthcare services. With just 1.5 beds, 0.5
physicians and 0.9 nurses per 1,000 people, the demand–supply gap in terms of healthcare
infrastructure facilities is enormous in the country. There is an urgent need to add 8 lakh beds
by 2012 with an estimated capital outlay of US$20-30 mn per year for the next decade, CII said. The
industry body said that though the Indian healthcare has shown a marked improvement over the years with
striking improvements in some of the important healthcare indices, the healthcare improvements in smaller
cities and rural India have not kept pace with those in metros and bigger cities. Conscious efforts aimed at
making healthcare universally accessible through innovative modes and mechanisms of healthcare financing,
by devising ways to integrate the private players through PPP models and standardize healthcare delivery
are essential to enhance healthcare delivery in India, CII opined. Currently the sector contributes about
6.1% to the GDP of the country, out of which the Government contribution is only 1.1%. The sector has the
potential to increase the GDP by 2-3 %, direct employment opportunities around 2 mn, and positioning India
as a Global Healthcare Destination. Hence, CII feels that government should create conducive environment
and to accord priority status to healthcare by extending tax holiday benefits for hospitals and
medical/paramedical institutes, providing land at concessional rates & healthcare financing by IIFCL. CII feel
that the government should leveraging technology to reach out to masses by facilitating attractive
environment for achieving localized production of cost effective equipment, devices, and consumables. The
government should expand existing preventive health programs and take effective steps for timely
reimbursement to Hospitals delivering central and state government schemes.
Voting against Taro’s Board… PROXY Governance, Glass, Lewis & Co & RiskMetrics, support Sun
Sun Pharmaceutical Industries has announced that PROXY Governance, Inc., a leading independent
proxy advisory firm, has recommended that shareholders of Taro Pharmaceutical Industries
withhold their votes for the re-election of the existing board of directors of Taro and vote against
the board's two nominees for external director and against both of the board's indemnification proposals in
the upcoming Annual General Meeting of Taro's shareholders scheduled for December 31, 2009. Observing
that the board's current indemnification proposal would explicitly cover the board's failure to provide audited
financial statements and other past actions, PROXY Governance concluded “the net effect of the proposal
would be ... to transfer liability for their failures from the incumbent directors to the company”. PROXY
Governance described the board's attacks on Sun as “misdirection” and “astonishingly clumsy”, recognizing
that the price of Sun's tender offer was “simply to fulfill a contractual obligation” for the exercise of its
option to purchase the Levitt-Moros family's founders' shares. Meanwhile, the Company has announced that
Glass, Lewis & Co, a leading independent proxy advisory firm, recommended that shareholders of Taro
Pharmaceutical Industries vote against all of the proposals made by Taro's board of directors, including all of
its nominees for election or re-election as directors, in the upcoming Annual General Meeting of Taro's
shareholders scheduled for December 31, 2009. Glass Lewis was "especially concerned about the lack of
disclosure regarding the audit committee," noting that without such disclosures, it is not possible to
ascertain such fundamental issues as the existence of proper oversight of the company's accounting,
financial reporting and internal and external audits. Meanwhile, the Company has managed to gain more
support in its battle to acquire Israel-based Taro Pharmaceuticals.
Ranbaxy to launch Daiichi Sankyo’ anti-hypertensive in six African countries
Daiichi Sankyo Company and Ranbaxy Laboratories announced that Ranbaxy will launch
Olmesartan Medoxomil, an anti-hypertensive originally discovered by Daiichi Sankyo, in six
African countries; Kenya, Mozambique, Nigeria, Tanzania, Uganda, and Zambia. The companies
will launch the products under the brand name Olvance, as soon as the necessary measures
have been completed in each country. Olmesartan Medoxomil is a member of the Angiotensin
receptor blocker (ARB) class of anti-hypertensive medications that help lower blood pressure by blocking the
angiotensin II receptor on the blood vessels and antagonizing the release of hormone which causes salt
retention and increased blood volume. Olmesartan Medoxomil is available in more than 50 countries
worldwide. Ranbaxy launched Olmesartan Medoxomil as Olvance in India in April 2009, followed by the
August launch of Ol-Vamlo, a fixed-dose combination of Olmesartan Medoxomil with Amlodipine Besylate.
Lupin has settled all ongoing Hatch Waxman litigation relating to Memantine tablets, Lupin’s generic version of Forest Laboratories’
Namenda tablets, used for treating Alzheimer disease. As per the terms of the settlement, Lupin will be licensed under the relevant
patents and would be free to commercially launch its generic product in January 2015 or earlier in certain circumstances.
IOL Chemicals & Pharmaceuticals has been featured in Industry 2.0's ranking of the Top 500 Indian Manufacturing Companies.
Glenmark Generics has received tentative approval from US FDA for Pramipexole Dihydrochloride tablets and Atomoxetine
Weekly Newsletter 10
Bridging the Information Gap in Corporate Landscape
STEEL, METALS & MINERALS
CIS steel industry may stabilize in 2010: Fitch
According to global ratings agency Fitch Ratings, CIS steel industry is expected to stabilize
in 2010, due to a forecasted slow recovery in steel volumes and stabilization in prices. Fitch
in its report entitled 2010 “CIS Steel Outlook: Performance to Stabilize Outlook Remains
Challenging” said that the 2010 industry outlook for Russian steel companies is stable due
to the expected stabilization of steel prices in Q3CY09 to Q4 CY09 and the expected slow recovery in steel
volumes. However, the credit outlook for Russia's Fitch-rated steel producers remains challenged due to the
low profitability of producers' overseas operations, substantial leverage and liquidity constraints for some
issuers. Meanwhile, in Ukraine, the recovery of steel industry players is likely to take longer than in Russia,
given significant foreign currency debt, constrained liquidity at some issuers and the higher risk of default,
Fitch states. The outlook for the Ukrainian steel producers remains negative due to the economic downturn
in Ukraine and producers' heavy export orientation. Fitch estimates that real domestic steel demand in the
CIS will grow by 3-6% in 2010, compared with 4 to 7% in Russia and 2 to 3% in Ukraine. It notes that de-
stocking in some markets and sectors still continues, which may result in the growth of apparent steel
demand by 7 to 9% in domestic markets in 2010, and even higher growth in apparent demand in key export
markets. Following this increases, the 2010 output of CIS steel producers is expected to increase by 8 to
10% YoY in Russia and by 5 to 7% in Ukraine. According to Fitch, the CIS steel companies will remain
export oriented in 2010 due to the significant decline in output of the domestic metal consuming industries
in 2009, Asian countries will remain the key export destination for producers, but the share of sales to
Europe and the US will grow as these markets recover from the downturn. Fitch notes that sales of
construction products to Middle East countries may decrease due to the ongoing financial difficulties in key
Global crude steel production up 24% YoY in Nov
World crude steel production for the 66 countries reporting to the World Steel Association recorded at 107.5
MT in Nov’09, up by 24.2% YoY. Nov’09 is the third month in a row showing a positive YoY growth rate since
September 2008. Most major steel producing countries showed an increase in crude steel production in
Nov’09 compared to the same month last year. China's crude steel production stood at 47.3 MT in Nov’09,
up by 37.4% YoY. Japan produced 8.9 MT of crude steel in Nov’09, up by 0.5% YoY. South Korea showed an
increase of 7.5% YoY, producing 4.3 MT of crude steel in Nov’09. Germany's crude steel production stood at
3.5 MT in Nov’09, up by 8% YoY, while Italy produced 1.9 MT in Nov’09, down by 17.2% YoY. Russia's crude
steel production stood at 5.3 MT in Nov’09, up by 42.6% YoY. Ukraine produced 2.7 MT in Nov’09, up by
67.1% YoY, while Turkey produced 2.1 MT of crude steel in Nov’09, up by 18.3% YoY. The US produced 6
MT of crude steel in Nov’09, up by 26.9% YoY, and Brazil's crude steel production in Nov’09 was 2.7 MT, up
by 15.1% YoY. Total crude steel production in the 66 reporting countries for the first 11 months of 2009 was
1,090 MT, down by 10.8% YoY. The world crude steel capacity utilization ratio in Nov’09 was 75.0%, a slight
decline from 76.9% in Oct’09. Compared to Nov’08, the utilization ratio in Nov’09 increased by 10.4%.
Bhushan Steel wins Prospecting License in Orissa; acquires land for Howrah CR complex
Following the approval of the Central Government, the Orissa Government has granted Prospecting License
(PL) in favor of Bhushan Steel, over an area of 280.75 hectares spread over Marsuan, Tiriba and
Narasinghapur villages in Keonjhar district of Orissa. The Company will have to deposit a fee for field
measurement of the PL area and a survey map will be prepared. After the Director of Mines authenticates
the survey map, the collector of the concerned district would execute the PL. The Company is setting up a 3
MT integrated steel plant at Meramundali in Dhenkanal district. While the company has already attained a
production capacity of 1.5 MT, it hopes to attain a capacity of 2.2 MTPA in the beginning of the next year.
During the second phase, the Company targets to attain a capacity of 5 MTPA by Oct’12. In a separate
development, the Company has almost completed purchasing land for its cold rolling project at Sankrail in
Howrah. Out of a total requirement of 100 acres, the Company has purchased 80 acres directly from the
land owners. The balance is likely to be completed soon and work is expected to start by the middle of next
year. The investment in 500,000 tonne CR mill would be Rs. 8-10 bn.
In Jan-Nov’09 period Russia produced 53.7 MT of crude steel (down 17.6% YoY), 46.2 MT of finished steel products (down 13.7%
YoY), 5.9 MT of steel pipes (down 19.5% YoY).
The US steel mills shipped 6,097,000 net tonne in Oct’09, as against 5,793,000 net tonne in Sept’09, registering a rise of 5.3% on
MoM basis, and 13.4% decrease on YoY basis (7,041,000 net tonne in Oct’08).
Jindal Saw has received of various orders/letters of intent totaling to over Rs. 11 bn for supply of large diameter welded pipes and
ductile iron pipes. The orders shall be executed in next 9-12 months time, the Company added.
Adhunik Metaliks has announced that IDFC Project Equity Company will invest Rs. 2.5 bn in the company's subsidiary i.e. Adhunik
Power & Natural Resources.
Rungta Mines, the flagship company of SR Rungta Group, has announced its plans to set up a 1 MT cement plant in Orissa, with an
investment of around Rs. 6 bn.
POSCO has reportedly decided to acquire Thainox Stainless, the largest stainless steel producer in Thailand.
Weekly Newsletter 11
Bridging the Information Gap in Corporate Landscape
STEEL, METALS & MINERALS
Steel price to recovery in 2010 driven by higher input costs: MEPS
UK-based leading independent supplier of steel market, MEPS International, said that despite a flood of
announcements from the US mills scheduling increases for the first quarter 2010, during recent
negotiations, some suppliers have lifted strip mill product values, others have lowered them and a number
have left them unchanged. It appears that producers are looking to fill their December order books and then
aim for rises in January probably achieving around US$20 per tonne. In spite of absence of any clear
indications that demand will be any healthier at the start of next year, the market players are still waiting
for the government's stimulus package to really kick in. There are very few foreign offers. MEPS said that
Canadian mills are using the month of December to clear their delivery backlogs so they can start 2010 with
a clean sheet. It added that local prices have continued to rally in China over the last few weeks although,
more recently, this upward momentum had slowed, or even reversed slightly, while the bullish government
statements on the economy have helped to maintain market sentiment. MEPS further said that demand
recovery in Japan is not solid so buyers and steel-makers are proceeding carefully. Tokyo Steel will cut list
prices for most products in January, on slow consumption due to the slump in private construction
investment and government spending on public works. MEPS said that South Korean economy is moving out
of recession, enabling the steel producers to benefit from the growing demand from key consumers such as
auto and appliance makers. MESP said that Polish demand for flat products remains muted. MEPS further
added that despite some minor downward corrections in Western Europe over the last month, the market
prices are starting to stabilize in most parts of the region.
Gallantt Ispat files DRHP with SEBI for IPO
Gallantt Ispat has filed a Draft Red Herring Prospectus (DRHP) with the SEBI for an Initial Public Offering
(IPO) of 8.1 mn equity shares of Rs. 10 each for cash at a price of Rs. 50 per equity share aggregating to
Rs. 40.5 crore. The issue comprised of 1.4 mn equity shares of promoter contribution and net offer to the
public of 6.7 mn equity shares. The issue would constitute 30.26% of the fully post issue paid up capital of
Company and the net offer to the public would constitute 25.03% of the fully diluted post issue paid up
capital of company. Post-issue, the promoters' shareholding will be reduced to 69.93% from 92.77%.
Gallantt Metal – a listed entity – owns 46.35% stake in the company its stake will be 37.55% post issue.
The objects of the issue are to part finance the integrated steel plant consisting of the modules sponge iron
plant with a capacity of 99,000 MTPA; MS billets with a capacity of 162,380 TPA; re rolled products with a
capacity of 167400 TPA, and captive power plant with a generating capacity of 16-MW and to part finance
the flour mill with a capacity of 180000 TPA.
Covai Mani Group to build steel plant in Trichy
The Covai Mani Group is setting up Rs. 1.2 bn state-of-the-art steel plant at Musiri in Trichy district. Besides,
it is establishing a sponge iron plant at an outlay of Rs. 1.95 bn at Madukkarai. The plant coming up on a 50
acre site at Musiri will have most modern infrastructure and a fully automatic end to end processing and
manufacturing facility. It would have the capacity to produce 110,000 tonne of billets and 100,000 tonne of
TMT reinforcement bars, channels, joists, angles and rounds. The TMT production unit would be set up with
German collaboration and would use imported raw material along with locally sourced scrap and sponge
iron. The sponge iron plant at Madukkarai coming up in 40 acres would have a production capacity of
110,000 TPA. In addition a power generation unit capable of generating 120 mn units will be set up there.
The Rs. 35 bn Covai Mani Group has four companies namely: Raja Steels, Raja Sponge Iron & Energy, MMS
Steels and Kanyaka Fine Weld. The products from these companies are marketed under the brand name
Sumitomo Metal Industries has opened a liaison office at Gurgaon in India. The new office will function as a bridgehead for
Sumitomo Metals' business expansion in India.
The Rs. 44.02 bn expansion project of NALCO is expected to be delayed by about 9 months because of the naxal attack at its Orissa
site early this year that brought construction work to a standstill. As part of its Phase-II expansion project, NALCO is in the process
of augmenting the annual production capacity of its alumina refinery from 1.57 MT to 2.1 MT.
Tata Steel has announced to cut carbon dioxide emissions from 2.2 to 1.8 tonne for every tonne of steel produced by 2012. It
would include emissions across the Tata Steel group which also includes TATA Steel operations in India and Corus group in Europe.
Tata Steel is planning to use Corus’ R&D expertise as well as its knowledge in steel construction in India even as steel prices may
go up early next year.
SAIL has reportedly raised Rs. 4.5 bn via bonds. The 10 year bonds carry a coupon rate of 8.65% and arrangers included Axis Bank,
Real Growth Securities and Trust Investment Advisor.
Weekly Newsletter 12
Bridging the Information Gap in Corporate Landscape
Silver Stream… Shivsu Canadian Clear launches High Output Reverse Osmosis System
Chennai-based Shivsu Canadian Clear International, a leading water technology solutions
provider and manufacturer of mineral water packaging equipments has launched 'Silver
Stream', a High Output Reverse Osmosis (RO) System. With the production capacity
reaching up to 10 lakh litres per day, Silver Stream finds applications in commercial
establishments, water bottling plants, residential complexes, amusement parks, hospitals,
colleges/schools/educational institutions, shopping malls, hotels, marriage halls, cinema theatres, industries,
etc., where high volumes of drinking water are required. Silver Stream Systems are fully automatic RO
systems that are designed to process water with typical local characteristics in terms of iron content,
salinity, impurity, turbidity, brackishness, etc. For instance, sea water or feed water with up to 12,000 parts
per million of total dissolved solids can be treated effectively to give drinking quality water. The RO plants
are equipped with large commercial type sediment filter to remove micro sized suspended solids - even as
small as 5 microns.
BIG Rural… Reliance Media World launches new business unit
Reliance Media World is all set to tap into the rich potential of rural markets, with the launch of a new
business unit BIG Rural. This division of Reliance Media World is the radio industry’s first attempt to reach
out to rural markets and offer marketers activation solutions backed by radio support. A truly thought
leadership initiative, BIG Rural will give brands inroads into lakh of villages across the country. BIG Rural
seeks to leverage the wide network of BIG 92.7 FM, which has 45 stations and presence in 52 cities in India.
BIG 92.7 FM already covers over 10% of the rural population of the country, which gives it access to rural
consumers. The current reach of BIG FM extends to over 52000 villages and 200 smaller towns, which are
the engines of economic growth in the coming years. With the proposed Phase-III roll out of FM Radio
licensing, it is just further expected to expand to over 2.5 lakh villages across India. BIG Rural will offer
clients the whole range of rural solutions from activation in villages, to activation of rural consumer
aggregation points – Haats, Rural Melas, Rural Fairs etc. Eventually BIG Rural will also create properties
catering to the rural population which can become platforms for brands to market their products/services.
Key categories BIG Rural would be targeting are: farm products (seeds, pesticides, and tractors), telecom
brands seeking inroads in rural markets, FMCG brands, banking and financial services.
Banswara Syntex to set up 15/18 MW thermal power plant
Banswara Syntex (BSL), a vertically integrated textile Company, has announced its plan for an additional
15/18 MW thermal-based power plant at Banswara (Rajasthan) at a capital expenditure of Rs. 50 crore. The
power generation on this plant is primarily for internal consumption and if found surplus for sale. The
Company already has a similar 15/18 MW thermal power plant operating successfully for more than 2 years.
The new thermal-based power plant is expected to cash in about Rs. 15 crore on an annual basis from
Q1FY12 onwards. For the power plant, BSL plans to consume imported and indigenous coal. Moreover, this
will also avail a 10-year tax holiday for the profit of this power plant unit. The Company had recently
announced the further expansion, modernization and diversification plan of Rs. 60 crore. The Company has
decided to fund the capex plan through term loan of Rs. 48 crore and Rs 12 crore through internal accruals.
The Company has currently diversified its Fabric business towards the jacquard and technical textile like
laminated fabric, fire retardant fabrics, water repellant fabrics, anti fungus and anti bacterial processing,
wash and wear fabric to name a few.
Riona Wine launches Italian premium wines in India
India and Italy shook hands to launch Riona Wines – a JV between Riona and the Italian's wine producing
companies like Cortesi Monarco & Cantine Enzo Mecella. Riona will have the first of its kind, state-of-the-art
winery with latest processing equipment established under the JV. Riona will import the most premium
quality wines from the region of Marche, Rosso Piceno & Rosso Conero. The JV between the Sangli-based
grape grower, KT Mane and Cantine Enzo Mecella and Terese Cortesi Moncaro, expects to crush its first
harvest in Feb’10. The Indo-Italian JV is not waiting to launch Indian wines. Instead, it is launching its
Italian range of wines from the Marche region. This wine will be bottled at the Riona winery in Sangli,
western Maharashtra. The Company will make local Indian wine, preferably reds. It will also import wine in
bulk from Italian wineries and bottle it in India. At the top-end the company will also bring in their own
wines for Indian consumers.
Kisan Mouldings has expanded its presence in Maharashtra and Punjab by opening new office and warehousing facilities at Pune
Hitachi Home & Life Solutions India has announced that the equity shares of the Company have been voluntary delisted from
Ahmedabad Stock Exchange Ltd.
GE Shipping has announced that its step-down Singaporen subsidiary i.e. Greatship Global Offshore Services has taken delivery of
'Greatship Maya', a Multipurpose Platform Supply and Support Vessel (MPSSV) from Singapore-based Keppel Singamarine.
Weekly Newsletter 13
Bridging the Information Gap in Corporate Landscape
Bio-Chem Fluidics introduces redesigned Pinch Valve Series
Bio-Chem Fluidics has introduced redesigned Pinch Valve Series, designed for effective control of fluid
handling systems. The newly redesigned solenoid operated pinch valves provide more effective control of
flow paths for fluid handling systems. The 075P2 2-way valves have low power requirements and are
available with a normally open or normally closed valve function. The new design eliminates sharp edges,
with smooth contours that allow easier insertion and removal of tubing without snares. An integrated insert
provides both positive tube retention and confirmation of correct tubing size. Manual push-button override is
available as an option. The valve's new design also includes a valve body constructed from Luran and a
plunger composed of Ryton. These materials are resistant to most common cleaning solutions and easily
meet Bio-Chem Fluidics' two mn cycle operation standard.
Global Delight releases Camera Plus Pro for iPhone
Global Delight, developers and publishers of the popular free camera app on the App Store - Camera Plus –
has released a Pro version of the app, Camera Plus Pro, for the iPhone. Camera Plus Pro aims at making the
iPhone the default camera for any occasion with its Capturing, Editing, Sharing and Managing options. With
features such as Point Zoom, Timed Capture, Burst Mode, Filters, Anti-Shake, Flash, Crop and more, Camera
Plus Pro provides the user with a lot of flexibility for capturing pictures and editing them. With the Point
Zoom feature, the users can zoom to a particular point on their screen with precision. Camera Plus Pro's
Timed Capture function enables the users to set a countdown timer for up to 10 seconds, enabling them to
be a part of the pictures as well. Burst mode function captures multiple photos continuously with a choice of
3 to 8 shots at a time, with only a second's difference between each shot. Camera Plus Pro also provides a
choice of 7 Filters; thus users can add that special touch to their captures. One can also get rid of blurry
pictures with the Anti-Shake feature. The users can apply up to 3 varying degrees of Flash, which can also
be selectively undone. Square and Circular Crop features enable the user to retain a portion of the capture
that they want.
The Board of Directors of Deccan Chronicle Holdings shall meet on December 28, 2009 to consider the merger of Company's wholly owned
subsidiaries i.e. Asianage Holdings, Deccan Chronicle Bangalore, and Sieger Solutions with itself and also to approve the draft scheme of
amalgamation in this regard.
Orient Ceramics & Industries has received Carbon Credits certified by Tuv Nord Cart Gmbh, Germany for the period 2004 to 2008. It has
launched over 300 new locally manufactured products including ceramic, vitrified, ultra vitrified & decorative tiles designed by Orient's chief
product and solution designer from Spain.
The Board of Directors of Ushdev International has approved the proposal to issue of 31.43 lakh equity shares at a price of Rs. 176 apiece
(including Rs. 166 premium) to promoters and investors on preferential basis.
Speciality Papers has bagged export order from Oman, of around 2000 tonne this week. This will help the Company to strengthen and
enhance its export market base in Oman.
The Board of Directors of Golden Tobacco has resolved to develop its Vile Parle Property (Development of real estate under its main object)
and development/sale of Marol (Andheri, Mumbai), Hyderabad and Guntur properties.
Sanwaria Agro Oils has opened a new branch-cum-marketing office in Mumbai with effect from December 01, 2009 at Bora Masjid Street,
The Board of Directors of JBF Industries has approved the proposal to raise funds of Rs. 50 crore, by way of issue of Non Convertible
Debentures or by way of Term Loan from the Banks.
Greenply Industries has announced that its new laminate unit situated at Paterh Bhonku village in Solan district of Himachal Pradesh has
started commercial production.
The Board of Directors of Anukaran Commercial Enterprises has decided to change the name of the Company to ACL Ltd.
Pace Textiles has announced that the name of the Company has been changed from Pace Textiles Ltd. to SVC Resources Ltd.
The Board of Directors of Prime Textiles shall meet on December 30, 2009, to consider the proposal for Scheme of Arrangement for financial
restructuring of the Company.
The Board of Directors of Kanoria Chemicals & Industries has approved the issue of equity shares for up to Rs. 45 crore on Rights basis.
The pricing, ratio, record date and other terms of the Rights Issue shall be decided by the Board of the Board and announced at a later date in
accordance with the relevant statutory requirements.
The Board of Directors of Murli Industries has approved the proposal of buy back of outstanding FCCB, i.e. US$14.5 mn, fully or partially at
a discount on or before the stipulated time given by the RBI to do so.
The Board of Directors of Kemrock Industries & Exports has approved the revision in issue size of Rights Issue from a sum not exceeding
Rs. 2 bn to a sum not exceeding Rs. 4 bn, including issue of detachable warrants with rights shares.
Catvision Products has secured an order worth Rs. 2.78 crore for the supply and installation of LED Score Boards at Major Dhyan Chand
National Stadium, New Delhi which is one of the venues for Commonwealth Games-2010.
UK-based diversified conglomerate, Caparo Group is planning to diversify its interests in India as supplier of components to the railways and
in the oil & gas sector as well.
Tata Realty & Infra has announced its Rs. 35 bn commercial and residential project, 'Ramanujan IT City' at Taramani in Chennai.
Sun TV Network has announced that it will restructure its distribution business and team with the creation of two verticals.
Hanung Toys & Textiles has signed export order tie-up with a leading US buyer, for exporting Home furnishing to the extent of US$60 mn
(Rs. 2.8 bn) to be completed by Dec’12. This agreement will bring greater strength and better revenue to the Company.
Nakoda Textile Industries has increased the production capacity to 1.51 lakh MPTA of texturised yarn in the wake of revival of textile
INOX Leisure has commenced the operations of a multiplex cinema theatre situated at Orbit Mall, Siliguri (West Bengal).
Shoppers Stop has opened one MAC store at Shopper's Stop, Noida.
Bhagwati Banquets & Hotels has launched kind exclusive club with world best amenities & facilities named "CLUB TGB" in Surat.
Weekly Newsletter 14
Bridging the Information Gap in Corporate Landscape
RATINGS, BUY-BACKS & OPEN OFFERS
Brickwork assigns “BBB+” rating for Raghuleela Leasing & Real Estates
Brickwork Ratings has assigned “BBB+” for Raghuleela Leasing & Real Estates’ (RLRE) proposed secured
Non-Convertible Debt Instruments (NCD) issue of Rs. 5 bn. Brickwork’s “BBB+” rating stands for an
instrument that is considered to offer ADEQUATE credit quality/safety in terms of timely servicing of
principal and interest obligations. The rating has factored RLRE's promoter background and the promoter
group's track record of successful execution of various high profile projects, excellent location of the
proposed C-70 project at Bandra-Kurla Complex, Mumbai, which will be the underlying security for the NCD
Issue. Brickwork Ratings has considered various risk factors and is of the view that the project has average
financial risk. The promoter group of RLRE has a good track record in executing high profile commercial and
residential real estate projects in Mumbai and their current projects are a good mix of residential and
commercial in up market areas of Mumbai with recent expansion to Pune. However, the rating is constrained
by the current bearish scenario in commercial real estate, the price risk and funding gaps in case of
slowdown in advance sales.
ICRA ups short-term rating of SRSL to “A1+”; reaffirms long- term rating at “LA+”
ICRA has upgraded the short-term rating assigned to the Rs. 5.84 bn non-fund based limits of Shree Renuka
Sugars (SRSL) from “A1” to “A1+”. ICRA has reaffirmed the LA+ rating assigned to the Rs. 8.3 bn long-term
loans and Rs. 10 bn fund based bank limits of the company. ICRA’s rating action factors in the positive
outlook on the sugar sector in the near term arising out of stock correction in SY2008-09, and SRSL’s
significant size of sugar operations, satisfactory operational performance and forward integration into
cogeneration and distillery businesses, which will continue to provide alternate revenue streams and some
cushion against cyclicality in the sugar business. Further ICRA draws comfort from substantial refining
capacity (~4,000 TPD) of the company which enables it to process raw sugar, thereby suppressing the
impact of cyclicality in the industry to some extent. ICRA has taken note of the improved capital structure
following equity infusion and substantial accretions in SY§2007-08 and SY 2008-09 and reduction of debt
following stock correction in SY 2008-09. The Company’s liquidity is also supported by the availability of
adequate bank limits to fund the working capital intensive sugar operations.
ICRA assigns “A1” rating to Debt/CP program of Tata Motors Finance
ICRA has assigned the “A1” rating to the short term debt/commercial paper programme of Tata Motors
Finance (TMFL) for an enhanced amount of Rs. 40 bn (enhanced from Rs. 35 bn). ICRA also has an
outstanding rating of A1 on TMFL’s Rs. 45.23 bn short-term fund based limits and a rating of “LA” on the
company’s Rs. 23.74 bn long-term loans, Rs. 42.23 bn long-term fund-based limits, Rs. 20.15 bn long-term
non-fund based limits, Rs. 15 bn NCDs and Rs. 2 bn Subordinate Debt programme. The rating continues to
draw comfort from TMFL’s strong parentage and its strategic fit for the parent. Going forward the steps
taken by the company to abate the deterioration in its asset quality, which include tightening its lending
norms, strengthening of recovery initiatives and manufacturer support by sharing risk on certain models and
an improvement in operating environment could ease pressure on asset quality to some extent.
ICRA reaffirms “LA”- rating on bank limits of GE Energy Corp
ICRA has reaffirmed the “LA-” rating assigned to the Rs. 3.5 bn term loans of Great Eastern Energy
Corporation (GEECL). While reaffirming the rating, ICRA has taken note of the deferment of the IPO plans of
GEECL. The company has however alternatively mobilized £28.8 mn (net proceeds of Rs. 2.18 bn) by way of
a conditional sale of Depository Receipts by its promoter companies, in the AIM of the London Stock
Exchange. The proceeds of this sale have been infused in the company as fresh equity, which should take
care of a large part of its immediate and medium term funding requirements, thereby providing comfort
from a credit perspective. The reaffirmed rating continues to reflect GEECL’s operating strengths viz. access
to a discovered CBM field with a modest size of reserves, competitive royalty and production linked payment
rates under the Production Sharing Contract (PSC) with the Government of India and the favourable demand
prospects for CBM in the local market. ICRA notes that the company’s development plans are running with
some lag due to slower than expected progress on well completion and delays in completion of the
distribution pipelines which has affected its ability to sell gas in commercial quantities and in turn
constrained its internal cash generation. The cost of the project has also been revised upwards modestly
because of certain changes in the scope of the project.
CARE has assigned, a “PR1+(SO)” rating to the short-term non-fund based bank facilities of Reliance Communications
Infrastructure (RCIL). This rating is applicable for facilities having tenure up to one year.
CARE has assigned “PR1+(SO)” rating to the short-term non-fund based bank facilities of Reliance Webstore. This rating is
applicable for facilities having tenure up to one year.
ICRA has re-affirmed “LAA-” rating assigned to the Rs. 1 bn long-term loans, Rs. 1.5 bn fund-based working capital facilities, and Rs.
470 mn non-fund based facilities of Motherson Sumi Systems (MSSL). The long term rating has been assigned a “Stable” outlook.
ICRA has also re-affirmed “A1+” rating assigned to the Rs. 30 mn bank guarantee limits of MSSL. ICRA has also reaffirmed “A1+”
rating assigned to the Rs. 1 bn short term debt programme of MSSL.
Weekly Newsletter 15
Bridging the Information Gap in Corporate Landscape
RATINGS, BUY-BACKS & OPEN OFFERS
CARE assigns “PR1+” rating to CP/NCD Issue of Rel Com
CARE has assigned a “PR1+” rating to the proposed short-term debt CP/NCD issue of Reliance
Communications (Rel Com). This rating is applicable for instruments having tenure up to one year. The
rating factors in Rel Com’s presence as a leading integrated telecom service provider, substantial increase in
its subscriber base to become one of the largest player in wireless segment in the country, pan-India
presence through its various service offerings, leading market position in CDMA segment and increase in its
subscriber base due to the launch of its services in the GSM segment. Increasing competition from the
existing as well as new entrants in the telecom sector and declining ARPUs are the key rating concerns. Rel
Com’s ability to capture the market in the GSM segment and its ability to maintain its profitability in the face
of increasing competition are the key rating sensitivities.
CARE ups ratings to the bank facilities of Banswara Syntex
CARE has upgraded the rating assigned to the long-term bank facilities of Banswara Syntex (BSL)
aggregating Rs. 462.01 crore from “BB+” to “BBB”. This rating is applicable to facilities having tenure of
over one year. CARE also upgraded the rating assigned to the short-term bank facilities of the company
aggregating Rs. 35 crore from “PR4” to “PR3+”. This rating is applicable to facilities having tenure up to one
year. The ratings derive strength from the vast experience of the promoters in the textile industry, state-of-
the-art integrated operations, established relationship with leading retailers in domestic and international
markets and association with Carreman Michel Thierry. However, the ratings are constrained by the highly-
leveraged capital structure, restricting the credit risk profile of the company.
CARE reaffirms ratings assigned to Abhishek Industries’ bank facilities
CARE has retained the “BBB” rating assigned to the long-term bank facilities of Abhishek Industries (AIL).
This rating is applicable for facilities having tenure of more than one year. These ratings are assigned to
both long-term and short-term bank facilities aggregating Rs. 1,884.16 crore. The ratings continue to reflect
the consistent track record of the company in terms of growth, diversified revenue stream and established
clientele. However, the ratings are constrained by deterioration in the financial risk profile with increasing
gearing levels despite equity infusion through conversion of warrants in FY09, high debt repayments, foreign
exchange losses and delay in expansion projects impacting envisaged cash-flow position. Going forward,
improvement of gearing, ability of the company to sustain margins and prudent management of forex
exposure would remain the key rating sensitivities.
Brickwork assigns Grade 3 to proposed IPO of Aqua Logistics
Brickwork Ratings (BWR) has assigned BWR IPO Grade 3 to the proposed Initial Public Offer (IPO) of equity
share by Aqua Logistics, which indicates average fundamentals for the issue in relation to its peers. The
grading factors Aqua Logistics’ end-to-end logistics solutions which includes supply chain domain, freight
forwarding, third-party logistics services, supply chain consulting, logistics execution and project logistics.
The grading is constrained by lack of own assets like warehouses or trucks, highly competitive and
unorganized industry with multiple players, company's track record of negative cash flows from operating
activities and lower profit margins than peers and creation of 6 group companies in same/ complimentary
line of activity. Aqua Logistics is planning to raise Rs. 150 cr by issue of equity shares having face value of
Rs. 10 per share at a premium. Aqua Logistics proposes to use the issue proceeds to fund the purchase of
specialized equipments (Rs. 30 cr), expansion and establishment of offices (Rs. 17 cr), overseas acquisitions
(Rs. 35 cr), to meet the working capital gap (Rs. 45 cr) and other expenses (Rs. 23 cr).
ICRA revises ratings for bank facilities of Hikal
ICRA has revised the rating assigned to the Rs. 1017.4 mn term loan, US$33.1 mn term loan and Rs. 650
mn fund-based facilities of Hikal (Hikal) from “LBBB+” to “LB+”. ICRA has also revised the rating assigned to
Rs. 1.21 bn fund-based facilities and Rs. 480 mn non fund based facilities of Hikal from “A2” to “A4”. The
rating revisions reflect recent delays in debt servicing by the company pertaining to its working capital
demand loans. Hikal’s capital structure and liquidity position has been severely affected during 2008-09
period by investments write off for its international subsidiary – Marsing &Co. and foreign exchange losses
on forward contracts. The Company has written off Rs. 650 mn during 2008-09 as it closed down its loss
making international operations. The Company’s liquidity position is expected to remain stretched in medium
term with cash flows vulnerable to exchange rate movements and FCCB repayment due in FY11.
Nevertheless, ICRA derives comfort from Hikal’s profitable track record for contract manufacturing business,
strong promoter background and experience, and adequate manufacturing & research facilities.
CARE has assigned a “BBB-” rating to the long-term bank facilities of Gati Infrastructure (GIL). This rating is applicable to facilities having
tenure of more than one year. The rating factors in the GIL’s position as a group company of Gati Ltd., infusion of planned equity for the
project as envisaged by the promoters, government support for the power sector and minimal operational cost being a hydro based project.
Essar Capital Finance has made an Open Offer to the shareholders of Frontier Leasing & Finance to acquire up to 49,000 equity shares of
Rs. 10 each at a price of Rs. 30 apiece payable in cash. The Offer shall open on February 13, 2010, while the date of closing of the Offer has
been fixed at March 04, 2010. Intensive Fiscal Services has been retained as the Manager to the Open Offer.
Weekly Newsletter 16
Bridging the Information Gap in Corporate Landscape
Bucyrus agrees to acquire Terex Corporation’s mining biz for $1.3 bn
South Milwaukee, Wisconsin-based mining equipment maker, Bucyrus International has
agreed to acquire the mining business of Westport, Connecticut-based diversified global
manufacturer, Terex Corporation for US$1.3 bn in cash, creating a premier mining
equipment supplier. The deal, which has the approval of the Boards of Directors of both
companies, is expected to close in the first quarter of 2010. Meanwhile, Bucyrus revealed that Terex may
request to receive US$300 mn of the price in the form of Bucyrus shares, though the consideration for the
proposed deal is fully in cash. Bucyrus will acquire the business of Terex that is used to design,
manufacture, and sell hydraulic excavators, surface mining trucks, drills, high-wall miners, and related
components, parts, and after-sales service, commonly known as O&K, Unit Rig, Reedrill, Superior Highwall,
Halco, and Hypac. Following the closure of the proposed deal, Bucyrus will double its addressable market to
over US$30 bn from about US$15 bn and create a team of about 10,000 people in nearly 100 locations
around the world.
Sanofi-aventis to buy Chattem for $1.9 bn
Paris-based drug company, Sanofi-aventis has agreed to acquire Chattanooga,
Tennessee-based, Chattem, a maker of over-the-counter healthcare products and
dietary supplements, for about $1.9 bn in cash. The deal will enable Sanofi to enter the over-the-counter
drugs market in the US. The Company noted that the transaction will create the world's fifth-largest
consumer healthcare company measured by product revenues, combining Chattem's strong presence in the
US and Sanofi's international presence. Sanofi also said it will seek to convert its antihistamine brand,
known as Allegra in the US, from a prescription medicine to an OTC product. Upon Allegra's conversion to an
OTC product, Chattem will assume responsibility for the Allegra brand as part of becoming the platform for
Sanofi's US OTC and consumer healthcare business. Under the terms of the deal, Sanofi will commence a
tender offer for all the outstanding shares of Chattem at $93.50 per share in cash. The tender offer will
commence in Jan’10 and the companies anticipate the transaction will close in the first quarter of 2010.
Centurion Minerals signs MoU to buy three gold properties in Indonesia
Centurion Minerals has signed a Memorandum of Understanding (MoU) with PT Sigma Mineral Exploration, a
privately-held Indonesian company, to acquire an 85% interest in three properties, each of which holds a KP
exploration claim and all of which are located in the Aceh Tengah Regency in Northern Sumatra, Indonesia.
All three project claim areas are about 10,000 hectares in size and are located directly to the south of the
Miwah epithermal gold project held by East Asia Minerals Corporation. Pursuant to the agreements,
Centurion shall manage all exploration activities, be responsible for license issuance costs and 100% of
exploration expenditures and related costs through to feasibility study. Upon receipt of IUP mining claim
licenses, completion of definitive agreements and regulatory approval, Centurion plans to commence an
active exploration program on the three projects.
State Street Corp to buy Intesa's securities services arm for €1.28 bn
State Street Corporation, a provider of financial services to institutional investors, has signed a
deal to acquire securities services business of Italian banking group Intesa Sanpaolo. The
transaction is valued at about €1.28 bn ($1.87 bn) in cash at closing, which is expected to occur
during Q2CY10. Intesa Sanpaolo is one of the top banking groups in Europe, serving about 11.1
mn customers through 6,100 branches. Intesa Sanpaolo's Securities Services business (ISPSS)
provides securities services in the Italian market with significant presence in the Luxembourg market. State
Street would acquire the global custody, depository banking, correspondent banking, and fund
administration portions of the ISPSS business. State Street also expects to acquire ISPSS's cash deposits of
approximately €11 bn, or $16 bn, at closing, assuming that the cash balances in the business are consistent
with levels at June 30, 2009. The agreement also includes a long-term investment servicing arrangement
with Intesa Sanpaolo to service all of its investment management affiliates, including Eurizon Capital, a fund
manager in Italy with about €135 bn, or $197 bn, in assets under management as of September 30, 2009.
Devine Impex has announced that its subsidiary company i.e. Tiara Jewels has taken over the running business of Nikka Mal Babu Ram
engaged in the jewellery business.
Shriram Transport Finance Company has purchased hypothecation loan outstanding of commercial vehicles and construction equipments
of GE Capital Services India and GE Capital Financial Services (GE) aggregating to approximately Rs. 11 bn.
Borelli Tea Holdings (Borelli) – the WOS of McLeod Russel India – has signed a share purchase agreement with two UK-based vendors
namely James Finlay and James Finlay International Holdings for acquisition of 100% of the share capital of Uganda-based Rwenzori Tea
Investments (Rwenzori) for a provisional consideration of US$25,000,000.
The Board of Directors of Zee Entertainment Enterprises has granted its in-principle approval for amalgamation of ETC Networks, a listed
subsidiary of the Company with the Company. Its Board has also approved the proposal to demerge the education business from the
Company into a separate Company. The said merger/demerger is subject to necessary approvals and the demerged entity shall be listed at
the stock exchanges where the Company's shares are listed the Company said.
Religare Capital Markets – the investment banking arm of Religare Enterprises – has been recognized for excellence in deal-making at the
8th Annual M&A awards announced in New York recently.
Weekly Newsletter 17
Bridging the Information Gap in Corporate Landscape
INSURANCE & MUTUAL FUNDS
IRDA allows firms to offer life-cum-health insurance cover
The Insurance Regulatory & Development Authority (IRDA) has allowed insurance companies to offer 'Health
plus Life Combi Product', a policy that would provide life cover along with health insurance to subscribers.
Under the guidelines issued by the IRDA, the life and non-life insurance firms can come together to offer
health-plus-life cover. Under the existing structure, non-life insurers do not provide pure life insurance
products. The IRDA has notified the guidelines following representations by the insurance companies for an
"umbrella of a single product" to give more choice to a policy subscriber. The guidelines added that it would
be mandatory for life and non-life insurance companies to enter into agreements before offering the new
product to subscriber. IRDA further said the combi products may be promoted by all Life Insurance and non-
Life insurance companies. The regulator further said between these two insurers any number of combi
products may be promoted. The sale of the combi products can be made through direct marketing channels,
brokers and composite individual and corporate agents, common to both insurers. However, these products
are not allowed to be marketed through 'bank referral' arrangements. The regulator further said the
guidelines do not apply to micro insurance products.
Canara-HSBC-OBC Life Insurance enters into strategic tie-ups with two RRBs
Canara HSBC Oriental Bank of Commerce Life Insurance Company – a partnership between two of India's
largest public sector banks, Canara Bank and Oriental Bank of Commerce, and HSBC Insurance (Asia Pacific)
Holdings – has announced strategic tie-ups with two Regional Rural Banks (RRBs) namely Shreyas Gramin
Bank (UP) and Pragathi Gramin Bank (Karnataka). The two RRBs are sponsored by Canara Bank. Along with
the three shareholder banks, the RRBs too will function as corporate agents of the life insurer to sell its
products. Through a strong network of around 550 branches of the two RRBs, Canara HSBC Oriental Bank of
Commerce Life Insurance Company will reach out to more than 4.6 mn customers to provide customized life
insurance solutions in addition to the existing customer base of 48 mn. Shreyas Gramin Bank and Pragathi
Gramin Bank have very strong customer relationships and will provide an excellent opportunity for Canara
HSBC Oriental Bank of Commerce Life Insurance to further strengthen presence in the important markets of
Uttar Pradesh and Karnataka. In order to meet its expansion plans, the life insurer's three shareholders have
infused capital of Rs. 1 bn, increasing the total capital base to Rs. 6.25 bn.
Weekly Newsletter 18
Bridging the Information Gap in Corporate Landscape
10th Auto Expo on Jan 5-11 in New Delhi
Auto Expo is the Complete Automotive Show in this part of the world, organized jointly by
Automotive Component Manufacturers Association of India (ACMA), Confederation of Indian
Industry (CII) and Society of Indian Automobile Manufacturers (SIAM). The first Auto Expo was
held in 1986, the second in 1993, and the third in 1996. Since then, Auto Expo has been
institutionalized as a biennial show. There will be six focused pavilions such for alternate fuel/gas,
accessories, design, diesel, garage equipment and robotics.
MNRE, FICCI to organize Solar Conclave 2010 on Jan 11 in New Delhi
The Ministry of New & Renewable Energy (MNRE) along with Federation of Indian Chambers of Commerce &
Industry (FICCI) is organizing a Solar Conclave 2010 which will provide a common plat form to share the
experience of various stakeholders including the NRIs in the promotion of solar energy in India and meeting
the national Solar Mission target a reality. The one-day conclave will be held on January 11, 2010 with
speakers and icons from Non-resident Indians, central and state governments, experts from academia and
research institutions, key industry representatives and other related organizations. The main objective of the
event is to showcase the opportunities and the potential of solar energy development in the country. With
the launching of National Solar Mission, India is set to harness its huge solar potential. At this juncture the
conclave will provide a common ground for Non-Resident Indians (NRIs) and Indian stakeholders to join
hands for making the National Solar Mission a success and facilitate further expansion. The event will
highlight the impact of suitable policy frame work announced by the government and provide a platform for
mutual exchange of ideas. The event will also stress upon the changing solar technology for both Solar
Photo-Voltaic and Solar Thermal applications and the need to take proactive measures for capacity building
in advanced technologies and mass production of solar power.
FICCI to organize 13th Insurance Conference on Jan 12 in Mumbai
The Federation of Indian Chambers of Commerce & Industry (FICCI) is organizing its 13th Conference on
Insurance on January 12, 2010 at Hotel Taj Lands End in Mumbai to discuss and debate the current issues
and challenges faced by the industry and set a roadmap to enable the Indian Insurance Industry become
globally competitive. The conference will attempt to sketch the emerging landscape of the Insurance
Industry and the shape it will take a decade from now. The Conference is the most comprehensive forum
available for insurance professionals. More than 300 industry experts gather to examine trends and
strategize for the future of insurance penetration, product development, distribution and administration.
ASSOCHAM to organize 12th Energy Summit on Jan 19 in New Delhi
In order to discuss various prospects and challenges that exist in the
Indian Oil and Gas sector, the Associated Chambers of Commerce &
Industry of India (ASSOCHAM) is organizing the 12th Energy Summit –
Indian Oil & Gas Sector on January 19, 2010 in New Delhi. The Summit is
designed to provide a balanced view of the opportunities in upstream,
refinery, oil field services, and the prospect of cooperation in joint R&D in developing cutting edge
technologies. This Summit will also provide an excellent networking platform for local and international oil &
gas companies, technology and equipment providers and other industry players to discuss the latest &
future trends in this sector. The objective of the Summit is to provide a common platform to the
representatives from the oil, gas, power, infrastructure, financing, equipment manufacturing and other
related sectors for a meaningful B2B dialogue. The theme of the discussion will be centered around evolving
and exploring business opportunities in oil & gas sector, which lay emphasis on sustainability and security
ASSOCHAM, AMFI to organize Mutual Fund Summit on Jan 20 in New Delhi
With the objective of spreading better understanding of the Mutual Fund Industry as an appropriate
investment avenue for wealth creation and to discuss best investment practices and investors’ protection,
the Associated Chambers of Commerce & Industry of India (ASSOCHAM) jointly with Association of Mutual
Funds in India (AMFI) is organizing a Mutual Fund Summit on January 20, 2010 at Hotel Le-Meridien in New
Delhi. The key issues to be discussed include: Protecting & promoting interest of Investors; Enhancing
awareness of Mutual Fund Industry; Trends and Challenges for the Asset Management Business;
International Investing; Emerging Market Opportunities; Understanding Risks Associated with Mutual Fund
Investment; Globalization of Mutual Funds; Challenges of Mutual Fund Industry: Reaching out to retail
Weekly Newsletter 19
Bridging the Information Gap in Corporate Landscape
Obama urges US regional bankers to boost lending
Following a meeting with the representatives of regional and community banks, the US President
Barack Obama stressed the importance of smaller financial institutions in the nation's economic
fabric. Maintaining that the community banks serve a vital function all across the country,
Obama noted that while the overwhelming majority of smaller banks hadn't been part of the
risky financial trading schemes of larger institutions blamed for bringing the nation's financial
network to the brink of disaster, they had still suffered from the fallout. Obama said that the
regional bankers suggested a need for an improved way to connect solvent banks with credit-worthy
businesses. Despite not having direct authority over federal banking regulators, Obama said he would seek
ways to reduce government “red tape” and seek to persuade overseers against an overabundance of
caution. Obama said he also discussed the administration's push to overhaul the financial regulatory system
with the regional bankers, finding them largely supportive of his initiatives. But, Obama stressed that one
key element of his reform proposals, the creation of a dedicated federal agency to focus on consumer
financial protection, would most certainly apply even to the smaller banks.
BoJ maintains economic assessment; sees conditions improving
The Bank of Japan (BoJ) has maintained its economic assessment and said conditions in the
economy are likely to improve further, although the pace of improvement would be
moderate. In its monthly report for December, the BoJ said, “Japan's economic conditions
are likely to continue improving, although the pace of improvement is likely to remain
moderate for the time being.” The central bank noted that Japan's economy is picking up
mainly due to various policy measures taken at home and abroad, although there is not yet sufficient
momentum to support a self-sustaining recovery in domestic private demand. The central bank said the
uptrend in exports and production is expected to continue, reflecting continued improvement in overseas
economic conditions, although the pace of increase is likely to moderate gradually. Private consumption,
notably durable goods consumption, is likely to continue to pick up for the time being mainly due to policy
measures, despite the severe employment and income situation. However, business fixed investment is
expected to remain more or less unchanged for the time being, with corporate profits remaining at a low
level and the sense of excessive capital stock being strong. Meanwhile, public investment is likely to
decrease gradually. Further, the central bank said the financial environment, with some lingering severity,
has continued to show signs of improvement.
CBI sees fragile recovery for UK; raises 2010 outlook
The British economic recovery would be fragile given the challenging conditions lying
ahead and the absence of any strong growth driver, the Confederation of British Industry
(CBI) said, raising its growth outlook for 2010. The business lobby now forecast a 1.2%
increase in gross domestic product in 2010 after contracting by 4.5% this year. The CBI
said the UK is expected to end recession in the fourth quarter of this year, when the economy probably grew
0.5% sequentially, helped by consumers bringing their spending forward to beat the VAT rise. But, it noted
that growth will remain subdued thereafter and GDP is unlikely to have reached pre-recession levels by the
end of 2011. GDP growth in the first quarter of 2010 would be 0.1% and may accelerate to 1% in the
second quarter. Rising unemployment, relatively weak wage growth and tendency to save more would
squeeze the level of household spending throughout 2010, the CBI said. Consumption is expected to recover
over 2011, growing by 2.3%, as unemployment starts to fall back and income growth strengthens, the
group said. The jobless rate would be 8.7% in 2010, up from 7.8% this year. It will then ease to 8.3% in
2011. Consumer price inflation in 2010 is forecast to rise to 2.3% from 2.1% this year in response to the
VAT increase and is likely to ease to 1.7% in 2011. The group noted that rate hikes will withdraw some of
the significant monetary stimulus currently in place. A slight recovery is seen for exports next year after a
slump this year. The CBI foresees 1.9% growth for exports next year, with the recovery starting in the
second quarter. It follows an estimated 10.9% fall this year.
The US GDP increased at a revised rate of 2.2% in Q3CY09, as against 2.8% reported earlier.
The UK GDP fell 0.2% QoQ in Q3CY09, following 0.7% contraction in Q2 CY09.
There is a “significant” chance the US economy will contract in H2CY10, said Nobel Laureate Joseph Stiglitz, urging the government
to prepare a second stimulus package to spur job creation.
According to the US Commerce Department, personal income increased by 0.4%, while the personal spending rose by 0.5% in
Germany's import price index decreased 5% YoY in Nov’09, slower than the 8.1% fall in Oct’09. On a monthly basis, import prices
increased 0.4% in Nov’09, compared to the 0.5% growth in Oct’09.
The National Bank of Poland has kept its key policy rate unchanged for the sixth consecutive month in December. The NBP has
retained the reference rate at 3.5% on an annual basis. It has also maintained its lombard rate at 5%, deposit rate at 2% and
rediscount rate at 3.75%
Weekly Newsletter 20
Bridging the Information Gap in Corporate Landscape
US home sales up 7.4% to 6.54 mn units in Nov
The existing home sales in the US rose 7.4% to a seasonally adjusted annual rate of 6.54 mn units in
Nov’09 from a revised 6.09 mn in Oct’09. The stronger than expected existing home sales growth reflected
increases in sales in all four regions of the country. Existing home sales in the West and Midwest showed
notable increases, rising by 10.6% and 8.4%, respectively. Sales in the Northeast rose by a more modest
6.6%, while sales in the South increased by 4.8%.The increase in existing home sales reflected a jump in
sales of single-family homes, which rose by 8.5%. At the same time, existing condominium and co-op sales
were unchanged in Nov’09. The inventories of existing homes fell 1.3% to 3.52 mn homes available for sale.
This represents 6.5 months of supply at the current sales pace, down from 7.0 months of supply in October
and the lowest level of supply since April of 2006. The national median existing-home price for all housing
types stood at $172,600 in Nov’09, which is down 4.3% YoY.
Wind power for remote communities in Asia gets ADB support
Wind offers a reliable and carbon emission-free source of electricity and the Asian Development Bank (ADB)
is providing support to expand its use throughout remote communities in Asia, helping to alleviate poverty
and improve lives. Technical assistance grants totaling $3.87 mn from ADB’s concessional funds for the
Deployment of Distributed Small Wind Power Systems in Asian Rural Areas will lay the groundwork for
utilizing wind power to enhance access to electricity in poor rural communities. The technical assistance
work will examine ways to overcome current hurdles, paving the way to replicate and scale-up deployment
of small wind power systems around the region. It aims to develop financing mechanisms that can boost the
viability of small wind power systems, including financial leasing and the mobilization of grant assistance. It
will also examine public-private partnerships and build-operate-transfer models, along with ways of utilizing
carbon credits, to boost the feasibility and sustainability of wind power. Pilot activities will be carried out in
remote mountainous communities, deserts and grasslands, and ocean islands, which will provide models for
replication in similar areas.
In France, the consumer spending on manufactured goods declined 0.1% MoM in Nov’09, slower than the 1% growth in Oct’09. The
consumer spending on durable goods rose 2% MoM in Nov’09, after a 1% increase in Oct’09. The consumer spending on other
manufactured goods slipped 1% in Nov’09, as against 0.5% growth in Oct’09. On an annual basis, consumer spending climbed 3.2%
in Nov’09, slower than the 3.6% growth in Oct’09.
Japan's convenience store sales fell 6.3% YoY in Nov’09, following 5.5% decline in Oct’09.
Sweden's consumer confidence indicator declined unexpectedly in Dec’09. The confidence index decreased to 8.8 in Dec’09, as
against 11.4 in Nov’09. The business confidence indicator rose by six points in Dec’09, and was up for the ninth consecutive month.
Similarly, manufacturing index rose to minus 9 in Dec’09 from minus 10 in Nov’09. Meanwhile, the economic sentiment indicator
climbed to 101.6 in Dec’09 as against 98.9 in Nov’09.
Italian hourly wages rose 3.1% YoY in Nov’09, slower than the 3.2% growth in Oct’09. According to collective agreements per
employee, wages increased 3.2% annually in Nov’09 and remained unchanged compared to Oct’09.
Canadian retail sales rose roughly in line with estimates in Oct’09, as all components of the automotive sector reported increased
sales. Retail sales in current dollars rose 0.8% in Oct’09 to $35.3 bn, the eighth gain in 10 months. Sales at new car dealers rose for
the sixth consecutive month, gaining 3.6%. It was the first month where the value of sales at new car dealers was higher in 2009
than in 2008.
The Netherlands' Central Bureau of Statistics announced that the producer confidence indicator declined to minus 8.6 in Dec’09 from
minus 5.6 in Nov’09. The decline in confidence was mainly due to entrepreneurs were much pessimistic about future production.
The leading economic index for Australia decreased 0.3% MoM in Oct’09, after remaining unchanged in Sept’09, which marks the
first decrease in the index in five months.
New Zealand has recorded a current account deficit of NZ$1.41 bn in Q3CY09, which is the lowest in more than seven years. The
seasonally adjusted Q3 current account balance stood at NZ$34 mn. For the full year to the September quarter, New Zealand's
current account deficit stood at NZ$5.7 bn, representing 3.1% of GDP.
Taiwan's jobless rate stood at 5.86% in Nov’09, down from 5.96% in Oct’09. The number of unemployed persons totaled 645,000 in
Nov’09, smaller than the 653,000 persons in Oct’09. Meanwhile, the labor force participation rate stood at 58.15% in Nov’09, faster
than the 57.94% in Oct’09.
Philippines national government showed a budget deficit of Pesos 272.5 bn in Jan-Nov’09 period, widening from a deficit of Pesos
66.7 bn recorded bn in Jan-Nov’08 period. During the period, revenue collections declined 5.5% to Pesos 1,021.7 bn from Pesos
1,027.7 bn last year. Meanwhile, government expenditures increased 12.7% to Pesos 45.2 bn. In Nov’09, the budget deficit stood at
Pesos 6.4 bn, widening from Pesos 4.3 bn in a year earlier. Revenues and expenditures decreased by 11.7% and 9.4% respectively.
According to the Bundesbank, the volume of building orders in Germany increased 3.6% MoM in Oct’09, rebounding from the 5.9%
decrease in Sept’09. On a yearly basis, building orders climbed 0.3% in Oct’09, reversing some of the 6.1% slump in Sept’09.
According to Economic and Social Research Institute (ESRI), the Ireland economy is expected to contract to shrink 0.25% in 2010
compared to a 1.1% fall estimated in Oct’09. For 2009, the think-tank estimates an annual decline of 7.25%.
The new home sales in the US unexpectedly showed a steep decline in Nov’09, with the report also showing a notable downward
revision to sales in Oct’09.
Industrial production in Singapore slumped 8.2% YoY in Nov’09, reversing the downwardly revised 3.2% increase in Oct’09. On a
monthly basis, industrial output dropped a seasonally adjusted 3.6% in Nov’09, slower than the downwardly revised 7.2% decrease
in Oct’09. Excluding the biomedical sector, output rose 2.4%.
The Philippine Balance of Payment (BoP) showed a surplus of US$1.1 bn in Q3CY09, a reversal of the US$394 mn deficit registered
in Q3CY08. The favorable external payments position was due to the strong performance of the current account.
Weekly Newsletter 21
Bridging the Information Gap in Corporate Landscape
ConAgra Foods net income surges 42.3% YoY to $239.7 mn in Q2
Omaha, Nebraska-based packaged foods company, ConAgra Foods has posted $239.7 mn net
income in the second quarter, as against $168.4 mn net income in the year-ago quarter,
registering a rise of 42.3% on YoY basis, driven by strong performance at its consumer foods
segment. Its income from continuing operations increased to $243.2 mn from $172.1 mn in the comparable
quarter a year ago. The net sales for the quarter decreased 2.4% to $3.17 bn from $3.25 bn in the same
quarter last year. Consumer foods sales for the second quarter increased 3% to $2.08 bn, which is 64% of
total sales, from $2.02 bn in the prior-year quarter. Sales for commercial foods declined 11.4% to $1.09 bn,
which is 36% of total sales, from $1.23 bn in the year-ago quarter. Total segment operating profit for the
second quarter increased 19.8% to $489.7 mn from $408.9 mn in the same quarter last year. For the first
six months, the Company has posted $405.6 mn net income as against $610.5 mn net income in the prior-
year period. Its YTD income from continuing operations increased to $409.7 mn, as against $279.7 mn in
the comparable period a year ago. Its YTD net sales decreased 2.8% to $6.13 bn from $6.31 bn in the same
period last year. Looking ahead, the Company expects to continue demonstrating the earnings power with
consistent and sustainable growth. For fiscal 2010, ConAgra Foods raised its forecast for earnings from
continuing operations, excluding items impacting comparability. For its consumer foods segment, ConAgra
expects continued year-over-year operating profit growth for the rest of the fiscal year. For the full year, the
Company continues to expect the commercial foods segment to deliver operating profits in line with year-
Citigroup pays back $20 bn TARP Aid
New York-based financial service provider Citigroup followed Bank of America and Wells Fargo with
a partial repayment of the US Government bail-out funds received under the Troubled Asset Relief
Program (TARP) in Oct’08. Citi made a part payment of $20 bn through a combination of stock
and debt offerings. In addition, Citigroup also terminated the loss-sharing agreement with the Treasury. Citi
has paid back $20 bn of a total of $45 bn fund it received from the U.S. government's TARP Program,
pursuant to the successful completion of a securities offering. In order to repay the $20 bn, Citi issued $20.5
bn of capital and debt, comprising $17 bn of common stock, with an over-allotment option of $2.55 bn, and
$3.5 bn of tangible equity units, consisting of about $2.8 bn of prepaid common stock purchase contracts
and about $0.7 bn of subordinated notes. In addition to the TARP repayment, the company also terminated
the $1.8 bn of the $7.1 bn loss-sharing agreement with the Treasury.
Fitch cuts Nokia ratings
Credit rating agency, Fitch Ratings cut Nokia’s ratings for long-term debt from “A” to “A-” which is four
levels above junk or non-investment grade. This marks the second time Fitch has cut the rating on debt, the
earlier being in July. Fitch said that it is concerned that the growth market of smart phones is highly
competitive. It added that niche players such as Apple and RIM have already established strong product
positions in the segment indicating that it will be challenging for Nokia to counter the competition from these
players. Fitch further said that Nokia also faces concerns over its JV in NSN with Siemens. Fitch said it
forecasts that Nokia’s sales for the year will be in the range of €40-40.5 bn. However, Fitch mentioned that
the cut in ratings does not signal any deterioration in Nokia’s near-term liquidity. Fitch said, coupled with
sizeable standby credit facilities, the company’s short-term debt liabilities of €852 mn at the end of
September are adequately covered.
Ford near deal to sell Volvo to China-based Geely; offers early retirement, buyouts to workers
Dearborn, Michigan-based automaker, Ford Motor has confirmed that the Company is
nearing a deal to sell its Volvo unit to China-based private automaker Zhejiang Geely
Holding Group. The Company said that all substantive commercial terms have been settled
related to the sale of Volvo Car Corporation. The firms expect to sign a definitive sale agreement in the first
quarter of 2010 and anticipate closing the deal during the second quarter, subject to regulatory approvals.
Ford noted that it would continue to cooperate with Volvo Cars in several areas after a possible sale. The
prospective sale would also ensure that Volvo is equipped with sufficient resources, including capital
investment, necessary to further strengthen the business and build its global franchise. Meanwhile, Ford said
it will continue to focus on and implement its core ONE Ford strategy. Separately, the Company has reported
offering its 41,000 factory workers in the US buyouts and early retirement options in an effort to reduce
payroll costs in an effort to return to profit by 2011. The Company said that its workers have until late
January to accept the offer, which includes payouts of up to $70,000 cash for newer hires to $60,000 cash
for veterans already eligible for retirement.
Ford Motor has sold 123,167 vehicles in Nov’09, as against 123,222 vehicles in Nov’08. The Company has left its fourth-quarter
production forecast unchanged at 570,000 vehicles and said it plans to build 550,000 vehicles in the first quarter of 2010, an
increase of 201,000 units or 58% from the first quarter of 2009.
Weekly Newsletter 22
Bridging the Information Gap in Corporate Landscape
Red Hat GAAP net income declines 32.5% YoY to $16.4 mn in Q3
Raleigh, North Carolina-based world's largest seller of Linux software, Red Hat has posted
of $16.4 mn GAAP net income in the third quarter, as against $24.3 mn GAAP net income
in the year-ago quarter, registering a decline of 32.5% on YoY basis, as higher operating
expenses and a litigation settlement charge more than offset an 18% revenue growth. The GAAP operating
income for the quarter stood at $19.8 mn or 10.2% of revenue, compared to $21 mn or 12.7% of revenue a
year ago. Non-GAAP operating income for the quarter stood at $46.1 mn or 23.7% of revenue, compared to
$38.6 mn or 23.2% of revenue last year. The total Q3 revenue rose 18% to $194.35 mn from $165.33 mn
in the same quarter last year. Subscription revenue for the quarter rose 21% to $164.4 mn from $135.5 mn
a year ago, while training and services revenue grew slightly to $29.91 mn from $29.88 mn last year. For
the first nine months of its fiscal year, the Company has posted $63.9 mn GAAP net income, as against
$62.7 mn GAAP net income in the same period last year. Its non-GAAP net income for the nine-month
period stood at $101.6 mn, as against $93 GAAP net income in the prior year period. Its total revenue for
the nine-month period increased to $552.37 mn from $486.35 mn in the corresponding year-ago period.
Take-Two Interactive net loss widens to $21.99 mn in Q4; backs Q1, FY10 outlook
New York-based video-game publisher Take-Two Interactive Software has posted $21.99 mn net
loss in the fourth quarter, as against $14.95 mn net loss in the year-ago quarter, hurt mainly by
non-cash goodwill and intangible impairment charges, as well as non-cash tax expense,
notwithstanding an increase in net revenues. Excluding items, the Company's non-GAAP net income for the
quarter rose to $7 mn from $1.6 mn or $0.02 per share in the same quarter last year. Net revenue for the
fourth quarter increased to $343.4 mn from $323.4 mn in the prior-year quarter. For the full year 2009, the
Company has posted $137.9 mn net loss, as against $97.1 mn GAAP net income in fiscal 2008. Its non-
GAAP net loss for fiscal year 2009 stood at $85.7 mn, compared to $158.2 mn non-GAAP net income in the
prior year period. The net revenue for the full year declined to $968.5 mn from $1.54 bn in the
corresponding year-ago period. Looking ahead to Q1, the Company has reiterated its guidance and expects
revenue in the range of $210-260 mn. For the full year 2010, the Company reiterated its guidance and
expects revenue in the range of $1-1.2 bn.
3Com Corp net income rises to $19.99 mn in Q2
Marlborough, Massachusetts-based enterprise networking solutions provider, 3Com
Corporation has $19.99 mn net income in the second quarter, as against $12.87 mn net
income in the year-ago quarter, reflecting higher margins. Even though sales for the quarter
declined 9.1% from the prior-year period, it grew 10.9% sequentially driven by recovery in
the EMEA and Latin America regions and continued "strong" performance in China. Its Q2 sales decreased
9.1% to $322.16 mn from $354.56 mn in the prior-year quarter, while its Q2 revenue increased 10.9% QoQ
from $290.5 mn. Its operating income stood at $14.37 mn, up from $4.4 mn in the previous year, while its
non-GAAP operating income increased to $43.47 mn from $38.4 mn in the previous year. Its Q2 GAAP
operating profit margin stood at 4.5%, while the non-GAAP operating profit margin improved to 13.5%
compared to 10.8% in the second quarter of the prior year. For the six-month period, the Company has
posted $27.45 mn net income, as against $92.71 mn net income in the same period last year. Its half-yearly
sales declined to $612.67 mn from $697.21 mn in the previous year.
Navistar International Corp net income nosedives to $86 mn in Q4
Warrenville, Illinois-based truck maker, Navistar International Corporation has posted $86 mn net income in
the fourth quarter, as against $343 mn net income in the year-ago quarter, boosted by higher commercial
truck volume and continued military sales, as well as lower expenses. Excluding items, its non-GAAP
earnings grew to $144 mn in the fourth quarter, as against $41 mn in the year-ago quarter. Its Q4 sales
and revenues decreased 15% to $3.3 bn from $3.9 bn in the same quarter last year. For fiscal year 2009,
Navistar has posted $320 mn net income, as against $134 mn net income the previous year. Excluding the
Ford settlement and fourth-quarter charges and costs, net income fell to $205 mn, as against $528 mn in
the prior year. Its annual net sales and revenues declined to $11.6 bn, as against $14.7 bn in the year-ago.
Looking ahead to fiscal 2010, Navistar anticipates total truck industry retail sales volume for Class 6-8
trucks and school buses in the US and Canada to be in the range of 175,000 to 215,000 units.
Illinois-based truck maker, Navistar International Corporation has announced that the Company would establish a dedicated
Research & Development facility to support its diesel power system components. Navistar continues to advance strategic JV and
acquisitions that align with its strategic goals, including NC2, the company's global commercial truck JV with Caterpillar, the all-
electric commercial truck venture with Modec Limited of the UK.
Paris-based drug company, Sanofi-aventis has discontinued the development of its insomnia treatment Ciltyri (Eplivanserin), and
atrial fibrillation treatment Idrabiotaparinux, due to setbacks in development of the two drugs. In Sept’09, the US FDA rejected
Eplivanserin, saying additional information about benefits and risks would be needed before approval.
Redwood City, California-based video-game publisher, Electronic Arts has posted a wider net loss in its second quarter, as revenue
dropped mainly because of revenue deferral related to certain online-enabled packaged goods games and digital content.
Weekly Newsletter 23
Bridging the Information Gap in Corporate Landscape
Ryanair pulls out of negotiations with Boeing to buy up to 200 aircrafts
Dublin, Ireland-headquartered low-cost passenger airline, Ryanair Holdings has
unsuccessfully ended its negotiations with Boeing to buy up to 200 new B737-800 series
aircraft to be delivered in 2013-2016. The airline said it has no plans to reopen talks with Boeing or any
other plane supplier. Ryanair’s Board resolved that it could not successfully conclude the negotiations with
Boeing before the end of the calendar year. The airline further said it would announce details of its revised
business plan in the first quarter. The Irish carrier has noted that while it agreed with Boeing on pricing for
the 200 aircraft, Boeing was against Ryanair's incorporating some other terms and conditions from existing
agreement into the new aircraft order. Ryanair finds it appropriate to return the surplus funds to
shareholders, if the Company could not use the funds to purchase aircraft on terms, which will satisfy its
demanding return on capital targets. Ryanair also specified that it will continue to work with its partners in
Boeing on the 48 deliveries, which the company is scheduled to take in 2010.
Commercial Metals slips into red; posts $31.23 mn net loss in Q1
Commercial Metals Company has posted $31.23 mn net loss in the first-quarter, as against
of $62.01 mn net profit in the year-ago quarter, hurt by sharp sales declines in its business
segments except for Americas Recycling, reflecting lower steel demand and falling prices.
Its quarterly net sales decreased to $1.45 bn from $2.37 bn a year ago. Segment wise, Americas Recycling
generated net sales of $289.51 mn, up from $260.45 mn in the previous year. Americas Mills posted
quarterly sales of $289.19 mn, a decline from $387.48 mn in the same quarter of fiscal 2008. Americas
Fabrication & Distribution net sales were $341.81 mn, compared with $916.74 mn last year. International
Mills posted first-quarter net sales of $170.85 mn, lower than the prior-year quarter's $224.07 mn.
International Fabrication and Distribution net sales plunged to $572.42 mn from $930.59 mn in the previous
year. Stating that the second quarter is historically the weakest for the company, Commercial Metals said
that the second half of the fiscal year appears more promising, although at modest levels, along with an
improving economy. Private nonresidential construction and import competition are likely to be weak.
Iron Ore Holdings signs two agreements with Rio Tinto
Iron Ore Holdings (IOH) has signed two agreements with Rio Tinto. It has signed an iron ore sales
agreement with Rio Tinto’s subsidiary Hamersley for production from the Phil’s Creek Project. It has also
signed a relationship agreement with Hamersley Iron relating to IOH’s flagship Iron Valley deposit. Phil’s
Creek is expected to be the first mine development to be undertaken based on a cooperative ore sales
arrangement between a junior iron ore company and one of the major operating mining companies in the
Pilbara. This mine gate sale agreement represents an innovative approach to solving the infrastructure
accessibility issues that face many of the Pilbara juniors, and is a further milestone for IOH in the Company’s
ongoing progress from explorer to iron ore producer. Under the relationship agreement, the parties will
endeavor to negotiate the terms of an Acquisition Agreement for IOH’s Iron Valley Project. IOH has granted
to Hamersley Iron a 6 month exclusivity period for agreement to be reached. IOH has agreed to deal
exclusively with Hamersley Iron in respect of Iron Valley, during this negotiating period.
Cintas Corp net income declines 20.4% YoY to $57.17 mn in Q2
Cincinnati, Ohio-based uniforms and related business services provider, Cintas Corporation
has posted $57.17 mn net income in the second quarter, as against $71.83 mn net income
in the comparable period a year-ago, registering a decline of 20.4% on YoY basis. Its
adjusted net income for the quarter declined 17% to $59.65 mn from $71.83 mn a year-ago. Its total
revenue declined 10.2% to $884.51 mn from $985.18 mn in the comparable period a year-ago. Segment-
wise, revenue from renal uniforms and ancillary products declined 9.5% to $643.59 mn from $711.45 mn a
year-ago, while other services revenue declined 12% to $240.91 mn from $273.73 mn a year-ago. For the
six months ended November 30, Cintas has posted $111.16 mn net income, as against $150.47 mn net
income in the year-ago period, registering a decline of 26.1% on YoY basis. Its YTD adjusted net income
declined 16.5% to $125.58 mn from $150.47 mn in the prior year period. Its year-to-date total revenue
declined 10.6% to $1.77 bn from $1.98 bn in the year-ago period.
Camp Hill, Pennsylvania-based, Rite Aid Corporation has posted $86.1 mn net loss in the third quarter, as against $248.7 mn net
loss in the year-ago quarter. Its Q3 revenues totaled $6.35 bn, down 1.8% from the previous year's revenue of $6.47 bn.
CVS Caremark has posted $1.02 bn net income in the third quarter, as against $732.5 mn net income in the year-ago quarter. Its
Q3 net revenues increased 18.1% to $24.64 bn, as against $20.86 bn in Q3 last year.
Paris-based drug company, Sanofi-aventis has announced that that the US Food & Drug Administration (US FDA) has granted an
accelerated review of its Cabazitaxel as a second-line treatment for prostate cancer.
Santa Monica, California-based, Activision Blizzard has reported a profit for the third quarter from a loss in the prior year.
Florida-based contract electronics manufacturer, Jabil Circuit has posted $28.3 mn GAAP net income in Q1, as against $275.9 mn
GAAP net loss in Q1 last year. Its Q1 GAAP operating income stood at $66.3 mn, as against $240 mn GAAP operating loss in Q1 last
year. Net revenue for the first quarter fell 9% to $3.09 bn from $3.38 bn in the same quarter last year. Looking ahead, the Company
forecast revenue of $2.9 bn to $3.1 bn in the second quarter.
Weekly Newsletter 24
Bridging the Information Gap in Corporate Landscape
Micron Technology back in black; posts $204 mn net profit in Q1
Boise, Idaho-based, memory chipmaker, Micron Technology has posted $204 mn net
income in the first quarter, as against $718 mn net loss in the year-ago quarter, helped
by higher sales volume and average selling prices. Its Q1 net sales increased to $1.74
bn from $1.4 bn in the same quarter last year. Its Q1 revenue from sales of DRAM products soared 50%
QoQ, driven by a 25% growth in sales volume and 21% higher average selling prices. The revenue from
sales of NAND Flash products grew 21% QoQ, due to a 16% increase in sales volume and a 5% increase in
average selling prices. Its gross margin on sales of memory products for the quarter improved to 27% from
12% in the fourth quarter of fiscal year 2009, due to higher average selling prices. The Company generated
$326 mn in cash flows from operations in the first quarter of fiscal 2010 and ended the quarter with cash
and investments of approximately $1.6 bn.
General Motors appoints Chris Liddell as VC & CFO
General Motors has appointed Chris Liddell, former Chief Financial Officer (CFO) at Microsoft, as
its vice chairman and chief financial officer, effective January 1, 2010. Liddell replaces Ray Young
who has been reassigned as the company's vice president of international operations effective
February 1, 2010. The appointment of Liddell represents another move by GM to induct an
outsider to the auto industry into its executive team. Liddell had also been an outsider when he
was appointed as Microsoft's chief financial officer. He joined Microsoft in 2005 and is slated to leave
Microsoft as chief financial officer effective December 31. He is an engineering graduate from University of
Auckland, with a master's degree in philosophy from Oxford University in England. Prior to joining Microsoft,
Liddell had served as CFO with International Paper (IP).
Nortel Networks has sought court approval to sell certain assets of its Carrier voice over Internet protocol and application solutions
business to Texas-based Genband for US$82 mn. The Company said that Genband is acting as the “stalking horse bidder,” setting
the floor price for the assets at an auction supervised by the bankruptcy court.
Nippon Steel & Sumikin Stainless Steel Corporation (NSSC) has widened its supply ability of duplex grades, and will expand its
production capacity of plates next autumn by three times, which push up NSSC's position to one of the largest suppliers of duplex
plates, covering full range of grades from lean to super. Moreover, after completion of under-going investment, NSSC will become
the distinct supplier of duplex plates with world widest width of 4M, which allows customers to make broad use of duplex stainless
Melville, New York- based electronic and computer parts maker, Arrow Electronics expects better profit in fourth quarter than
expected earlier, citing stronger than expected growth in the component business. Meanwhile, the Company decided to keep its
expectation on global enterprise computing business unaltered.
Deerfield, Illinois-based drugstore chain operator, Walgreen Company has posted $489 mn net income in the first quarter, as
against $408 mn net income in the year-ago quarter. Its Q1 net sales grew 9.5% to $16.36 bn from $14.95 bn in the prior year,
while the total sales for the comparable stores grew 4.9% during the quarter. Its operating income stood at $797 mn in the first
quarter, as against $669 mn in the same quarter last year.
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Weekly Newsletter 25