A CEO at 16, now a millionaire!

Innovation is the secret of their success. They believe a simple idea can transform lives. They dream big and are passionate about their goals... Meet the young, ambitious, intelligent and enterprising architects of India. Here's a special series on India's best innovators and entrepreneurs, winners of the latest Nasscom Innovation Award 2008.

A gaming success mantra

It has been games, games and more games for 31-year-old millionaire entrepreneur Vishal Gondal. He flunked his BCom exams as he was devoted to games, a passion he pursued from the age of 13. Later, this passion led to a serious business when people offered him money to develop games.

In fact, Vishal was amused to see that people were ready to pay him for doing what he liked the most.

At the age of 16, he started his first company, FACT. Later, he received seed capital from Infinity and IL&FS. With an initial investment of Rs 3.25 crore (Rs 32.5 million), Indiagames was born in 1999.

The initial years were tough, especially during the dot-com bust, but they remained focussed and never gave up. Indiagames's products are now distributed to over 75 countries through partnerships with mobile operators.

From a humble beginning in a garage with just five employees, Indiagames has come a long way. Today, Vishal leads a team of over 300 employees and has offices in Mumbai, London, Los Angeles and Beijing. In 2006, UTV acquired 51 per cent stake in Indiagames.

Thinking 'out of the box' has kept Vishal Gondal ahead in this space. He believes that gaming will grow bigger than cricket and Bollywood in India.

"Entrepreneurs must have a clear focus. One must keep focusing on a single thing than trying to do many things at the same time. And copy cat ideas will not survive. One needs to be innovative and do unique things," he points out. However, he laments over the dismal state of innovation in India. "Indian companies had it very easy till now he says. They will be forced to innovate and do things differently."

Why are IPOs still attractive: A comparison between going public or staying private

Easy access to capital, as well as inexpensive leverage, has led to an increase in activity of PE buy-outs of market leaders with strong cash flow. The competition for objects that are for sale has amplified, which has resulted in price increases of the objects. The higher prices offered by the PE companies also affects the number of initial public offerings (IPO) on the Stockholm Stock Exchange. One reason for the small number of current IPOs is that the objects simply have been valued higher by PE companies than they would do in an IPO.

The purpose with this thesis is, from a shareholder’s point of view, to analyze and describe the reasons of making an IPO instead of selling to a PE company.

Contents

1 INTRODUCTION
1.1 BACKGROUND
1.2 PROBLEM
1.3 PURPOSE
1.4 DEFINITIONS
2 METHODOLOGY
2.1 QUALITATIVE APPROACH
2.2 DEDUCTIVE APPROACH
2.3 PRIMARY DATA COLLECTION
2.3.1 Research Sample
2.3.2 Interviews
2.4 VALIDITY, RELIABILITY AND GENERALISATION
3 THEORETICAL FRAMEWORK
3.1 FINANCIAL MARKETS
3.2 IPO
3.2.1 Motives for IPO
3.2.2 Valuation of IPOs
3.2.3 Preparations and Requirements for IPO
3.2.3.1 Before the IPO
3.2.3.2 After the IPO
3.2.4 Performance of IPOs
3.3 BUY-OUT
3.3.1 Motives for Buy-out
3.3.2 Valuation of Buy-outs
3.3.3 Preparations and Requirements for Buy-out
3.3.3.1 Before the Buy-out
3.3.3.2 After the Buy-out
3.3.4 Performance of Buy-outs
3.4 THEORETICAL DISCUSSION
3.4.1 Questions Arising from the Theoretical Discussion
4 EMPIRICAL FINDINGS & ANALYSIS
4.1 WHAT WERE THE MAIN MOTIVES FOR MAKING THE IPO?
4.2 HAVE THE STATUS AND/OR THE PUBLICITY OF THE COMPANY CHANGED SINCE THE IPO?
4.3 DO YOU THINK THAT THE MARKET NORMALLY MAKE ACCURATE VALUATIONS OF PUBLIC
COMPANIES?
4.4 WHAT WERE THE DISADVANTAGES OF MAKING AN IPO?
4.5 ARE THERE ANY DISADVANTAGES OF BEING A PUBLIC COMPANY?
4.6 WERE ALTERNATIVES TO IPO DISCUSSED?
4.7 WOULD THE PREPARATIONS TO SELL TO A PE COMPANY BEEN DIFFERENT THAN MAKING AN
IPO?
4.8 PREMIUM PRICES ARE OFTEN PAID WHEN TAKING A PUBLIC COMPANY PRIVATE (SEE RECENT BID
ON GAMBRO). WOULD NOT THE COMPANY THEN BE VALUED HIGHER PRIVATE THAT PUBLIC?
4.9 CAN THE COMPANY VALUE BE AFFECTED BY WHO THE SHAREHOLDERS ARE?
4.10 HOW DID THE OWNERSHIP FOR THE MANAGEMENT TEAM CHANGE WITH THE IPO?
4.11 HOW WOULD THE MANAGEMENT TEAM VALUE THE SIMPLICITY OF BEING PRIVATE, I.E. BE
SPARED FROM PUBLIC DEMANDS?
4.12 IF THE SHAREHOLDERS FACED THE SAME SITUATION AGAIN, WITH IDENTICAL CONDITIONS,
WOULD THE SAME DECISION BE MADE, I.E. MAKE AN IPO?
5 CONCLUSION AND DISCUSSION
5.1.1 Conclusion
5.1.2 Discussion
5.1.3 Authors reflections
5.1.4 Critique of Chosen Method
5.1.5 Further Research
REFERENCES
APPENDIX

Do You Need to Go to IRCE?

IRCE stands for the Internet Retailer Conference and Exhibition, the major trade show for E-retailers. It is being held June 15-18 at the Boston Convention Center. There is definitely a culture split in the internet business: there is the corporate internet world — ebay.com, Target.com, Overstock.com, Meijers, Kohl’s — you get the idea. Then there are us scruffy guys — upstarts, guerillas, part-timers, millionaires-to-be. IRCE is corporate. It’s THE trade show for E-retailers but it’s overkill if you’re just starting out and working on the basics of building your empire. There are separate “tracks” you can attend. There is a Track B: Corporate Management and a Trade D: Small Retailers (as well as tracks for Operations, Marketing…) But judging from the conferences and workshops “Small Retailers” is for “Mid-size Retailers” in our humble opinion. (workshops like negotiating with vendors, how to right-size your fulfillment center — fullfillment center?! You mean our garage?). Unless you are mid-sized, Worldwide Brands is a great solution, at least to start. One interesting note: the founders of www.zazzle.com are scheduled to speak. We’ll talk about them in a future post. (But keep this is mind: Zazzle is not a “small retailer” — the Google founders invested $16 million in the company.)

Of course, one day, you may find you have built an empire, and you — or your employees — will need to attend — or exhibit — at this trade show. But for now, just be aware of it — for later. If you do wanna go now, go to www.IRCE.com. The standard 2-Day Conference and workshops pass is $1,295 (early bird special $1,195 before April 1). But like we said, we’d rather invest that two grand into a smart Google Adwords campaign, so we will have much more money to attend later on, if we wanna.

Network Marketing Success- What’s the Secret?

Network Marketing Success, Many Have Tried, Many Have Failed. So What’s the Secret?

Network marketing success: Why are some able to soar to greater heights while others fall, crash to the ground, and burn to a blackened crisp? Is it destiny or fate? Is there really a secret formula or are some just lucky?

I have talked to many people with these questions. The reason they are asking is because they want to achieve network marketing success but are unwilling to step out and test the waters. They are waiting until someone guarantees them internet success.

This is something I am unwilling to do. If someone guarantees you that you won’t fail, probably you should run away as fast as you can in the opposite direction. Success will only come to those who are willing to pay the price. The only person who knows that for sure is you.

Getting back to some of the questions that were asked, is there a secret? Well, I think the answer to that is yes. Probably there is more than one. I’m not sure how secret the secrets are anymore, but there are things you need to know.

If you want network marketing success, your greatest asset will be you. The number one reason most people in network marketing fail is a lack of action. YOU have to act. YOU will need to do the work involved. Of course, there are many other factors as well.

Money is another factor. If you don’t learn how to monetize, you will end up spending more money than you ever make each month. I’m not saying you need to have tons of money in order to succeed, but to say you will not need any would be a falsehood on my part.

Those who succeed are those who are willing to pay the price. There may be many paths to reach your goal, but the ones who will stay on their path and not be swayed will be the ones to reach their goal.

The awesome thing about this business is the amount of useful information available through the internet. Many experts in the field are willing to share their network marketing success.

They have paid a huge price to accumulate valuable information through years of experience. In turn, they now give it away to you free.

When someone looks at it from that angle, it gives them a responsibility to make sure they don’t squander what they have been given. Sometimes, if we obtain something free of charge, we forget its value.

I believe part of our network marketing success has to do with our attitude. Not only does this affect you personally, it also affects those with whom you come in contact. I can tell almost immediately when I am talking to a negative person.

Our words will give us away. No matter what the subject is, the negative person always finds a way to point out why something won’t work. A positive person is always looking for a solution to the problem.

In order to have network marketing success, make sure you not only follow all the guidelines found on this hub, but begin to have a positive outlook. This will go a long way toward helping you succeed.

Clemson University Study Favors Payday Loans

Clemson Universities Department of Economics study on payday loans concludes:

• No casual relationship between access to payday loans and bankruptcy filings for all payday loan borrowers as a whole (affirms YadYap belief)
• Access to high-interest-rate consumer credit correlates with improved household financial condition

Clemson Universities Department of Economics released a payday loan study recently that YadYap believes is noteworthy. This study was more than a simple study on payday loans. The study was conducted using data collected between 1990 and 2006. The purpose of the study was to determine whether or not payday loans lead to bankruptcy.

This study is a legitimate evaluation of important data and should be used by industry regulators when considering the types of regulation, if any, that should be made within the payday loan industry.

The researchers found two positive outcomes from the study. First, that access to high-interest-rate consumer credit correlates with improved household financial condition. Second, that there was no causal relationship between access to payday loans and bankruptcy filing rates for all payday loan borrowers as a whole.

Credible studies such as this should not be set aside. There is no reason that Clemson University would have to report anything other than the facts from a 16 year study of the payday industry. On the other hand, there are those in the industry that create a bad name for everyone by using less than ethical practices.

As for YadYap, this study affirms the belief we have that there is a need for this type of short term lending. YadYap is a marketplace where the best possible solution to short term loans will be offered to fill the need.

Wells Fargo Bank Cuts Its Dividend By 85%

On March 6, 2009, Wells Fargo bank announced that it would slash 85% of its dividend which would reduce the price to a nickel per share. According to Wells Fargo, this move will save them approximately $5 billion per year. Wells Fargo is a San Francisco-based bank which took over Wachovia Corp. five months ago.

The bank refused to confront its investors about their decision to slash the dividend through a conference call. Wells Fargo also confirmed their strong position this year as their shares increased by 7% recently to $8.69.

Wells Fargo is not the first bank to cut its dividend during this economic crisis. Most of those banks that survived the banking crisis such as JPMorgan Chase & Co., PNC Financial Services Group Inc and US Bancorp have decided to cut their dividend by 85%.

Wells Fargo recently took $25 billion from the government in shares and through this cut, they plan to pay the government as soon as possible. John Stumpf, president and chief executive, said, “These actions will help us repay the government’s investment at the earliest practical date.”

Google executive Tim Armstrong moves to AOL

Tim Armstrong, the executive of Google is soon going to adopt a new role of AOL’s chief executive. This has fueled the rumors regarding the separation of AOL from the parent Time Warner Inc. The idea of an independent AOL has been supported by Google also for some time now.

Google on the basis of its investment in AOL which was $ 1 billion, requested Time Warner for their money either as a refund or spin the unit out to shareholders.

The appointment of Tim Armstrong as the AOL chief executive has created positive vibes on Wall Street. It is believed by Richard Greenfield of Pali Research that Armstrong probably has agreed to join AOL because he knows he will get a chance to manage a public company soon which was highly unlikely while he was at Google.

It is visible by efforts like spin off of AOL by Time Warner that the parent company is trying to streamline operations. AOL has bought Bebo Inc and also focused on its “Platform” which is an online advertising network. Nielsen Online has ranked AOL 4th in February for US Internet audience. AOL had 83 million users while Google has 134 million. AOL search is also used by many in US.

But looking at current conditions, an AOL IPO isn’t commented soon. A lot of analysts and investors are in the favor of Time Warner to spin off AOL. Many see the step of AOL and Time Warner joining hand in 2000 as a misstep.

Two Teachers Accused of Having Sex With Same Student

Two junior high school teachers in Utah have been arrested for allegedly sexually assaulting the same 13-year old boy, according to a newspaper report.

The inappropriate student-teacher relationships involved Utah studies teacher and cheerleading adviser Linda R. Nef, 46 and Valynne Bowers, 39, a math teacher, the Salt Lake Tribune reported.

Both Bountiful Jr. High teachers did not know the other was carrying on an affair with the student until recently, Bountiful Police Lt. Randy Pickett told the Tribune.

Nef reportedly met with police and said that she had been having sex with the boy for over a year, police said. She then told police about the boy's subsequent relationship with Bowers, who later confirmed it.

Pickett, the police lieutenant, said the teachers exchanged sexual text messages with the boy and that led to phone sex and later, assault.

The assaults occurred off campus, he said.

Baby sitters accused of taping sex with children

A couple who ran a baby-sitting service out of their home videotaped themselves performing sex acts with children, some as young as 2 months old, police said Friday.

Stephen E. Quick, 31, and Samantha Light, 25, both of Veedersburg in western Indiana, were being held on $100,000 bond in Fountain County Jail. Both faced preliminary charges of child molestation and child exploitation. Jail staff did not know whether either one had an attorney.

Police who searched the couple's home found a videotape depicting sex acts involving Quick and Light and at least four different children between the ages of 2 months and 6 years old, said Fountain County Sheriff's Deputy Bob Kemp.

"In 15 years of doing this job, it's the worst thing I've ever seen or imagined," he told WRTV. "Just horrible, just horrible It's a new low."

Police searched the couple's home after the parents of a 3-year-old girl reported that she told them Quick and Light had touched her inappropriately and photographed her at their home on Feb. 28.

Deputies seized several computers, cameras, a video camera, pornographic materials, drugs and drug paraphernalia. Several sex toys that appeared in the video were seized during a second search, police said.

Quick and Light were arrested March 5. Neither has a criminal history.

Authorities have removed the couple's daughter from their home.

Fault lines open in talks over global crisis fixes

There's widespread agreement among the world's biggest countries that the current global financial and economic crises require global solutions. But as leaders from twenty of those countries gather this weekend in London, that may be about all they can agree on.

The upcoming meeting is the last of a series of preliminary sessions before an April 2 summit that was called to try to reverse the downward spiral in the global economic and financial systems.

There’s little debate over the scope and urgency of the problem. And all parties have called publicly for a unified approach to economic stimulus programs, coordinated efforts to bail out the battered financial system and tougher, comprehensive rules to prevent the global financial system from running off the rails again.

When the time comes to work out the details, the limits of global harmony quickly become apparent.

“I think they’re pretty disunified,” said Simon Johnson, a professor at MIT’s Sloan School of Management and former chief economist at the International Monetary Fund. “But they don’t obviously want to present that too publicly.”

After months of preliminary work, several major fault lines have opened, largely between the U.S. and European countries, say analysts. The Obama administration, represented this weekend by Treasury Secretary Tim Geithner, has been pressing European countries to boost spending. For their part, the Europeans have been urging quick action on tightening financial regulations.

Officials on both sides of the Atlantic have been teeing up the issues this week. On Tuesday Federal Reserve Chairman Ben Bernanke outlined the issue facing U.S. financial regulators, but pointedly lowered expectations for the April G-20 summit.

“I think it's asking too much for a meeting like that to come out with detailed proposals in many different areas,” he said.

Bernanke focused much of his speech on the need for a more centralized approach to U.S. regulations that could more closely monitor increased risks to the entire financial system, not just the risks faced by individual banks.

But so far, no one has figured out how to pull that off.

“The fact that the best idea they can come up with is a 'college of regulators' — which essentially means air miles for the regulatory industry — suggests that we are not seeing any coordinated action,” said Tom Vosa, head of economics research for nabCapital in London. “That’s not surprising because different countries have different histories of their banking system. The structures are entirely different.”

Given the complexity of those different regulatory systems — not unlike the multiple federal and state financial regulations in the U.S. — it’s hard to envision a single global regulator with the sweep and authority to undertake the kind oversight being discussed, according to Sebastian Mallaby, a senior fellow at the Council on Foreign Relations.

“This G-20 meeting in April 2 is not going to resolve financial regulation,” he said. “It’s just too difficult and too complicated. There’s been some noise from the Europeans saying, ‘Gee, we’ve got to regulate hedge funds’ and so forth. That’s because they want to change the subject from the fact that they ought to have more fiscal stimulus.”

AIG paying millions in bonuses despite bailout

WASHINGTON - American International Group is giving its executives tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion dollars.

AIG is paying out the executive bonuses to meet a Sunday deadline, but the troubled insurance giant has agreed to administration requests to restrain future payments.

The Treasury Department determined that the government did not have the legal authority to block the current payments by the company. AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.

Treasury Secretary Timothy Geithner has asked that the company scale back future bonus payments where legally possible, an administration official said Saturday.

This official, who spoke on condition of anonymity because of the sensitivity of the issue, said that Geithner had called AIG Chairman Edward Liddy on Wednesday to demand that Liddy renegotiate AIG's current bonus structure.

Geithner termed the current bonus structure unacceptable in view of the billions of dollars of taxpayer support the company is receiving, this official said.

Contractual obligations

In a letter to Geithner dated Saturday, Liddy informed Treasury that outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

Liddy said in his letter that "quite frankly, AIG's hands are tied" although he said that in light of the company's current situation he found it "distasteful and difficult" to recommend going forward with the payments.

Liddy said the company had entered into the bonus agreements in early 2008 before AIG got into severe financial straits and was forced to obtain a government bailout last fall.

The large bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer.

A white paper prepared by the company says that AIG is contractually obligated to pay a total of about $165 million of previously awarded "retention pay" to employees in this unit by Sunday, March 15. The document says that another $55 million in retention pay has already been distributed to about 400 AIG Financial Products employees.

The company says in the paper it will work to reduce the amounts paid for 2009 and believes it can trim those payments by at least 30 percent.

Bonus programs at financial companies have come under harsh scrutiny after the government began loaning them billions of dollars to keep the institutions afloat. AIG is the largest recipient of government support in the current financial crisis.

Firm pledges to restructure bonuses

AIG also pledged to Geithner that it would also restructure $9.6 million in bonuses scheduled to go a group that covers the top 50 executives. Liddy and six other executives have agreed to forgo bonuses.

The group of top executives getting bonuses will receive half of the $9.6 million now, with the average payment around $112,000.

This group will get another 25 percent on July 14 and the final 25 percent on September 15. But these payments will be contingent on the AIG board determining that the company is meeting the goals the government has set for dealing with the company's financial troubles.

The Obama administration has vowed to put in place reforms in the $700 billion financial rescue program in an effort to deal with growing public anger over how the program was operated during the Bush administration.

That anger has focused in part on payouts of millions of dollars in bonuses by financial firms getting taxpayer support.

Skiing: Svindal clinches World Cup overall

ARE, Sweden — Aksel Lund Svindal of Norway has clinched his second World Cup overall title when Benjamin Raich of Austria straddled a gate in the opening run of the final slalom of the season and was disqualified.

Raich, the only skier who could catch the leading Svindal, trailed by two points going into the final race of the season.

Svindal also won the overall in 2007.

Raich, who started first, quickly found his rhythm and skied smoothly through the first gates at the top of the course before straddling a gate about halfway down on Saturday.

A three-time winner of the World Cup slalom season title, Raich finished the season with 1,007 points.

Svindal, one of the last starters, had 1,009 points going into the race.

The 31-year-old Raich, who also won Olympic and world championship golds in the slalom, failed to pick up points in four of 10 slaloms this season.

In Tape, Bin Laden Calls Gaza Offensive a ‘Holocaust’

CAIRO (AP) -- Al-Qaida leader Osama bin Laden called Israel's offensive in the Gaza Strip a ''holocaust'' and lashed out at Arab governments that he said failed to stop the bloodshed in an audio recording broadcast Saturday.

Bin Laden, whose message was released in excerpts on Al-Jazeera TV, called Arab leaders hypocrites and accused them of sacrificing the Palestinians in Gaza and collaborating with Israel. The three-week offensive, which ended on Jan. 18, killed about 1,300 Palestinians, according to Palestinian human rights groups.

''It was clear that some of the Arab leaders have collaborated with the Crusader-Zionist alliance against our people, those whom America calls the moderate leaders,'' said bin Laden. ''We must disown ourselves from all those'' governments.

He did not mention any governments by name in the brief excerpts, but Egypt, in particular, drew criticism during the offensive for not opening its border with Gaza to more aid shipments and humanitarian cases.

Both Israel and Egypt have closed their borders with Gaza since the Islamic militant group Hamas violently seized control of the Palestinian territory in June 2007. The closure deepened economic hardship in the already impoverished strip, home to 1.4 million Palestinians.

It was bin Laden's second audio message on the Gaza offensive since January, when he urged Muslims to launch a jihad against Israel. It was not possible to verify the message's authenticity. A spokesman for Al-Jazeera refused to say how the network obtained the recording.

The terror leader again urged Muslims to fight Israel.

''The Gaza holocaust, amid this prolonged embargo, is an important historic event and a catastrophe that shows the necessity of distinguishing Muslims from hypocrites,'' he said. ''It is not right that our situation after Gaza will be as it used to be before. There should be serious work and preparation for jihad to fulfill righteousness and defeat evil.''

Australian oil spill worse than thought

Ten times more oil than originally thought leaked from a ship to blacken miles of white sand beaches along Australia's northeast coast, a government official said Saturday.

Authorities declared a disaster zone along 37 miles (60 kilometers) of some of Australia's most popular beaches in Queensland state after they were covered in a blanket of heavy fuel oil that spilled from a ship hit by rough seas on Wednesday.

Queensland state Deputy Premier Paul Lucas told Australian Broadcasting Corp. radio Saturday that officials originally thought between 5,300 and 7,900 gallons (20,000 and 30,000 liters) of oil had leaked from the ship. Lucas said it is "now apparent" that the amount of oil spilled was around 60,700 gallons (230,000 liters). He did not explain how he arrived at that estimate or offer any further details.

Anthony Tregoning, spokesman for Britain's Swire Shipping Ltd., the Hong Kong-registered ship's owner, said the company would not be releasing any further figures on how much oil had spilled.

Queensland officials accused the company of initially misleading the government about the size of the spill. Premier Anna Bligh said the company told the government the spill was much smaller, leading officials to predict there would be little environmental damage.

Swire said containers of fertilizer had slipped from the ship's deck as it rocked in rough seas, ripping a hole in a fuel tank and spilling more than 11,000 gallons (42,500 liters) of oil into the sea. On Friday, the company said an inspection of the hull led it to conclude the amount of spilled oil was "significantly more" than that, but did not give a figure.

National parks at Moreton and Bribie islands just north of the state capital of Brisbane were hardest hit by the oil, and fuel also washed ashore in pockets along the Sunshine Coast.

Hundreds of government workers trudged along beaches Saturday, scooping up black, sludgy sand and throwing it into bags. Bligh said most of the cleanup on the Sunshine Coast and Bribie Island was completed Saturday, though the cleanup of Moreton Island was expected take longer.

The Environmental Protection Agency said no dead wildlife had been discovered so far.

The Australian Maritime Safety Authority said the ship, brought to port still leaking oil, would not be allowed to leave until officials were satisfied the spill had been explained. Queensland officials threatened the shipping company with a multimillion-dollar lawsuit.

Under Australian law, the ship's owners face fines of up to 2 million Australian dollars ($1.3 million) and could be liable for up to AU$250 million ($160 million) more in penalties for causing environmental damage.

In a statement, Swire said it regretted the extent of the pollution caused by the spill and said the company and its insurers were talking with the government about cleanup costs.

Pakistani troops on alert ahead of protests

Pakistan's government put the army on alert ahead of planned opposition protests in the capital, the military said Saturday, raising the stakes in a political crisis that endangers the country's effort against Islamist extremism.

In another sign of strain on the pro-Western government, a prominent minister tendered her resignation from the Cabinet after a television station complained its coverage of the standoff was curbed.

Authorities have vowed to prevent lawyers and supporters of opposition leader Nawaz Sharif from converging on Islamabad for a mass sit-in in front of Parliament on Monday, arguing it will paralyze the administration and present a target for terrorists.

President Asif Ali Zardari on Saturday offered to negotiate a solution to a conflict triggered by last month's removal of Sharif's party from power in the country's biggest and richest province, Punjab.

But protest leaders are vowing to defy the widening clampdown, raising the likelihood of violent clashes that could cast the nuclear-armed country into turmoil just a year after democratic elections ended years of military rule.

In response, the government alerted the army. Authorities have blocked the main boulevard leading to Parliament with metal shipping containers and say they also have to protect nearby foreign embassies. The area is already a high-security zone.

Information Minister Sherry Rehman announced her resignation from the Cabinet on Saturday after the private Geo TV channel complained that cable TV companies had blocked its programming in several cities.

Geo accused Zardari of ordering the restrictions - an allegation his spokesman Farhatullah Babar said was "absolutely incorrect."

Rehman, who has often spoken in defense of media freedoms, didn't explain her decision, and the channel appeared to be available again on Saturday in major cities.

Police have temporarily detained scores of activists across the country, including five people at a gathering of hundreds of lawyers and Sharif supporters Saturday in the central city of Multan.

"So far our attitude is soft, but we can change our strategy," said Ali Ahmad Kurd, the leader of the country's lawyers movement, said in Quetta after authorities allegedly prevented him from boarding a plane to the eastern city of Lahore.

"When one path is blocked, God opens 100 others, and we will reach Lahore and then Islamabad," said Kurd, whose road convoy was turned back by police a day earlier.

Pakistan's lawyers are mobilizing against Zardari's refusal to reinstate a group of judges, including the former Supreme Court chief justice, fired by former military leader Pervez Musharraf.

Sharif, widely viewed as the country's most popular politician, threw his weight behind the already planned protest last month when the court banned him and his brother from elected office.

Zardari then dismissed the Punjab provincial administration, which had been led by Shahbaz Sharif and was his party's only foothold in Pakistan's patronage-based political system.

Army spokesman Maj. Gen. Athar Abbas said the government put the army on notice on Friday that an unspecified number of troops might be needed to protect "sensitive areas" in Islamabad and elsewhere.

"When the situation deteriorates, gets out of hand of police, paramilitary (troops), only then the army is deployed," Abbas told The Associated Press.

Washington, which wants Pakistan to focus on the threat from the Taliban and al-Qaida and help boost the faltering war effort in Afghanistan, has been pressing all sides to resolve their differences.

U.S. Ambassador Anne Patterson met with Prime Minister Yousuf Raza Gilani late Friday, Gilani's office said, shortly before the premier huddled with the president and other officials.

After talks that dragged into the early hours of Saturday, the government decided to try to defuse the tension through dialogue, a presidential statement said.

It didn't indicate what concessions the government could make and Sharif loyalists vowed the protest would go ahead.

However, there have been suggestions that officials are considering letting Sharif's party return to power in Punjab, where no party holds an outright majority in the suspended provincial assembly.

A formerly pro-Musharraf party, which holds the balance of power in Punjab, ruled out taking sides in the feud on Saturday, calling for all three to form a unity government in the region.

No decision on seat sharing in Bihar UPA: Congress

The decision on seat sharing among Cogress, RJD and LJP in the state was yet to be finalised, Bihar Pradesh Congress Committee President Anil Kumar Sharma said.

SP changes mind, to contest against Jitin Prasad

The SP announced its candidate from Dhaurara parliamentary constituency, one of the six seats which it had said it will leave for Congress following a deadlock over seat sharing in Uttar Pradesh.

No military solution to Tamil issue in Sri Lanka: Mukherjee

External affairs minister Pranab Mukherjee said that India was deeply concerned at the sad plight of the Tamil civilians in Sri Lanka who have been the victims of crossfire but insisted that there was no military solution.

Karnataka unit of Janata Party ”merges” with BJP

Karnataka unit of Janata Party, led by its President Ashok Navalagund, today ”merged” with the BJP ahead of the Lok Sabha elections.

BJP poll promises: Mandatory I-cards, laptops at Rs 10,000

If voted to power, BJP will make Multi-purpose National Identity Cards mandatory, provide laptops to students at Rs 10,000 and give free mobile phones to people below poverty line.

India replies to Pakistan’s queries on 26/11 attack

India on Friday handed over the response to Pakistan’s 30 questions on the Mumbai terror attacks in an effort to push Islamabad to move forward on the investigations. The response to Pakistan questions was contained in a 401-page dossier that was handed over by foreign secretary Shivshankar Menon to Pakistan’s high commissioner to India Shahid Malik.

Sources said the response is “comprehensive and detailed” and includes CDs of the intercepted voice recordings of the conversation between the Mumbai attack terrorists and their handlers, Abu Hamza and Kahfa. The external affairs ministry said India had responded to all the 30 questions asked by Pakistan. The response also includes fingerprints of the terrorists and the other detail that Pakistan wanted.

India has answered all the 30 questions but an additional query from Pakistan on former ATS chief Hemant Karkare and oblique references to the Samjhauta express through Lt Col Prasad Shrikant Purohit do not figure in India’s response. Pakistan had asked for an eyewitness account of Karkare’s killing as he was investigating the Malegaon case and Purohit’s involvement.

India’s response comes at a time when Pakistani President Asif Ali Zardari is trying to defuse a political crisis that could even end in his own ouster. Sources said they expected the investigations and the legal process to move forward despite the preoccupation of the Zardari regime.

In a bid to satisfy Pakistan’s demand for evidence that would stand up in a court of law, the dossier also contains proof along with detailed responses to each of the 30 questions. “We expect Pakistan to prosecute and punish the accused. It is a comprehensive document supported by documentary evidence,” said home minister P Chidambaram, who handed over the dossier to external affairs minister Pranab Mukherjee.

The MEA forwarded the dossier to Pakistan through the Pakistani High Commission. The home minister also said the response to every question had been supported by detailed evidence including documents, CDs and forensic reports. “If Pakistan is serious about investigating the origins of the dastardly act, these answers provide a solid base,” Mr Chidambaram said.

A ministry of external affairs statement asked Pakistan to take credible action. “It is our hope and expectation that this step will lead to bringing the perpetrators of the Mumbai attacks to justice and to credible action by government of Pakistan against the infrastructure of terrorism in that country,” it said.

Pakistan had asked India to hand over the response by March 13 citing legal issues related to the detention of the six Mumbai attack suspects in Pakistan. In its questionnaire, Pakistan had asked a range of questions ranging from DNA samples, postmortem reports and fingerprints of all the Mumbai attack terrorists to the forensic analysis of the Thuraya phone and other phones used by the 10 terrorists who carried out the attacks.

It also sought details of the interrogation of two Indian nationals who were arrested for providing mobile phone SIMs to the terrorists. After meeting Mr Menon and collecting the dossier, the Pakistani high commissioner said: “It is
helpful to us to carry out our investigations.”

India hands over replies to Pakistan

India on Friday handed over its response to the clarifications sought by Pakistan investigating linkages of its nationals to the Mumbai terror attacks in November last year. The replies were submitted to the Pakistan High Commissioner Shahid Malik at the External Affairs Ministry in the evening.

‘Answers comprehensive’

Union Home Minister P. Chidambaram said the answers were “very comprehensive” and should be sufficient for Pakistan to act decisively against the perpetrators of the terror strikes.

“We have put together answers to 30 questions submitted by Pakistan. It is a very comprehensive document, answering each of the 30 questions,” he told newspersons, after handing over the replies, along with the evidence to External Affairs Minister Pranab Mukherjee.

The Ministry of External Affairs hoped that this step would help bring the perpetrators of the Mumbai attacks to justice.

It also expected Islamabad to ensure “credible justice and to credible action against the infrastructure of terrorism in the country.”

Mr. Chidambaram said the replies were backed by documentary proof, CDs and forensic evidence.

India’s response runs into about 500 pages and has nearly 16 annexures.

The material includes DNA profiles and fingerprints of the 10 attackers, photographs from closed circuit television, global positioning system details, and copies of key documents, including transcripts of conversations.

US collector wants auctioned Gandhi memorabilia back

Washington, March 14: Citing a "political turn" to events in India, US-based collector James Otis now wants a New York auction house to return a few of Mahatma Gandhi's personal belongings sold for USD 1.8 million in a controversial auction.

"It has become very political in India. The items are being used in a fashion that are not Gandhian at all," the peace activist who had made a futile last minute bid to withdraw the five auctioned items, told a news service over the phone.

Otis, who had earlier reconciled himself to the sale of Mahatma Gandhi's iconic round eye glasses and other personal belongings -pocket watch, sandals, eyeglasses, bowl and plate - to Indian business baron Vijay Mallya, said he was unhappy with the turn of events ahead of elections in India.

As a first step, his lawyer Ravi Batra explained, they were notifying Antiquorum Auctioneers that the sale was null and void as conditions under which he had put the items for auction no longer exist. He would also tell them that he would not ratify the sale.

Without Otis's ratification of the sale they can only turn over the possession to the buyer but not the title of ownership, he said. Under the law of contract, the auctioneer may at best have a claim to expenses if the seller chooses to change his mind.

Batra recalled that he had delivered a letter to Antiquorum before the March 5 auction saying that Otis wanted his stuff back. He had also held a press conference to inform the prospective buyers that the sale was illegal in view of a notice by US Justice Department of a Delhi High Court order staying the auction.

But when Antiquorum went ahead with the auction and the items were sold to Mallya, Otis decided not to contest the sale on the understanding that he would hand them over to the Indian government. But when he saw people jockeying for political benefits in India, he again changed his mind and went on a fast.

Asked if Otis planned to file a case in the New York State Supreme Court in an effort get the items back, Batra said: "We may end up there next week. But we are not there yet." It all depends on how the auction house responds to their notice.

Asked whether he would donate the items to the India, Otis said he had made a proposal to the Indian government to either increase allocation for the poor or sponsor a 78-nation tour of Gandhi's items to promote his principle of non violence.

He said he had received no formal response to the proposal though he had read in the newspapers that it had been rejected. He would continue negotiations with the government, he added.

Asked to comment on the development, a spokesperson of the Indian Consulate General in New York said the matter is sub judice in view of the Delhi High Court order and Justice Department notice. "As far as we are concerned, our role is over."

Citibank introduces mobile banking with Citi Mobile

Citibank has recently introduced City Mobile, its mobile banking solutions, to provide convenience and on-the-go banking with upgraded mobile technology that is compatible with the popular mobile handsets across most GSM operators. With Citi Mobile, bank customers can check account balances, issue drafts, make credit cards, send money, request for a cheque book and much more.

Citi Mobile can be easily downloaded onto a mobile phone and the subscribers should have a Citibank Banking/ credit card account, a mobile phone number that is registered with the bank, an active internet PIN and a Java-enabled mobile phone with a GPRS connection.

Japan Plans New Economic Stimulus Package

Japan announced the implementation of a new 100-trillion yen economic stimulus package lately. The details of the package are however to be made public only in the beginning of April 2009.


Japan had already introduced several stimuli packages earlier worth a total of 75 trillion yen. They are made up of two extra budgets for the current fiscal year and the principal budget for the next fiscal 2009 with fiscal spending of 12 trillion yen.


The plan will be presented at a meeting of G20 leaders in April in London.

Reliance attracts 3.3 million customers in Feb

One of India's leading mobile operators, Reliance Communications, has attracted 3.3 million wireless customers in the month of February, as stated by the company. The total number of customers till the end of January was 66.3 million, as displayed by the telecom regulator's data.

RIL to start production by mid April

Reliance Industries Ltd is likely to commence gas production from its east coast field by the month of mid-April. It would start gas output from its eight wells with an expected production rising to 40 mn cubic meters a day by August and peak at 120 mn cubic meters a day.

At present, RIL is checking the condition of its 1440 kilometer pipeline that will carry the gas from the manufacturing place to the western state of Gujarat.

ROBIN BANERJEE APPOINTED AS CFO OF SUZLON

The fifth largest turbine maker of world, Suzlon Energy, has filled its post of chief financial officer (CFO) by appointing Robin Banerjee with immediate effect. Robin Banerjee is having an international working experience as he has worked at the top positions of varied domains like finance and treasury and M&A in industries like travel, steel, FMCG, auto etc.

Sumant Sinha, the COO of Suzlon, said that Robin's experience of working will bring value to the company for its share holders.

Simplex Infrastructure eying to grow revenue by 30%-40%

Construction company Simplex Infrastructures Ltd is eying to grow its revenue by 30% - 40% with a core margin of 10% in the near future by maintaining a good order book, as stated by a company official.
The company is looking out to maintain its order book at Rs.100-120 billion till the end of this year, as stated by Amitabh Mundhra, Director of the firm.

RBI TO CONDUCT SPECIAL REPO AUCTION

The Reserve Bank of India is going to have a repo auction for Rs.583.30 billion on Friday and its reversal on March 30 as stated by the bank.

A special repo facility for Rs.200 billion special was introduced October 14 in order to meet the mutual funds liquidity needs. The facility was increased later to Rs.600 billion to meet the needs of housing finance companies and non-banking financial companies also.

Hyundai i10 sales crosses 3,00,000 units

Hyundai Motor India Ltd (HMIL), one of India's leading car makers, has stated that its small family car i10 has successfully crossed the sales mark of 3,00,000 units since it has been launched in October 2007. Around 1.44 lakh units have been sold in India and other 1.56 lakh units were exported to more than 100 countries world over, as stated by the company.

HMIL exacted it is the fastest ever sale of 3,00,000 units of any car amongst its competitors. HMIL Senior Vice-President (Marketing and Sales) Arvind Saxena stated that he would like to thank all the customers in India and abroad to select i10 over others and to make it reach to that height.

North East States Report

The North East Region (NER) refers collectively to the eight states located in the midst of the East Himalayan region, comprising Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. Primary sector activities mainly comprise of cultivation on which approximately 75 per cent of the region's population depends for employment; agriculture accounts for approximately 30 per cent of the Net State Domestic Product (NSDP).

Industrial products primarily include crude petroleum, natural gas, tea, minerals and steel fabrication. Total amount of investment approved by the Ministry of Development of North-East Region (DoNER) was US$ 1.31 billion. The maximum amount was approved for Assam, Tripura and Nagaland for roads, power and education sectors.

State Report (FY 2008-09)
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State Presentation (FY 2008-09)
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Govt plans stimulus package for chemical industry

Days after announcing excise duty cuts on commodities like steel and cement, the government is working on a plan to provide a major stimulus to the chemicals and petrochemicals industry by revising Customs/excise duty on inputs required by the industry.

The proposals under consideration include waiving the current 5 per cent Customs duty on naphtha and reducing the excise duty on mono ethyl glycol (MEG) from 8 per cent to 4 per cent.

The Cabinet secretariat has sought views from various ministries and departments for this package. “The chemical sector is one of the sectors that have been adversely affected by the global economic crisis,” the Department of Chemicals and Petrochemicals has observed.

Drastic fall in prices, slump in export orders and a substantial slowdown in demand in the domestic market have forced the chemical industry to curtail expansion plans and operate at lower capacities.

Grasim, which manufactures viscose staple fibre for the textile industry, saw sales volume decline by 22 per cent in the third quarter. Consequently, the company has decided to scale down production.

With the crash in crude oil prices from $147 per barrel in July 2008 to $40-45 levels now, prices of all chemicals, solvents, polymers and petrochemicals have also fallen sharply. Currently, prices of many chemicals are prevailing at the 2002-03 levels, according to industry experts.

The above measures have been proposed following the department’s interaction with industry associations, including the Chemicals and Petrochemicals Manufacturers Association, All-India Plastic Manufacturers Association, Indian Chemicals Council, Association of Synthetic Fibre Industry and Alkali Manufacturers Association of India.

'We outsource for value, not cost'

As banks continue to look at outsourcing most of their IT services, UK-based major Standard Chartered continues to have a large in-house IT team servicing close to 60% of its functions. While Citi is the only major bank to sell off its IT captives, the European bank has no such plans with its back-office Scope International based in Chennai, StanChart’s Group Head of Technology David Awcock says in an interview..

Q: What percentage of StanChart's overall IT spends is outsourced to third-party vendors and how much of it is to Indian IT vendors?

A: We have 6,000 employees in our IT team at StanChart across the world with a majority of them in India. We outsource approximately 40% of which close to 10% is to Indian vendors. Only a limited portion is outsourced as we have our own expertise to handle most IT functions. While data centre network services and desktop support services continue to be managed by third-party vendors, only a limited part of our software services is outsourced.

Q: Will you increase outsourcing as it would help save costs further?

A: Firstly, we have never outsourced because of cost arbitrage. We look at the capabilities we have in Chennai and Kuala Lampur as value and not cost centres. Yes, these are challenging times and we are doing everything to ensure that we use this opportunity to increase efficiency internally. However, we will not be outsourcing any more than we already have. We have our own expertise in wholesale banking and payment systems, which we would not like to outsource to a third party as they would not value IT, the way we do.

Q: How is it more cost-effective to develop your solutions in-house compared to outsourcing?

For our in-house developed core banking software platform we do not need to pay a vendor for licensing the application software. Charges usually consist of an initial licence charge (ILC) per country plus an annual maintenance charge (AMC) which is up to 20% per annum of ILC typically. In addition our software development from the outset has been based upon using JAVA and other open source tools to run in a Linux environment. This provides us with a low-cost development platform going forward and a cost-effective operating platform. For instance, we recently launched our own core-banking product in Chennai that has been released across 31 other geographies over the last five years. We will not want to give this up as we believe it is better than any other package or solutions present in the market.

Q: Are you re-negotiating any of your current contracts? Do you see a drop in billing rates?

A: All our vendor contracts that are coming up for renewal will now be negotiated very keenly. Especially with desktop and network vendors. Now is a good time for us as customers are in a better position to bargain with vendors as there is some tough competition between vendors. Each one wants to do better than the other in the services offered. We are expecting a downward revision of at least 10% compared to the current bill rates.

Q: How is your relationship with Indian vendors changing?

A: Vendors are willing to be more flexible now and it is easier to draw contracts. Indian vendors have been very much fixed on their US business and also maintaining high margins. This is changing. We never looked at Indian vendors for low costs, but for skills and niches we did not have. Earlier only the likes of IBM and EDS used to approach us with infrastructure services. But these days Indian vendors too are approaching us with these services and not just software services. We are having healthy discussions with them and are looking at contracts that add both value and are cost-effective for us.

Q: Do you prefer to work with large vendors or are you open to working with the smaller ones too?

A: We have relationships with large vendors in India which are satisfactory. We are willing to talk to smaller vendors as they are more flexible and have new ideas. If the smaller guys have the expertise in niche areas like financial markets and it suits our needs, then we would be very much interested. But we prefer to work with fewer vendors. Currently we are working with about three large ones and 10-11 smaller vendors.

India bright spot in MNC gloom story

Indian subsidiaries, relatively minor cogs in the wheels of large multinational companies until 2007, have emerged as crucial profit generators, as earnings in developed western markets tumble amid the worst economic downturn in a generation.

Barring a few exceptions, the locally-listed units of companies such as ABB, Glaxo, Siemens, Cummins, Oracle, Suzuki, Whirlpool, Nestle and Areva have increased their contribution to the global consolidated earnings, as growth remains robust in various sectors of Indian industry.

Significantly, this has happened despite a sharp depreciation of the rupee against major international currencies in the past one year, which tends to depress earnings in dollar terms, as the dollar value of the subsidiary’s contribution is lower after currency conversion. Had this not happened, the contribution of these Indian units would have been much higher.

The Indian unit of engineering group ABB contributed 18% of global profits in the last quarter. ABB India posted a net profit of Rs 193 crore ($50 million) in the October-December quarter of 2008, up 7% from the year-ago period. The parent company, by comparison, posted a nearly 88% drop in net income globally for the fourth quarter at $213 million.

Diesel engine maker Cummins reported a 78% jump in net profit to Rs 133 crore in the fourth quarter of 2008 at its Indian operations. This comes at a time when its parent’s net earnings more than halved to $43 million. As a result, Cummins India’s contribution to global earnings has jumped to almost 63% from about 10% in the Q4 of 2007.

Ditto with business software major Oracle, which acquired Indian banking software company i-flex (now Oracle Financial Services Software) four years ago. It posted a 74% increase in profits (Rs 193 crore) from India for the October-December quarter. For the same period, Oracle’s global earnings fell 0.7% to $1.29 billion.

India’s biggest carmaker, Maruti Suzuki, has helped its Japanese parent despite lower profits. Suzuki’s losses during the last quarter would have been higher by 32% (around 4 billion yen) had it not been for the contribution from Maruti.

Similarly, consumer durables company Whirlpool India reported lower earnings for the October-December quarter, but still contributed a higher percentage of profit, which rose to 3.2% from 1.1%.

Despite a drop in revenues during the fourth quarter, Siemens India’s contribution to its parent’s earnings has risen to around 4% from 0.5%, while in the case of GlaxoSmithKline, which has two separate listed companies in India, the combined profits from its consumer goods and pharma units more than doubled to Rs 240 crore. The UK parent reported a 10% drop in earnings to £1 billion during the quarter.

Some like Colgate reported better earnings growth in India compared to the global firm, but a 25% depreciation in the rupee’s value against the dollar over the past one year brought down its contribution to the consolidated earnings. Swiss cement maker Holcim’s two Indian firms, ACC and Ambuja Cements, together saw profits drop around 25% for 2008. But this drop was much lower compared with Holcim, the profits of which for the year more than halved.

India’s economy, which grew by more than 9% on average in the past three years, is expected to slow to near 6-7%, but this is far better than the deep recession staring at most developed economies. However, HDFC Bank chief economist Abheek Barua chose to play down the impact of Indian subsidiaries.

“Whether India and China can help the global economy to grow with them is yet to be seen. Similarly, it is still unclear whether the Indian arms can lift the global performance of MNCs to stem the global downturn,” he said.

The past two years have seen a sea change in the profile of a majority of Indian arms of multinationals, from being revenue drivers for their parents, they have now metamorphosed into significant profit generators. Nestle India reported a 29% jump in net profit for 2008, while its Swiss parent posted a 17% drop in profit, excluding a one-time gain from a stake sale in a company.

One exception to the trend was Hindustan Unilever. Its Anglo-Dutch parent Unilever reported a sharp 51% jump in profits during the fourth quarter of 2008, while the Indian arm reported a decline in profits. A company spokesman did not respond to a specific query on the likely reasons behind the dip in profit contribution, but the firm had earlier said its profit decline was because of exceptional items.

Profits apart, for many global firms, India is generating better revenues too. For the world’s largest mobile operator, Vodafone, its Indian subsidiary Vodafone Essar posted a 37.3% jump in revenues to $674 million for the quarter ended December 31, the highest in percentage terms among the 30-plus countries it operates in. Two of every three new mobile customer that Vodafone added during the quarter globally were in India.

For GlaxoSmithKline’s consumer healthcare business, India is among the top five markets globally in terms of sales. The company believes its focus on local brands is giving it the edge. “Only 5% of our sales in India come from global brands, the rest is from brands managed locally. This speaks of the potential the local arm has,” said executive vice-president for marketing Shubhajit Sen.

Coca-Cola India is another example. Although it does not have a publicly-listed arm in India and its profit contribution is not known, the company has delivered its 10th straight quarter of growth. In India, the company’s unit case volumes increased 28% in the fourth quarter. Nestle has also generated eight straight quarters of 20% plus sales growth.

FDI shoots up 90% this fiscal to Rs 85,700 cr

Foreign investment inflows into India grew 90% in the first eight months of the current fiscal year, indicating that the country continues to be an attractive destination for investors despite a fall in economic growth rates.

Foreign direct investment (FDI) inflows during the April-November period stood at Rs 85,700 crore compared with Rs 45,000 crore in the corresponding period of the previous fiscal, despite most of the developed world reeling under the impact of a global recession. According to the FDI data compiled by the commerce and industry ministry, investments from three Asian countries — Mauritius, Singapore and Japan — contributed more than 55% of the total inflows during the period.

Economists see nothing unusual in the situation. “Today, India and China are the warm spots in the global economy. We expect high growth in India as there is huge unmet demand. India is growing faster than the more mature economies of the world, and this is luring investors into India,” Boston Consultancy Group chairman Arun Maira said.

Mauritius remained the largest source of foreign investment, with the island nation contributing Rs 35,000 crore in FDI inflows during the April- November period, almost doubling its contribution from Rs 19,000 crore in the same period of the last fiscal.

Singapore replaced the US as the second-largest source of long-term investments into India. Singapore, which was placed fifth last year, saw its investments growing to Rs 8,500 crore during the period from Rs 3,500 crore in the same period last year.

Increased investment from Singapore came from the investment arms of the government: GIC and Temasek. Temasek Holdings Advisors India made a Rs 2,500-crore investment in Bharti Infratel while GIC affiliate Indivest Pte invested Rs 900 crore in Reid & Taylor, a clothing company promoted by S Kumars. Japanese investment into the country received a major boost when Daiichi Sankyo invested Rs 20,000 crore to pick up 63% stake in Ranbaxy.

However, the FDI figures captured by government statistics may not necessarily reflect the actual origin of investment. For instance, tax havens like Mauritius are used by investors from across the world to invest in India.

While Mauritius remains the No. 1 source of such FDI routed into India, other tax havens are also catching up. European hub Cyprus is gaining ground as a favoured route for channelling FDI into the country. Investments from Cyprus doubled to Rs 4,486 crore in the April-November period this fiscal from Rs 2,000 crore in the same period last year.

Inflation falls to over six-yr low of 2.43%

Inflation fell to a six-year-low of 2.43% for the week ended February 28 from 3.03% in the previous week, raising possibilities of further rate cuts. Analysts expect it to reach 0% by the end of this month. Lower prices of food items and manufactured products resulted in a fall in the inflation.

“Wholesale price index (WPI)-based inflation is now at its lowest level since June 2002, This is on the expected lines. It was during last February and March that inflation increased. The prices of commodities, primarily oil and foodgrains, have moderated,” said Pronab Sen, chief statistician of India and secretary, ministry of statistics & programme implementation.

Inflation is now below Reserve Bank of India (RBI’s) target of 3% by this fiscal-end. The fall in inflation has also raised hopes of further rate cuts by the Reserve Bank of India to spur the economy as industrial output contracted to 0.5%, for the second month in a row in January 2009. The RBI could cut policy rates by 50 basis points ahead of the general elections starting in mid-April, HSBC said in a note on Thursday. With a decline in the commodity prices, fiscal policies eased resulting in interest rate cuts, domestic activity should remain resilient, HSBC said. The RBI slashed its short-term lending and borrowing rates by 50 basis points each last week.

Inflation for the week ended January 3, 2009, was revised upward to 5.33% from 5.24% in the provisional estimates.

The 30-share BSE Sensex ended up 2.25% at 8,343.75 points and the 50-share NSE Nifty ended up 1.72% at 2,617.45 points, as investors tried to catch up with the upward movement on Wall Street on Tuesday and Wednesday. The 10-year bond yield ended at 7.17%, above Monday’s close of 6.84% as investors braced up for heavy supplies of government debt. The rupee ended at 51.88/90 per dollar, from Monday’s close of 51.85/87, and off an intra-day peak of 51.525, as a rise in share prices was offset by renewed dollar buying by crude refiners after a rebound in global oil prices.

Primary articles’ prices decreased to 5.8% for the week ended February 28 from 6% in the earlier week, the finance ministry said in a statement. In food articles, inflation remained stable at 8.3% in the current and previous weeks, but sub-groups such as fruits and vegetables, condiments and spices and other food articles have recorded an increase in prices compared to last week.

In non-food articles, inflation fell to 1.3% compared to 1.7% in the previous week. Fuel and power group prices continued to decline at 5.1% vis-à-vis 4% last week. Manufactured products’ inflation rate decreased to 4% in the current week, from 4.5% last week.

Domestic drug makers immune to slowdown

At a time when various industries have been been hit due to the current economic slowdown, the domestic pharmaceutical market registered a value growth of 14.4 per cent in January and 9.9 per cent in the 12 months ended January 2009. The yearly turnover was Rs 34,487.17 crore.

The growth of the domestic drug sector, which was just 6.8 per cent in November 2008, improved to 13.2 per cent in December and to 14.4 per cent this January.

“This is because of the seasonal nature of drug sales. Sales of drugs for cough and cold, respiratory diseases, and of other antibiotics are usually more during the November-January winter season,” said Ranjit Kapadia, head of Life Science Research at Prabhudas Liladhar.

Data revealed that while sales of anti-infectives grew 11.6 per cent, the gynaecology segment grew 15.9 per cent, and vitamins and minerals 13.1 per cent. The demand for drugs for respiratory diseases increased 12.1 per cent this January.

This is far ahead of the growth rate of the global generic industry. The rate came down to 3.6 per cent in the 12 months ending September 2008, from 11.4 per cent in the previous 12 months.

Data for January said Cipla — which markets 844 drugs in the domestic market — show it maintained its number one position by growing 14.6 per cent in January. For the 12 months, Cipla’s domestic business grew 13.4 per cent, with a turnover of Rs 1,839 crore. Cipla has 5.34 per cent domestic market share.

The second largest domestic player, Ranbaxy Laboratories, which markets 536 products in the domestic market, grew 7.2 per cent in January. For the 12 months, Ranbaxy’s growth was 11.5 per cent in value terms. Its market share rose to 5.03 per cent. Ranbaxy’s growth in the domestic market in value terms in 2008 was only 7 per cent, with a turnover of Rs 1,485 crore, compared with Rs 1,393 crore in 2007.

ORG-IMS data revealed that the market share of the other top 10 companies in the domestic market remained more or less the same. GlaxoSmithKline retained its third position, followed by Piramal Healthcare, Zydus Cadila, Sun Pharma, Alkem Laboratories, Lupin Labs and Mankind Pharma. Companies such as Piramal Healthcare (30.3 per cent), Alkem Laboratories (21.6 per cent), Mankind (26.5 per cent), USV (34.2 per cent), Ipca Labs (43.2 per cent) and Indoco Remedies (22.1 per cent) grew their sales substantially in January.

ORG-IMS, which tracks sales of pharmaceutical drugs in India, had earlier projected that the domestic market would grow 10.3 per cent (in value terms) until November 2008, to Rs 33,769 crore, over the 12 months of the previous year.

Analysts said better health insurance coverage, more government funds, introduction of mass healthcare projects such as the National Rural Health Mission (NRHM) and increasing rural penetration by pharmaceutical companies contributed to the growth of domestic drug sales. It is estimated that more than 65 per cent of the Indian population lacks access to proper healthcare facilities and drugs.

A YES Bank study has estimated that the demand for drugs in India will grow due to rising population, especially those over 60 years of age, and rising incomes. It said the domestic formulation industry market would touch $21.5 billion by 2015. A KPMG analysis said the domestic market’s compounded annual growth rate over the next few years would be 13.1 per cent. It would reach $11.2 billion by 2011-12, KPMG predicted.

“Future demand for domestic formulations would be driven by chronic therapeutic segments such as anti-diabetic, central nervous system, cardio-vascular systems and gastrointestinal drugs on account of changing lifestyles,”

Aircel plans Rs 1000cr spread in Andhra

GSM telecom player, Aircel Limited, will be investing Rs 1,000 crore in Andhra Pradesh by the end of this calendar year, said company’s chief operating officer Gurdeep Singh.

This is part of the company’s $5-billion (over Rs 25,500 crore) pan-India expansion spanning the next three to five years, which envisages covering the National Capital Region, Uttar Pradesh (east and west) and Mumbai circles by mid April this year, and eventually connecting Gujarat, Madhya Pradesh, Rajasthan, Punjab and Haryana by mid 2010, he told mediapersons here on Thursday.

“We currently have a national subscriber base of 17 million, with about 10 million predominantly in Tamil Nadu and the rest split between the 11 circles including North East and Assam. We expect this to grow to 30 million by 2009,” Singh said, adding the company aims to achieve a double digit market share nationally in the next three years from the present 5 per cent.

Detailing the expansion plans for Andhra Pradesh, he said the company would invest Rs 500 crore in the first phase for building base stations, installing switches and intelligent network, creating a data centre and setting up offices besides enhancing its retail presence by mid May, and an equal amount by this year end.

The initial phase will have 450 stations for Hyderabad and Secunderabad. This will be scaled up to 1,000 base stations in the next 60 days when all the major cities including Vijayawada, Visakhapatnam, Warangal and Kadapa will be covered, and touch 2,000 stations by this year end. Besides, the number of self service kiosks will be increased from four to 20 during the same time frame.

“We are right now sharing passive infrastructure (towers) on rental agreements or on longer lease basis with other operators,” Singh said after launching Aircel’s GSM services in the city

Hyderabad, with a penetration rate of 78 per cent, has 2 million migrants out of a total population of 8.1 million, which is indicative of the huge potential the market holds for Aircel, Singh said.

Replying to a query, he said the company was in talks with handset manufacturers to provide application-oriented handsets, which will be rolled out from June this year.

R-ADAG to buy 51% in UK currency company

Reliance ADAG is acquiring 51% stake in UK-based currency exchange and money transfer firm No 1 Currency to foray into the international forex business and to tap onto the 1.6 million NRI population in the country for money remittance business, a top company executive said. Although the deal value stands undisclosed, a person with direct knowledge of the transaction said the Indian business group will shell out Rs 100 crore to pick majority stake in the UK company.

The deal, first reported by ET in its edition dated December 16, 2008, will mark the first overseas acquisition of a foreign exchange company by an Indian firm.

Edinburgh-based No 1 Currency operates close to 300 currency exchange outlets in the UK and is one of the fastest growing independent foreign currency specialists in the country. Formed in 1996, the privately-held firm is owned by its two founding partners David Hale and Mark McElney.

As per the transaction, Reliance Money Express, a subsidiary of Reliance Capital will acquire shares from both the current owners who will continue to be minority shareholders.

Reliance Money CEO Sudip Bandyopadhyay, who is part of the team overseeing the money transfer business of the R-ADA group, confirmed the deal, “The existing management of No 1 Currency would continue to lead the firm. Reliance ADAG will get 2-3 board seats once we complete the transaction.” He declined to comment on the deal value.

Trai suggests 3 year lock-in on stake sale by new telcos

While recommending a blanket ban on promoters of new telecom licensees from selling their stake for a period of three years after getting the licence, the Telecom Regulatory Authority of India has added a caveat. In case a promoter does wish to sell his stake in the first three years of getting the licence, then 50% of the transacted amount must be paid to the government while the remaining 50% must be invested back into the telecom company.

While recommending the same Trai has acknowledged that the new licences given by the department of telecommunications did not capture the current market price for licences and spectrum. Further, the lock-in period would apply on circle basis and not on a pan-India basis. This means an existing telecom operator, if granted a licence for a new circle would be covered by the regulation. Further, Trai has also recommended that henceforth companies would have to report the promoter shareholding also to the it and DoT on a regular basis.

It is to be seen whether the government now acts upon the Trai recommendation or taking refuge of the model code of conduct for elections lets a new government take a decision on the matter.

FE had first reported on September 28, 2008, that the government was planning to levy a charge on the income earned from such stake sale by licensees in the first three years of getting the licence.

The department of telecommunications (DoT) had finally suggested that in order to raise money the promoter may issue fresh equity shares and the entire amount earned in doing so should be ploughed back into the telecom venture only.

The government had allotted licences to new operators in a controversial manner in 2007, where applicants were allotted licences on first come first serve basis until September. This was done for the first time and was contrary to the practice so far. It was debated that the pan-India licence fee of Rs 1,651 crore was a paltry amount for a lucrative telecom licence and the bundled 4.4 Mhz spectrum which came along with it, since the actual price was much higher and the government was being robbed of thousands of crore.

Later the promoters of new licensees such as Swan Telecom and Unitech Wireless diluted their stake in these companies by issuing fresh equity shares and received astronomical valuations of around $2 billion or around Rs 10,000 crore without starting any operations or investing money on network only on the basis of the licence and the bundled spectrum.

The regulatory body has recommended that there should be a lock-in of the equity share capital of promoter, whose net-worth has been taken into consideration for determining the eligibility for grant of UAS license, for a period of three years from the effective date of licence. However, with prior written approval of the DoT and on fulfillment of roll out obligations, the promoters may be permitted to sell their equity share even during the lock-in period.

GE adds green 'Odyssey' to its India centre

Company’s investment in India R&D totals $175 mn.

At a time when most of the global companies are going slow on their expansion plans in India, GE, the American technology and services conglomerate, has expanded its research and development capabilities in India. The company has opened a new facility at the John F Welch Technology Centre (JFWTC) in Bangalore, GE’s largest integrated multidisciplinary R&D centre outside of the US.

Spread over 3,85,000 sq. ft., the new building Odyssey which has bagged Leadership in Energy and Environmental Design (LEED) gold certification, will house 2000 scientists and engineers. Officially opened on March 6, the green building fits in with GE’s ecomagination initiative, which represents the company’s commitment to solve the world’s toughest environmental challenges, the company said in a statement.

Dr Mark Little, senior vice president, GE Global Research said, “GE greatly values the well developed intellectual capital that India has to offer. The Odyssey building illustrates the increasing role our center in Bangalore has in GE’s global innovation strategy and for local technology development here in India.”

Since its inception in 2000, the JFWTC has grown from 200 scientists and engineers to close to 4,200 people now. GE has its other research centers located in New York, Shanghai (China) and Munich (Germany). With the opening of the new building, GE’s investment in the JFWTC has now totalled $175 million.

As part of GE’s ecomagination commitment, the company has set targets to reduce both its greenhouse gas emissions and water usage, and improve the energy efficiency of its own operations. GE has committed to reducing its absolute greenhouse gas emissions by one percent by 2012.

The company also has set a target of achieving a 20 per cent reduction in water use by 2012. When compared to a standard building, the Odyssey building will offer a 30 to 40 per cent reduction in operating costs, according to the company.

GE is doubling its investment in clean technologies from $700 million in 2005 to over $1.5 billion by 2010 as part of the company’s ecomagination initiative. The company said that the scientists working with JFWTC are playing a significant role in this campaign, supporting global research endeavours in wind and solar power, gas turbine technologies, locomotives and aircraft engines.

India can cut interest rates further, says ADB study

India has room to cut interest rates further, and it should quickly disburse funds related to the fiscal stimulus packages announced recently to cushion economic growth from the impact of the global economic turmoil, Asian Development Bank (ADB) said in a new study published today.

“There is further room for interest rate reductions, particularly in India and Sri Lanka. While most countries have little scope for large stimulus packages, given deficit constraints, India, which has introduced two of them, should disburse the funds swiftly for maximum impact,” the study said.

Titled ‘The Impact of the Global Economic Slowdown on South Asia’, the study also noted that the sub-region had been hit by capital outflows and weaker commodity prices, and faced a sharp slowdown in exports and remittances as global troubles worsened.

“Governments could consider incentives to encourage overseas workers to remit money home, such as special savings instruments, and they should also discuss currency swap arrangements and other measures to keep their financial systems stable,” it added.

A number of short-term measures have been taken to cushion the impact of the crisis, including monetary easing and fiscal stimulus packages. India had announced a Rs 20,000-crore additional planned expenditure in the current fiscal, refund of certain service taxes, interest subsidy to labour-intensive sectors and extended finance support to various sectors, including infrastructure.

Additionally, the Reserve Bank of India had cut repo rate, the rate at which the central bank lends to banks, for the fifth time since October 20, and the overall cut effected since the global credit crisis intensified added up to 400 basis points. Since September, the central bank had also lowered cash reserve ratio requirements, or the proportion of deposits that banks set aside, by another 400 basis points to inject Rs 1,60,000 crore into the system.

“South Asian countries can weather the global financial crisis by taking both short- and long-term measures to stimulate their economies,” the study said.

“In the long term, South Asian countries need to reduce their fiscal deficits, diversify their economies, step up infrastructure investment and boost intra-regional trade to take up the slack of lower demand from G7 nations,” it added.

“While some countries in South Asia have had relatively less exposure to the crisis from the adverse impacts of capital flows, more than half of the 900 million people in developing Asia who survive on US$1.25 a day live in the sub-region, so any tempering of growth is a serious cause for concern,” said ADB President Haruhiko Kuroda.

The study is being presented as a discussion paper at the South Asia Forum on Impact of the Global Economic and Financial Crisis, a two-day forum being held at ADB headquarters at Manila on March 9 and 10.

The global financial crisis slashed the value of financial assets worldwide by $50 trillion in 2008, said an ADB study on the global financial turmoil. Financial asset losses in developing Asia, which suffered more than other emerging markets, totalled $9.6 trillion, or just over one year’s worth of developing Asia’s gross domestic product, the ADB report said.

Indian banks planning expansion while others consolidating biz

The government’s argument that Indian banks are healthier than those in the western world has got fresh backing from an international study, which shows that the banking and financial services players in emerging economies are looking to expand at a time when their counterparts in the United States and Europe and Middle East are consolidating their businesses.

According to the survey of 275 executives of global banks and other financial institutions conducted by The Economist Intelligence Unit (EIU) between October and November 2008, 65% respondents said in the short-term they would focus on domestic market and fewer product lines.

However, 48% in the Asia-Pacific said they plan to enter or expand their footprint in foreign markets.

Banks in North America and the Middle East are particularly conservative, while emerging-market institutions express they plan to expand business, the report on the survey titled ‘Beyond the home market: The future of crossborder banking’ stated.

“Old-school virtues are back for now and the focus will be on core banking and home regions, but emerging Asia will continue to offer growth opportunities,” Economist Intelligence Unit senior editor Manoj Vohra said.

The survey pointed out that Asia is seen the best opportunity to grow business as it has a vast population, which is outside the banking net. Forty-nine percent respondents cited this as a key reason for expanding in the region. However, nearly two-third of the total executives said that political and regulatory hindrances limit their expansion plans.

Among the other findings, the survey pointed out that majority of the respondents is putting a higher premium on risk management to limit the impact of financial crisis.

This area was quoted as the major concern by 57% executives. “Security and fraud detection are also viewed as important issues,” the report stated.

On the use of information technology, it said that building IT platforms is difficult for banks with operations in foreign markets. “Indeed, just 10% of banks say they have experienced no problems when implementing an IT strategy in foreign markets. The most common problem surrounds the interoperability and integration of platforms and applications-mentioned by 42% of respondents,” the survey found.

The survey, which chose was 20% respondents from North America, 16% from Western Europe, 24% from Asia-Pacific, 24% from the Middle East, and the rest from other regions. Thirty-three percent of them were chief executive officers, chief financial officers and chief investment officers, while the rest consisted of senior vice-presidents, heads of business units and other senior managers.

Of the total 275 survey respondents, 35% work with banks and financial institutions with assets over $50 billion, 39% with assets between $1 billion-50 billion, and the balance under $1 billion.

India Inc optimist, expects growth despite slowdown

India Inc representatives seem to be optimistic about the prospects of the economy and corporate growth even in the troubled times. ICICI Bank managing director and CEO KV Kamath mentioned India Inc is expected to deliver better results in the current quarter with compared to its average performance in the third quarter of the current financial year.

Kamath reiterated India’s GDP is expected to grow over 7% in the coming days.

Kotak Mahindra Bank managing director and vice-chairman Uday Kotak and Reliance Industries chairman and managing director Mukesh Ambani also participated in a panel discussion at the Emerging Economic Giant: Business Law Conference in Mumbai on Friday. Ambani too indicated India will certainly clog double digit growth at least over next three to four decades. “However, we might take another couple of years to recover from the global downturn effect,” he added.

Ambani explained that India has a sizeable amount of young population and therefore growing younger in a scenario where rest of the world’s population is getting older. The consumption of goods & services by the younger generation is expected to rise phenomenally in future. “It’s a fact that India is going to get richer before it gets older whereas China is expected to grow older before it becomes richer. Thus among developing economies, India enjoys a competitive advantage in many aspects. Also, we have a vibrant democracy which has embraced technology in an excellent way,” he said.

India must work towards establishing a peaceful atmosphere in the neighboring countries. Kotak said India is expected to come out of the current economic crisis earlier compared to other developed as well as developing economies of the world. “India has sound and sustainable domestic banking and financial system, the country has huge market for domestic consumption and we are a significant producer of goods & services to suffice the domestic needs,” he said.

These three criteria are more than adequate to ensure that whenever there is an upturn in the global economy, we will be the first to enjoy its benefits. “However, I do not know how long the current crises will last. It’s beyond my assessment,” he said.