Month At Glance

Tanmay Agarwal

September

Automobile
NEWS ROUND UP
Daimler AG betting big on India
From a commercial vehicle perspective, they being the world‘s largest commercial vehicle manufacturers have been eyeing the Indian Market for the last few years. BharatBenz is part of their strategy to gain a foothold in the Indian Commercial vehicle market, and September saw a part of their plan bearing fruit, as they launched three heavy duty vehicles in the 25 and 31 tonne categories in the price range of Rs. 15.7 lakh to Rs 23.1 lakh. Slightly costly than the competition, BharatBenz is relying on fuel efficiency as its USP while positioning itself as an aspirational brand in India. Although they are targeting to be the market leaders but the initial impact is most likely to be felt by smaller players as AMW and Eicher. Daimler also plans to ramp up its investment in the luxury car segment via its Mercedes Benz subsidiary. It recently disclosed plans to ramp up its investment in India, in this segment, to Rs 850 crore by 2014. Underlining the high potential growth markets including India, Mercedes Benz will soon start assembling the M-Class in India. India will be among the first markets outside their home base, where such assembly is being planned. and foreign markets. They are likely to launch its new electric car, the fourseater Reva NXR, during Diwali and have lined up five new models, including three from Mahindra platforms and two from Reva, for launch till 2016.

Honda Cars sales rise 16 per Mahindra & Mahindra opens cent in September technical centre in Troy, Michigan
Honda Cars India Ltd (HCIL) reported an increase of 15.76 per cent in its total sales for September at 5,508 units. The company had sold 4,758 units in the same month last year, HCIL said in a statement. During the month, the company sold 2,815 units of its flagship sedan City and 2,064 units of Brio. It also sold 556 units of the premium hatchback Jazz and 47 units of Civic. To tap into highly skilled automotive talent pool of US, India's largest utility vehicle and tractor maker started a technical centre in Troy, Michigan to leverage on the regions design and consulting service resources. M&M intends to use this centre to support the company's requirements in India.

Nissan unveils India Plans
Nissan announced plans to introduce ten new passenger-vehicles by the end of March 2016. Intending to double its vehicle sales in the current financial year from last year's 33,000, the company is looking to have eight per cent share in the domestic market by 2016.

Mahindra Reva to launch five electric cars
Two months ahead of the launch of its next-gen electric car, Mahindra Reva is finalizing an aggressive product road map to expand its business in India

Special Focus : Mahindra & Mahindra beating the downturn ?
Due to increasing fuel prices and interest segment, including Verito and UVs, rerate pressures several auto makers re- ported sales of 23,808 units, which reported an increase of 22 per cent against ported a dip in their September sales. the sales of same tenure of last year, However Mahindra and Mahindra the which stood at 19,447 units. country's largest Utility Vehicle (UV) maker, bucked the trend and came up Expressing his views on the performance, with a 10 per cent surge in its total sales the Chief Executive—Automotive Division with figures standing at 48,342 units in the of the company, Pravin Shah said , ―We month of September 2012. Considering are happy with the performance and domestic sales of the company, M&M growth that we have achieved during delivered 45,263 new vehicles during the September 2012 over the festive season period, which was a growth of 10 per cent month of September 2011. We are hopeunder the review of 41,136 units sold in ful of a good performance in the upcomyear ago period. The passenger vehicle ing festive season.‖

Industry Talk
―If we hadn‘t undertaken localization, we would have been suffering due to 20 per cent devaluation of the rupee. Our Mr Micheal Boneham strategy is for high President & Managlevels of localization ing Director, – on high volumes Ford India of products – in the 80-85 per cent range, and a domestic and export strategy for both vehicles and engines. The export strategy provides a nice hedge for us. So, we have more flexibility to respond to what is going on globally‖

Indigo etc have increased their fares almost equaling that of frills airlines like Air India. The plane can travel a distance of over 16.33 percent by the Indian Oil Corporation. There is a reward. a lot of travel agents are also coming up with guidelines to the passengers that minimum fares may not be available in the so called ―LOW COST CARRIERS‖ and that utmost care should be taken while buying the air tickets. But many other analysts also believe that this is essential for the survivorship. The total order by Air India stands at 27 planes. which is considered to be the most fuel efficient aircraft in the world. it wants two maintain fairness in the ticket prices especially when two big airlines (Kingfisher and Air India) are forced to reduce capacity due to their financial problems.. Many experts also believe that Low Cost was never going to be an easy option for the airlines. it distorts competition. Still. Jet fuel prices see a cut The Jet fuel (ATF) prices have been cut down by 4. it distorts the market. but the execution of that is the question As long as the Indian government continues to provide support for Air India.711 per kilo litre earlier in New Delhi‘s IGI airport. proposition. It gets worse as in a few cases the prices are even higher than the frills airlines. As a comparison. . Kingfisher selling stake Kingfisher Airlines chairman Vijay Mallya is believed to be negotiating with a few foreign airlines in order to sell stake of the airlines. prices The CCI has maintained that it is keeping a close eye on the way hike is being done in the ticket prices.Month At Glance Abhishek Dadwhal September Aviation NEWS ROUND UP Air India receives first DREAMLINER After an almost four year delay and encircled with controversy. regular flight cancellations. This is a major step towards sustaining the financial woes the company is facing especially with the introduction of FDI. to be completed in the coming years. who resigned on 4 Oct. it creates an uneven playing field and I can't see how many airlines would be interested in investing while the market continues to be like that. there are talks doing rounds of Jet Airways finding a partner in Etihad Airways. Air India has initial plans to run it on domestic New Delhi – Chennai route and would later be used for international routes. As per CCI. CEO. KFA‘s inability to pay salary. Mallya selling stake in United Breweries to Diageo to raise funds for Kingfisher Airlines. access British Airways to a vast market.516 per kilo litre as compared to Rs 73. especially in a country like India where fuel prices constitute a major part of total expenses of an airline.000 km non-stop. 2012. Latest to jump ship was Company Secretary Bharath Raghavan . the low cost carriers like Spicejet. Thus. problem of safety regulations. No clear details about the talks and the potential buyers have been provided. Air India finally received the delivery of its first Boeing 787 DREAMLINER . Expert Talk ―Anybody who is looking at investing in Aviation in India now is going to say it's going to be an extremely difficult Willie Walsh . Kingfisher woes continue Kingfisher faces a near death scenario. It is done in order to keep a tab on cartelization but CCI cleared that so far the prices have moves up purely on the demand and supply factor. This is a first cut happening on over three months. the minimum fares in the non-peak season have increased up to Rs 40005000 from about Rs 2800-3000 in the past one year. and rumours of Spicejet talking with a Gulf based airlines. One of the major reason cited by the airlines for this is the robust demand in the industry all year. Competition Commission of India keeping a close eye on Special Focus : Low cost carriers no more low cost Feeling a hit in the finances..‖ . M&A Corner The recent allowance of 49% FDI in aviation hasn't really got any buzz going in the market. With employees including pilots going on strikes leading to partial lockdown. In India ATF constitutes for over 40 percent of total airlines‘ expenses. the airline is getting deeper and deeper into the crisis with fears of facing a closure. Now the ATF would cost Rs 70. It did help them fill their seat but didn‘t help generate enough revenue.

aries. the gold loan business has taken a hit in the first two quarters of this financial year. Canara Bank. 7. Even as companies expect a slight revival in the third quarter.5% of total exposure in the segment. of <9-10% v/s 11-12% interest rate on SEB cent and up to 100 per cent. The reto have a Tier-1 capital of 12% of riskcently announced reform measures weighted assets by April 2014. sharp drop in electricity The central bank had also directed production even as the manufacturing NBFCs having half of their assets in gold sector continues to stagnate. As per existing norms. Indian Bank. This move will help them increase their CAR. . with the mini- Banks to release funds to KFA on humanitarian grounds: SBI Kingfisher lenders have decided to release funds to the debt-ridden airline on "humanitarian grounds" considering that its employees have not been paid for the past seven months.Month At Glance Chirayu Gandhi and Vineet Gupta September BFSI NEWS ROUND UP State Electricity Board Relief loans. accumulated losses of state power distribution companies (discoms) are estimated to be about 2. a ―The IIP figures are dislarge customer base has shifted to the appointing. are Package: Benefit to Banks? status. Government relaxes norms for setting up arms for foreign owned NBFC Non-banking financial companies (NBFCs) with foreign holding of more than 75 per Special Focus: NBFCs gold loan business loses shine over tough norms After registering rapid growth for the past few years. Loans have revived business confidence to against bullion and gold coins for NBFCs some extent. What is of unorganized segment for better reserious concern is the t u r n s . duly backed by state governments guarantee. This is a first of its kind marriage of the strengths of a bank and an oil distribution company to make modern banking services available to the people residing in semi-urban and rural India that remain inaccessible by the current branch network. Beginning with Pilibhit. This has become a banks to bring down the credit exposure necessity now to kick start the investto a single NBFC from existing 10% to ment cycle‖. This shall be first converted into bonds to be issued by discoms to participating lenders. Repayment and interest payment will be done by state governments till the date of takeover. which is likely to fetch up to Rs 60 cr for the carrier. Earlier this year. with a minimum capitalization of USD 50 million are allowed to establish any number of step down subsidiaries for specific NBFC activities. Prior to that. Bankers after an emergency meeting had agreed to release funds from escrow accounts. HDFC Bank plans to cover 1000 KSKs in a phased manner and each of these outlets will be able to serve around 1.now allowed to open any number of subsidiAs per CCEA.17-bank consortium has Rs 7. Andhra Bank and Vijaya Bank having high exposure to SEB advances ranging from 4% . Non-banking finance companies (NBFCs) offering gold loans say growth has declined despite increased prices of gold offering better leverage (more loans) to the consumer.000 cr outstanding to the airline. which is negative from the perspec. HDFC Bank and Indian Oil join hands to provide banking services in rural areas HDFC Bank has announced a tie-up with IOCL where its rural petrol pump outlets KisanSevaKendras (KSKs) will act as the Bank's Business Correspondents (BCs). SBI has already classified its 1580 crore advances as NPA and the airline is a cause of concern for other banks too.500 customers. Beneficiaries are banks like BOB. The takeover can be in the form of equities or any other security receipt. what is required now is a too were banned and the RBI had asked cut in repo rate. Consequently.owned NBFCs.46 lakh crore as on March 31. executives say gold loan growth will be in the range of 10-15%. Total 50% of these outstanding liabilities will be taken over by state governments. BOI. This could also impact the earnings for banks as bonds may carry an interest rate tive of banks.10% of their total advances. Central Bank. only 100 % foreign. Dena Bank. most India Inc asks RBI to cut interest rate CII Director General NBFCs had been offering LTVs up to Chandrajit Banerjee said 70% of the gold value. RBI had capped the loan-to-value(LTV) ratio for Industry Talk NBFCs at 60%. The bonds are unlikely to get SLR mum paid-up capital of USD 50 million. Concern: The package will become fruitful only if SEBs improve their financial performance via tariff hikes and T&D loss reduction. 2012. owing to the tightening of norms by RBI.

has resumed talks with Diageo. eign investment Chairman. not a Zero Sum Game With every person believing the fact. it‘s not a zero sum game. with Mr. here‘s the reality. Colgate’s market share at 15 year high Colgate Palmolive India increased its share in the toothpaste market to 54. ITC Ltd venturing into new food segment categories India's biggest cigarette maker is going on a health kick. Vijay Mallya owned United Spirits. After all. We have the infrastructure and the back-end. The farmers might benefit by the incoming cold storage and storage warehouses but the need of the hour is also to bring in expediential reforms in the agricultural sector. Looking to cater to the ―bottom of the pyramid‖ i.e. With the influx of FDI. Rs. Hence. Yes. both direct and indirect.4% an year ago. electronics– just to name a few. With a growing economy and consumer spend. it may increase to a maximum of $150bn. Noticing the sales trend in India for HUL by the introduction of Rs. Future Group but if you ask me all– NO. Though the effective price hikes have been in the range of 6% to 9% . Already competing with the likes of HUL and P&G. Industry Talk ―We have different formats from lifestyle. the small packs and cheaper variants taking a cue from HUL. or through reduction in grammage as in the case of Maggi by Nestle. but it is not the only solution to India‘s problems. With people turning to health conscious choices in the food segment. across consumer segments along with a 32% increase in advertising spend were the major drivers behind this growth. The price hike has been through direct price increases as in the case of variants of Close Up by HUL and select SKUs of Navratne cooling oil by Emami. the momentum has slowed down as compared to the months of June and July with fewer hikes as well. ITC plans to enter into it.5 and Rs. There are also expectations of P&G launching Crest in India making the competitive scenario more intense. one problem it faces is capturing the market size in this segment. The deal is expected to be a stake-sale. Out of the current $470bn of retail merchandise consumption in India. medium & large retail cater to only $33bn. We are nearly 4 times bigger than our closest competitor . Uniliver has incorporated the same into their international markets launching products at $1 or £1 and lower grammage. Already selling cookies as the likes of Sunfeast biscuits and potato chips with the famous name of Bingo. which still leaves a gap of $223bn for the small stores to latch on. India's second largest alcoholic drink maker. dairy & healthy breakfast choices would not be a difficult stretch for the company. In that sense . it wants to increase the revenue by capturing this market. to cater the growing demand.Month At Glance Zain Khan & Shrey Tandon September Consumer Goods & Retail NEWS ROUND UP Diageo set to buy United Spirits stake Dr. for a possible stake sale after failure of similar talks in 2008. Mallya offloading a part of his 28% stake in the company and ceding management control to Diageo. the highest since 1998. Hence. The talks are seen as the second boost for the ailing airlines. hypermarkets. after the Government allowed FDI in Aviation earlier in the month.5%. kirana stores will shut down with the induction of large Multi brand retail stores. the retail industry outlook looks bright. low consumer confidence and slower growth in GDP. 10 packs of consumer goods.1. customers who want a particular value at a particular price.‖ . FMCG companies continue with the price hike trend Product prices of FMCG companies have continued to rise in September despite high inflation. by a staggering 10mn in the next 10 years. bringing in FDI will not hurt anyone. in some of them. from 52. the world's largest producer of spirits. we will bring in forMr Kishore Biyani. we have a huge start. Launch of new extensions and innovations Unilever incorporates HUL strategies to developed markets Uniliver has ventured into a new strategy - Special Focus : FDI in Retail. This is aimed at reducing UB Group's huge debt of Rs 8600 crore and saving Kingfisher Airlines which has amassed debts of about Rs 9000 crore. increasing the number of jobs in the retail sector.

The old-school mentality of seeing labour only as a necessary evil. many BPO/ITeS companies are strengthening their bench strength in cities such as Lucknow and Jaipur owing to the escalating manpower and logistics cost in metros.Performance driven world forms in Industrial Disputes Act also to faciliChief Consultant. In a first such initiative globally. Within China and India. Labour reforms should have started alongside economic reforms in the 1990s. Indian comcomprehensive view on panies are acquiring companies abroad labour market reforms is required. While up to 15% of the workers would still be temporary hands. Indian laKrishna said in the bour laws are so numerpresent world everyous. new R&D locations are emerging. There is a dire need for re. Beijing and Shanghai have drawn so much R&D investment they are experiencing a shortage of scientists and engineers. BPO/ITeS companies would rather spend to train people and set up new offices than pay exorbitant salaries in metros and tier I cities. which calls for investments in the employment generating sectors. the Indian offshore arm of Microsoft's IT engineering division is trying to persuade women techies who have taken a career break for personal reasons such as marriage or child birth to come back to work. Well-established centres such as Bangalore. who can be poached. A downturn forces organisations to change their strategy to remain competitive and cost-effective. R&D centres like Bangalore. A ness is shifting towards Asia. but we are still working with old archaic labour laws and labour reforms are required to attract investors in the employment generating sectors. . but recruitment firms have gone into a huddle to ensure they bag the mandates from retail companies about to enter India.Month At Glance Garima Chib September Human Resourse NEWS ROUND UP Microsoft work offer for stay-at-home moms Microsoft-IT India is turning to an unlikely talent pool to find more employees-stay-athome mothers. have all had urgent calls with their global heads and discussed strategies to outdo their competitors. Staffing and executive search firms such as Kelly Services. Jayant same time. Center of gravity of global busiindustrial relations. Ikya Human Capital. At the vices (TCS). they would be paid on par with the permanent staff. India and China are attracting the lions' share of new R&D investments in Asia as there is a greater availability of workers with the right skills and experience. and an optionor any other tailor-made solution that techie moms demand. It has also decided to dump its practice of hiring contract workers through contractors. Current labour laws have failed to attract foreign investments in potential environment gener- Industry Talk ating industries. one that hence the world is becoming flatter . The point is to put in place managerial practices and incentives to align workers‘ interest with those of the enterprise as a whole. a cost to be kept as low as possible. Randstad. Names have been sent to parent companies on domestic retail and supply chain heads. is a shortterm view on par with shipping a consignment of shoddy goods to make some extra money on one export order. complex and even thing is performance ambiguous that they driven and to achieve excellence in perpromote litigation rather formance organizations need to focus on than the resolution of employees and in fact more than their cusproblems related to tomers.com RecruiteX report. facing skill shortage: Mercer According to the report from the Economist Intelligence Unit and commissioned by Mercer. Tata tate smooth working of Consultancy Serthe companies. BPO and ITeS companies eyeing talent in smaller cities According to the latest TimesJobs. to eliminate complaints about wage discrimination. flexible working hours. Maruti’s wage hike: Learning for companies Maruti Suzuki has given its workers a frontloaded three-year wage increase of up to 75%. FDI in retail: Action in job and placement market The decision to allow FDI in retail has spurred action in the search and placement market. They are offering reskilling and mentoring. regardless of what it means for their living standards and morale. These are early days yet. addresses the needs of both employers and workers. Special Focus: Labor Reforms call of the hour Labour Reforms have become important as India would require millions of skilled labour in the next 10 years. Team Lease and Maxima Global.

the entire country needs to go digital by 2014 and industry estimates suggest investments to the tune of Rs 20. As the spectrum allocation rules have changed from subscriberlinked criteria to auction there is no in- Industry Talk centive for operators to bear the cost of IT Cos exploring New Markets Indian IT and BPO offering services to inactive users. shorter product life cycles of engi- Indian smartphone users spend more on 3G services According to a study done by Ernst & Young. This will be about 35 per cent of the overall ER&D market. Indian subscribers are spending more than the Chinese and the Russians ($26 and $32 for post paid and $29 and $29 for pre paid respectively).423) for Special Focus: Mobile subscriber base dips for first time since 1994 The share of active mobile subscribers has jumped to 78 per cent as mobile companies eject inactive users.000 crore are required.4 Mhz spectrum will have to pay a one-time fee for the remaining period of their 20-year license. pre-paid card subscribers. Operators using CDMA technology will have to pay for all spectrum over 2. companies are exploroperators could get more spectrum if they ing new markets like amassed more subscribAfrica. While 49 per cent FDI will be allowed through automatic route. of which 701 million are considered active users or those who make a call or send an SMS at least once in 60 days.000 crore. FDI limit increased to 74% in broadcasting sector The increase in FDI limit to up to 74 per cent in broadcasting carriage services that include Direct to Home (DTH).2 billion. Government nod will be required to increase it to 74 per cent in these services.4 Mhz The Empowered Group of Ministers on Monday decided that all GSM operators with more than 4. this market is pegged at $10. The availability of skilled talent pool coupled with a shortage of engineers in the developed markets is also another factor favoring Indian engineering service providers.5 Mhz. The biggest impact amounting to 10000 crore will be on state-run Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd since they have as much as 10 Mhz spectrum in most circles. Among private players. this one -time fee could mop up about Rs 27. digital cable networks and teleports besides mobile television will help bring in the much needed investments as the industry is gearing up for digitization. years. The share of active users was 68 per cent of the total subscriber base a year ago. As a result of the West Asia. decreasing time to market and flexibility in offering end products. the average monthly spend of 3G smartphone users stand at $43 (Rs 2. good for The telecom Suparno Moitra said. The total telephone user base now stands at 939 million.Month At Glance Manpreet Singh and Ravi Singla September IT. Currently. There nies is beginning to inis also increasing demand from uncrease for the first time tapped emerging markets (10 per cent)‖ in many years. Earlier. This is Nasscom Regional Manager (East). ―The major clean-up exercise the Average Revenue Per markets for software exports is still the User for telecom compa. The growth is attributed to flexible business models. . Japan. Telecom and Media NEWS ROUND UP EGoM decides for one-time levy on spectrum in excess of 4.45 billion by 2020. neering companies. The Indian IT-BPO companies which have been struggling industry had total software export $69 with declining revenues for the past two billion financial year 2012 .000-25.267) for post-paid users and at $27 (Rs 1. Indian engineering services in demand. and ers. While this is still lower than what 3G users in the US and UK ($115 and $59 for post paid and $78 and $52 for pre paid respectively) spend. which is estimated to reach $118 billion by 2020. This is a good sign for Indian telecom companies that have been struggling to improve their revenues with the average revenue per user from voice services at only about $2 (Rs 105) a month. If imposed. says Nasscom According to a report released by Nasscom and Booz and Company Indian engineering research and development outsourcing industry is set to reach $37. Bharti Airtel could end up paying the most at 4400 crore. The four metros need to be digitized before November.US (accounting for 62 per cent of exports) and Europe (28 per cent).

2463. price for making shale gas investments. Hydrocarbon found in the form of shale gas has. and the industry continues to undergo a stall in drilling permits and lease sales. RIL has acquired shale acreages in the US. Fewer than 2. diesel prices are hiked by nearly 13%. industry (10%). transformed the energy scenario for the world‘s biggest energy consumer. Oil exploration is still struggling to achieve pre-2010 drilling levels. tilling and transportation. OIL-IOC now joins Reliance Industries Ltd. Diesel is used for diverse purposes —trucks (37%). would show that the government is not suffering from ‗policy paralysis‘ as it is being accused of. (GGCL) to state-owned Diesel price hike by 13 pc and cap on subsidized LPG The government has hiked diesel price by a steep Rs. These companies submitted their comments to draft shale gas policy last month. the US. The government is looking to launch the first shale gas auction by December 2013 and is working on the policy that could be finalized by year-end.S. Industry Talk IT Cos exploring New Markets Like most industries. The government should emphasize that this measure will not affect the 70% of the population that lives in rural communities and depends on diesel for their pump sets.5 billion cubic meters of annual production by 2015. The current market price is around Rs. The joint venture would spend $230 million over the next 3-4 years on the shale property.Gujarat State Petroleum Corp (GSPC) for Carrizo Oil and Gas’s shale gas perience with the D6 gas allocation. .5 million (about Rs.2464 crores BG Group has sold the controlling stake in Special Focus: Mobile subscriber base dips for first time since 1994 India is on the edge of a "fiscal precipice" and should urgently slash fuel. power generation (8%) and rail (6%). but now increased by just 5% in September 2012 as compared to 9. oil-and-gas workers are keeping an eye on the November presidential election. water availability and handling. The acquisition is in the long-term interests of the industrial and retail customers of Gujarat. Diesel demand had been growing rapidly after the government decontrolled petrol in June 2010. from close to none this year. Gujarat Gas Co Ltd.428 crores). an allocation policy for shale gas. (OIL) and Indian Oil Corporation (IOC). (RIL)‘s ex.750 per cylinder.5 per liter and decided to limit sale of subsidized LPG to six per annum to a consumer. buses (12%).two state owned oil companies announced buying 30% stakes in Houstonbased Carrizo Oil and Gas‘s Niobrara shale oil and gas assets in Colorado for $82.1 percent of GDP this fiscal year. would save several thousands of crores in diesel subsidy and change the country‘s direction towards the road to fiscal rectitude. While a consumer can now get up to six LPG at subsidized rate of Rs. China will soon launch a second round of shale gas auctions and is targeting 6. food and fertilizer subsidies to curb a budget deficit that could hit 6. leaving many tentative to predict the future. Recently. he will have to shell out the market price for additional quantities. President Barack Obama continues to push alternative energy resources. assets suggested the government should not have The acquisition makes GSPC the country's Oil India Ltd.8% in September 2011. OIL will acquire 20 per cent and IOC will get 10 per cent in the DenverJulesburg basin in Colorado. passenger cars (15%).8 crores after lengthy negotiations. Removing the subsidy on diesel for sales in the 50 biggest cities might be politically more palatable than total removal of subsidy on diesel. Meanwhile.399 each. This would be the first purchase of shale gas assets abroad. largest distributor of natural gas with total volume of close to 8 million cubic meters a day. Other critical issues highlighted by the companies relate to land acquisition. price clarity in shale gas policy Oil and gas exploration companies like British Gas and Essar Energy want clarity on pricing and gradual linkage to international GSPC buys 65 pc stakes in Gujarat Gas for Rs. they Rs. over the past few years.Month At Glance Himanshu Arora September Oil & Gas NEWS ROUND UP OIL and IOC buy 30 % stake in After Reliance Industries Ltd. would not affect rural residents in any significant way.000 workers are on rigs in the Gulf of Mexico. The synergy between GSPC Group and GGCL will benefit all the stakeholders. Companies want allocation. agriculture (12%). which produces both natural gas and liquids. and GAIL India in race for securing shale gas assets in the U.

The Mumbai based drug maker witnessed gross sale of around Rs. 3 FDI proposals cleared by Government in Pharma Government of India has cleared 14 FDI Tata Group’s Advinus Pharma ties proposals worth Rs.happy as they are concerned that their sumption nature and absence of sufficient multinational partners getting hit. Switzerland's Roche Holding AG filed a patent infringement case over Cipla's cancer drug Erlocip and the Delhi High Court ruled in favour of local pharma major Cipla Ltd. ―We believe the decision undermines intellectual property rights in India and we will vigorously defend our basic Sutent patent. said. Pfizer to challenge Indian Patent Office for revoking patent on its cancer drug Pfizer will appeal before the Intellectual Property Appellate Board and challenge the country's patent office for revoking a patent for its cancer drug 'Sutent'. 1995. Under DPCO. or if a single formulator has a market share of 40% or more. would be insulated from the policy. Lupin has filed for 13 ophthalmic products.‖ Though the policy looks pro-consumer however much thoughts are required to be given before concluding. and holding out nership to carry out business of establishinvest Rs.35 crore including up with Takeda Pharma for drug 3 from pharmaceutical sector (Rs.05 crore). managing director of Pfizer India. indicating the multinational companies‘ growing market interest of pharmaceuticals specializing in dermatology. Kamal Sharma. find it difficult to sustain MD. The company currently has 10 manufacturing plants (2 in Japan and 8 in India).ing and managing short stay surgery cenIndia‘s third largest pharmaceutical company by revenue Lupin is planning to set up two manufacturing plants in the country to meet increasing demands for drugs from advanced and emerging markets. if it has an annual turnover of Rs 4 crore or more and there are less than five bulk drug producers or less than 10 formulators. The research will be spread over three years. 81. 500 crore for new units hope for start up firms engaged in re. Faced with patent expiry and generic competition in markets like the US. Still 70% of medicine is outside the boundary of rules. 500 crore on the new plants for manufacturing formulations and active pharmaceutical ingredients. Lupin looking at sustaining 25-30 per cent growth in the US generic market. the Indian Patent Office's decision raised concerns over country's seriousness to protect intellectual property.Month At Glance Sebabrata Banerjee SEPTEMBER Pharmaceuticals and Healthcare NEWS ROUND UP Lupin Pharmaceuticals plans to in Indian drug research. . The company proposes to bring FDI worth Rs 14 crore in the venture. anti-histamines. The basic parameter which brings any Moreover Indian companies are also not drug under price control are its mass con. It will take around 3 years for these plants to be functional as the management expects to commercialize the units by 2014. As per the company. is going to impact the MNCs most. Companies like GSK Pharma who enjoy premium pricing of their brands would be affected the most while Indian players like Reddy‘s and Ranbaxy who also have a presence in export space. multinational giants are on the lookout for every possible company and startup that would help them stave off future challenges. companies investing in technology. trying to increase presence in difficultto-manufacture product segments such as oral contraceptives. Jazz Tobaccowalla. However. and may expand further.‖ Last month. Advinus will receive guaranteed funding of $36 million from Takeda to explore novel molecules in the areas of inflammatory disease. ters in India with its flagship center in Pune. Lupin Limited post the patent-cliff. 113. anti-asthma and dermatology should be able to sustain growth even beyond the patent cliff. The goal is to carry out the business R&D Advinus pharma has entered into a joint drug discovery deal with Japanese pharma giant Takeda Pharma. Industry Talk On ―Can Indian companies sustain the current growth pace in the US market?― ―Marginal players may Dr. Players like Prime Surgical Centers Private limited was given clearance to set up Limited Liability Part- Special Focus : MNCs to be affected by new drug pricing policy The new drug pricing policy in pharmaceutical industry which intends to take the number of essential drugs under price control regime to 348 (30% of pharmaceutical industry) from 74 currently. any bulk drug and its formulations would invite price control. antibiotics and oncology products. competition. the revenues from which should start flowing from FY14. central nervous system and metabolic diseases. 7000 crore in 2011—2012 is expected to invest close to Rs. search.

FDI in power exchanges will not only help bring in more funds but technological knowledge also.000 MW is also planned.000 MW wind. dia currently holds 84. Indian Energy Exchange (IEX) and Power Exchange India (PXI) are operational and they are trading about 2% of the total 800 billion units generated in the country. restricted to the secondary market and no single entity is allowed to hold more than five per cent stake. Power generation capacity of Government has allowed 49% foreign inthe government stake would come down to 88000 MW is targeted in 2012vestment in power exchanges . 2011. which would restructure the debt of distribution companies by asking state governments to take over half of their shortterm debt. The rising cost of conventional power.000 MW Sasan ultra mega power project in Madhya Pradesh has been connected to the national grid.Month At Glance Manish Gupta September Power and Utilities NEWS ROUND UP 49 % Foreign Investment allowed the current fiscal. Grid parity is the point at which the cost of solar power equals the cost of utility power. due to volatile market conditions. The package makes it mandatory for state governments to go for annual revisions of power tariffs. Reliance Power’s Sasan UMPP gets connected to national grid Reliance Power‘s 4. Adding a grid interactive renewable capacity addition of about 30.000 crore in Special Focus: Govt. State-government controlled power distribution companies had accumulated losses of Rs 1. however. With the proposed disinvestforeign direct investment (FDI) and the rest 2017 via foreign institutional investors (FII). to recast power discoms’ loans The Centre has announced a debt restructuring package for the distribution companies.26% via 75 per cent. This was primarily due to the non-revision of tariffs.425 MW. the government had to postpone the sell off process in some PSUs. Post disinvestment.000 MW.100 crore. By 2017. the target for the 12th Plan has been fixed at 88. from conventional sources.5% stake sale in NTPC The government has initiated the process for sale of further 9.50 per cent stake in in power trading exchanges the Maharatna company. The Cabinet Committee on Economic Affairs (CCEA) approved the package. . Last fiscal. The share of the private sector in the additional capacity will be 52 per cent compared to the target of 19 per cent in the 11th Plan. and provide for faster retirement of the old energy inefficient plants. with the remaining to be rescheduled by lenders.000 MW solar. The project is now ready to draw power from the grid to provide startup power for the first 660 MW unit which is nearing completion. In order to bridge the gap between peak demand and peak deficit. It comprises 15.50 per cent in state-run power generation major NTPC to meet its disinvestment target of Rs 30. convert loans to equity and bring in private participation in distribution. FII purchases are.seven states from the Sasan UMPP. Another two power exchanges are planned and they include National Power Exchange and Marquis Energy Exchange. ment. The same switchyard would enable evacuation of the power to Government initiates process of 9. the government is expected to mop up about Rs 13. Industry Talk India‘s solar capacity has grown from less than 20 Mw to more than 1.000 crore. The 11th Plan aimed at 78. The 400 Kv switchyard at the Sasan Ultra Mega Power Plant has been commissioned and with this the Sasan UMPP is now connected to the national grid.000 crore in 2011-12 against a target of Rs 40. The Planning Commission had earlier estimated a capacity addition requirement of 75. this could grow to 12. 10. 2. It raised only Rs 14.577 MW capacity addition. as of March 31. The package comes a decade after the Union government extended a similar one-time settlement of state electricity boards‘ dues. but achieved only close to 52.9 lakh crore. alongside a steady decline in solar power prices could result in solar projects reaching grid parity by 2014. which increased the gap between the cost of supply and average tariff to 145 paise a unit (kilowatt per hour) in 2009-10 from 76 paise in 1998-99. The Government of In.000 Mw in the last two years.785 MW in the next five years.500 Mw of solar power generation capacity.100 small hydro and the balance primarily from bio mass planned. Currently.

Currently. The project Godrej Summit.adjourned the matter to November 21. the realty firm. This is company's second project in the National Capital Region. he said. this is close to double the investment of Rs 27. The tribunal had also asked DLF to file one draft agreement before the commission.14% of the GDP as compared to 7. a COMPAT bench -. the figures in dollar terms were revised in view of falling value of rupee. sale agreement in DLF case stock exchanges. . Pirojsha Godrej. expected to triple in the next decade from the present 30%. will be developed in partnership with Zara Sanya under an area sharing agreement. accounting for nearly 15% of the total input.Month At Glance Abhinav Mishra and Aakash Gulati September REAL ESTATE NEWS ROUND UP COMPAT gives CCI time to modify According to bulk data available with the up more than 3% after this announcement. Citigroup Global Markets 12th Plan infrastructure plan outFair trade regulator CCI sought more time (Mauritius) purchased 42.has high potential. Labour costs. other costs also move up leading to overall higher costs.000 sq ft and the company hopes to rake in Rs 1. Planning Commission Member B K Chaturvedi has said.05. COMPAT had directed the CCI to complete the process of modifying draft sale agreement by the end of September by giving "top priority to this matter".DLF Park Palace and The Belaire. Infrastructure sector investment as percentage of the Gross Domestic Product (GDP) is projected to rise steadily to 10. launch of 17 new projects. has increased by 30-40% since the past one year as availability of skilled workers is constrained. "The construction process is highly dependent on the manual work and hence labour component is critical.200 crore revenue from this project.headed by Chairman Justice VS Sirpurkar -. he cautioned that such potential has to be assessed on medium-to-long term basis. Labour shortage causes delays in projects and raises the input costs leading to cost over-runs. He asked American investors to have confidence in India and its market. The Planning Commission is targeting for an outlay of Rs 51.081 shares in from the Competition Appellate Tribunal lay aimed at Rs 51. the construction industry is facing a huge manpower shortage. will negatively impact the overall productivity of the sector. not high risk. warn industry experts.40% in the terminal year of the 12th Plan (2016-17).which has been has been pegged at around USD 1 trillion over next five years .46 lakh crore in infrastructure sector during the 12th Plan period (2012-17). The average investment in infrastructure sector as a whole is likely to be about 9. marginally lower than the earlier projection of about Rs 55 lakh crore (US$ 1 trillion). they are planning a Citigroup Global buys 42 lakh shares in HDIL Foreign fund house Citigroup Global Markets (Mauritius) today acquired more than 42 lakh shares in realty player Housing Development & Infrastructure (HDIL) for over Rs 33 crore through open market Special Focus: Skilled labor crunch in construction A severe crunch of skilled manpower in construction industry. On July 18. MD & CEO of Godrej Properties said that Phase I. The stock shot Godrej Properties starts project ‘Godrej Summit’ Leading real estate player Godrej Properties would invest up to Rs 600 crore in developing a residential complex in Gurgaon over the next five years. Investment in India's infrastructure sector -. The average rate was under Rs 6. The shares were sold on an average price of Rs 80 valuing the deal to Rs 33.74 lakh crore realised during the 11th Plan. Going forward. Although the Prime Minister in March 2010 had pegged the investment target for infrastructure sector USD 1 trillion. especially those with skill-sets. But." Cushman & Wakefield executive director (corporate and investor services) Sumit Rakshi said. transaction. Accepting the request.63 crore.22% during the previous Plan.46 lakh crore (COMPAT) to complete draft modifications in the sale agreement between realty major DLF and flat owners of two of its housing projects at Gurgaon -. When there is a delay in project due to labour issues. in which GPL will hold 65% stake. which comprises of 50% of the whole project has been sold on the first day itself. However. to sustain growth in infrastructure and real estate sectors. Industry Talk US Biz in Indian Infrastructure Sector India's infrastructure sector is poised for a big leap and offers significant investment opportunities for US businesses and other investors.

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