Financial News for the Week 19/8/2013 to 22/8/2013

Debt at top 10 business group increased by 15% as compared to last fiscal The Countries 10 leading business houses including reliance group, Vedanta, Essar, Adani have seen their total debt level soar by 15%. The collective debt rose to Rs 6 lakh crore. It is likely to increase more due to the continuum in rupee depreciation. FDI Limit in ARCs Raised to 74% from 49% with a Rider The Reserve Bank of India has increased the ceiling for foreign direct investment (FDI) in asset reconstruction companies (ARCs) from 49% to 74% subject to the condition that no sponsor may hold more than 50% of the shareholding in an ARC either by way of FDI or by routing through an foreign institutional investor (FII). The foreign investment limit of 74% in ARC will be a combined limit of FDI and FII. Govt Mulls Currency Swap to Stabilise Rupee Starts internal discussions on entering into currency swap lines with its large trading partners The government has begun internal discussions on entering into currency swap lines with its large trading partners in a bid to provide stability to its currency. The idea mooted by the commerce and industry ministry has backing within some sections of the finance ministry as well. The Indian currency crashed to 63.13 to the dollar on Monday. We do not have a strategy on currency swaps now. The idea is to examine such agreements, said a government official privy to the development. Samsung Beats Apple to the Wrist Its watch-like phone will debut next month It looks like Samsung not Apple! will be first to market with the product weve all been expecting since David Hasselhoff used a souped-up digital watch to summon his talking Trans-Am. Thats right, a wristphone, known as the Galaxy Gear, will apparently debut next month. It will be able to surf the Web, make phone calls, and send e-mails presumably, short ones. Whats really interesting is that Samsung, not Apple, is getting there first. Pop This: A Business that Makes Slowdown Corny Why popcorn business is booming in India, with high sales & margins and new investments Where, everyone is asking, is a business thats got some serious pop and crackle? With double-digit growth rates, new investments, great margins? If you are watching a movie, you are most likely munching on the answer. Popcorn, that eternal movietime munchy, has become a sizzling business in India, as much of a slowdown-buster as

movies are. Sales, say industry watchers, are growing 10% annually. Nationwide regularised production, sales and profit data on the popcorn business is tougher to find than a Bollywood movie with a tragic ending. But ETs close study of the popcorn economy produced enough evidence to support the claim that the business of heating corn kernels is, well, a hot new business. Consider the following: So high is the demand that despite a 56% Customs duty on quality imported corn (sourced mostly from the American continent), the two major popcorn players Agro Tech Food, which has India rights for American company Con Agras Act II brand, and Banaco Overseas import around 23,000 tonnes annually. That makes a lot of multiplex-style popcorn tubs (35-120 gm) and microwavable popcorn packages (50-100 gm). Agro Tech didnt respond to ETs questions, though Banaco did. Agro Techs import estimates are sourced from industry. PVR, Indias leading multiplex chain with 383 screens in 90 locations, sells on average 18,000 popcorn tubs daily. Popcorn sales are growing very fast, says Rahul Singh, senior VP, operations, PVR. Banacos proprietor Vinod Kansal says 70% of multiplex revenues come from popcorn and soft drinks. Banaco supplies corn kernels to almost 80% of Indias 500-plus multiplexes. You now know just the Khans cant keep movie halls going, they need the corn too. The popcorn business has margins that the wildest movie script cant dream of. A bulk supplier of corn kernels, who did not wish to be identified, said the raw material is sold to movie halls for . 120-130 per kg. You buy, say, a 110 gm of popcorn tub in a multiplex for . 150. The retail price of popcorn is around . 1,500 a kg. Accounting for everything from equipment to labour to packaging costs, thats an eye -popping margin. Popcorn Entrepreneurs

RBI Faces Uphill Task as Re Touches New Low of 64.62 Super Rich with over 10-cr Income mayve to Pay 35% Tax RBI to buy 8000cr bonds on Friday 23rd august to ease liquidity SEBI Auctions out government bonds worth $9.34 Billion Egypt, Syria Civil Wars to Hit Spices, Tea & Rice Exports Bloodbath in Egypt and political unrest in Syria have impacted spices, tea and rice exports from India. While spices exports are down by 50% to Egypt Coal shortages in India are likely to remain at elevated levels in the medium term due to following factors. First, the current coal production level falls short of the requirements for coal. The total production of raw coal in the country during

2012-13 was 558 million tonnes (MT). As per the 12th Plan document, this gap is projected to increase to 185 million tonnes by 2016-17. To meet the gap between overall demand and domestic availability of coal, 138 million tonnes of coal was imported during 2012-13.

INSPIRATION MOVING UP THE LADDER AND LEADING FROM BEHIND

SO O N a f t e r K R a m a n Ramanan passed his 10th standard, his priority was a job to fend for his six-member family. His mother worked as a housemaid after his father, the sole breadwinner, passed away. We were very poor and I couldnt study further, he says. His mothers employer recommended Ramanan to CJ George, owner of Geojit Securities, a brokerage (now, Geojit BNP Paribas Financial Services). Ramanans initial job, in the late-1990s, was to run to the well of the Cochin Stock Exchange, and scream to buy and sell stocks for Geojit clients. Those were the days of outcry trading, unlike the electronic and Internetbased trading of today. He also had to collect share certificates from clients or deliver them. For all this, Ramanan earned Rs 250 a month. After a few years of working the lower rungs of a broking operation, Ramanan was promoted to Geojits clearing and settlement department. His work was to verify, codify hundreds of share certificateswhose worth could go up to Rs 3 croreand ferry them to the National Stock Exchange office inMumbai for registration. The excitement was flying in planes to Mumbai, says Ramanan. There were also risks. Once, in 1997, Ramanan lost 100 shares of Satyam Computer (now Tech Mahindra), of Rs 1 lakh in value. He walked into his boss room for a loan to buy shares for the client and a promise to gradually repay from his monthly salary of Rs 9,000. Forget it now, buy 100 shares and deliver to the client, George told him. In any other firm, I would have lost my job, says Ramanan, who completes 26 year in Geojit. In 2007, French bank BNP Paribas purchased 26% in Geojit, and Ramanan started reporting to a German boss, who recommended him for a promotion a year on. As Geojit grew to 500 branches, Ramanans workload increased. At present, he is an assistant general manager in the compliance department, with a senior above him. His job entails visiting the brokerages branches to ensure that they are following Sebi rules. He owns a 1,600 sq ft house and drives a Santro. For a school dropout who started at the basement of the brokerage business, Ramanan has climbed well.