SectorSnippets Issue 27:TP4 WhitePaper A4.QXD · Page 2 of 16 Sectoral Snippets About Sectoral...

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Sectoral Snippets India Industry Information Issue 27 - January 2009 KPMG IN INDIA

Transcript of SectorSnippets Issue 27:TP4 WhitePaper A4.QXD · Page 2 of 16 Sectoral Snippets About Sectoral...

Page 1: SectorSnippets Issue 27:TP4 WhitePaper A4.QXD · Page 2 of 16 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter

Sectoral SnippetsIndia Industry Information

Issue 27 - January 2009

KPMG IN INDIA

Page 2: SectorSnippets Issue 27:TP4 WhitePaper A4.QXD · Page 2 of 16 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter

Page 2 of 16

Sectoral Snippets

About Sectoral Snippets

Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter brought out by

KPMG in India. This newsletter provides an overview of the Indian economy in the form of

news-briefs from across key sectors.

Contact [email protected] if you are interested in receiving this newsletter on a

regular basis, or wish to unsubscribe.

Table of Contents

1. Indian Economy 3

2. Auto and Auto Components 4

3. Banking and Insurance 5

4. Consumer Markets and Retail 6

5. Hospitality 7

6. IT / ITeS 8

7. Media 9

8. Oil and Gas 10

9. Pharma 11

10. Power 12

11.Real Estate and SEZs 13

12.Telecom 14

13.Transport and Logistics 15

Sectoral Snippets, Issue 27

Even�as�the�Indian�Government�announced�afresh�set�of�economic�and�fiscal�measures�in2009,�Satyam’s�founder�and�CEO�B�RamalingaRaju�formally�admitted�to�manipulating�hiscompany’s�accounts�for�years�to�the�tune�ofaround�INR�7000�crores,�earlier�this�month.While�investigations�into�the�extent�andmechanism�of�the�fraud�are�underway�by�thecapital�markets�regulator�(SEBI),�Serious�FraudOffice�(SFIO)�and�other�regulatory�authorities;the�Government�has�stepped�in,�appointing�anew�board�and�considering�other�ways�ofrestoring�confidence.�

As�the�Indian�economy�aims�for�all�inclusivegrowth�in�the�year�ahead�amidst�the�presentinvestment�climate�and�economic�conditions,efforts�are�on�amongst�all�the�constituents�tostrengthen�shareholder�and�investor�confidence

I�hope�you�find�this�edition�of�Sectoral�Snippetsinformative�and�useful.

Regards,

Russell

Russell Parera

Chief Executive Officer

KPMG in India

©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

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As�a�bleak�economic�scenario�persists�globally,�the�Reserve�Bank�of�India�(RBI)

has�sharply�cut�interest�rates�since�July�2008�to�re-instill�confidence�and�improve

spending�in�the�domestic�economy.

In�December�2008,�RBI�slashed�its�repo�rate�to�6.5�percent�from�7.75�percent�at

the�beginning�of�last�year,�when�it�had�to�raise�rates�to�provide�respite�from�a

rapidly�rising�inflation.�It�also�cut�the�reverse�repo�rate�to�five�percent�from�six

percent.

To�ease�the�pressure�on�liquidity�in�the�banking�system,�RBI�had�also�cut�the

cash�reserve�ratio�(CRR)�to�a�low�of�5.5�percent�in�November�2008�from�7.50

percent�in�the�beginning�of�last�year.

Inflation�too�has�cooled,�after�peaking�to�a�16-year�high�of�12.91�percent�in

August,�a�trend�that�may�allow�RBI�to�effect�more�cuts�in�key�rates�to�boost

economic�expansion.�Declining�food�and�fuel�prices�have�enabled�inflation�to

hover�in�single�digits�around�6.0�percent,�the�lowest�in�the�past�nine�months.

With�crude�oil�prices�dipping�from�an�all-time�high�of�USD�147�a�barrel�in�July

2008�to�under�USD�45�a�barrel;�the�Government�cut�petrol�price�by�INR�5�a�litre

and�diesel�by�INR�2�per�litre�earlier�in�December.�

The�Government�of�India�has�also�announced�a�fiscal�stimulus�package�offering:

• Increased�planned�expenditure�of�USD�4.1�billion

• A�cut�of�four�percent�in�excise�duties�across�the�board�and�interest�rate�cuts

on�loans�for�infrastructure�and�exports

The�fiscal�stimulus�package�is�expected�to�provide�support�to�exports,�housing,

Micro,�Small�and�Medium�Enterprises�(MSME)�sector,�textile,�infra�financing

sectors,�in�addition�to�shield�the�Indian�economy�from�impact�of�global

slowdown.

As�per�Government�estimates,�Indian�Inc.�can�look�forward�to�an�economic

growth�of�seven�percent�in�the�year�ending�31�March�2009,�albeit�down�from

nine�percent�or�more�in�the�previous�three�years,�still�the�second-fastest�among

the�major�economies�--�behind�only�China.

Indian EconomyPage 3 of 16

Analyst: Asmita Deshmukh©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

Source:�Reuters

RBI’s Tough Call

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• Jagdish Khattar plans to open 100 "multi-brand auto solution hub"

by 2010

Jagdish�Khattar�armed�with�funds�from�Premji�Invest�and�IFCI�Venture�Funds

plans�to�open�100�"multi-brand�auto�solution�hub"�in�three�years�under�the

name�of�Carnation�Auto�India�Limited�Premji�Invest�and�IFCI�have�invested�USD

16�million�and�USD�5.6�million�respectively�in�the�form�equity.�Carnation�is�a

third�party�multi-brand�car�service�provider�and�is�expected�to�sell�tyres,

batteries,�car�detailing,�insurance�and�other�four-wheeler�related�issues,

besides�servicing�cars.�Each�unit�of�Carnation�is�likely�to�have�20�to�40�work

bays,�with�each�bay�capable�of�handling�three�to�four�cars�a�day.�The�first�set�of

these�solutions�hub�are�expected�to�be�in�Kochi,�Chennai,�Bangalore,

Hyderabad,�Amritsar,�and�two�in�Noida.

• Swiss Finance Corp increases its stake in Amtek Auto to 8 percent

Mauritius-based�Swiss�Finance�Corporation�(SFC)�bought�an�additional�4

percent�stake�in�Amtek�Auto�through�open�market�purchases.�SFC�acquired�a

total�of�57.2�lakh�shares�for�about�USD�6.2�million�on�December�12�2008.�Post-

acquisition,�SFC's�stake�in�the�company�rose�to�8.2�percent.�Warburg�Pincus,

Citigroup,�Credit�Suisse�Singapore,�CLSA�Mauritius�and�Sansar�Capital

Mauritius�are�among�other�major�foreign�institutional�investors�holding�a

substantial�stake�in�the�company.

• Bajaj Auto increases its stake in KTM to 25 percent

Two�and�three-wheeler�manufacturer�Bajaj�Auto�Ltd�(BAL)�has�increased�its

stake�in�Austrian�sports�bike�maker�KTM�to�25�percent.�In�2007,�BAL�acquired

14.5�percent�stake�in�the�firm�for�about�USD�60.4�million�which�has�been�now

increased�to�25�percent.�BAL�has�announced�that�it�is�expected�to�continue�to

increase�its�stake�in�the�company�but�has�not�disclosed�any�further�details.

Under�the�agreement,�the�companies�planned�to�jointly�develop�high-efficiency

bikes,�sourcing�for�production�and�assembling�of�KTM�bikes�in�India.�The�jointly

developed�bikes�would�be�produced�at�BAL's�Chakan�facility�for�export�to

Europe�under�KTM�brand.

• Daimler to launch financial services subsidiary in India

German�auto�major�Daimler�has�proposed�to�launch�its�financial�services�arm�-

Daimler�Financial�Services�-�in�India.�The�aim�is�to�deal�with�the�liquidity

shortage�situation�which�is�decreasing�the�demand�for�its�luxury�passenger

cars�and�commercial�vehicles,�manufactured�by�the�Mercedes-Benz�unit.�The

company�feels�that�the�consumers�were�not�buying�their�vehicles�due�to

difficulty�in�getting�funds�from�the�financial�institutions.�Currently,�Mercedes-

Benz�has�a�tie-up�with�ICICI�for�offering�financial�services�to�customers�in�India.

Daimler�Financial�Services�offers�vehicle�financing,�leasing,�insurance�and�fleet

management.�

Page 4 of 16

Auto and Auto Components

Analyst: Rajiv Somani©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

"It's not that there is no demand,but funding is a challenge intoday's market situation. That'swhy we are looking at bringingour financial services arm in thecountry.” Wilfried Aulbur, Managing Director and CEO,

Mercedes-Benz

(Source: DNA-Daily News & Analysis, 6 December2008 )

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• Financial Technologies acquires stake in Bourse Africa

Financial�Technologies�India�Limited�(FTIL)�group�has�signed�a�deal�to�acquire60�percent�stake�in�Botswana-based�Bourse�Africa�Limited.�Bourse�Africa�hasbeen�licensed�by�government�of�Botswana,�to�set-up�spot�and�derivative�multi-asset�exchange�for�trading�in�commodities,�currencies,�bonds�and�diamonds.Bourse�Africa�is�likely�to�have�a�pan-Africa�presence�through�a�hub�and�spokemodel,�connecting�major�African�countries.�

FTIL�is�a�market�leader�in�exchange�and�distribution�technologies�and�haspromoted�Multi�Commodity�Exchange�(MCX),�India’s�leading�commodityexchange.�With�the�acquisition�of�Bourse�Africa,�FTIL�has�set�up�ten�exchangeventures�across�Asia,�Middle�East�and�Africa.

• Switzerland-based Amas Bank buys 40 percent stake in PATCO

Investments

Amas�Bank,�the�banking�entity�of�Hinduja�Group,�has�acquired�a�40�percentstake�in�Paterson�Investment�and�Consultancy�Services�(PATCO),�for�anundisclosed�amount.�The�acquisition�is�part�of�Amas�Bank's�strategy�to�expandits�presence�in�the�India.�Amas�also�has�plans�to�launch�asset�management�andprivate�equity�business�in�India.

Patco�is�a�Chennai-based�Non�Banking�Finance�Company�(NBFC)�offeringservices�like�stock�broking,�derivatives�trading,�portfolio�and�wealthmanagement,�corporate�advisory,�investment�banking�and�allied�financialservices.�Patco�has�20�retail�branches�across�India,�a�majority�of�which�are�inthe�South�India.

• BNP Paribas forms joint-venture with Sundaram Finance

Sundaram�Business�Services�(SBS),�a�unit�of�Sundaram�Finance,�and�BNPParibas�Securities�Services�have�formed�an�alliance�to�provide�securitiesservices�in�India.�The�new�venture�is�to�be�called�Sundaram�BNP�ParibasSecurities�Services.�Sundaram�BNP�Paribas�Securities�Services�is�likely�to�bededicated�to�provide�a�full�range�of�securities�services,�including�fundaccounting�and�transfer�agency�to�both�domestic�and�off-shore�investors�inIndia.�BNP�Paribas�has�an�existing�Joint�Venture�(JV)�to�provide�assetmanagement�and�housing�finance�services�with�the�Sundaram�Group.�

SBS�is�the�Business�Process�Outsourcing�(BPO)�arm�of�Sundaram�Finance,engaged�in�providing�transaction�processing�services�primarily�to�the�financialservices�industry.

• HDFC Bank to acquire 10 percent stake in MMTC-Indiabulls

commex

HDFC�Bank,�India’s�leading�private�sector�bank,�has�sought�approval�fromReserve�Bank�of�India�to�buy�10�percent�stake�in�a�commodity�exchangepromoted�by�MMTC-Indiabulls.�Indiabulls�and�MMTC�have�received�approvalfrom�Forward�Markets�Commission�(FMC),�the�commodity�market�regulator,�inJuly�2008.�The�exchange�is�expected�to�be�operational�from�March�2009.�Thenew�exchange�would�be�the�fourth�national�level�commodity�exchange�besidesMCX,�NCDEX�and�NMCE.�India�has�22�commodity�exchanges,�including�threenational�exchanges,�with�a�combined�turnover�of�USD�934.5�billion�in�2007-08.

Page 5 of 16

Banking and Insurance

Analyst: Kunal Jain©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

Source:�Source:�FMC

Note:�1USD�=�43.5

Commodity Group-wise Value of Trade (USD

Billion

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• Indian FMCG sales not affected by slowdown

The�fast�moving�consumer�goods�(FMCG)�sector�in�India�is�likely�to�grow�by�25percent�and�reach�USD�25�billion�in�2008�as�against�USD�20�billion�in�2007.Furthermore�FMCG�sales�have�grown�at�a�faster�rate�in�the�rural�markets�thanin�urban�centres�and�are�expected�to�touch�USD�5�billion�in�2008.�Theincreased�market�penetration�in�rural�regions�can�be�attributed�to�higherconsumption�of�products�such�as�consumer�durables�including�refrigerators,television�sets�and�electrical�appliances�

• Indian ice cream market attracts Snowberry USA

Snowberry�USA�Inc,�a�US-based�ice�cream�maker,�plans�to�make�its�entry�intothe�Indian�organised�icecream�market�with�a�planned�investment�of�USD�50million.�The�company�plans�to�set�up�1,000�parlours�and�kiosks�across�thecountry�by�2010�for�which�it�has�entered�into�a�franchise�agreement�with�Delhi-based�realty�finance�company�Soni�Buildcom.�Snowberry�is�planning�to�investUSD�5�million�to�set�up�a�21,000�sq�ft�manufacturing�facility�at�Manesar�whichwould�start�operations�in�2010.�The�company�is�targeting�a�sales�volume�ofUSD�25,000-30,000�from�each�outlet�within�six�months�of�starting�operationsand�is�aiming�to�capture�20�percent�of�the�USD�165�million�organised�ice�creammarket�in�India�by�2010

• Belvedere’s vodka to hit Indian market soon

Belvedere�Group,�a�France-based�vodka�producer,�plans�to�venture�into�Indiathrough�the�travel�retail�channel.�The�company�is�entering�into�a�distribution�tie-up�for�two�east�European�vodka�brands,�Danzka�and�Sobieski.�India’s�travelretail�market,�estimated�at�over�one�million�cases�currently,�has�been�growingat�over�25�percent�with�international�airlines�connecting�more�cities�andexisting�aviation�hubs�undergoing�modernization.�Belvedere�through�itssubsidiaries�controls�over�20�vodka�brands�with�substantial�market�share�in�theeastern�European�markets

• Italy's Loro Piana plans India foray

Loro�Piana�SpA�plans�to�enter�India�through�single�brand�retail�window.�Thecompany�has�opted�for�a�51�percent�stake�in�a�JV�called�LP�Retail�with�theKishor�Bajaj-promoted�Bada�Saab�Design,�which�is�also�a�franchisee�for�anotherItalian�brand,�Brioni,�in�India.�The�privately-owned�Loro�Piana�has�a�globalpresence�with�approximately�113�stores�world-wide

• Kohinoor Foods takes Indian foods to USA

India’s�Kohinoor�Foods�Ltd,�a�ready-to-eat�food�product�manufacturer,�has�tiedup�with�a�US-based�retail�chain�Target�Corporation�for�marketing�Indian�foodproducts�in�America.�With�this�partnership,�the�company�aims�to�serve�theincreasing�demand�for�Indian�food�in�the�US.�Target�Corp,�which�operatesapproximately�1,500�stores�in�47�states�of�US,�is�expected�to�source�and�sellover�16�different�Indian�delicacies�of�Kohinoor�Foods.��Initially,�Target�plans�totake�forward�four�selected�categories:�cook-in�sauces,�microwave�rice,microwave�meal�and�meal�kit.�Kohinoor�Foods,�which�is�also�known�for�itsbranded�basmati�rice,�has�a�plant�capable�of�producing�over�1,20,000�meals�perday.�

Page 6 of 16

Consumer Markets and Retail

Analyst: Sonia Topiwala ©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

“India is one of the mostattractive markets for retailinvestment. Many national andglobal players have been investingin the retail segment and haveambitious plans for furtherexpansion. The vast middle classwith rising purchasing power areattracting global retail giants intothe almost untapped retailindustry.”(Source: India retail report-Images Retail, January2009)

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• ITC looking for acquisition of hotels

ITC�Limited,�one�of�the�diversified�conglomerates�in�India�is�seeking�for�aninvestment�opportunity�through�take�over�or�acquisition.�There�has�been�acorrection�in�the�valuations�of�many�hotel�properties�which�were�priced�at�apremium�a�year�before.�The�current�down�turn�in�the�economy�has�createdopportunities�for�major�players�in�the�hotel�industry�to�take�over�valuableproperties�at�attractive�prices.�ITC�plans�to�acquire�properties�in�the�three�starhotels�to�seven�star�hotels�category.�Apart�from�this�acquisition�plan�thecompany�would�continue�with�its�capex�plans�declared�last�year.

• Unitech to develop 35 hotels with an investment of USD 625

million

Unitech,�one�of�the�realty�majors�in�India�plans�to�develop�about�35�hotels�withan�inventory�of�5,000�rooms�in�3-5�star�categories.�These�hotels�would�be�openin�the�national�capital�region�(NCR),�Kolkata,�Chennai,�Goa,�Mysore,�Bangalore,Hyderabad,�Chandigarh,�Siliguri�and�Assam.�The�company�has�a�land�bank�inthese�cities�and�would�build�hotels�on�the�same.�About�50�percent�of�thehotels�would�be�constructed�in�Kolkata�and�NCR.�It�is�likely�to�invest�USD�625million�in�the�next�6-7�years�to�develop�these�hotels.�The�company�also�plans�tosell�these�hotels�after�developing�them.����

• Ginger hotel bets on flexible model for expansion

Roots�Corporation,�a�wholly-owned�subsidiary�of�The�Indian�Hotels�CompanyLimited�is�adopting�a�flexible�model�for�its�budget�brand�‘Ginger’.�The�companywould�operate�hotels�on�management�contract�and�long�lease�basis�instead�ofowning�it.�It�has�leased�the�existing�‘Rail�Yatri�Niwas’�in�Delhi�and�MadhyaPradesh�from�Indian�Railways.�The�company�has�tied�up�with�restaurant�chainssuch�as�Sayaji�Hotels�and�The�Harbour�Market�to�provide�restaurant�facilities�atits�Baroda�and�Goa�properties.�The�company�also�has�a�national�tie�up�withCafe�Coffee�Day.

• Taj plans makeover for luxury hotels

Taj�Hotels�Resorts�&�Palaces�has�opened�its�new�premium�business�hotel�inBangalore�under�the�brand�name�Vivanta.�The�200�room�hotel�is�located�atWhitefield,�Bangalore's�IT�hub.�It’s�the�fifth�property�of�Taj�in�Karnataka.�Thecompany�plans�brand�makeover�of�its�other�Indian�hotels�such�as�Mumbai's�TajPresident,�Fisherman's�Cove�in�Chennai�and�the�nine�Taj�Residency�propertiesas�well.�Its�international�properties�would�continued�with�the�same�brand�name‘Taj’�as�the�brand�is�globally�recognized.�The�company�is�following�the�currenttrend�in�the�hospitality�where�players�are�branding�hotel�properties�with�aunique�name�instead�of�using�their�family�name�for�their�business.

Page 7 of 16

Analyst: Pallavi Phatak

Hospitality

©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

“The next 18 to 24 months aretesting times for the industry, buthoteliers with a proven trackrecord will take things in theirstride and come out of therecession with learning andexperience.”M P Purushothaman, President, FHRAI(Source: Express Hospitality, 8 December, 2008 )

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• Wipro acquires Citi Technology Services Limited

India’s�leading�IT�service�provider�Wipro�Technologies�has�acquired�CitiTechnology�Services�Limited�(CTS),�the�India�based�captive�unit�of�Citigroupengaged�in�infrastructure�and�technology�outsourcing�business,�from�US�basedCitigroup�Inc,�for�about�USD�127�million.�The�acquisition�has�enabled�Wipro�tobag�Citigroup�as�a�key�client�and�provide�Technology�Infrastructure�Services(TIS)�and�domain�led�Application�Development�Management�(ADM)�services�toCiti’s�business�segments.�With�this�acquisition,�Wipro�expects�to�strengthen�itsinfrastructure�and�facilities�management�business.�Apart�from�strongcompetencies�in�TIS,�CTS�has�strong�expertise�in�ADM�for�cards,�capitalmarkets�and�corporate�banking.�The�move�is�also�expected�to�enable�Citi�to�cutdown�its�employee�strength�and�cost.

• Rolta acquires Chicago based Piocon Technologies

Rolta,�a�Mumbai-based�IT�firm�has�acquired�Chicago-based�Piocon�Technologies(Piocon).�Rolta�expects�that�the�acquisition�is�likely�to�give�it�access�tosolutions�to�address�critical�operational�needs�of�refineries.�Piocon�that�hasmajor�customers�in�the�oil�and�gas�sector�are�mostly�based�in�the�US�and�Roltaplans�to�expand�this�to�the�Middle-East�and�India.�Rolta�also�intends�to�cross-sell�these�services�to�its�existing�customers�for�engineering�design,�which�aremostly�in�oil�and�gas,�petrochemical�and�energy�sectors.�

• Core Projects buys Princeton unit

Core�Projects�and�Technologies�(Core),�a�India�based�education�managementsystems�provider�has�acquired�a�unit�of�The�Princeton�Review,�a�US-basededucation�company�for�about�USD�20�million.�The�Company�expects�theacquisition�to�add�approximately�USD�24�million�to�Core’s�global�revenues�overthe�period�of�next�four�quarters�after�the�buyout.�

• Satyam confesses to huge fraud in India

Satyam�founder�and�CEO,�B�Raju�resigned�on�January�07,�2009�afterconfessing�that�his��company�had�been�falsifying�its�accounts�for�years.�TheCEO�in�his�resignation�to�the�Board�of�Directors�disclosed�inconsistencies�inSatyam’s�financials�resulting�from�inflated�profits�over�the�last�several�years�forSatyam’s�standalone�accounts.�In�a�related�development,�the�ministry�ofcompany�affairs,�SEBI�and�other�regulatory�authorities�have�beguninvestigations�into�the�fraud.

• Infosys bags AstraZeneca deal

India’s�leading�IT�player�Infosys�Technologies�has�won�a�five-year�deal�fromUK’s�leading�pharmaceutical�company�AstraZeneca.�As�per�the�terms�of�thedeal,�Infosys�is�to�deliver�complete�application�maintenance�services�to�thefirm's�global�operations�in�areas�such�as�manufacturing,�supply�chain,�finance,human�resources�and�other�corporate�functions.�The�deal�signifiesAstraZeneca’s�transformation�initiative�to�accelerate�innovation�and�getproducts�faster�to�the�market,�and�is�expected�to�help�improve�its�operationalefficiency�significantly.�

Page 8 of 16

Analyst: Parnika Patil

IT / ITeS

©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

“This partnership enables Citi toleverage Wipro’s expertise ininformation technology serviceswhere we have significant plansfor driving higher efficiencies byleveraging the Global DeliveryModel.”Marty Lippert, Chief Operations and Technology Officer,Citigroup Inc(Source: Wipro Press Release, 23 December, 2008)

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• CDI to invest in animation and gaming

Integrated�media�and�entertainment�company�Compact�Disc�India�(CDI)�is�likelyto�invest�USD�63�million�for�animation�feature�film�and�multi�platform�gaming.This�budget�is�also�likely�to�include�the�merchandising�of�a�project�with�formerBrazilian�football�player�Pele.�Further,�the�company�has�plans�to�invest�approx.USD�19�million�for�gaming�development�and�publishing�project.�In�2008-09,�thecompany�is�expected�to�acquire�Laser�Infomedia,�to�set-up�a�developing�andpublishing�gaming�software�studio�at�New�Delhi�in�collaboration�withSingapore-based�Golden�Games�Pte�Limited

• UTV, Moser Baer signs pact for home video distribution

UTV�Motion�Pictures�and�Moser�Baer�Entertainment�have�entered�into�anagreement�for�their�home�video�distribution�business.�This�strategic�alliancebetween�the�two�companies�is�an�attempt�to�build�on�each�other's�strengths.The�agreement�provides�Moser�Baer,�the�video�rights�to�25�films�of�UTV�whichincludes�9�under�production�films,�10�UTV's�premium�catalogue�films�and�6recently�released�premium�films.�

With�pirated�copies�of�films�available�in�less�than�24�hours�and�companiesfailing�to�stop�piracy,�theatres�have�witnessed�a�fall�in�the�footfalls.�The�homevideo�business�in�such�a�scenario�is�thus�not�likely�to�be�a�threat�to�theatres.

• PVR plans to set up 15 fun centres

Multiplex�operator�PVR�has�plans�to�set�up�15�entertainment�centres�withbowling�alleys�and�gaming�zones�by�2012.�These�centres�are�expected�to�comeup�at�shopping�malls�and�are�likely�to�be�named�‘BlueO’.�Earlier,�the�companyhad�formed�a�JV�with�Thailand’s�Major�Cineplex�group�to�set�up�and�runbowling�alleys�in�the�country.�The�company’s�first�bowling�alleys�are�expectedto�come�up�at�Gurgaon.�In�the�first�stage,�PVR�plans�to�open�these�centres�at�4to�5�destinations�like�Bangalore�and�Chennai�followed�by�2�more�in�2009.

• Global crisis hits Indian PR industry

The�global�meltdown�has�resulted�in�public�relations�firms�facing�the�heat�withthe�business�houses�going�slow�on�image�building�and�advertisementcampaigns.�After�witnessing�a�30�percent�growth�rate,�PR�firms�are�finding�itdifficult�to�retain�clients.�Negotiations�are�on�and�cost�reduction�is�likely�to�be�anatural�phenomenon�under�such�circumstances.�Wherever�possible,�theindustry�is�providing�the�required�support�to�the�already�suffering�businesshouses.�Being�an�essential�part�in�the�business�arena,�the�Indian�PR�industry�islikely�to�bear�the�brunt�if�the�global�or�Indian�business�is�disturbed.

• Nalanda Capital acquires 1.8 percent in Sun Network

Singapore-based�Nalanda�Capital�has�acquired�a�1.8�percent�stake�in�SunNetwork�for�approx.�USD�20�million.�The�stake�was�picked�from�the�BombayStock�Exchange�through�an�open�market�bulk�deal�transaction.�Nalandapurchased�70�lakh�shares�of�Sun,�each�valued�at�about�USD�3.�Sun�Network�isa�diversified�media�player�with�interests�in�TV�channels,�MSO,�radio,newspapers,�magazines�and�movie�production.

Page 9 of 16

Media

Analyst: Mehul Desai©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

"As against the normal 25-30percent growth rate the industryhas been experiencing over thepast 5 years, growth this year maybe 10-15 percent. The Indian PRindustry is an integral part of thelarger business landscape.Anything that impacts global orIndian business will indirectlyimpact the industry here" Madan Bahal, Managing Director-Adfactors PublicRelation (Source: Economic Times, 14 December 2008)

Page 10: SectorSnippets Issue 27:TP4 WhitePaper A4.QXD · Page 2 of 16 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter

• Nelp-VIII likely to offer 100 blocks

The�petroleum�ministry�has�plans�to�auction�over�100�potential�areas�for�oil�and

gas�exploration�by�March�2009�under�the�eighth�round�of�New�Exploration

Licensing�Policy�(Nelp�VIII).�Nelp�VII�was�considered�as�the�largest�round�with

150,000�sq�km�of�area�offered�and�Nelp�VIII�is�expected�to�be�even�bigger�with

400,000�sq�km�of�area�being�offered.�The�government�has�already�started�its

interactions�with�stakeholders�for�bid�evaluation�criteria�of�oil�and�gas

exploration�blocks�and�coal�bed�methane�(CBM)�assets.

• India’s OIL, ONGC to co-operate in exploration and marketing of oil

and gas

Oil�and�Natural�Gas�Corporation�(ONGC)�and�Indian�Oil�Corporation�(IOC)�have

signed�a�Memorandum�of�Understanding�(MoU)�for�exploration�and�marketing

of�oil�and�gas.�The�MoU�anticipates�ONGC�to�provide�support�to�IOC�in

exploration�under�Nelp,�and�IOC�to�support�ONGC�for�marketing�its�Aviation

Turbine�Fuel�(ATF).�The�two�companies�are�also�expected�to�jointly�build

strategies�for�the�marketing�of�natural�gas�produced�by�ONGC.�Besides�this,

the�MoU�also�incorporates�IOC�to�supply�diesel�to�ONGC�in�order�to�meet�its

operational�requirements.�

• India curbs LNG buying; prefers Naphtha

Asia’s�already-slow�spot�market�for�Liquefied�Natural�Gas�(LNG)�has�come�to�a

standstill�with�Indian�buyers�switching�to�Naphtha.�An�alternate�to�LNG,

Naphtha�has�noticed�a�recent�dramatic�drop�in�prices.�Naphtha�prices�are

currently�at�almost�half�of�the�price�at�which�LNG�is�assessed�in�Asia.�This�is

the�primary�reason�why�Indians�have�stopped�buying�LNG.�LNG�on�the�other

hand�is�not�fighting�an�easy�battle�especially�since�India’s�gas�supply�is�about�to

increase�from�next�year,�thereby�creating�Naphtha�as�its�rival�not�only�in�liquid

fuels�but�also�in�Indian�gas.

• BP ready to explore Indian deepwater

British�Petroleum�(BP)�and�Reliance�Industries�Limited�(RIL)�have�signed�a

production�sharing�contract�with�the�Government�of�India�for�the�block�KG-

DWN-2005/2.�This�1949�sq�km�block�was�offered�to�BP�in�the�seventh�round�of

NELP.�It�is�located�about�40�kilometers�off�the�Krishna�Godavari�coast�and�is

close�to�the�existing�deep�water�discoveries�in�the�KG�basin.�BP,�with�30

percent�participating�interest�in�the�block�expects�to�conduct�detailed�2D�and

3D�seismic�surveys�and�reprocess�the�existing�seismic�data.

• IOC puts petrochem project on hold, to focus on refinery

One�of�the�country’s�largest�refiners,�Indian�Oil�Corporation�Limited�(IOC)�has

put�a�stay�on�its�petrochemical�complex.�The�global�meltdown�alongside�the

liquidity�crunch�and�a�three�fold�increase�in�the�combined�project�cost�has

forced�the�company�to�shift�its�focus�to�the�refinery�project.�The�petrochemical

complex�is�expected�to�come�up�in�the�second�phase�since�the�company’s

borrowing�has�more�than�doubled�from�the�previous�year�(approx.�USD�1.2

billion),�thereby,�pressurizing�IOC�to�disburse�approx.�USD�32�million�crore�by

way�of�interest�cost.

Page 10 of 16

Oil and Gas

Analyst: Suman Lala©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

Parameter NELPI

NELPII

NELPIII

NELPIV

NELPV

NELPVI

NELPVII

No. of

Blocks

Offered

48 25 27 24 20 55 57

No. of

Blocks

Bid for

28 23 24 21 20 52 45

No of

Bids

Received

45 44 52 44 69 165 45

No of

blocks

awarded

25 23 23 21 20 52 44

No of

PSC

signed

24 23 23 20 20 55 44

Source:�Press�Articles

NELP History

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• Piramal Healthcare acquires Minrad International, Inc.

Piramal�Healthcare�Limited,�one�of�India’s�leading�pharmaceutical�companies,has�signed�an�agreement�to�acquire�Minrad�International,�Inc.,�a�supplier�ofgeneric�inhalation�anesthetics.�Minrad�is�expected�to�merge�with�Piramal’snewly�incorporated�wholly-owned�subsidiary.�The�total�consideration�of�the�dealis�expected�at�USD�40�million.�

This�acquisition�is�expected�to�provide�Piramal�an�access�to�vital�intellectualproperty�pertaining�to�the�production�of�inhalation�anesthetics.

• Ranbaxy signs an exclusive licensing agreement with US-based

BioPro Pharmaceuticl, Inc.

Ranbaxy,�one�of�India’s�leading�pharmaceutical�companies,�has�entered�into�anexclusive�licensing�agreement�with�US-based�BioPro�Pharmaceuticl,�Inc.,�tomarket�Gliadel®�Wafer,�a�drug�for�brain�tumor,�in�India.�Ranbaxy�has�alreadyreceived�the�import�permission�for�marketing�the�US�FDA�approved�drug.�Thisagreement�is�expected�to�strengthen�Ranbaxy’s�presence�in�the�oncologytherapeutic�segment.�

• Glenmark is likely to launch drug for HIV-associated diarrhea in

developing economies by 2010

Glenmark�Pharmaceuticals,�an�Indian�research-oriented�pharmaceuticalcompany,�is�expecting�to�file�the�New�Drug�Application�(NDA)�for�the�launch�itsnovel�drug�being�development�for�multiple�indications�including�HIV-associateddiarrhea�–�Crofelemer�–�by�2010�in�the�US.�It�is�likely�to�complete�the�regulatoryprocedures�and�seek�approvals�for�the�drug�in�the�ROW�countries�during�thisperiod.�The�opportunity�in�the�ROW�countries�is�estimated�at�USD�80�million.�

At�present,�Crofelemer�is�in�the�Phase�III�in�the�US�and�Glenmark�has�theproduct�rights�for�diarrhea�indications�in�140�countries.�

• 20 more biotech parks likely to be set up in India

Kapil�Sibal,�the�Union�Minister�of�Science�and�Technology,�is�reported�to�haveannounced�that�20�more�biotech�parks�plan�to�be�set�up�in�India,�in�order�topromote�life�sciences-related�research.�Currently,�there�are�only�three�functionalbiotech�parks�situated�in�Pune,�Hyderabad�and�Punjab�besides�the�recentlyinaugurated�Lucknow�Biotech�Park.�

Page 11 of 16

Pharma

Analyst: Nandita Kudchadkar & Dhruti Parikh

©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

"Setting up of new biotech parksis one of our initiatives forpromoting quality research inbiotechnology and its appliedfield."Kapil Sibal, the Union Minister of Science andTechnology(Source: Economic Times, 7 December, 2008)

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• NPCIL in agreement with Areva to supply uranium

State�run�Nuclear�Power�Corporation�India�Limited�(NPCIL)�has�entered�into�anagreement�with�French�energy�firm�Areva�to�supply�300�tones�of�uraniumannually.�The�fuel�is�likely�to�generate�1500�MW�power,�which�represents�35percent�of�country’s�installed�nuclear�power�generation�capacity.�PresentlyNPCIL’s�plants�are�operating�at�45�percent�Plant�Load�Factor�(PLF).�Howeverwith�availability�of�fuel;�the�plants�are�expected�to�operate�at�full�capacities.NPCIL�currently�operates�17�nuclear�reactors�at�6�locations�with�a�totalgeneration�capacity�of�4,120�MW.�

• BHEL bags USD 237 million order from Bina Power

Government�owned�equipment�maker�Bharat�Heavy�Electrical�Limited�(BHEL)has�bagged�USD�237�Million�order�from�Jaypee�group’s�company�–�Bina�PowerCompany�Limited.�The�contract�is�for�setting�up�a�500�MW�thermal�power�plantat�Bina�in�Madhya�Pradesh.�BHEL�would�install�2�units�of�250�MW�each(2x250),�which�is�expected�fall�during�the�XIth�Plan�period�(2007-12).�BHEL'sscope�of�work�includes�design,�engineering,�manufacturing,�supply,�erection,testing�and�commissioning�of�boilers,�turbines�and�associated�auxiliaries.

• Punj Lloyd to form JV with Thorium Power

Punj�Lloyd�has�enetered�into�an�Memorandum�of�Understanding�(MoU)�to�forma�50:50�JV�company�with�US�based�Thorium�Power�Ltd�for�building�nuclearpower�plants.�The�new�company�is�likely�to�combine�Punj�Lloyd’s�expertise�inEngineering,�Procurement�and�Construction�(EPC)�contract�work�and�ThoriumPower’s�technological�expertise�in�the�use�of�thorium�to�generate�nuclearpower.�The�JV�is�expected�to�undertake�fuel�designing�for�the�reactors;�provideservices�to�build�nuclear�reactors�as�well�as�advisory�services�to�exploreinvestment�opportunities�in�the�nuclear�energy�sector.

• RIL to sell solar energy in Rajasthan

Reliance�Industries�Limited�(RIL)�has�entered�into�an�agreement�with�threepower�companies�of�Rajasthan�viz.�Jaipur�Discom,�Ajmer�Discom�and�JodhpurDiscom�to�sell�solar�energy.�RIL�is�expected�to�set�up�a�five�MW�solar�powergeneration�plant�at�Khimsar�village�in�Nagaur�district.�As�per�the�agreement�RILis�expected�to�receive�INR�15.78�per�unit.�The�power�purchase�rate�would�beINR�3.67�for�10�years�while�Indian�Renewable�Energy�Development�Agency(IREDA)�is�expected�to�pay�INR�11.33�per�unit�as�per�the�directives�ofRenewable�Energy�Regulatory�Commission�(RERC)�to�promote�solar�greenenergy.�Apart�from�that,�the�discoms�is�likely�to�pay�0.78�paise�per�unit�to�thepower�generation�company.�

Page 12 of 16

Power

Analyst: Rajiv Parekh©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

Source:�White�Paper�on�Strategy�for�XIth�Plan�,�CEA

Requirement for various materials for planned

capacity additions during XIth Plan

MaterialXIth�Plan�

78577�MW(�Fig�in�lakh�tonnes�)

Cement 306.3

Structural Steel 80.4

Reinforcement Steel 51.3

CRGO Steel 10.7

Castings 0.4

Forgings for TG sets 0.4

Special Steel for Sub-Stations 3.3

Steel for Conductors in

Transmission Lines2.7

Steel for Conductors in Distribution

Lines4.5

Aliminium 16

Copper 8.1

Zinc 1.5

Thermal Insulation 2.5

Page 13: SectorSnippets Issue 27:TP4 WhitePaper A4.QXD · Page 2 of 16 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter

• Trikona to Invest USD 400 million in India

Trikona�Capital�is�planning�to�invest�about�USD�400�million�in�Indian�real�estate

market�in�2009.�It�plans�to�invest�about�USD�120-160�million�for�affordable

housing�aimed�at�middle�income�groups.�The�company�is�investing�in�a�project

that�is�coming�up�in�Virar,�near�Mumbai,�on�a�217-acre�plot.�The�apartments�are

expected�to�be�priced�starting�at�USD�26178.�700�apartments�are�to�be

constructed�in�the�first�phase�and�there�are�plans�to�develop�about�13000

apartments�over�a�period�of�7�years.�The�company�is�targeting�a�return�of

20-25�percent�on�this�investment�in�2009.

• Unitech to Build Houses for Middle Class

Unitech,�Indian�real�estate�developer,�is�planning�to�invest�about�USD�500

million�to�build�affordable�housing�for�the�middle�income�group�in�Gurgaon,

Noida,�Greater�Noida,�Kolkata�and�Chennai.�The�company�plans�to�build�about

10,000�units�in�the�USD�60000-100,000�price�category.

• Vascon Developing Residential Project in Pune

Vascon�Engineers,�a�Pune�based�real�estate�company,�is�developing�a

residential�project�called�Willows,�at�Baner�near�Pune’s�IT�hub�Hinjewadi.�The

company�plans�to�spend�about�USD�81�million�towards�developing�this�project.

The�project�would�consist�of�high-end�apartments�of�2,500�square�feet�to

3,000�square�feet�and�penthouses�of�over�6,000�square�feet�spread�in�4

towers.�The�first�phase�is�expected�to�be�completed�by�mid�2009.�The�price�of

the�apartments�is�set�at�USD�86�per�square�feet�(INR�4250�per�square�feet).

• Ansal to Develop Housing Project in Jammu

Ansal�Housing�&�Construction�Ltd,�a�real�estate�developer�in�India,�has

announced�its�plans�of�a�residential�project,�called�Ansal�Grace,�in�Jammu.�The

residential�units�would�be�priced�between�USD�48,000�and�USD�70,000.�The

company�has�planned�several�modern�amenities�like�Clubhouse,�Swimming

Pool,�Landscaped�parks,�children�play�area�and�Tennis�Court,�amongst�others�in

the�project.

• AMRL to Develop SEZ

AMRL�International�Tech�City,�a�JV�of�Hyderabad-based�AMR�Constructions�Ltd

and�Tamil�Nadu�Industrial�Development�Corporation�Ltd�(Tidco),�is�planning�to

invest�around�USD�161�million�to�develop�a�multi-product�special�economic

zone�(SEZ)�in�Tamil�Nadu.�The�SEZ�has�been�given�notification�in�November

2008.�The�construction�of�first�phase�of�the�project�has�begun�and�is�expected

to�go�full�swing�by�January�2009.�The�project�is�expected�to�attract�investments

of�about�USD�3�billion�and�generate�about�7000�jobs.�The�SEZ�is�expected�to

support�sectors�like�engineering,�auto�components,�pharmaceuticals,

electronics�and�hardware,�bio-technology,�IT�and�ITeS,�textiles�and�logistics.

Page 13 of 16

Real Estate and SEZs

Analyst: Nitin Dehadraya ©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

“The thrust given by the CentralGovernment to bring the economyto its full momentum isencouraging. The correction inreal estate prices supported bylower interest is a trigger thatwould lead to many positivethings.”Sanjay Dutt, CEO, Jones Lang LaSalle Meghraj(Source: India Real Estate Monitor, 27 December, 2008)

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• Tata Tele sells 49 percent stake to Quippo

Tata�Teleservices�Limited�has�sold�49�percent�stake�in�its�telecom�tower�andinfrastructure�arm�to�Quippo�Telecom�Infrastructure�Ltd�(QTIL).�As�per�theunderstanding�QTIL�is�likely�to�make�an�upfront�cash�payment�of�USD�483million�and�also�transfer�its�5000�towers�to�the�Tatas�tower�company�–�WirelessTata�Telecom�Infrastructure�(WTTI).�Quippo,�in�return�is�expected�to�receive�49percent�stake�and�management�control�of�merged�entity.�The�combined�entityis�likely�to�have�over�18,000�towers.

• Opportunity in an adverse scenario

The�financial�meltdown�has�affected�almost�all�the�business�verticals�across�theglobe,�however�networking�companies�in�India�are�looking�for�an�opportunity�ingovernment,�defence�and�telecom�companies.�Juniper�Networks�–�one�of�theleading�networking�company�is�aggressively�pursuing�e-government�dealsespecially�for�State�Wide�Area�Networks�(SWAN).�These�includes�deployingrouting�and�security�solutions�to�link�its�public�agencies�and�deliver�e-government�citizen�services�that�are�secured�using�online�validation�and�digitalcertificates.�Juniper�is�currently�working�with�states�of�Chhattisgarh,�Bihar�andHimachal�Pradesh�while�Cisco�is�working�with�states�of�Karnataka,�Haryana,Maharashtra,�Madhya�Pradesh,�West�Bengal�and�Kerala�for�their�SWANprojects.�As�per�Juniper�Networks,�the�total�opportunity�in�e-governance�fornetworking�equipment�is�about�USD�200�to�250�million.

• Tata Tele and Nortel to jointly offer managed services

Tata�Tele�Services�Limited�(TTSL)�in�collaboration�with�Nortel�has�launched�anew�service�to�address�the�communication�needs�of�the�small�and�mediumbusiness�(SMB).�Under�this�new�service,�Tata�Tele�would�provide�a�singleinterface�solution�to�the�SMBs�for�their�communications�requirements,including�digital�ISDN�connectivity,�voicemail�services,�interactive�voiceresponse�and�Mobile�Extension�Services.�The�services�would�be�available�on�amonthly�rental�model�and�would�not�require�any�upfront�payment�towards�thepurchase�of�telecom�equipment.

• RComm dials GSM

Reliance�Communication�Limited�(RComm)�–�country’s�second�largest�wirelesstelecom�operator�has�launched�nationwide�GSM�services�which�is�likely�tocover�11,000�towns�and�3,40,000�villages�and�is�expected�to�invest�USD�2billion�for�the�proposed�roll-out.�Currently�majority�of�wireless�subscribers�useGSM�services,�which�is�expected�to�complement�RComm’s�current�CDMAservices.�It�is�expected�that�RComms�GSM�services�is�likely�to�cover�over�onemillion�retailers�in�India.

Page 14 of 16

Telecom

Analyst: Rajiv Parekh©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

Source:�TRAI

Tele-Density (percent)

Page 15: SectorSnippets Issue 27:TP4 WhitePaper A4.QXD · Page 2 of 16 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter

• Jet Airways join hands with Emirates

India�based�airline�Jet�Airways�and�UAE�based�Emirates�Airline�have�planned�aunilateral�code�share�agreement�and�a�reciprocal�frequent�flyer�arrangement.Effective�from�15�December,�Emirates�along�with�Jet�Airways�share�daily�flightsfrom�Mumbai�and�New�Delhi�to�Dubai�which�aims�to�give�travelers�betterconnectivity�and�an�expanded�range�of�services�between�India�and�Dubai.Emirates'�customers�are�likely�to�have�the�option�to�travel�on�its�four�dailyflights,�as�well�as�on�Jet�Airways'�daily�service�between�Mumbai�and�Dubai.Likewise�on�the�New�Delhi-Dubai�sector,�Emirates�would�offer�its�customersthe�choice�of�25�flights�per�week�on�its�aircraft�and�an�additional�seven�flightsper�week�on�Jet�Airways.��

• Reliance Infrastructure won Haryana road projects

Reliance�Infrastructure,�the�infrastructure�arm�of�Reliance�Anil�DhirubhaiAmbani�Group,�has�been�bagged�a�four-laning�of�Gurgoan-Faridabad�road�andup-gradation�of�Ballabgarh-Sohana�road�on�build-operate-transfer�(BOT)�mode.The�project�involves�construction�of�a�66�mm�of�highways.�It�is�expected�to�becompleted�in�2�years�from�the�date�of�commencement�with�a�concessionperiod�of�17�years---the�period�in�which�the�company�is�expected�to�recover�itsinvestment�by�collecting�tolls.�The�company�is�presently�in�the�advanced�stagesof�a�project�which�involves�four-laning�of�five�national�highway�projects�in�TamilNadu,�covering�a�length�of�400�Km�at�an�estimated�cost�of�USD�632�million.With�the�latest�addition,�its�roads�and�national�highway�portfolio�has�nowreached�to�466�Km.

• IRCTC, Cox & Kings to launch luxury train service

The�Indian�Railway�Catering�Tourism�Corporation�(IRCTC),�the�tourism�arm�ofIndian�Railways,�has�tied�up�with�travel�company�Cox�&�Kings�India�(CKI)�tolaunch�a�pan-India�luxury�rail�service.�According�to�the�deal,�IRCTC�is�expectedto�run�the�train�while�CKI�is�likely�be�responsible�for�the�marketing.�Theestimated�cost�of�the�new�project�is�around�USD�102�million,�and�both�partieshave�a�profit-sharing�agreement.�The�train�is�expected�to�start�functioning�bythe�third�quarter�of�2009.�

• GoAir to increase fleet size to 35 by March 2011

Wadia�Group’s�no-frills�airline�GoAir�is�expanding�its�operations�and�increasingfleet.�The�airline�has�decided�to�scale�up�its�fleet�size�to�35�by�March�2011�fromthe�existing�six�in�two�tranches.�It�is�likely�to�add�20�aircraft�by�this�year�andlater�bring�in�another�nine�in�the�next�two�years.�The�proposed�expansioncoupled�with�the�tumbling�crude�and�aviation�turbine�fuel�prices�would�help�thebusiness�break-even�faster.�GoAir�is�looking�at�an�alliance�with�foreign�carriersto�expand�services�and�increase�its�market�share�to�more�than�10�percent�fromthe�existing�2.3�percent

• MARG Ltd has been awarded contract for airport project

Infrastructure�and�Real�Estate�Company�MARG�Ltd�has�won�a�contract�fordeveloping�and�operating�greenfield�airport�in�Karnataka�on�build,�own�andtransfer�basis.�The�airport�is�expected�to�come�up�on�a�727�acres�of�land�inBurnapur�village�north�Karnataka.�MARG�has�won�a�30-year�deal�to�design,develop,�operate�and�manage�the�airport.�Thereafter�the�term�can�be�extendedby�the�company�for�another�30�years.�After�expiry�of�the�60-year�term,�theagreement�may�be�extended�by�a�further�period�of�30�years�based�on�mutualconsent�of�both�parties�--�Government�of�Karnataka�and�MARG�Limited.

Page 15 of 16

Transport and Logistics

Analyst: Ashish Punjabi©�2009�KPMG,�an�Indian�partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International,�a�Swiss�cooperative.�All�rights�reserved.

"The agreements betweenEmirates and Jet represent asignificant step forward instrengthening the relationshipbetween two airlines andbetween long-standing partners,India and the UAE”Mr. Salem Obaidalla, Senior Vice PresidentCommercial Operations, Emirates(Source: Jet Airways website, 12 December, 2008 )

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Reference material for preparing this document is

taken from following sources:

Asia Pulse

Business India

Business Standard

Business Today

Central Statistical Organisation (CSO)

Confederation of Indian Industries (CII)

Dow Jones International News

Energy Asia News

Factiva

Financial Express

Hindustan Times

India Infoline

Indian Brand Equity Foundation (IBEF)

Indian Business Insight

Infraline

India Today

Mergerstat

NASSCOM

Oil Asia Magazine

Petrobazar

Petromin News

Pharma Biz

Press Trust of India

RBI

Reuters News

The Asian Age

The Economic Times

The Financial Times

The Hindu Business Line

The Namibian

The Statesman

Times of India

Voice & Data Magazine

Xinhua News Agency

Antara News

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Research Inputs by KPMG’s India Research Center