• Citi's India equity over Rs 8k cr
• US global dominance 'set to wane'
• DoCoMo pays $2.7 bn for 26% in Tata Tele
• Wealth of nations
• BSNL eyes global market, plans acquisitions
• IIM-A alumnus to help India out of financial crisis

• Tata Chem to invest Rs 180 cr in Singapore co
• Only in India is ATF cheaper than petrol: Ram Naik
• IT firms emerge big hospitality players
• Qatar to invest $5 billion in India
• Russia clears ONGC's purchase of Imperial Energy
• India doing better than other economies: JP Morgan

Tata Chemicals, through its whollay-owned subsidiary Tata Chemicals Asia Pacific Pte Ltd, will invest Rs 180 crore over four years for a 35 per cent stake in JOil (Singapore) Pte Ltd, a jatropha seedling company set up by Temasek Life Sciences Laboratory Ltd.

Tata Chemicals' investment comes at a time when Tata Sons Chairman, Mr Ratan Tata, has warned of hard times ahead and told group companies to put on hold their acquisition and capital expenditure plans. In a letter sent to heads of the group firms and subsidiaries, Mr Tata has told to "put on hold any plans for acquisition unless considered strategically critical and also defer non-essential capital expenditure and capacity expansion." Tata Chemicals investment will get exclusive marketing rights for JOil's jatropha seedlings in India and East Africa and a preferential price on seedlings required for its cultivation. Tata Chemicals will also set up tissue culture laboratory in India in one year. Mr Homi Khusrokhan, Managing Director, Tata Chemicals, said the tissue cultured jatropha seeds would address both the problems of variable maturity and unsustainable yields in the conventional jatropha cultivation.

Pilot projects
The pilot trans-esterification plant to extract diesel from jatropha oilseeds will be set up in Madurai, he added. The company has created a model farm in Aurangabad and trial farms for the cultured jatropha seeds in Tamil Nadu, Andhra Pradesh, Maharashtra and Gujarat, besides Kenya. Depending on the success in the trial farms, the company will start marketing tissue cultured jatropha seedling in 12 to 18 months in India.

Evolution of Biodiesel
Justifying the project at a time when crude oil prices are on a downward spiral, Mr Khusrokhan said crude prices will touch $100 a barrel in 8-10 months and touch $125 a barrel in next two to three years. "Our present investments will start yielding results after three years when crude will not be at the same level what it is today," he added. Terming the evolution of bio-diesel at least three years behind ethanol, Mr Khusrokhan said the issue on availability of land would be sorted out as they would be targeting only non-arid and wasteland. According to the government estimates, he said, there is about 14 per cent wasteland available in India. Tata Chemicals' pilot plant for producing ethanol from sweet sorghum at Nanded in Maharashtra is expected to go on stream by December-end. It has invested Rs 60 crore for setting up the 30 kilolitre-a-day unit. The multi-feedstock unit can also use sugar beet as raw material.

Courtesy: www.moneycontrol.com, November 25, 2008

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Citigroup's equity investments in India are now worth over Rs 8,600 crore at Friday's closing prices. Citi's assets in India include its equity investments in over 130 companies - in sectors as varied as finance, software, pharma, infrastructure and real estate. These investments are significant when viewed in the context of Citigroup CEO Vikram Pandit's recent statements that the bank might look at selling some of its assets to stay afloat, rather than merge with some other bank. Data collated from latest disclosed shareholding patterns of companies to NSE and BSE show that, as on September 30, over half the value of Citi's equity investments in India - worth nearly Rs 4,700 crore - was in one company, housing finance major Housing Development Finance Corp (HDFC), in which it holds a stake of nearly 12%. The number of companies in which Citi's shareholding exceeds 1% of the company's paid-up capital currently works out to 136, worth about $1.7 billion. The other top holdings were in Satyam Computer (worth nearly Rs 200 crore) and Educomp Solutions, K S Oils and IDFC, each worth between Rs 160 crore and Rs 170 crore. In terms of Citi's major stakes in other companies, it has 27% in Spentex Inds, 23% in Polaris and 21% in JBF.

Market players said Citi's India portfolio could be worth even more if its holdings in those companies in which it holds less than 1% stake are also taken into consideration. Current rules do not require companies to disclose to the exchanges the names of shareholders holding less than 1% of their capital. The US financial house's investments in India are routed through a number of investment vehicles that include Citi's Mauritius-based investment arms and companies fully-owned by Citi holding major shares in listed entities. In HDFC, it holds 9.1% through Citigroup Strategic Holdings Mauritius while Citigroup Holdings Mauritius holds the balance 2.6% in the home mortgage major. It also has PE arms (whose investments are not strictly investments by Citi) holding major stakes in companies. For example, Citigroup Venture Capital Intl-Growth Partnership Mauritius holds its entire interest in Spentex. These investments have also been included in the list on the assumption that if these are ever to be liquidated, then at least some percentage of the sales proceed would also accrue to parent Citigroup. Citi's disclosed portfolio in India show that other than in HDFC, it also holds about 2.7% in Bajaj Holdings, the holding company for Rahul Bajaj group's financial services business and other investments. In the same financial services space, it holds stakes in IDFC, Allahabad Bank, Canara Bank, Central Bank, Indian Overseas Bank, JM Financial, Dewan Housing, Federal Bank, IFCI, Indiabulls Securities, India Infoline, Karnataka Bank and a few other entities. The US financial services major also holds stakes in several companies from across sectors like infrastructure and real estate, software and technology, pharmaceuticals, telecom and others. On Friday Citigroup's stocks dipped below $4-mark, weighed down by reports that the financial major might have to merge with another bank or sell-off parts of itself to survive. In India market players are keeping their fingers crossed. In case Citi is pushed to the wall, resorting to fire sale in its India portfolio could be a possibility.

Courtesy: www.timesofindia.indiatimes.com, November 24, 2008

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Former Petroleum Minister Ram Naik has flayed the UPA government lowering prices of Aviation Turbine Fuel (ATF), saying India is the only country where ATF is cheaper than petrol. "This is the eighth wonder of the world. In no other country will you find that ATF is cheaper than petrol", Naik said here today. The senior BJP leader has put up hoardings decrying the government over the move in the North Mumbai Lok Sabha constituency, where he lost to Bollywood actor Govinda in the 2004 elections. "ATF is sold at Rs 40 per litre to the airlines, whereas petrol which is consumed by the common man, the mobike riders, taxi and autorickshaw users costs Rs 57 per litre," he said."The government is leaning towards the affluent and rich people, that is why it reduced ATF prices but did not reduce price of diesel and petrol despite substantial fall in their international prices," Naik said.

Courtesy: www.samachar.com, November 21, 2008

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US economic, military and political dominance is likely to decline over the next two decades, according to American intelligence agencies.

US clout will weaken as China and India grow more powerful, the National Intelligence Council (NIC) predicts in its latest report on global trends. The US dollar will no longer be the world's major currency and food and water scarcities will fuel conflict. The NIC report comes as President-elect Barack Obama prepares to take office. It will make sombre reading for Mr Obama, says the BBC's Jonathan Beale in Washington, as it paints a bleak picture of the future of US influence and power. "The next 20 years of transition to a new system are fraught with risks," says Global Trends 2025, the latest of the reports that the NIC prepares every four years in time for the next presidential term.

Nuclear weapons use
The NIC's 2004 study painted a rosier picture of America's global position, with US dominance expected to continue. But the latest report says that rising economies such as China, India and Brazil will offer the US more competition at the top of a multipolar international system. A world with more power centres will be less stable than one with one or two superpowers, it says, offering more potential for conflict. Global warming will have had a greater impact by 2025, triggering food and water scarcities that could fuel conflict around the globe. And the use of nuclear weapons will grow increasingly likely, says the report, as rogue states and terrorist groups gain greater access to such weapons. But the NIC does give some scope for leaders to take action to prevent such scenarios. "It is not beyond the mind of human beings, or political systems, [or] in some cases [the] working of market mechanisms to address and alleviate if not solve these problems," said Thomas Fingar, chairman of the NIC. And, adds our correspondent, it is worth noting that American intelligence has been wrong before.

Courtesy: http://www.bbc.co.uk, November 21, 2008

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Guess who are emerging as big hospitality players! IT and ITeS companies. Infosys Technologies has a countrywide room inventory of as many as 13,000. Around 5,000 of these rooms are for trainees. But many others, including a 500-room facility in its Electronics City facility in Bangalore, are meant for visitors and are of a quality that compete with luxury hotels. Wipro has 500 rooms across three of its facilities in Bangalore Electronics City, Sarjapur Road and Koramangala a 30% increase over the number it had one year ago. TCS, Satyam, HCL, IBM, Accenture and HP (EDS) too have their own or outsourced accommodation arrangements for their clients and employees travelling for site visits and projects respectively. The reason? These options are highly cost effective compared to regular hotels. Since they are part of the workplace facility, commuting can be avoided. And since these companies have large numbers of visitors and travelling executives every day, the cost saving is huge. Wipro gets about 500 visitors a day. Infosys Electronics City facility alone receives some 150 foreign visitors and other centres 25 foreign visitors a day. What's more, 6,000 employees of the company travel every day between various facilities of the company. Says T V Mohandas Pai, head of HR in Infosys Technologies, A hotel room night costs $150, and it will cost us $25,000 to put up 175 foreign visitors. Thats around $10 million for a year. And to put up some 6,000 employees, the cheapest single-bed will cost Rs 2,500, so it will cost Rs 1.5 crore a day and Rs 450 crore for 300 days. Even a 50% saving in this is big for us. Infosys charges just Rs 1,250 per night for their rooms, and Wipro Rs 1,000. While the companies are benefiting, its adversely affecting the hospitality sector. Bangalore alone has 1,200 to 1,300 rooms of IT/ITeS companies that directly compete with higher-end hotels. This inventory has grown by 20% over last year. Today, when hotel occupancies in the city are down to 55-60%, Infosys facility has a 100% occupancy. According to analysts, hospitality ventures by tech firms have reduced occupancy in star hotels and serviced apartments in Bangalore by at least 15%-20%. Infosys captive hotel unit will surely take away 30-40 rooms per day from the hotel room inventory in the city, says Mohan Kumar, GM, Taj West End. According to Taposh Chakraborty, CEO of Boutique Hospitality Consultants, Infosys would be saving anywhere between 70% and 80% on costs by running their own hotel. Infosys Technologies has a countrywide room inventory of as many as 13,000. The company has 500 rooms in its Electronics City facility, about 10,000 in Mysore, 1,000 in Chennai, 1,000 in Pune, 500 in Bhubaneshwar, 450 in Hyderabad and 250 in Chandigarh. Its also in the process of adding another 3,000 rooms. The company has already invested Rs 1,200 crore in this project.

Courtesy: www.timesofindia.indiatimes.com, November 13, 2008

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NTT DoCoMo of Japan today said it will buy 26 per cent in Tata Teleservices Ltd for approximately Rs 13,070 crore ($2.7 billion), valuing the closely-held mobile services operator at Rs 50,269 crore ($10.38 billion) and each of its 25 million subscribers in 20 circles at Rs 19,334. Of the 26 per cent stake, DoCoMo will buy six per cent from Tata Sons and other group companies and the remaining 20 per cent will be new shares issued by Tata Teleservices. In accordance with the takeover regulations of the Securities and Exchange Board of India (Sebi), DoCoMo, along with Tata Sons, will make an open offer for 20 per cent in Tata Teleservices Maharashtra Ltd, which operates services in Maharasthra and Mumbai and has five million subscribers, in which Tata Teleservices holds 37.7 per cent. Together, the two companies have a 9.3 per cent share of the Indian mobile market. With over 53 million customers, DoCoMo is one of the world's largest mobile services companies. Out of this, 46 million are FOMA subscribers, the brand name for the world's first 3G mobile service based on W-CDMA technology. The company hogged the spotlight in 1999 when it launched i-Mode, the first mobile Internet service, challenging the domination of the personal computer. It was also the first to launch a handset with "wallet transactions" (meaning it can be used as a credit card).

Tata Teleservices operates CDMA-based services and has a licence to operate GSM services, for which it has already recieved spectrum in many circles. It reported a loss of Rs 1,813 crore in 2007-08, down from Rs 2,062 crore the previous year. A DoCoMo spokesperson in Tokyo said the company will have the right to appoint three directors on the Tata Teleservices board. The valuation paid by DoCoMo shows the buoyancy in the Indian telecom market, notwithstanding the global economic meltdown. In 2006, Sivasankaran had paid Rs 1,200 crore for 8 per cent in Tata Teleservices, giving it a per subscriber valuation of Rs 15,000. In the same year, Temasek paid about Rs 1,500 crore for 9.9 per cent in the company at a somewhat similar subscriber valuation (see table). The price that Tata Teleservices has received is attractive when compared with the per subscriber market capitalisation of companies like Bharti Airtel and Reliance Communications, which have seen their stocks battered in the market. The per subscriber market capitalisation of the country's largest private sector telecom player, Bharti Airtel, is Rs 14,977, and that of Reliance Communication is Rs 7,420, based on today's market capitalisation. It has also paid much lower than Telekom Malaysia which picked up a 15 per cent stake in Idea Cellular, which has a near similar subscriber base, at a per subscriber value of Rs 23,152, in July this year. However, DoCoMo has paid much lower than Vodafone, which picked up 67 per cent in Hutchison-Essar Ltd in 2006 for an enterprise value of $18.8 billion (Rs 80,840 crore). It paid a staggering Rs 32,336 per subscriber to acquire the stake. Experts said that the Japanese company could buy the stake held by Temasek and Sivasankaran and take its stake in Tata Teleservices higher. Sivasankaran, however, said DoCoMo has not made him an offer. The DoCoMo spokesperson denied reports that the company plans to up its stake in the Indian company from 26 per cent to over 50 per cent. Sector experts said the deal makes strategic sense for both. "DoCoMo brings in significant technology and service experience in 3G which it has pioneered in the world and puts Tata Teleservices in a different league," telecom analyst Mahesh Uppal said, adding: "For DoCoMo, this marks its entry into one of the fastest growing telecom markets in the world."

Courtesy: www.business-standard.com, November 13, 2008

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ON BOARD PRIME MINISTER'S SPECIAL AIRCRAFT: Fresh from inking a pact on a joint investment fund with Oman, India has also secured an understanding from Qatar for investing $5 billion in energy-related sectors. The discussions with the top leadership of both the countries on channelling their surplus funds to India is part of the government's strategy to ensure that the needs of the infrastructure sector continue to be met despite the global credit squeeze. "We discussed the modality of Qatar investing about $5 billion in India. In the next two to three months, we will work out the modalities to identify projects in the areas of energy, power, fertilizer and other related activities to enable the government of Qatar take firm decisions about the areas these investments could be directed," Prime Minister Manmohan Singh said after wrapping up his three-day visit to the Gulf countries of Oman and Qatar. The joint India-Oman fund, with a contribution of $50 million from each side with the scope of raising the amount to $1.5 billion, could become a major vehicle for channelising investments from Oman to India, noted the Prime Minister.

Dr. Singh termed the climate as highly favourable to widen and deepen India's relationship with the Gulf countries. "At a time when the global economy is hit by crises, there are opportunities for the countries of the Gulf and India working together to promote economic trade and investment cooperation," he felt. The Prime Minister pointed out that the visits were in the pipeline for a long time and important not only from the point of India's economy and security but also because 50 lakh Indians were working in the Gulf. Remittances from Oman and Qatar alone averaged $800 million. "So our effort has been to ensure that our workers get a fair treatment, that they are well looked after besides exploring the possibility of expanded economic, trade and investment cooperation with Oman and Qatar," he added. In both countries, the objective was to ensure the well-being of Indian workers. In Oman, India signed an MoU on manpower which was a "significant step" in ensuring that workers from India would be treated fairly. "This is not to say that they are not being treated well. We are grateful to Oman and Qatar for creating a hospitable environment for our workers to earn their livelihood but there is always scope for improvement," the Prime Minister said. Since India had been trying to negotiate a free trade agreement with the Gulf Cooperation Council, the Prime Minister felt it would be a good idea to visit the Gulf countries to request for the support of Oman and Qatar in the negotiations. On the liquefied natural gas front, both sides agreed to consider enhancing the allocation in the next year or two. India had earlier signed an agreement with Qatar for 7.5 million tonnes per annum of LNG of which five million tonnes are being currently made available and 2.5 million tonnes will be available by the last quarter of 2009. The Prime Minister said the two sides also discussed the possibility of expanding cooperation in regard to supply of fertilizers and investing in fertilizer plants in India or expanding production in existing plants in Qatar with an assured market in India.

Courtesy: www.hindu.com, November 12, 2008

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Prime Minister Manmohan Singh's statement in Muscat on Sunday that the Indian economy would be affected more than previously anticipated by the global financial crisis and that growth is expected to slow down to 7-7.5% does not come as a surprise. The PM is only reiterating what many think-tanks and multilateral institutions, most notably the International Monetary Fund (IMF), which recently lowered its estimate of India's GDP growth for 2009 to 6.3%, have already said. That growth will slow down in India, as in the rest of the world is quite evident. However, it may slow down much less in India than elsewhere. It is pointless to quibble over precise numbers when there's no knowing when the financial de-leveraging being witnessed in the western world will finally end. The only thing we can say with any certainty is that while some countries like the US may see a contraction in their GDP, India will see its GDP grow at a rate that will still count as among the fastest in the world, barring China. That is essentially the message that the PM was trying to get across to his audience in Muscat. There is a reason for this, especially if you consider that west Asia and the UAE, in particular, are home to some of the largest sovereign wealth funds (SWFs), thanks to their surplus petro-dollars, accumulated during the months when oil prices were on an upswing. Given our traditionally close economic and cultural links with west Asia, the PM was, doubtless, trying to project India as a lucrative investment destination. At a time when external sources of funding have dried up while our need for finance, especially for the infrastructure sector, have not, SWFs offer an attractive alternative. Not only are they unlikely to be as fickle as foreign institutional investors (FIIs) or private equity, they are usually willing to take long-term strategic decisions, even if it means taking a hit, temporarily. They also have large funds at their command. Best of all, and contrary to widespread belief, most SWFs tend to be passive investors and do not entail compromising our national economic interests. All of this makes them a very attractive source of finance. Will they respond to the PM's overtures? We'll have to wait and see.

Courtesy: www.economictimes.indiatimes.com, November 11, 2008

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Russia's anti-trust office has allowed Indian energy firm ONGC to buy London-listed, Russia-focused oil firm Imperial Energy, a spokesman for the office said on Friday. Imperial's stock jumped by 15 per cent and ONGC rose by 5 per cent. India's biggest oil producer agreed the takeover of Imperial for $2.6 billion in late August. The deal marks ONGC's second investment in Russia, where the company already has a 20 per cent stake in the Sakhalin-1 oil and gas consortium headed by US major Exxon.

Courtesy: www.economictimes.indiatimes.com, November 07, 2008

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State-run telecom operator Bharat Sanchar Nigam Ltd (BSNL) is looking at international markets to expand its services, and is even considering acquisitions, a top company official said here Friday. 'We have started looking at markets in Africa and Middle East countries. It depends on the competition. We have made a bid in Middle East and are exploring other options,' BSNL chairman and managing director Kuldeep Goyal told reporters at a press meet during the launch of its data card for voice and data services. The company is planning expansion in mobile and broadband segments in countries where telecom density is low. He also said the company is looking at acquisitions, saying: 'We will definitely consider that also. We have just started thinking on that line.' BSNL is also planning to hive off its tower business. 'We are planning to make our infrastructure division into a separate company to generate more revenues,' Goyal said, adding that American consultancy Boston Consulting Group has been appointed to evaluate the infrastructure business. In the current fiscal, BSNL has a plan to invest Rs.180 billion, and similar plans for the next financial year fiscal as well. But next year, Goyal said, investments could be even scaled down to around Rs.140-150 billion on account of the economic meltdown. The BSNL chief ruled out his company would come out with an initial public offer (IPO), an issue that was much discussed of late. 'Looking at the current market scenario, I don't think an IPO can come now. It depends on the market condition.' The BSNL board has approved an IPO, with the the proposal now lying with the telecom ministry. The telecom operator proposed dilution of about 10 percent stake. Dwelling on other plans, Goyal said BSNL is eyeing a mobile subscriber base of about 100 million by 2010-11 and hopes to add seven to eight million customers in the remaining part of the current financial year. At present, BSNL's total mobile service base is 39.17 million till September, of which 2.96 million connections got added in the April-September period. On BSNL's plans for third generation (3G) services rollout, he said the company would first target the cities in the north and the east - in Punjab, Haryana, Uttar Pradesh, West Bengal and Orissa - in the 'early part' of 2009. 'We expect about 2 percent of the total mobile subscribers in the country to shift to our 3G service once it is launched.' Regarding submarine cable laying, Goyal said BSNL was part of a seven company consortium, Europe India Gateway (EIG), which would lay a trans-Atlantic undersea cable link. The telecom operator will invest $50 million in the project. In addition, Millennium Telecom Co, promoted by BSNL and Mahanagar Telecom Nigam Ltd (MTNL), will float a tender for laying another submarine cable line. 'It will be on both the east and west; one side going towards Singapore and another to Europe.'

Courtesy: www.indiaenews.com, November 07, 2008

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Indian economy will not be affected as badly as other countries by the global financial as it has a strong growth record, Jamie Di2008: Year of global financial crisis Mon, chief executive of financial services firm JP Mrgan Chase and Co, said. "India is doing far better than most other countries... Most important that you (India) might slow down a little bit but you have still a pretty good growth, so I don't think it needs to do quiet anything like it has been done elsewhere," Dimon said in an interview with a news channel. He, however, said that the global economic scenario was alarming and the current crisis was "worst since the great depression" of 1930s. Referring to the great depression, he said: "I don't think it will go that bad but that will be the worst." With the three major economies - the US, Europe and Japan - facing downturn, Dimon urged the emerging economies to be prepared to deal with its consequences.

Courtesy: www.economictimes.indiatimes.com, November 05, 2008

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The man who will now help the country emerge out of the deep economic crisis spent some of his formative days in Ahmedabad, Honing his skills at the Indian Institute of Management here. Former chief economist Raghuram Rajan, who was appointed the honorary economic advisor to Prime Minister Manmohan Singh on Monday, is an alumnus of IIM-A, where his professors remember this "bright boy with extraordinary skills". Rajan, who teaches at the University of Chicagos Graduate School of Business and will shuttle between Chicago and New Delhi, is a 1987 batch post graduate programme student of IIM-A. "He has his fingers on the pulse of the world economy, both the emerging and advanced markets and developing and developed countries. Being at the head of research at IMF has given him a grasp over world economy," says former IIM-A director Bakul Dholakia, who has been his professor. "He is a rare combination of an economist who understands financial markets. His specialisation in IIM was finance," says Dholakia. But this IIT-Delhi graduate in electrical engineering, who did his PhD from MIT, isnt just a bookworm. His professors and classmates remember his cricketing skills and he was captain of the IIM-A team during inter-IIM meets. He was also the first alumnus of IIM-A to address the institutes convocation in 2005. Professor Ajay Pandey, a finance and accounting faculty at IIM-A, who specialises in capital markets and financial sector regulations said, "Its a welcome move by the Indian government. He is a competent person who has taken over a place of great importance.""Rajan has to ensure that the impact of current global crisis is minimised and the Indian economy bounces back fast. What we do in the next three to four months is more crucial than any long-term action. So, it is literally a fire-fighting job for him," says Dholakia.

Courtesy: www.timesofindia.indiatimes.com, November 05, 2008

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