His spirits soar further

The flamboyant Vijay Mallya of UB Group is cheering. After having acquired premium scotch distiller Whyte & Mackay for $1.18 billion, he has now been successful in acquiring a 26% stake in Deccan Aviation at Rs.5.5 billion. The Kingfisher– Air Deccan M&A deal is the third deal in the Indian skies this year. The previous ones were the Jet-Sahara and Air-India- Indian. Though his first attempt at the stake acquisition was snubbed by G.R. Gopinath, Mallya came out victorious in his second attempt. UB Group has been allotted 96,77,419 fully paid-up equity shares of Air Deccan, at Rs.155/share.

While an advance amount of Rs.1.5 billion has already been paid, the remaining amount would be paid in another four weeks time. An open offer of another 20% stake is soon to be launched by Mallya and he has already initiated talks with the financial institutions for the same. Both the airlines together would now boast of a fleet of 71 aircraft s, coverage of 70 destinations and command 33% market share. With the domestic skyline being now strengthened, Mallya now aims to cross the national boundary. Earlier, Mallya had placed orders for five A380s with an option for another five that are used for longhaul flights. With the Indian government keen on bringing down the cap of flying international from five years to three years of domestic flying, Mallya should be in high spirits!

$100 billion and still counting...
May has proved to be a very good month for Indian economy, especially for Mutual Fund companies. In this month, in quick succession, the country’s GDP and BSE’s market capitalisation managed to go beyond the $1 trillion mark. To add more to the list, the Mutual Fund industry crossed the $100 billion milestone. Assets under management (AUM) by 29 fund houses were pegged at Rs.4.07 trillion. At the current rupee-dollar exchange rate of Rs.40.52, this interprets into a little over $100 billion. Th is milestone was reached on the back of a 16% rise in industry AUM in May over the previous month and a 48% jump over the May 2006 figures.

Tata AIG expands its India presence!
Tata AIG Life Insurance Company Ltd., the private insurer giant intends to broaden its Indian footprint by growing its number of offices and also laying importance on small towns offering higher growth scenario. “We are planning to increase our number of offices from 72 to 120 during the year. 10 new branches will be added in the eastern region,” said Tata AIG Managing Director Trevor Bull. The size of the sales personnel would be doubled from current 10,000 and the company strategically plans its moves to foray in smaller towns to accomplish growth targets. The company is also planning to initiate new products in the market in 2007 in the various fields like health, pension and gratuity.

The pied piper cardiologist: Naresh Trehan
Escorts Heart Institute and Research Centre in Delhi, from being a Mecca for heart patients has now turned into a war zone between leading cardiologist Dr. Naresh Trehan and Shivinder Mohan Singh, Managing Director, Fortis Healthcare. Dr. Trehan, who had a 10% stake holding in Escorts was sacked by Shivinder Mohan Singh as the Executive Director of Escorts for conflict of interest over Trehan’s stake in Medicity. However, everything Has now been put to rest with Trehan resigning From Fortis to join Apollo.

Mukesh’s SEZ will have to wait!
Mukesh Ambani has once again hit a roadblock with his Navi Mumbai SEZ. Government has deferred its decision on the multi product SEZ based on the objections made by revenue department. Also, the Jawaharlal Nehru Port Trust has objected that the national highway passing through Navi Mumbai SEZ should first be upgraded to four-lane and only then the SEZ could be approved. The Tatas on the other hand have been lucky as they have received the approval for their Gopalpur SEZ project in Orissa.

Xerox India revs up its distribution plans!
Xerox has decided to ramp up its expansion plans in the highly competitive Indian IT peripheral market. As per the plan, 25 Indian cities would have 100 Xerox kiosks by end of 2007. This forms a part of the ‘Go to Market’ strategy of Xerox India, which is a move to strengthen its position in Indian market. Ahmedabad, Jaipur, Lucknow, Chandigarh, Kolkata, Pune, Mumbai, Bangalore and Hyderabad, Are among the 25 cities short listed by Xerox for the purpose. The kiosks are aimed at promoting sales and increasing market share of its products. A channel expansion plan is also on its anvil. By the third quarter of the current fiscal year, Xerox will add 35 new channel partners and will also announce five new channel schemes.

DLF is the new buzz word!
Suddenly, DLF seems to be the epicentre of all corporate activities in India. The real estate behemoth has entered into an agreement for floating a joint venture with Fortis Healthcare to set up hospitals all across India. Shivinder Mohan Singh, Managing Director of Fortis Healthcare has intimated that they would have the majority stake (74%) in the venture and the rest of the pie would remain with DLF. The agreement would mark DLF’s expedition in the healthcare segment. It has also tied up with USbased Prudential Insurance to sell life insurance products. All these plans come ahead of the historical IPO of the company which is all set to hit the Indian market on June 11, 2007.

BMW to establish its IPO in India!
German luxury car maker BMW is all set to join the race with global auto majors to resource auto parts from India! The company is all set to open its worldwide purchasing office in India to furnish the needs of its global ancillary requirements. “We will be setting up an international purchasing office (IPO) which will be headed by an expat to take care of sourcing components for BMW’s global operations,” BMW India President Peter Kronschnabl said. The office is anticipated to be begin operations by August 2007. BMW presently has a purchase division for its India functions at Chennai. Kronschnabl added that the latest purchasing office would be autonomous of the India processes and would report to BMW’s Munich headquarters.

JSW’s unique compensation plan!
Perhaps for the first time ever, after Singur and Nandigram, farmers of Bengal would not mind parting with their land for industrialisation purposes. The Jindal Group is setting a steel plant in Salboni in West Midnapore district of West Bengal and is offering a unique compensation scheme to the land owners. JSW Bengal Steel will acquire around 450 acres of land for setting up the 10 million tonne steel plant in Bengal. As compensation package, Sajjan Jindal, Vice-Chairman, JSW Steel, is giving the families the total value of land in cash and an equal amount as shares. The landowner’s shares would be held in a trust managed by the district magistrate. Also, a member per family will be offered a job and each family would get a monthly income from annuity scheme managed by LIC.

Now, GE to set up infrastructure fund
With a feel good factor in the Indian economy, General Electric (GE) has plans to set up a $300-500 million infrastructure fund in India. “Sooner than later we will institute an infrastructure fund, chances are there that the proposed investments might be doubled,” Jeffrey R. Immelt, Chairman & CEO, GE, said. The government’s 11th Five Year Plan envisions investment in infrastructure to the tune of $320 billion. This declaration from GE followed just after Citigroup, Blackstone, IDFC and IIFCL had declared their plans to set up $5 billion fund for infrastructure development. The company is also expected to explore its potential in financial services industry.

BHEL set to join $10 billion club!!!
Come 2012 and BHEL would enter the prestigious $10 billion club. At least that is what the company is aspiring towards. Bharat Heavy Electricals Limited (BHEL) has the ‘Strategic Plan 2012’ in place which entails that it would grow at a 20% compounded annual growth rate and achieve a turnover of $10 billion by 2011-12, which is two and a half times its present turnover of $4 billion. Thus the company would achieve a turnover of $10 billion by 2011-12. Presently its turnover stands at $4 billion. Capacity and capability enhancement in core areas like power, industry, transportation, transmission, exports and spares and services businesses will be the main drivers for the two and a half times leap in its turnover.

At last; North India rests in peace!
The Gurjar protests, for their inclusion in the Scheduled Tribes category, have finally come to an end. The meeting between Vasundhara Raje, CM of Rajasthan and Colonel Kirori Singh Bhainsla, who lead the protests through his Gurjar Sangharsh Samiti, resulted in formation of a committee. The three member committee, would then submit their report to the government about the possibilities of awarding the ST status to Gurjar community. The process should be within the provided guidelines of the Union Government. In the past week, the protestors blocked national highways and railway tracks. The capital was also sealed off when the protestors held siege at all the key entry points of Delhi. Some Gurjars lashed out at Bhainsla, for surrendering so meekly, after they had taken the movement to such feverish pitch.

Expect more ‘Spark’ from GM in India!!!
After successful voyage of its Chevrolet Marque, launched in India four years ago, General Motors is expected to introduce more brands such as Cadillac, Pontiac and Saab in India. The company plans to grip 10% share in the passenger vehicle market by 2010. “It cannot be ruled out that GM brands like Cadillac, Pontiac, Saab and Vauxhall would be launched in India,” says GM India President and Managing Director Rajeev Chaba. The company has recently launched its highly awaited Chevrolet Spark mini-car and has ambitious target of selling 70,000 cars per annum in India.

Automobile sector feels the heat of May
According to the data released by Society of Indian Automobile Manufacturers (SIAM), the automobile sector growth fell by 6.55% as compared to the last year. While the domestic passenger car sales grew by 9.07%, the motorcycle segment experienced a decline of 16.36%during the month of May, 2007. Maruti led the passenger car segment with a growth of 9% while Hyundai lagged behind with a meagre growth of 3.36%. Interstingly, GM escaped the slump due to its new launch, Spark, which resulted in a staggering 95% increase in its sales. In the motorcycle segment, most of the companies like Hero Honda and Bajaj registered negative growth.

Will it be a smooth SAIL?
Steel Authority of India Ltd (SAIL), Ispat Nigam Limited and National Mineral Development Corporation are setting up a steel plant in Chattisgarh through a jointventure. The agreement of these companies is based on equity participation. The plant is being set up with an initial capacity of four million tonnes in a year as per the ‘in principle’ approval by the board of directors of SAIL. The Memorandum of Association between the partners of the joint venture is yet to be finalised but the activities for the same have started.

BSNL to sort-out contract hiccups!!!
State run telecom operatorsare now bringing in new strategies to get past their private rivals. BSNL has revealed that it would seek a lower price from their vendors Ericsson and Nokia for awarding them an estimated $4.8 billion contract which would add 45 million GSM lines to its network. BSNL CMD A.K. Sinha also assured that the PSU would seek an advanced purchase order at a reduced price, against the $107 per line quoted by Ericsson, which would install 60% of the 45 million GSM lines. The remaining 40% will be executed by Nokia. The operator has also unveiled a new postpaid plan that offers cheap tariff s for roaming facilities and other services of BSNL.

Reliance Money to quadruple its kiosks!
Anil Ambani owned Reliance Money is making all possible efforts to take the count of its web-enabled trading kiosks from the present 2,500 to 10,000 by March 2008. The company has joined hands with coffee chain Barista for setting up 100 stalls at its outlets across the country. Reliance Money provides a trading stand for carrying on deals in stocks, commodities trading, insurance, mutual fund, and other products. The company will also put up an institutional desk to transact with foreign institutional investors. Reliance Money, a relatively new entrant in the market, already has a turnover of close to Rs.6 billion.

‘Fast and first’ in 18 long years!

It is definitely time for jubilation for the Indian economy. For the first time in eighteen years, the Indian economy has grown a good 9.4% in the fiscal year 2006-07. Such fast rate was witnessed last in 1988-89, when the economy grew by 10.5%. The positivity was also extended to the federal fiscal deficit as it decreased to 3.5% from 4.1% year on year. For the January- March quarter, while the manufacturing sector leaped ahead with a growth of 12.4 %, services showed a similar growth of 9.9% as the same quarter previous year. The only disheartening growth has been that of the agricultural sector, which comprises 60% of our population. It grew a meagre 3.8% in the fourth quarter as compared to the previous year. Sparing the dismal performance by the agricultural sector, the economy’s robust growth emphasizes the emergence of India as a global economic power. The Tata- Corus deal earlier this year and other high profile global takeovers by Indian companies has reinforced the same. “With high growth comes high savings and high investment which, in turn, reinforce growth itself ,” commented P. Chidambaram, the finance minister of the country on this commendable growth of the Indian economy.