SectorSnippets Issue 39:TP4 WhitePaper A4.QXD€¦ · Page 2 of 19 Sectoral Snippets About Sectoral...

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Sectoral Snippets India Industry Information Issue 39 - January 2010 KPMG IN INDIA

Transcript of SectorSnippets Issue 39:TP4 WhitePaper A4.QXD€¦ · Page 2 of 19 Sectoral Snippets About Sectoral...

Page 1: SectorSnippets Issue 39:TP4 WhitePaper A4.QXD€¦ · Page 2 of 19 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter

Sectoral SnippetsIndia Industry Information

Issue 39 - January 2010

KPMG IN INDIA

Page 2: SectorSnippets Issue 39:TP4 WhitePaper A4.QXD€¦ · Page 2 of 19 Sectoral Snippets About Sectoral Snippets Sectoral Snippets is an India-focused, monthly, freely-distributable newsletter

Page 2 of 19

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 Financial Services 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 39

The�Indian�economy�weathered�the�globalfinancial�crisis�in�a�relatively�prudent�manner�lastyear,�supported�by�two�decades�of�strongfundamentals,�revealing�the�strong�base�andmaturity�of�India’s�banking�system�and�financialmarkets.�In�the�wake�of�the�new�year,�the�Indianeconomy�gears�up�to�take�on�challenges�such�ashigh�inflation�especially�in�food�prices,�fiscalimbalances�and�the�impact�of�an�insufficientmonsoon.�Another�key�issue�on�the�policymaker’s�agenda�is�when�and�more�importantlyhow,�to�carry�out�the�reversal�of�the�measuresundertaken�to�counter�the�impact�of�the�globalfinancial�situation,�as�the�timing�and�manner�ofthe�same�is�bound�to�have�considerablerepercussions.��

Going�forward,�analysts�are�positive�on�theoutlook�for�the�economy�this�year�with�positiveindicators�such�as�an�increase�in�industrialoutput.�From�recent�news�it�would�seem�thatthe�GST�implementation�date�will�be�delayedbeyond�April�2011.

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

Regards,Russell

Russell Parera

Chief Executive Officer

KPMG in India

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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As�India�has�emerged�strong�from�the�recession,�the�last�month�of�the�year

continued�to�post�an�upward�trend�in�growth.�The�Indian�Prime�Minister's

economic�panel�stated�that�the�growth�projection�of�6.5�percent�for�2009�will�be

revised�upward�on�the�back�of�the�high�growth�of�7.9�percent�in�the�quarter�of�the

fiscal.�Overall,�the�last�quarter�of�the�year�that�went�by,�witnessed�growth�in

many�key�areas�painting�a�glorious�picture�of�India’s�rebound.�Mineral�production

in�the�last�quarter�grew�by�8.25�percent�(as�of�October�2009)�while�the

manufacturing�sector�witnessed�growth�for�the�first�time�in�December�(2009)

since�October�(2009)�with�activity�reaching�its�highest�since�May�(2009)�on

account�of�the�sharp�rises�in�the�inflow�of�work�and�output.�

The�other�areas�that�witnessed�growth�and�consequently�showcased�India’s

steady�recovery,�included�the�growth�in�exports.�The�country’s�exports�grew�for

the�first�time�in�14�months�ending�November�2009.�Overseas�shipments

increased�by�18.2�percent�to�USD�13.2�billion�in�November�from�a�year�earlier

after�sliding�to�an�average�of�21�percent�per�month�since�October�2008.�On�the

other�hand,�imports�fell�by�2.6�percent�to�USD�22.8�billion�in�November,�resulting

in�a�decrease�in�trade�deficit.�

Furthermore,�experts�predict�that�2010�is�likely�to�be�marked�by�a�positive

domestic�outlook�fuelled�by�continued�growth�in�key�areas.�The�Prime�Minister's

economic�adviser�C.�Rangarajan�stated�that�the�economy�will�expand�by�8

percent�in�2010-11�supported�by�an�expected�improvement�in�agricultural�input.�A

large�portion�of�this�growth�can�be�attributed�to�the�growing�domestic�demand

and�the�high�levels�of�private�investment.�However,�the�downside�of�high�liquidity

in�the�system�is�rising�inflation.�India's�annual�wholesale�inflation�rose�to�4.78

percent�in�November�2009,�compared�with�1.34�percent�rise�in�October�2009.

Consequently,�the�current�fiscal�year�might�witness�a�reversal�of�the

expansionary�monetary�policy�with�the�repo�rate�forecast�to�stand�at�6�percent�by

the�end�of�2010�and�at�6.75�percent�by�the�end�of�2011.

Overall,�a�common�view�among�experts�is�that�if�supported�by�fiscal�and

monetary�intervention�in�the�right�direction,�2010�is�likely�to�be�a�year�of

expansion�and�distinct�improvement�in�growth�for�India.�

Indian EconomyPage 3 of 19

Analyst: Asmita Deshmukh, Nishtha Satyam

Indicators 2010F 2011F

Nominal GDP (USD

Billion)*1,541.9 1,800.6

Real�GDP�Growth* 6.8 7.8

GDP�Per�Capita 1300 1500

Inflation�Rate�(WPI)*** 2% 5%

Source: *EIU , *** Planning Commission

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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• Volkswagen AG launches Beetle in India

Global�auto�major�Volkswagen�AG�reportedly�launched�its�hatchback�model,�theBeetle,�in�India.�Positioned�as�a�luxury�hatchback,�the�Beetle�is�expected�to�bepriced�at�about�USD�42716�ex-showroom�in�Delhi.�The�company�is�expected�toimport�this�model�as�a�completely�built�unit�(CBU)�from�Mexico,�attracting�aduty�of�over�100�percent.�It�has�been�reported�that�there�were�over�170�advancebookings�for�the�iconic�Volkswagen�model.�The�Beetle�is�anticipated�to�helppopularize�the�Volkswagen�brand�in�India.

• M&M to consolidate auto parts businesses under Systech

Indian�vehicle�maker�Mahindra�and�Mahindra�Ltd�plans�to�consolidate�its�autocomponents�businesses�into�a�single�entity�under�the�Systech�brand.�Theconsolidation�is�believed�to�result�in�significant�cost�reduction�for�the�companyas�well�as�rationalization�of�its�widespread�marketing�operations.�MahindraGroup�firms�such�as�Mahindra�Forgings,�Mahindra�Composites,�MahindraGears,�Mahindra�Castings,�Mahindra�Ugine�would�reportedly�be�clubbedtogether�under�the�Systech�brand.

• Michelin to manufacture tyres in India

French�tyre�manufacturer�Michelin�plans�to�set�up�a�production�facility�in�TamilNadu�to�manufacture�tyres�for�commercial�vehicles.�The�company�is�estimated�toinvest�USD�859.2�million�and�is�expected�to�start�its�operations�by�2012.�Michelinhas�reportedly�signed�a�Memorandum�of�Understanding�with�the�Tamil�Nadugovernment�for�the�plant’s�construction�in�the�Tiruvallur�district.�The�company�islikely�to�hire�1500�workers�from�the�local�population.

• Fuji Heavy Industries to launch models in India

Fuji�Heavy�Industries�Ltd�plans�to�foray�into�the�Indian�car�market�in�2011,�withthe�launch�of�its�models�including�its�flagship�Legacy�sedan.�The�company�isalso�likely�to�mull�launching�its�Forester�sports�utility�vehicle�in�India.�Fuji�hasreportedly�received�inquiries�from�Indian�sales�offices�and�trading�companies,and�is�expected�to�choose�a�partner�for�its�Indian�operations�soon.

Page 4 of 19

Auto and Auto Components

Analyst: Ranjeet Javeri and Kudrat Puri

“India is a strategic market for theVolkswagen Group and holdsenormous potential for it” Prof. Dr. Jochem Heizman, Member, Board of Management, Volkswagen AG

(Source: Wheels Unplugged, Volkswagen commencesproduction of its first made-in-India car Polo, December12, 2009)

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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• Kotak ties up with Russia's top I-bank for M&A advisory services in

CIS, Africa

Kotak�Mahindra�Bank,�investment�banking�subsidiary�Kotak�Investment�hasentered�into�an�alliance�with�Renaissance�Capital(a�part�of�the�RenaissanceGroup),�one�of�the�leading�investment�bank�in�Russia,�Central�Asia,�EasternEurope�and�Africa.�The�alliance�is�likely�to�enable�the�bank�to�engage�in�cross-border�M&A�advisory�services�in�Commonwealth�of�Independent�States�(CIS)countries�and�Africa�by�leveraging�Renaissance�Capital�experience�in�thesemarkets.�

As�per�industry�sources,�many�Indian�companies�are�exploring�opportunities�forbuy-outs�in�oil�&�gas�and�natural�resources�across�the�African�region�and�CIScountries.�Similarly,�Russian�firms�and�other�companies�from�CIS�are�alsolooking�at�the�Indian�market�for�an�expansion�in�the�metals�segment.�Both�thecompanies�can�take�advantage�of�the�interest�shown�by�other�players.

• Indiabulls plans to foray into infra financing business segment

Indiabulls�Financial�Services�Ltd.�(IBFSL)�is�planning�to�venture�into�theinfrastructure�and�construction�equipment�financing�space,�primarily�to�capitalizeon�the�growing�need�of�infrastructure�projects.�The�company�is�planning�todisburse�about�USD�1.7�billion�in�the�coming�year�and�also�plans�to�launch�autoloans�products�and�scale�up�its�commercial�vehicle�finance�business.�

Further,�it�is�planning�to�venture�into�the�financing�businesses�through�a�wholly-owned�subsidiary�Indiabulls�Infrastructure�Credit�Ltd�(IICL),�which�hasreceived�the�nonbanking�finance�company�(NBFC)�license�from�the�ReserveBank�of�India�(RBI).�

• ICICI Bank plans to raise capital through Tier I and Tier II bonds

ICICI�Bank,�is�planning�to�raise�USD�860�million�capital�through�the�issue�ofUpper�Tier-II�and�Tier-I�perpetual�bonds.�The�bank�is�planning�to�issue�Upper�Tier-II�bonds�and�Tier-I�hybrid�bond�for�USD�430�each.�The�capital�is�likely�to�enablethe�bank�to�support�its�business�growth.�

As�per�credit�rating�agency�CRISIL,�ICICI�Bank�is�considered�as�one�of�the�highlycapitalized�banks�with�an�overall�capital�adequacy�ratio�(CAR)�of�17.7�percent�andTier-I�CAR�of�13.3�percent�as�on�September�30,�2009.�

• OBC plans open offices in Hong Kong and Africa

Oriental�Bank�of�Commerce�(OBC),�one�of�the�leading�public�sector�banks,expects�to�open�more�foreign�offices,�as�a�part�of�its�efforts�to�expand�its�globalfootprint.�The�bank�is�in�the�process�of�seeking�RBI’s�permission�for�moreoverseas�offices�preferably�in�Hong�Kong.�The�bank�believes�that�a�full-servicebranch�in�Hong�Kong�provides�business�opportunity�in�terms�of�trade�financingto�Indian�corporates.�In�addition,�the�bank�is�also�exploring�opportunites�inAfrica.

Page 5 of 19

Banking and Financial Services

Analyst: Kunal Jain and Ruchika Anand

Credit Growth

Source:�RBI,�India�Infoline�Research�

USD billionDecember

4, 2009

YOY

(percent)

Bank Credit 633.0 10.5

–�Food�Credit� 9.7 -13

–�Non-food�Credit� 623.3 11

Deposits 911.3 18.3

–�Demand�Deposits� 113.9 19.4

–�Time�Deposits�� 797.4 18.2

Investments 300.3 25.6

Credit�–�deposit�ratio(percent)� 69.5 (491.8)�bps

Investment�–�depositratio�(percent) 33 190.8�bps

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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• Indian consumer goods company Marico acquires a Colgate Palmolive

brand

Indian�consumer�goods�major�Marico�has�bought�Colgate�Palmolive’s�hair�carebrand,�Code�10,�to�push�its�revenue�growth�in�the�South-East�Asian�markets�andstrengthen�its�position�to�fight�future�competition�in�India.�The�acquisition�isestimated�to�be�about�USD�5.4�million�as�per�industry�sources�and�also�involvesgetting�intellectual�property�rights�related�to�the�brand�from�Colgate-Palmolive.�Theacquisition�of�Code�10�is�likely�to�bring�a�strong�consumer�equity�in�Marico’sportfolio�and�the�brand�is�expected�to�serve�as�a�platform�to�the�South-East�Asianmarket.�Code�10�is�the�third-largest�selling�brand�in�Malaysia.

• Marks and Spencer aims to expand in India

The�British�retailer,�Marks�&�Spencer,�is�looking�at�scaling�up�its�India�operationsand�plans�to�open�at�least�50�more�outlets�in�the�country�over�the�next�few�years.The�company,�which�is�present�in�India�through�a�joint�venture�(JV)�with�RelianceRetail,�is�also�looking�at�increasing�its�product�range�in�the�country.

• Gucci to enter Indian retail through single brand stores

Italian�designer�goods�maker�Gucci�can�now�go�ahead�with�its�plans�to�enter�theIndian�retail�market�through�single�brand�stores�with�the�government�allowing�it�topick�up�a�majority�stake�in�its�Indian�franchisee�Luxury�Goods�Retail.�Thegovernment�has�cleared�a�proposal�by�Luxury�Goods�Retail�for�foreign�equityparticipation�of�51�percent�by�Gucci�Group�NV,�Netherlands�with�an�investment�ofUSD�0.2�million�for�retailing�Gucci�brands�in�the�country.�Luxury�Goods�Retailcurrently�sells�products�under�the�Gucci�brand�in�India�under�a�franchiseagreement.�The�company�currently�has�two�stores�located�in�Delhi�and�Mumbai.�

• South African Café forays into India

South�African�premium�cocktail-�bar�chain�News�Cafe�plans�to�invest�up�to�USD21.5�million�over�the�next�5�years�to�expand�operations�in�India.�The�company,which�recently�ventured�into�India�under�a�master�franchise�agreement�withHyderabad-based�Numbersonly�Hospitality�plans�to�open�20�outlets�across�India�inthe�next�5�years.�The�café�has�just�opened�its�first�Indian�restaurant�at�Delhi,�whichalso�marks�its�first�foray�outside�the�African�continent.�It�plans�to�open�four�morecafes�in�India�in�2010.�The�investment�is�likely�to�come�from�the�franchise�operator,Numbersonly�Hospitality�and�the�franchise�arrangement�could�be�extended�forother�South�Asian�countries�and�Mauritius�in�the�future.�

• India’s diversified conglomerate, Essar group acquires electronics store X-Cite

Essar�group�has�entered�into�the�consumer�durables�and�IT�products�businessthrough�the�acquisition�of�X-Cite,�the�chain�of�large�format�electronics�stores�ofImpact�Retail,�a�franchisee�of�Kuwait's�Alghanim�Industries�for�an�undisclosed�sum.Essar�is�expected�to�scale�up�the�number�of�retail�outlets�to�2,500�by�fiscal�2011from�the�existing�1,300�stores.�The�consumer�durables�and�IT�market�is�currentlygrowing�at�15�percent�and�Essar�is�aiming�around�10�percent�of�market�share�in�thenext�5�years.�Essar-promoted�cellular�retail�chain�The�MobileStore�is�expected�totake�over�the�seven�stores�of�Impact�Retail's�X-Cite�across�Delhi,�Gurgaon,Bangalore,�Hyderabad,�Pune�and�Ahmedabad,�spanning�over�95,000�sq�ft.�ImpactRetail,�a�franchisee�of�Kuwait-based�Alghanim�Industries,�entered�India�last�year.�

Page 6 of 19

Consumer Markets and Retail

Analyst: Sonia Topiwala

“Marks & Spencer believes Indiaoffers significant expansionopportunities and the potential ishuge with a wider range ofproducts, bigger M&S stores anda better brand experience overall” Nandini Sethuraman, Head of Marketing, Marks &Spencer Reliance India Pvt Ltd Head (Source: The Economic Times, Marks & Spencer toscale up India operations, December 14, 2009)

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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• Bharat Hotels forays into budget segment

Bharat�Hotels�which�owns�and�operates�hotels�under�the�brand�name�‘The�Lalit’plans�to�expand�its�footprint�in�the�economy�segment.�The�company�is�likely�toinvest�USD�491.5�million�to�set�up�a�number�of�luxury�and�mid-market�hotelsacross�business�and�leisure�destinations�in�India�and�abroad.�Looking�at�thebudget�segment’s�impressive�growth�over�the�last�few�years�the�company�mayhave�an�economy�brand�in�the�next�2-3�years.�

• Videocon checks into hospitality sector

Videocon�group�is�making�an�entry�into�the�hospitality�business.�It�plans�to�setup�a�hotel�as�a�part�of�its�upcoming�USD�~192�million�IT�Park�at�Salt�Lake,�WestBengal.�The�hotel�is�likely�to�cater�to�the�IT�and�ITeS�companies�in�this�proposedmixed�use�development.�Considering�the�success�of�this�project,�the�group�islikely�to�explore�the�expansion�opportunities�in�the�hospitality�business�acrossthe�country.�The�company�is�negotiating�with�a�number�of�international�hotelchains�for�a�possible�tie-up�with�its�upcoming�property.�

• Zuri to set up hotels in India and Kenya

Zuri�Hospitality�India�plans�to�invest�USD�85.5�million�to�develop�two�newhotels.�The�company�is�likely�to�set�up�a�new�property�near�BangaloreInternational�Airport.�The�other�property�is�expected�to�come�up�at�Nairobi�inKenya.�The�company�has�raised�around�30�percent�of�the�funds�required�for�thenew�projects�from�private�investors�in�West�Asia,�while�the�rest�has�been�raisedfrom�nationalized�banks.�Currently,�it�has�four�five-star�properties�in�India.�Thehospitality�firm�is�also�exploring�the�management�route�to�expand�its�hotelsbusiness.�

• Sahara Hospitality to set up seven more hotels

Sahara�Hospitality�Ltd.�is�likely�to�set�up�seven�properties�across�India�by�end-2012.�It�is�likely�to�add�over�1,000�rooms�to�its�portfolio.�The�company�isexploring�the�option�of�acquiring�some�existing�properties�and�is�also�looking�atGreenfield�projects�for�expansion.�Hotel�Sahara�Star,�is�the�only�premiumproperty�owned�by�Sahara�Hospitality�which�has�an�inventory�of�223�rooms.

Page 7 of 19

Analyst: Pallavi Phatak

Hospitality

“We expect recovery to take placein the hotel business by the lastquarter of 2010 and in the next18-24 months we expect thedemand to outstrip supply” Rajeev Menon, Area Vice-President, MarriottInternational (India, Pakistan, Maldives and Malaysia)(Source: Business Standard, Marriott to Open 18 Hotelsin India, December 23, 2009)

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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• HCL Axon bags deal with GSK

HCL�Technologies�has�signed�a�multi-year�deal�worth�about�USD�200�millionwith�a�UK-based�insurance�firm�Equitable�Life�Assurance�Society�(ELA).�As�perthe�terms�of�the�deal,�HCL�would�provide�complete�solutions,�including�policyadministration,�finance,�actuarial�services,�IT�operational�support�and�call�centerservices�to�ELA.�The�deal�has�been�signed�with�HCL�Insurance�BusinessServices,�HCL’s�UK-based�life�and�pensions�administration�business�arm.

• IBM gets USD 82 million deal from Digicable

IBM�has�bagged�a�10-year�outsourcing�contract�from�Digicable,�a�cable�andbroadband�distribution�player�in�India.�The�USD�82�million�deal�is�to�support�theintegration�of�Digicable’s�digital�media�content�delivery�and�value�addedservices�application�by�providing�IT�infrastructure�services�network,�supportapplication�maintenance�services�and�security�services.�Prior�to�this,�IBM�hasalready�signed�deals�with�media�and�entertainment�companies�like�Star�TV,�SunTV�and�Tata�Sky.

• Interglobe opens BPO centre in Manila

Gurgaon-based�BPO�services�firm�InterGlobe�Technologies�(IGT)�has�launchedits�BPO�delivery�center�in�Manila,�Philippines�with�an�initial�outlay�of�USD�2.3million.�The�400-seater�unit�has�already�hired�350�people�and�may�further�recruit650�people�with�an�additional�investment�for�the�same.

• HCL Tech bags multi-million pound deal from News Corp arm

HCL�Technologies�has�signed�a�5-year�multi-million�pound�deal�with�NewsInternational,�(NI)�a�UK�arm�of�global�media�firm�News�Corporation.�The�deal�isto�provide�software�services�in�terms�of�technology�infrastructure�managementand�transformation.�As�per�the�agreement,�HCL�would�manage�NI’s�data�centreand�network�environments�thereby�reducing�its�operational�costs�andincreasing�technology�process�standardisation.

• Wipro in deal with Telefonica O2 Germany

Wipro�Technologies�has�signed�a�deal�with�a�Germany-based�Telefonica�O2Germany�(TOG)�for�an�undisclosed�amount.�As�per�the�deal,�Wipro�wouldprovide�testing�services�and�solutions�like�test�analysis,�management�andexecution,�deployment,�integration�and�implementation�management�services.

• Indian IT market to double to USD 13 billion by 2013

According�to�a�study�conducted�by�Springboard�Research,�Indian�IT�servicesmarket�is�expected�to�touch�USD�13�billion�by�2013.�The�domestic�market�isexpected�to�grow�at�an�average�of�nearly�19�percent�annually�from�USD�5.7billion�in�March�2008.�The�study�further�states�that�infrastructure�managementservices�(IMS)�are�expected�to�reach�USD�7.2�billion�in�2013�with�53�percentmarket�share,�and�a�CAGR�of�18.1�percent�from�2008-13.�However,�applicationsservices�with�a�growth�rate�of�19.6�percent�are�expected�to�remain�the�fastestgrowing�market�segment.�In�terms�of�verticals,�banking,�financial�services�&insurance�is�likely�to�lead�the�market�with�about�21�percent�of�the�market�share.

Page 8 of 19

Analyst: Yesha Mehta

IT/ITeS

“We are exiting 2009 with somelevel of optimism, as the demandenvironment appears to beimproving compared with lastyear. Customers will spend ontransformational engagements —both in terms of demandgeneration for their business andcost transformation” Suresh Vaswani, Joint CEO of Wipro Technologies,India’s third-largest IT company.(Source: Business Standard, Analysts more optimisticabout IT services companies, December 31, 2009)

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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• Reliance Mediaworks to set up a joint venture with In-Three

Reliance�Mediaworks�formerly�known�as�Adlabs�Films�has�entered�in�a�jointventure�with�US-based�In-Three.�The�JV�would�set�up�a�studio�for�converting�2Dmovies�into�3D�in�India.�The�studio�would�primarily�focus�on�Hollywood�titlesand�content�from�global�clients�of�In-Three�and�not�Indian�content.�The�JV�isexpected�to�do�15-25�feature�film�projects�in�a�year�with�the�first�projectexpected�to�commence�in�early�2010.

• MSM to launch a sports channel

Broadcast�network�Multi�Screen�Media�(MSM)�is�expected�to�launch�a�newsports�channel�to�cash�in�on�the�popularity�of�its�exclusively-owned�property,�theIndian�Premier�League�(IPL).�According�to�the�Chief�Operating�Officer,�N�PSingh,�the�channel�is�expected�to�be�launched�in�the�next�6-9�months�as�thenetwork�is�acquiring�other�sporting�events.�Besides�IPL,�the�network�hasbroadcast�rights�for�New�Zealand�Cricket�series�and�FA�cup.�In�India,�sportschannels�gross�approximately�USD�320-340�million�annually�in�advertisingrevenues,�but�however,�their�share�in�overall�television�viewship�has�shrunkfrom�4.8�percent�in�2004�to�2.7�percent�currently.�MSM�runs�a�diversifiedbouquet�of�channels,�including�Sony�Entertainment�Television,�SAB�TV,�Set�Maxand�Channel�8.

• Digicable increases stake in CableComm

Digicable�Network�has�increased�its�stake�in�Kolkata-based�multi-systemoperator�(MSO)�CableComm�from�51�percent�to�80�percent.�In�2008,�Digicablehad�invested�USD�6.4�million�for�a�51�percent�stake.�DigiCableComm�Services,as�the�company�is�now�known�has�presence�in�14�out�of�18�districts�in�WestBengal�and�is�expected�to�launch�broadband�services.�DigiCableComm,�hadplans�to�expand�its�services�in�neighboring�states�like�Orissa,�has�decided�not�topursue�inter-state�ambitions�for�now�and�focus�on�digitizing�and�strengtheningits�foothold�in�Kolkata�Metropolitan�Area.�

• Indian console gaming market to reach USD 123 million in 2010

According�to�a�study�by�research�firm�eTech�Group,�console-based�gamingmarket�in�India�is�expected�to�reach�USD�123�million�by�2010.�The�consolegaming�market�is�expected�to�grow�at�41�percent�from�INR�86.5�million�in�2009.On�the�other�hand,�mobile�gaming�industry�which�is�currently�valued�at�USD61.8�million�is�expected�to�grow�to�USD�173.5�million�in�2010.�The�report�alsohighlights�that�low�broadband�speed�and�price�sensitivity�are�posed�as�majorbarriers�to�the�growth�of�the�industry.�

• Sri Adhikari Brothers plans to launch regional channels

Sri�Adhikari�Brothers�plans�to�launch�regional�entertainment�channels�for�whichit�is�expected�to�raise�USD�21.6�million�through�issue�of�securities.�The�companyhas�also�approved�the�offering�and�issue�of�up�to�2.92�million�warrants�to�thepromoter�group.�The�company�launched�Hindi�views�channel�Janmat,�which�waslater�changed�into�Hindi�news�channel�Live�India.�It�has�also�entered�into�theMarathi�entertainment�arena�with�Mi�Marathi.�Sri�Adhikari�Bros�sold�51�percentstake�in�both�the�channels�to�property�developer�HDIL�group.

Page 9 of 19

Media

Analyst: Mehul Desai

“The only property that has takenoff well in India is cricket, butthere is potential for many othersporting events. Therefore, to thatextent, Sony has an advantage”Shashi Sinha, CEO, Lodestar Universal

(Source: Financial Express, MSM to launch a sportschannel, December 23, 2009)

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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• Spanish and Malaysian firms join hands with Indian firms to bid for

oil projects in Venezuela

Spain’s�Repsol�YPF�SA�and�Malaysia’s�Petronas�have�joined�hands�with�ONGCVidesh�Ltd�(OVL),�the�overseas�investment�arm�of�Oil�and�Natural�GasCorporation,�along�with�Indian�Oil�Corporation�(IOC)�and�Oil�India�Ltd�(OIL)�to�bidfor�the�Carabobo�project�in�Venezuela’s�Orinoco�oil�belt.�A�maximum�of�40�percent�stake�is�being�offered�by�Venezuela�for�the�development�of�this�acreage,with�the�rest�being�held�by�Petroleos�de�Venezuela�SA,�(PdVSA),�Venezuela’sstate�oil�company.�Repsol�and�Petronas�together�are�expected�to�hold�25�percent,�OVL�10.1�per�cent�while�IOC�and�OIL�2.45�per�cent�each.�

Mukesh�Ambani’s�Reliance�Industries�Ltd.�(RIL)�was�earlier�expected�to�worktogether�with�the�Indian�companies�and�was�to�equally�divide�32-33�percentstake�with�OVL,�the�rest�being�shared�by�IOC�and�OIL.�It�was,�however,replaced�by�the�Spanish�and�Malaysian�firms.

• Fertilizer industry steps up campaign for increased gas allocation

The�demand�for�gas�from�user�industries�like�fertilizers,�power,�glass�andceramic�sector�is�increasing�in�line�with�the�increased�gas�production�from�RIL’sKG�Basin,�along�with�possible�future�production�from�ONGC�and�GSPC�blocks.Gas�demand�within�the�country�currently�stands�at�196�million�standard�cubicmeters�a�day�(mmscmd),�and�is�expected�to�touch�280�mmscmd�by�2011-12.

Besides�increased�gas�allocation,�the�fertilizer�industry�is�requesting�for�twoamendments,�change�of�gas�transmission�methodology�from�the�existing�slabbasis�to�a�distance�basis�and�that�of�the�gas�allotment�system�from�the�existingvolume�basis�to�energy�basis.

The�fertilizer�industry�has�requested�for�an�increased�gas�allocation�onarguments�of�food�security�as�the�demand�for�food�is�expected�to�touch�300million�tonnes�by�the�end�of�the�next�Plan�Period�from�the�current�220�milliontonnes.�GAIL,�which�currently�has�about�11,000�km�of�pipelines�capable�oftransporting�275�mmscmd�of�gas�across�the�country,�is�planning�to�expand�itspipeline�infrastructure�by�2011-12�on�prospects�of�increasing�gas�availability.

• Design capacity of KG D6 facilities successfully tested

Mukesh�Ambani’s�RIL,�which�currently�produces�about�60�mmscmd�of�gas�fromtwo�of�the�18�gas�discoveries�in�the�KG�D6�block,�successfully�tested�thedesign�capacity�of�the�KG�D6�deepwater�gas�production�facilities�and�hasachieved�a�flow�rate�of�80�mmscmd�as�envisaged.�These�volumes�weredelivered�to�Reliance�Gas�Transportation�Infrastructure�Ltd�(RGTIL).�The�D6�fieldhas�produced�over�8.5�billion�cubic�meters�of�gas�since�it�commencedproduction�in�April�2009.

The�KG�D6�gas�has�impacted�various�aspects�of�the�country's�economy�besidescontributing�to�India’s�critical�industrial�sectors.�The�Index�of�IndustrialProduction�(IIP)�figures�reflected�double�digit�growth�in�the�mining�sector�in�thelast�two�quarters�owing�to�the�KG�D6�gas�contribution.�Besides�this,�a�growth�ofabout�30�per�cent�was�achieved�in�gas-based�power�generation�in�the�countryfrom�April�to�November,�leading�to�a�reduction�in�power�deficit�in�the�sameperiod.Compared�to�the�world�average�of�9-10�years�for�similar�deepwaterproduction�facilities,�RIL�started�gas�production�in�KG�D6�in�six�and�a�half�yearsfrom�discovery.

Page 10 of 19

Oil and Gas

Analyst: Sidharth Balakrishna and Neha Saraf

“Urea imports are making a denton the country's economy andhence it is imperative to step upfertiliser production to help Indiaachieve food security” Mr R.S. Nanda, Director and COO of NagarjunaFertiliser and Chemicals Ltd.

(Source: The Hindu Business Line, Fertiliser industryseeks more gas allocation, December 24, 2009)

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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• Hospira enters into agreement to acquire Orchid Chemicals’

generic injectable business

Hospira,�Inc.,�a�US-based�global�specialty�pharmaceutical�and�medicationdelivery�company,�has�inked�an�agreement�with�Orchid�Chemicals�&Pharmaceuticals�Limited,�an�Indian�pharmaceutical�company,�to�acquire�thelatter’s�generic�injectable�finished-dosage�form�pharmaceuticals�business.�Theconsideration�for�the�same�is�reported�to�be�around�USD�400�million.

The�acquisition�is�expected�to�involve�Orchid�Chemicals’�beta-lactum�antibioticsmanufacturing�complex,�the�pharmaceutical�research�and�development�facilityat�Irungattukottai,�Chennai�as�well�as�the�generic�injectable�product�portfolio�andpipeline.�

Besides�this,�Hospira�and�Orchid�Chemicals�have�also�entered�into�an�exclusiveagreement�for�the�supply�of�active�pharmaceutical�ingredients�(API)�by�OrchidChemicals�for�the�acquired�injectable�pharmaceuticals�business.

• Dishman Pharma forms JV in Saudi Arabia for API production

Dishman�Pharmaceuticals�and�Chemicals�Limited,�a�leading�contractmanufacturing�organization�in�India,�has�reportedly�formed�a�Joint�Venture�(JV)company�with�three�partners�for�manufacturing�APIs�in�Saudi�Arabia.�WhileDishman�Pharma�has�a�30�percent�stake�in�the�venture,�its�partners�Arab�Companyfor�Drug�Industries�and�Medical�Appliances�(ACDIMA),�Spimaco,�and�the�CapitalAdvisory�Group�hold�the�remaining�stake.�The�JV�company�has�been�offered�a�USD55�million�soft�loan�for�15�years�by�the�Saudi�Industrial�Development�Fund.

• Intas Pharma enters into partnership with US-based Amarillo

Biosciences

Intas�Pharmaceuticals�Limited,�an�Indian�pharmaceutical�company,�hasreportedly�entered�into�a�strategic�partnership�with�US-based�biotechnologyfirm�Amarillo�Biosciences,�Inc.

Under�the�agreement,�Intas�is�expected�to�sponsor�clinical�trials�of�AmarilloBiosciences’�orally�administered�interferon-alpha�lozenges�which�are�used�tocombat�influenza�viruses�such�as�the�H1N1�virus.�Amarillo�Biosciences�isexpected�to�receive�a�royalty�from�Intas�Pharma�on�the�net�sales�once�themarketing�approval�is�received�in�India.

• Ranbaxy to market Daiichi Sankyo’s anti-hypertensive product in

six African countries

Ranbaxy�Laboratories�Limited�and�Daiichi�Sankyo�Company�Limited�announcedthat�the�former�will�likely�market�the�latter’s�lmesartan�Medoxomil,�an�anti-hypertensive,�in�six�African�countries�—�Kenya,�Nigeria,�Tanzania,�Uganda,Mozambique,�and�Zambia�—�under�the�brand�name�Olvance™.�The�twocompanies�have�been�seeking�to�leverage�synergies�through�their�hybridbusiness�model�and�had�recently�explored�similar�collaborations�in�Mexico�andRomania.

Page 11 of 19

Pharma

Analyst: Nandita Kudchadkar and Parnika Dayal

“The Indian pharmaceutical industry,now over one lakh crore (USD 20billion) industry, has showntremendous progress in terms ofinfrastructure development,technology base creation and a widerange of products. The country nowranks third worldwide by volume and14th by value thereby accounting foraround 10 percent of the world'sproduction by volume and 1.5percent by value” Srikant Kumar Jena, Minister of State in the Chemicalsand Fertilisers Ministry

(Source: The Economic Times, India's drug industry isover Rs one lakh crore, December 3, 2009)

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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• Reliance Power commences power generation from Rosa Power

Plant

Anil�Dhirubhai�Ambani�Group�(ADAG)’s�Reliance�Power�commenced�generationfrom�its�1200�Mw�coal-based�Rosa�power�plant�in�Shahjahanpur�district�of�Uttarradesh.�The�project�(comprising�of�two�stages�of�600�Mw�each)�commissioned300�Mw�capacity�of�the�first�phase�(consisting�of�two�units)�four�months�beforeschedule.�The�entire�plant�is�expected�to�be�fully�operational�by�the�end�of�theEleventh�Plan�by�March�2012.�

The�company�has�entered�into�a�long-term�contract,�valid�for�the�entire�plant�lifeof�25�years,�with�Central�Coalfield�Limited�(CCL)�in�Jharkhand�for�fuel.�Further,the�fly�ash�produced�at�the�plant�is�to�be�utilized�in�a�cement�unit�run�by�ADAG.The�company�has�entered�into�a�Purchasing�Power�Agreement�to�supply�entire600�Mw�of�first�phase�to�UP�Power�Corporation�Limited�(UPPCL)�along�with�anadditional�300�Mw�of�the�second�phase.�The�balance�300�Mw�is�expected�to�besold�on�a�merchant�basis�to�outside�consumers.

The�project�is�expected�to�start�commercial�operations�in�a�few�months�afterthe�completion�of�the�trial�run.

• India and Bhutan enter into Power MoUs

India�and�Bhutan�have�entered�into�seven�Memorandum�of�Agreements�(MoUs)to�tap�Bhutan’s�power�potential�and�meet�India’s�need�for�it.�Besidespreparation�of�detailed�project�reports�for�Amochhu�(620�Mw),�Kuvi-Gongi�(1800Mw),�Kholongchhu�(486�Mw)�and�Chamkarchu-I�(670�Mw)�projects,�theagreements�also�include�setting�up�a�master�plan�for�a�national�transmissiongrid�in�Bhutan.�As�per�the�agreements,�India�is�now�eligible�to�import�additional10,000�Mw�hydro�power�from�Bhutan�by�2020.

Bhutan,�with�hydro�power�capacity�of�30,000�Mw,�requires�only�about�500�Mwand�already�exports�1000�Mw�of�power�to�India�out�of�its�total�generation�ofabout�1,500�Mw.

• Ultra Mega Power Projects resolve land issues

The�two�Ultra�Mega�Power�Projects�in�Tamil�Nadu�and�Orissa�respectively�areexpected�to�soon�issue�‘Requests’�for�Qualifications.�Both�the�projects,�each�of~�4,000�Mw�capacities,�were�earlier�delayed�for�several�months�due�to�landacquisition�problems.�The�project�at�Cheyyur,�Tamil�Nadu�is�expected�to�bebased�on�imported�coal�and�provide�electricity�to�the�state�and�neighbouringones,�while�the�one�at�Bedabahal�in�Sundergarh�district,�Orissa,�has�been�allocated�coal�blocks�at�Meenakshi,�Meenakshi�B�and�Meenakshi�dipside.

These�projects�are�expected�to�be�attractive�to�both�domestic�and�internationalplayers�since�the�power�ministry�has�relaxed�a�few�norms�recently�and�has�alsoallowed�the�sale�of�surplus�coal�from�captive�mines�and�power�beyond�4,000Mw�at�competitive�rates.

Page 12 of 19

Power

Analyst: Sidharth Balakrishna and Neha Saraf

“Rosa project would be the largestprivate sector investment in UPwith investment outlay over Rs6000 crore. It will add around 20percent to the existing generatingcapacity of the state and willgreatly contribute to the reducingpower deficit” J P Chalasani, CEO, Reliance Power

(Source: The Economic Times, Phase I of Rosa plantgoes onstream, December 29, 2009)

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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• Maharashtra State Government to mobilize USD 1084 million

through increase in ready reckoner rates

The�Maharashtra�State�Government�increased�market�value�of�real�estate�by�10-20�percent�in�its�ready�reckoner�2010.�Ready�reckoner�is�a�guide�for�the�marketprice�of�residential�and�commercial�properties,�based�on�which�the�stamp�dutyand�registration�fee�for�their�sale�and�purchase�are�calculated.�This�move�isexpected�to�raise�the�sale�price�of�finished�property�due�to�a�rise�in�the�cost�ofland.

• Gujarat Government announces new residential township policy

Recently�Gujarat�Government�announced�“Regulations�for�Residential�Townships–�2009”.�Under�the�regulations,�all�private�developers�who�can�be�an�individual,�aregistered�cooperative�society,�an�association,�a�firm,�a�joint�venture,�aninstitution�or�a�company�will�have�to�purchase�at�least�40�hectares�of�land�tobuild�a�residential�township�in�the�areas�falling�under�the�urban�developmentauthorities�of�Ahmedabad,�Surat,�Vadodara,�Rajkot,�Gandhinagar,�Bhavnagar�andJamnagar.�In�the�case�of�other�towns�and�relevant�urban�authorities,�thedevelopers�will�need�to�purchase�minimum�20�hectares�of�land�for�suchtownships.�The�regulation�allows�maximum�Floor�Space�Index�(FSI)�at�1.5.Besides�the�permissible�1.0�FSI,�the�additional�0.5�FSI�will�be�allowed�on�thepayment�of�charges�based�on�jantri�rates.

• DIPP to scan FDI use in realty

The�Department�of�Industrial�Policy�and�Promotion�(DIPP)�has�set�up�amonitoring�cell�to�investigate�the�end-use�of�foreign�funds�raised�by�realty�firms.The�objective�is�to�ascertain�diversion�of�money�in�banned�areas�like�agriculturalland�etc.�Under�current�regulations,�Foreign�Direct�Investment�(FDI)�is�banned�inagriculture�and�agriculture-related�activities.�However,�100�percent�FDI�isallowed�for�integrated�townships�and�housing�development�projects.

• Falcon Realty planning to expand in Bihar

Gurgaon-based,�Falcon�Realty�Services�is�planning�to�build�affordable,�eco-friendly�housing�projects�in�Bihar�after�receiving�positive�response�for�suchprojects�in�National�Capital�Region�(NCR).�The�company�is�likely�to�target�Patna,Muzaffarpur�and�Purnia�for�its�projects.�The�company�has�already�identified�landfor�these�ventures�and�is�holding�talks�with�the�state�authorities�for�acquisitionof�200�acre�for�each�of�the�three�projects.�The�estimated�cost�of�the�projects�isUSD�64�million.

• Returning NRIs boost demand for residential property

According�to�World�Bank�report�on�Migration�and�Development�Relief,�anestimated�25�million�non-resident�Indians�(NRIs)�living�in�130�countries�have�sofar�remitted�USD�52�billion�followed�by�China�and�Mexico.�A�substantial�portionof�the�NRI�investment�was�directed�towards�Indian�real�estate.�Southern�citiesin�particular�Bangalore,�Chennai�and�Hyderabad�are�driving�the�demand�thoughminimal�level�demand�exists�for�other�cities�as�well.�Most�of�the�NRIs�keen�toinvest�in�real�estate�back�home�are�looking�for�home�loans�as�they�are�unable�toget�loans�locally�due�to�the�current�tight�liquidity�situation�across�US.�

Page 13 of 19

Real Estate and SEZs

Analyst: Rajiv Parekh

Note:�Top�six�cities�include�-�Mumbai,�NCR,�Bangalore,Chennai,�Hyderabad�and�Pune

Source:�Industry�Update,�Nomura,�11�November�2009

9.7

11.9

7.1

3.8

5.46.4

13.1

1QCY08 2QCY08 3QCY08 4QCY08 1QCY09 2QCY09 3QCY09

Revival

Fresh Demand Trends for Top Six Cities -

Commercial Office Space

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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Page 14 of 19

Telecom

Analyst: Neha Dayal and Rishabh Chadha

• MNP by March 2010

The�government�has�announced�that�it�will�introduce�Mobile�Number�Portabilityon�March�31,�2010�all�across�the�country.�There�has�been�a�three�month�delay�incase�of�the�metros�where�MNP�was�to�be�launched�by�December�31,�2009.The�delay�was�caused�because�some�of�the�operators�were�not�prepared�toimplement�MNP,�especially�the�state-owned�operators,�BSNL�and�MTNL.Another�reason�for�the�delay�was�that�Telecordia,�which�owns�74�percent�stakein�MNP�Interconnection,�one�of�the�companies�responsible�for�theimplementation�of�MNP�in�India,�is�said�to�have�implemented�MNP�in�Pakistanas�well.�This�raised�security�concerns�for�the�Home�Ministry.���

• DoT to impose USD 28.35 million penalty on telcos

DoT�has�imposed�a�combined�penalty�of�USD�28.35�million�on�some�of�themajor�telecom�operators,�for�failure�of�rolling�out�services�on�time.�These�havebeen�imposed�in�the�form�of�liquidated�damages.�Amongst�the�offendersincluded�are�Airtel�(USD�6.06�million),�Reliance�(USD�4.26�million),�TataTeleservices�(USD�6.06million),�Tata�Teleservices�Maharashtra�(USD�0.80�million)and�Aircel�(USD�6.23�million).�On�the�other�hand�players�like�BSNL,�MTNL�andVodafone�have�not�been�imposed�with�a�fine.�

• 3G auctions to start on February 13, 2010

The�long�awaited�3G�auctions�have�been�delayed�again�and�are�scheduled�totake�place�on�February�15,�2010.�The�delay�has�been�caused�because�DoT�wasnot�able�to�finalize�the�details�of�the�Notice�Inviting�Applications.�The�process�islikely�to�take�another�five�weeks�post�the�Notice�Inviting�Applications.�DoT�hasset�January�10,�2010�as�the�date�for�issuing�the�Notice�Inviting�Applications.These�applications�will�be�accepted�only�uptill�January�25�and�the�mock�auctionwill�be�held�on�February�10�and�the�final�auctions�on�February�13.�Thegovernment�has�announced�that�it�will�be�auctioning�four�slots�of�the�spectruminspite�of�there�being�a�spectrum�crunch�and�has�also�announced�that�thespectrum�will�be�allotted�to�all�players�in�August�2010�to�ensure�a�level�playingfield.

• GTL to buy Aircel’s Towers

GTL�Infrastructure,�a�company�that�lease�out�towers�to�telecom�operatorsannounced�that�it�has�agreed�to�buy�out�Aircel’s�tower�business�for�an�amount�ofUSD�859�million�in�an�all�cash�deal.�As�per�the�deal,�GTL�will�add�17,500�of�Aircel’sexisting�towers�to�its�portfolio�and�later�an�additional�20,000�which�are�in�theprocess�of�being�setup.�The�deal�value�however�is�USD�1.83�billion�as�GTL�will�alsobe�taking�a�debt�of�USD�858�million�existing�in�the�books�of�Aircel.�GTL�will�beacquiring�the�related�broadband�infrastructure�as�well.

• Average urban teledensity crosses 100 percent mark

The�latest�figures�revealed�by�DoT�indicate�that�the�average�urban�teledensityacross�the�country�has�breached�the�100�percent�mark.�This�implies�that�all�themetros,�towns�and�cities�which�have�been�demarcated�by�the�government�asurban�have�as�many�mobile�connections�as�people.�This�figure�was�hoveringaround�60�percent�in�March�2008.�

“Going forward, the rural sectorwill be a prime focus area as theindustry spreads its reach into theentrails of bucolic India on theback of customised applicationsthat not just add to the quality oflife, but to livelihoods, too” Anil Sardanai, MD, Tata Teleservices

(Source: The Financial Express, The Rural Consumer,December 31, 2009)

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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• RIICO to develop logistic park

The�Rajasthan�State�Industrial�and�Investment�Corporation�Limited�(RIICO)�hassigned�an�MoU�with�Container�Corporation�of�India�Limited�(Concor)�to�set�up�amulti-model�logistic�park�(MMLP)�in�the�state�with�an�investment�of�about�USD74.75�million.�The�logistics�park�is�to�be�developed�on�an�area�of�250�acres�andis�expected�to�be�completed�in�about�36�months.�RIICO�is�looking�at�this�projectin�order�to�benefit�from�the�Delhi-Mumbai�Industrial�Corridor�of�which�40percent�is�to�pass�through�Rajasthan.

• Mahindra Invests in Aerospace

Mahindra�Systech,�the�component�arm�of�Mahindra�&�Mahindra,�along�withKotak�Private�Equity�has�acquired�75.1�percent�stake�in�Aerostaff�Australia�(AA)and�Gippsland�Aeronautics�(GA),�Australia-based�aerospace�companies.�AA�is�inthe�business�of��manufacturing�high�precision�close-tolerance�aircraftcomponents�and�assemblies�for�companies�such�as�Boeing�and�Airbus,�whileGA�manufactures�2-20�seater�aircraft�and�turboprop�engines.�The�company�isplanning�to�set�up�a�plant�at�Mallur�with�the�help�of�AA�to�manufacturecomponents�and�to�sell�in�the�Indian�market�and�AA�and�GA.�

• Aegis Logistics acquires Shell Gas (LPG) India

Aegis�logistics�has�acquired�LPG�business�of�Shell�Gas�India.�The�acquisition�isexpected�to�give�Aegis�a�in�the�industrial�and�commercial�segments�and�anentry�into�the�cylinder�market.�Shell�Gas�currently�own�a�terminal�at�PipavavPort�and�a�filling�plant�at�Kheda�which�would�now�be�under�Aegis’�control.

• Policy on Ground Handling Deferred

The�airport�ground�handling�policy�which�was�expected�to�be�effective�fromJanuary�1,�2009�has�been�deferred�again�by�the�Civil�Aviation�Ministry.�As�perthe�proposed�policy�the�private�carriers�would�not�be�allowed�to�carry�out�theirown�ground�handling�activites�at�Mumbai,�Delhi,�Chennai,�Bangalore,Hyderabad�and�Kolkata�airports�and�have�to�be�handled�only�by�subsidiaries�ofAir�India,�airport�operators�and�service�providers,�selected�through�competitivebidding�at�the�airports.�The�policy�is�being�opposed�by�private�carriers�on�theconcern�that�at�least�10,000�employees�could�become�jobless�and�also�have�toincur�higher�costs�if�these�activities�are�given�to�new�handlers.�

• DIESL plans foray into SE Asia in next six months

Drive�India�Enterprise�Solutions�(DIESL),�a�Tata�group�company�providinglogistics�services,�is�planning�to�enter�the�South-East�Asian�market�in�the�nextsix-months.�It�is�also�planning�to�acquire�mid-sized�logistics�firms�as�a�part�oftheir�business�expansion�plans.�It�is�also�expected�to�expand�its�business�inChina,�the�US�and�Africa.�

Page 15 of 19

Transport and Logistics

Analyst: Nitin Dehadraya

“The year 2009 has been aneventful and tumultuous year forthe civil aviation sectorworldwide. We can drawsatisfaction from the fact that theworst is over. Things are turningfor the better, which is borne outby the rebound in air traffic figuresfrom October onwards” Praful Patel, Civil Aviation Minister - India(Source:Times of India, Worst over for global aviationindustry: Praful Patel, December 29, 2009)

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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Page 16 of 19

Reference material for preparing this document was takenfrom the following sources:

Note:1�USD=�46.6�INR

Sources

Foreword:

• The�Economic�Times,�The�three�positives�for�Indian�economy,�January�3,�2010.

• The�Economic�Times,�Industrial�output�at�2-year�high,�January�13,�2010.

Economy:

• The�Economic�Times,�Economy�to�Grow�8�Percent�in�FY�11:�Adviser�Says,�January�2,�2010

• The�Economic�Times,�Food�Inflation�at�11�Year�High,�Veggies�Cool,�January�1,�2010

• The�Economic�Times,�Food�Price�Index�Up�19.83%�Y/Y�on�December�19,�December�31,�2009

• Asia�Pulse,�India�5%�GDP�Forecast�for�2009-10�May�be�Revised�Upward,�December�01,�2009

• LiveMint,�India’s�Exports�Up�after�14�Months,�Grow�18.2%�in�Nov,�January�1,�2010,

• The�Economic�Times,�Mineral�Sector�Grows�by�Over�8�Percent�in�Oct�2009,�January�4,�2010�

Auto

• Business�Line,�Mitsubishi�drives�away�from�Eicher�Motors,�December�4,�2009

• Auto�Business�News,�VW�and�Suzuki�to�develop�hybrid�and�electric�car�in�India,�December�31,�2009

• Auto�Business�News,�Volvo�Bus�India�to�launch�hybrid�buses�in�India,�December�29,�2009

• Dow�Jones�International�News,�Fuji�Heavy�Industries�To�Enter�India�Car�Market�2011�–�Report,�December�3,�2009

BFSI:

• The�Economic�Times,�Kotak�ties�up�with�Russia's�top�I-bank�for�M&A�advisory�services�in�CIS,�Africa,�December�16,2009�

• Economic�Times,�Indiabulls�is�planning�to�foray�into�infra�financing�business�segment,�December�18,�2009�

• Business�Standard,�ICICI�Bank�planning�to�raise�capital�through�Tier�I�and�Tier�II�bonds,�December�26,�2009

• Financial�Express,�OBC�plans�open�offices�in�Hong�Kong,�Africa,�December�20,�2009�

• Business�Standard,�DCB�is�planning�to�foray�into�wealth�management�space,�December�10,�2009

CM:

• Times�of�India,�Marico�acquires�Colgate-Palmolive's�'Code�10'�brand,�January�04,�2010

• The�Economic�Times,�Marks�&�Spencer�to�scale�up�India�operations,�December�14,�2009

• Financial�Express,�Gucci�can�open�single-brand�stores�in�India,�December�04,�2009

• Fnbnews.com,�South�Africa’s�News�Café�sets�shop�in�India,�December�23,�2009

• The�Economic�Times,�Essar’s�telco�retail�arm�acquires�X-Cite,�December�09,�2009

Hospitality:

• Business�Standard,�Lalit�Suri�Group�plans�foray�into�economy�segment,�December�28,�2009�

• The�Economic�Times,�Videocon�to�enter�hospitality�biz,�set�up�hotel�at�Salt�Lake,�December�26,�2009

• The�Economic�Times,�Zuri�plans�to�build�two�hotels,�invest�Rs�400�crore,�December�11,�2009

• Business�Standard,�Sahara�Hospitality�to�build�1000�rooms,�December�01,�2009�

• The�Statesman,�IHC�plans�Rs�1000�crore�fund,�November�06,�2009

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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Page 17 of 19

IT:

• The�Hindu�Business�Line�,�HCL�Axon�services�for�GlaxoSmithKline,�December�18,�2009

• Hindustan�Times,�IBM�bags�INR�380-cr�deal�from�Digicable,�December�22,�2009

• The�Financial�Express,�Interglobe�opens�BPO�centre�in�Manila,�hires�350,�December�30,�2009

• The�Economic�Times,�HCL�Tech�bags�5-year�multi�million�pound�deal�from�News�Corp�arm,�December�8,�2009

• The�Economic�Times,�Wipro�to�provide�testing�services�to�Telefonica�O2�Germany,�December�18,�2009

• The�Economic�Times,�IT�services�market�set�to�double�by�2013:�Report,�December�24,�2009

Media:

• MediaNama.com,�Reliance�MediaWorks�To�Set�Up�JV�With�In-Three,�December�08,�2009�

• IndianTelevision.com,�Sri�Adhikari�Bros�plans�to�launch�regional�channels,�December�12,�2009�

• IndianTelevision.com,�Digicable�to�up�its�stake�in�CableComm�to�80,�December�26,�2009

• Financial�Express,�MSM�to�launch�a�sports�channel,�December�23,�2009

• Asia�Pulse,�Indian�Console�Gaming�Market�To�Touch�US$122�mn�In�2010,�December�23,�2009

Oil and Gas:

• The�Hindu�Business�Line,�OVL�to�bid�with�Repsol,�Petronas�for�Venezuelan�fields,�December�22,�2009

• The�Hindu�Business�Line,�Fertiliser�industry�seeks�more�gas�allocation,�December�24,�2009

• Business�Standard,�RIL�tests�peak�output�capacity�of�KG�fields,�December�28,�2009

Pharma:

• Company�Website,�Hospira�to�Acquire�Orchid's�Generic�Injectable�Pharmaceuticals�Business,�December�15,�2009

• Business�Standard,�Dishman�pharma�forms�JV�to�make�API�in�Saudi�Arabia,�December�10,�2009

• in-pharmatechnologist.com,�Dishman�partners�for�Saudi�API�making�JV,�December�17,�2009

• Business�Standard,�Intas�Pharma�ties�up�with�US�company,�December�2,�2009

• Company�Press�Release,�Daiichi�Sankyo�to�leverage�Ranbaxy’s�presence�in�Africa�for�marketing�and�distribution,December�21,�2009

Power:

• Business�Standard,�1,200-Mw�Rosa�project�starts�in�UP,�December�29,�2009

• The�Economic�Times,�Indo-Bhutan�power�MoU,�December�24,�2009

• The�Telegraph,�Big�power�projects�on�track,�December�29,�2009

• The�Economic�Times,�Power�plants�may�get�to�sell�unallocated�output,�December�23,�2009

Real Estate:

• Business�Standard,�Maha�realty�to�cost�more�with�new�ready�reckoner,�January�02,�2010

• DNA�India,�Realtors�mull�pulling�back�from�townships,�December�05,�2009

• The�Financial�Express,�DIPP�to�scan�FDI�end-use�in�realty,�December�18,�2009

• The�Financial�Express,�After�NCR,�Falcon�Realty�sets�sights�on�Bihar,�December�26,�2009

• The�Economic�Times,�Returning�NRIs�boost�demand�for�residential�property,�December�09,�2009

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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Page 18 of 19

Telecom:

• Financial�Chronicle,�Mobile�number�portability�by�March�2010,�December�31,�2009;�Business�Standard,�MNP�to�bedelayed;�DoT�calls�meeting�tomorrow,�December�16,�2009�and�The�Economic�Times,�Number�portability�hits�homeministry�hurdle,�December�17,�2009

• Business�Standard,�DoT�to�impose�Rs�132-cr�penalty�on�telcos,�December�31,�2009

• The�Hindu�Business�Line,�3G�spectrum�auctions�likely�from�Feb�13,�December�31,�2009;�Business�Standard,�3Gauction�may�start�by�Feb�end�or�March�1st�week,�December�28,�2009

• The�Economic�Times,�GTL�to�buy�Aircel's�towers,�December�24,�2009

• The�Economic�Times,�Average�urban�teledensity�crosses�100%�mark,�December�12,�2009

Transport and Logistics:

• Economic�Times,�‘RIICO�inks�pact�with�Concor�for�logistic�park’,�December�24,�2009

• DNA,�‘Mahindra�buys�two�Aussie�aero�cos’,�December�16,�2009

• Economic�Times,�‘Aegis�Logistics�acquires�Shell�Gas�(LPG)�India’�December�21,�2009

• Livemint,�‘Policy�on�ground�handling�being�deferred�again’,�December�30,�2009

• The�Hindu�Business�Line,�DIESL�plans�foray�into�SE�Asia�in�next�six�months,�Dec�20,�2009

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�of�the�KPMG�network�of�independent�member�firms

affiliated�with�KPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity.�All�rights�reserved.

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in.kpmg.com

Contact us:

For further information about thisnewsletter, please contact:

Ramesh SrinivasHead - Consumer Marketse-Mail: [email protected]: +91 80 3065 4300

Abizer DiwanjiHead - Financial Servicese-Mail: [email protected]: +91 22 3090 2380

Rajesh JainHead - Information, Communication &Entertainmente-Mail: [email protected]: +91 22 3090 2370

Jai MavaniHead - Infrastructure & Governmente-Mail: [email protected]: +91 22 3090 1920

Yezdi NagporewallaHead - Industrial Marketse-Mail: [email protected]: +91 22 3983 5101

Vikram UtamsinghHead - Private Equitye-Mail: [email protected]: +91 22 3090 2320

Research�Inputs�by�KPMG’s�IndiaResearch�Center

©�2010�KPMG,�an�Indian�Partnership�and�a�member�firm�ofthe�KPMG�network�of�independent�member�firmsaffiliated�with�KPMG�International�Cooperative�(“KPMGInternational”),�a�Swiss�entity.�All�rights�reserved.

KPMG�and�the�KPMG�logo�are�registered�trademarks�ofKPMG�International�Cooperative�(“KPMG�International”),�a�Swiss�entity

The�information�contained�herein�is�of�a�general�nature�and�is�not�intended�to�address�the�circumstances�of�any�particular�individual

or�entity.�Although�we�endeavour�to�provide�accurate�and�timely�information,�there�can�be�no�guarantee�that�such�information�is

accurate�as�of�the�date�it�is�received�or�that�it�will�continue�to�be�accurate�in�the�future.�No�one�should�act�on�such�information

without�appropriate�professional�advice�after�a�thorough�examination�of�the�particular�situation.

KPMG in India

MumbaiLodha Excelus, Apollo MillsN. M. Joshi MargMahalaxmi, Mumbai 400 011Tel: +91 22 3989 6000Fax: +91 22 3983 6000

Delhi4B, DLF Corporate ParkDLF City, Phase IIIGurgaon 122 002Tel: +91 124 307 4000Fax: +91 124 2549101

Pune703, Godrej CastlemaineBund GardenPune - 411 001Tel: +91 20 3058 5764/65Fax: +91 20 3058 5775

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