Issue No.

: 20
SSIM Business News Letter

Siva SivaniCrafting
Institute of Management
Careers Since 1992

Business News Letter

(For private circulation only)

Vol - 2 Issue No. : 20 August, 2014

Compiled by: Mr. S. Saibaba, Asst. Professor

Student Co-ordinators:
Smt. Akhilesh Reddy {NRP-BIFAAS} - (Sr)
Designed by Mr. V. Rajasekhar, Graphic Designer

Yes, You Can IN THIS ISSUE

Don't Be Disheartened;
Be Positive And Cheer Up!
When a great soul like Benjamin Disraeli said, "Despair is the
conclusion of fools," he wanted to drive home the idea that it is
wise never to get disheartened even if we do not achieve'
success in spite of our best efforts, That is why the people who
seem to be on a roll are those people who never give up their
positive attitude and always think that things will turn out right
for them some day if they are not so right now. They possess a
strong "can do" approach which keeps them from giving in to
failures.
A strong "can do" attitude will certainly help you move forward
in pursuit of your goals. If a failure dampens your spirit for the
time being, it will not let you fall into a state of inaction and feel
resigned to fate. It will always inspire you to take action and
encourage you to identify reasons why you can do something
rather than why you cannot. In fact, it is all in your way of
looking at things. By changing the way you look at things, the
things you look at will change. In other words, if you think or
expect others to treat you badly, you will undoubtedly attract
only those people who can do so. This will only reinforce your
poor attitude about your relationships and you will go on
having low expectations •of them. This may even lead you to
the feeling that you do not deserve to have a happy, loving and
fulfilling relationship. This is possible only when you stop
believing in the axiom that "life is all about ups and downs and
most of all overcoming the downfalls with smile." In any case,
you are supposed to be positive and cheer up.
Always remember that changing your attitude to a given task is
always easier than changing the task itself. If you focus on all
the good things that particular task has to offer, it is sure to
-make it a lot easier to do. Having a positive attitude and
continuing your efforts are what make all the difference. You
have to remind yourself that you have got this life only once
and you cannot start this cycle of time by yourself, you have to
v Corporate.............................................. 2
v Economy & Policy................................. 3
v Infotech & Logistics............................... 5
v Marketing............................................... 6
v Markets.................................................. 8
v Mergers & Acquisitions.......................... 9
v Money & Banking.................................. 9
v Persons in News..................................11
v Start - Ups............................................11
do everything in this life itself. Benjamin Franklin Once wrote-
"Were it offered to my choice, I should have no objection to a
repetition of the same life from its beginning, only asking the
advantages authors have in a second edition to correct some
faults in the first." He was wise and knew that nobody gets a
second life. Everybody has to develop his personality in this
life itself. And you ought not to forget that "personality is to a
man what perfume is to a flower."
If you have a belief that you should never quit and it is very
strong, this will drive your attitude and you will usually achieve
the desired goals. Your attitude will be healthy and strong; it
will allow you to regard difficulties as opportunities to learn;
difficulties as part of the process en route to your success. It is
your beliefs which control how you see and interact with the
world. In other words, changing a belief has an impact on your
attitude, which, in turn, affects your results. Continuing efforts
over a period of time helps you in programming your mind for
future success. Continued efforts always pay off. There is a
'famous quote-"The greatest oak was once a little nut which
held its ground."
Therefore, do not be disheartened. Be positive and cheer up!
Wishing you a positive attitude to stay focussed,
(Reproduced from Competition Success Review-August 2014)

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 Issue No. : 20
SSIM
CORPORATE
Ranbaxy, Cipher join hands for Brazil venture
Ranbaxy Laboratories and Cipher Pharmaceuticals
have entered into a licencing agreement under which
Ranbaxy would market, sell and distribute the latter’s
isotretinoin capsules in Brazil. “The agreement extends
the current relationship with Cipher, under which
Ranbaxy is marketing and distributing Cipher’s
isotretinoin product in the US under the brand Absorica,”
Ranbaxy said in a statement. Isotretinoin is primarily
used to treat cystic acne. Sometimes it is also used to
prevent certain skin cancers, besides being used to
treat brain, pancreatic and other forms of cancer. Under
the contract, Cipher will supply the product, for which it
will receive upfront payment, besides being eligible for
additional pre-commercial milestone payments,
Ranbaxy said. Ranbaxy would be responsible for
receiving regulatory nods for the product in Brazil. “The
isotretinoin formulation is expected to be a flagship
product in Ranbaxy’s dermatology franchise in Brazil,
once it achieves regulatory approval,” Ranbaxy said.
First quarter results show India Inc losing
momentum
The market rally since September last has been fuelled
by cyclical stocks, amidst expectations that these
beaten-down sectors will turn around with the economy.
As the Sensex gained 35 per cent since then, the BSE
Capital Goods Index doubled in value, while the auto
and banking indices moved up 40–60 per cent. While
there are some green shoots, the initial June quarter
results show that the turnaround may take more time
for most cyclical companies. An analysis of 300
companies that have announced their results so far
suggests waning momentum for India Inc in the April-
June quarter. Net sales and net profits for these
companies grew 11.3 per cent and 10.7 per cent,
respectively, over the June 2013 quarter. This is lower
than the 16 per cent growth in topline and bottomline
recorded in the March quarter. Read more…
After $1-bn fundraising, Flipkart now worth $7 bn
For Flipkart, India’s largest internet company by
estimated market value, billions seem to be multiplying
fast. Soon after announcing a $1-billion fundraising, the
biggest so far by an e-commerce company in the
country, Flipkart founder & Chief Executive Sachin
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Bansal on Tuesday said the next target for his company
was entering the $100-billion valuation club.
That might appear a grand ambition for a company
whose estimated valuation after its latest round of
funding is $7 billion, but Bansal is sure about it. He,
however, does not give a timeframe: “The $100-billion
valuation goal could be achieved in five, 10 or 15 years,”
he says, in a matter-of-fact way. Read more…
Tata Group to invest $35 billion in 3 years
The Tata group will invest $35 billion (Rs 2,10,000
crore) in the next three years and lay special focus on
four clusters - retail, defence & aerospace, financial
services and realty & infrastructure - over the next 10
years. Termed Vision 2025, the plan will also include
achieving a market capitalisation comparable with the
25 most valuable companies in the world. In 2013-14,
Tata Group’s annual revenue grew 18.5 per cent to Rs
6,24,757 crore ($103.27 billion), nearly 5.5 per cent of
India’s gross domestic product. Analysts said the group
would need to add another $60 billion to its current
combined market cap of $138 billion to become the
world’s 25th most valuable company. At present, this
position is held by Facebook, with a market cap of $193
billion, according to Bloomberg data. Read more…
Suzlon to refinance half of its Rs 9,000 cr
debt in current financial year
Wind turbine maker Suzlon will refinance Rs 4,000-
4,500 crore of its rupee debt and list its European
subsidiary Senvion as part of its turnaround plan. Last
month, the company’s international bond holders
agreed on a cashless restructuring of $485 million
bonds two years after the company defaulted in paying
one set of bond holders. Suzlon is estimating a valuation
of ^2 billion (about Rs 16,000 crore) for Senvion and 25
per cent dilution could generate about Rs 4,000 crore.
The restructuring has come as a breather for the
company, which has been making a loss since FY10
with its business impacted by slowdown, removal of tax
concessions for wind power in India, high interest
burden and stiff competition from Chinese companies.
While on a post tax level the company continues to
show negative result, Suzlon has shown positive
earning before interest, tax and depreciation and
amortisation (Ebitda) in last two quarters. In the first two
quarters of FY15 Suzlon reported a loss of Rs 751 crore
as against a loss of Rs 1,059 crore in the same period
last year. It reported Ebidta of Rs 73 crore in the first
quarter FY15 as against an operating loss of Rs 302
crore in the year-ago quarter.
The company has chalked out three steps to shore up
its business, which are raising of volume, improve
business efficiency and financial restructuring through
debt refinance, equity raising and sale of non-critical
assets.
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 Issue No. : 20
SSIM
Gedcol to set up 20 Mw solar plant
Green Energy Development Corporation Limited
(Gedcol), the nodal body appointed by the state
government to generate renewable energy, has
identified about 120 acre land at Manmunda in Boudh
district for establishment of 20 Mw solar power plant.
The land has been allotted to Gedcol from the industrial
park area earmarked by Odisha Industrial Infrastructure
Development Corporation (Idco). The green energy firm,
a Odisha Hydro Power Corporation (OHPC) subsidiary,
has already floated a engineering, procurement and
construction (EPC) tender for the project.
“The EPC tender is for development of the power plant
and maintenance for a period of 10 years,” said
S K Sahu, commercial director of Gedcol.Apart from the
Boudh project, the agency is in the lookout for additional
land in Koraput, Kantamal and Bolangir area for
installing about 200 Mw solar energy capacity.
Tsubaki raises stake to 51% in Mahindra
Conveyor Systems
Tsubaki Group, Japan, has acquired majority stake in
Mahindra Conveyor Systems Pvt Ltd (MCS), a
subsidiary of Mahindra & Mahindra.
The Japanese group earlier owned 8.5 per cent in MCS
and had a tie-up for technical know-how. It has acquired
another 42.5 per cent in it, raising its stake to 51 per
cent. Following this development, MCS, which has a
manufacturing facility at Pirangut near Pune, will be
renamed Mahindra Tsubaki Conveyor Systems Pvt Ltd
(MTCS) a statement said.
“The joint venture will enable us to carry out large-scale
manufacturing and sale of Unit Handling Systems for
supplies not only in India but also to markets in Asia,
ECONOMY AND POLICY
Inspired by Gujarat, Centre asks states to
provide 33% reservation to women in police
Inspired by Gujarat government, the Centre has urged
all the states to provide 33 per cent reservation for
women in their police forces to effectively deal with
cases of sexual violence and crime against women.
Women and Child Development Minister Maneka
Gandhi has written to Chief Ministers of all states to
take inspiration from Gujarat’s recent decision to
enforce 33 per cent reservation for women in the police
force. Last month, Gujarat Chief Minister Anandiben
Patel had announced that her government would
enforce 33 per cent reservation for women in the police
force as part of efforts to empower them. The Minister
said government does not want to amend the Domestic
Violence Act in such a way that it loses the effectiveness
to protect the daughter-in-laws from any sort of violence.
But, she added that at the same time, government was
looking at protecting the older people as well.
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Africa, the Middle East and Europe. We will also actively
invest in people and technology for growth of the
venture,” said Yohei Kataoka, Senior Advisor,
Tsubakimoto Chain Co.
Ravindra Vaidya, Managing Director, MTCS added,
“Tsubaki supplies equipment to users from
manufacturing plants, warehouses and research
facilities across a spectrum of industries, including
automotive, steel, appliances, beverages, IT,
pharmaceuticals, and so on. The company will now
bring this expertise to the joint venture.”
MCS, which notched turnover of Rs. 61 crore in FY-13,
specialises in supply of bulk material handling equipment
and systems to cement and other process industries. It
recently diversified into supply of conveyors for auto and
auto component manufacturing. Founded in 1917,
Tsubakimoto Chain’s main business divisions are Chain,
PTUC (Power Transmission Units and Components),
Automotive Parts and Material Handling Operations.
Hinduja keen to bring back the joys of motor
sport to India
Sanjay Hinduja, Chairman, Gulf Oil International, is eager
to bring back the joys of motor sport to India. The global
conglomerate had brought in luxury sports car Aston
Martin to Mumbai, as well as to the Buddh International
Circuit in Noida. The Hinduja scion is now waiting for the
British sports car-maker to build its new car.
“Aston Martin is a very cool brand – and not just
because of its association with James Bond. We
decided to tie up with them six years ago and have just
renewed the agreement,” Hinduja told Business Line .
In 2008, Aston Martin had teamed up with Gulf Oil
Corporation to enter two DBR9 racing cars in the
legendary Le Mans race in France. Read more…
India set on not supporting a pact on trade
facilitation at the WTO
India maintains its stand on not supporting an
agreement on trade facilitation at the World Trade
Organisation (WTO) till its concerns on food security
are met, a senior Commerce Ministry official has said.
“The Government’s position on the matter is clear. India
is not going to support a trade facilitation agreement till
it is satisfied that its concerns related to subsidies given
for food procurement and food aid will be suitably
addressed,” the official said. WTO members are
expected to sign the protocol for an agreement on trade
facilitation by July 31 as per the agreement reached by
WTO trade ministers in a meeting in Bali last December.
The trade facilitation pact, being pushed by several
developed countries, will place commitments on all
WTO members to upgrade their border infrastructure
and procedures to facilitate movement of goods.
The WTO’s General Council meeting, which was to
discuss all countries’ position on the issue of trade
facilitation and food security on Thursday, decided to
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 Issue No. : 20
SSIM Business News Letter

meet again on Friday. New Delhi had recently said in a
WTO meeting on trade facilitation that it may not be
able to support a pact at the moment as there was not
much progress on the issue of addressing concerns
related to subsidies given for public procurement of
foodgrains and food aid.
CRR is the slice of deposits (currently at 4 per cent) that
banks have to park with the RBI. Since taking over as
RBI Governor in September 2013, Raghuram Rajan
has raised the repo rate thrice by 25 basis points each
to 8 per cent, to fight the inflationary pressures in the
economy. Read more…

Consumer Protection Act to be amended to
ease mediation
Alarmed by the piling up of cases in consumer courts
across the country, the department of consumer affairs
is mulling a significant change in the Consumer
Protection Act-1986 to facilitate mediation and
arbitration. According to officials, the department plans
to create a structure of arbitration and mediation at the
point of grievance (the place where the consumer is
located) before the case is finally moved to the court.
The structure could involve empowering panchayats,
gram sabhas or similar institutions to mediate and
arbitrate between parties. The idea is to ensure an
aggrieved consumer moves court only after he has
exhausted all other options. "It has been observed that
because of the large number of cases in consumer
courts, the delivery of justice is painstakingly slow,
which sometime goes on for years, killing the very
essence of the Consumer Protection Act - to deliver
swift justice. Therefore, we are proposing a crucial
change which will help in appointing arbitrators for
ensuring out of court settlement of the case," a senior
official from the department of consumer affairs said.
Read more…
RBI likely to keep repo rate unchanged
The Reserve Bank of India is likely to keep repo rate,
the interest rate at which its lends to banks, unchanged
at 8 per cent in its upcoming policy review on Tuesday.
According to economists, fears of deficit monsoon
impacting food prices and a depreciating rupee making
imports expensive, may force the RBI to opt for status
quo. However, to address the volatility in the money
market the central bank may enhance the quantum of
liquidity available under the term repo facility and relax
the daily cash reserve ratio (CRR) maintained by banks.
Textile policy to focus on new export markets
With an aim to grab one-fifth of the global textile
business and increase exports to $300 billion in the
next decade, the Government proposes to rejig labour
laws, make special efforts to attract foreign investment
and enter new markets with high export potential, such
as Japan, China, Brazil and Russia. The proposals are
part of the vision strategy framed by the expert
committee on textiles, and will be used as inputs for the
National Textile Policy. Labour laws for the high
employment generating sector will also be re-visited to
make them both investor and labour friendly. The
textiles sector is the second largest employment
generating sector in the country after agriculture,
providing direct employment to about 35 million people.
Read more…
Ministry keen to rush Civil Aviation Authority Bill
In a move that could bolster India's efforts to regain
higher safety ranking from US regulator Federal
Aviation Administration (FAA), the civil aviation ministry
is trying to rush the amended Civil Aviation Authority
(CAA) Bill. The Bill aims at creating CAA, a financially-
autonomous body that will replace the Directorate
General of Civil Aviation (DGCA).
A senior ministry official said: "The Bill has been
circulated for consultation. Once we receive comments,
we will draft the Cabinet note after which it will be tabled
in Parliament."
The Cabinet had in February this year approved
amendments to the Bill for replacing the DGCA with
CAA. However, the process got stalled due to
declaration of Assembly elections in March.
Read more…

Indirect tax collections up 4.5% in April-June

Even as customs and excise duty collections dipped, the Finance Ministry has managed to collect over 18 per cent
of the Budget target for indirect taxes during the first three months (April-June) of the current fiscal.Indirect taxes
include customs duty, central excise duty and service tax. However, the growth rate in tax collection is still way
behind the targeted rate. The Budget aims to mobilise Rs. 6.23 lakh crore in 2014-15, which requires a growth rate
of 20 per cent over 2013-14. But collections in April-June stood at Rs. 1.14 lakh crore, showing a growth of 4.5 per
cent over Rs. 1.09 lakh crore collected during April-June in the previous fiscal.

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 Issue No. : 20
SSIM
INFOTECH AND LOGISTICS
Wipro lags peers in all key areas
Wipro once again fell behind peers TCS and Infosys by
reporting lower growth in its key financials in the June
quarter, though it has given a fairly healthy guidance for
the September period. In a seasonally strong quarter
for IT companies, a meatier performance was expected
of Wipro.
During the quarter, the company managed to derive
reasonable traction in many verticals, while its key
geographies of operation such as the Americas and
Europe held steady. But addition of large-size clients
has been anaemic, utilisation rates are still well behind
peers and relatively low-margin services have led the
growth this time around.
In the June quarter, Wipro’s IT service revenues grew
by 1.2 per cent sequentially, while operating profits fell
5.8 per cent, mainly due to salary hikes given from
June. TCS and Infosys witnessed revenue growth of
5.5 per cent and 2 per cent, respectively. Operating
margin, at 22.8 per cent is significantly lower than the
25-28 per cent levels achieved by TCS and Infosys.
Read more…
IBM, Wipro frontrunner for Rs. 1,300-cr
RCom’s call centre outsourcing deal
Reliance Communications (RCom), the country’s
fourth-largest telecom operator by subscribers, has
shortlisted three companies for outsourcing its call
centre operations under a Rs. 1,200-1,300-crore deal.
The operator is expected to announce the winner by the
end of this month.New York-headquartered IBM, Indian
IT major Wipro and London-headquartered Vertex are
the frontrunners for the outsourcing deal, under which
the company intends to outsource its call centre
operations, a source close to the development said.
Under the outsourcing contract, the telecom operator,
which straddles both CDMA and GSM services, would
outsource its call centre operations to a BPO firm.
RCom would also transfer its 3,500 employees to the
winner of the contract in the first phase.These would
transition to the roles of the vendor (winner) within 30-
45 days.When contacted Wipro declined to comment,
citing that the company doesn’t comment on deals that
is bidding for. IBM and Vertex could not be immediately
reached for comments. An RCom spokesperson also
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declined to comment, while the sources declined to be
identified before a formal announcement. Under the
second phase of the contract, RCom also intends to
outsource its entire shared services function that
includes security, administration and billing among
others. This will result in the operator transferring
another 1,800-2,000 employees to the vendor. The
company is also in discussions for a technological
upgradation contract worth Rs. 500 crore. However, the
names of the bidders could not be immediately
ascertained. RCom expects gains of Rs. 300 crore per
year, if it succeeds in outsourcing call centre and shared
service operations.
Mastek Q1 profit slips 88% in the first quarter
IT solutions company Mastek has reported an 88 per
cent dip in consolidated net profit for the first quarter
ended June 30, 2014.
Net profit went down to Rs. 85 lakh against Rs. 7.1
crore reported in the corresponding year ago quarter.
Revenue for the quarter went down marginally to Rs.
221 crore ( Rs. 222.3 crore). In a statement, the
company said that its numbers were impacted by
‘reassessment of project timelines of a North American
client resulting in the restatement of revenues to the
extent of Rs. 10 crore,” Mastek said in a statement.
Infosys will focus on innovations: Sikka
nfosys CEO-designate Vishal Sikka on Wednesday
said that the company should focus more on innovation
though there was no need to make any ‘grand changes’’
to the existing strategy. On the sidelines of an extra
general meeting which was called to approve his
appointment, the 47-year-old Sikka told reporters that it
was important for Infosys to build systems that deliver.
“There comes a time in the life of a company when the
instinct and the intuition, the knowledge of the founder
is replaced by processes, structure, principles and
innovations that we put together. Pravin Rao (COO)
and my endeavour will be to do that,” he said.
Read more…
Sify invests Rs. 300 cr in new data centres
Nasdaq-listed Sify Technologies has invested Rs. 300
crore to set up two new data centres in the wake of
increasing demand for such services, a top company
official said. The units, one each in Navi Mumbai
(Maharashtra) and Noida (Uttar Pradesh), are tier-3
data centres, which mean that the facilities would have
an up time availability of 99.982 per cent. A lion’s share
of the Rs. 300 crore has been channelised towards the
new centre in Rabale (Navi Mumbai), Chief Executive
Officer Kamal Nath, said. In the quarter gone by, the
company’s data centre services unit bagged 13 new
customers. The Rabale Centre has been termed as
‘ClouDCentre.’ It has 2,80,000 square feet of built up
space and 65,000 square feet of raised floor space.
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 Issue No. : 20
SSIM
Tech Mahindra plans delivery centre in
Hungary
Tech Mahindra is set to expand its European delivery
footprint by setting up a new 200-seater centre in
Hungary. Armed with an initial investment of $5 million,
the company has identified the capital city of Budapest
to provide IT support to an expanding clientele in
Eastern Europe, CP Gurnani, Managing Director and
Chief Executive Officer, Tech Mahindra. “Some of our
customers are expanding into countries such as Poland,
Hungary and Slovakia and we are following them.
Europe is an in integral part of our vision to clock $5
billion in revenue by 2015,” Gurnani said.The company
has already bagged an anchor customer for its
Budapest centre. In the first round of hiring, 50 new jobs
will be created at the centre.
MARKETING
AirAsia eyes 10% revenue from cargo
AirAsia India expects to earn nearly 10 per cent of
revenue from cargo operations. For this, it has
appointed Global Air Cargo India, part of French
company ECS Group, to manage its cargo sales. “We
left it to experts to handle cargo while we will concentrate
on the passenger side, which we know better,” Mittu
Chandilya, CEO, AirAsia India, told newspersons on
appointing Global Air as cargo sales agent. Cargo is
critical for an airline though not been given due attention,
he said. Read more…
Maruti Suzuki Ertiga Limited Edition hits the road
Maruti Suzuki has introduced the Ertiga Limited Edition
to mark the milestone of 1,50,000 unit sales in the
Indian market. The car will be available in Petrol, CNG
and Diesel variants across dealerships in the country. It
is priced between Rs. 6,76,836 and Rs. 8,05,677.
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Gurnani said the decision to setup the centre was also
aided by the tax breaks that Tech Mahindra received
from the government.For the last few quarters, the IT
firm has been strengthening its presence in Europe,
which accounts for about 31 per cent of the company’s
revenue. Business in Europe grew by about five per
cent sequentially in the quarter ended June 30, 2014.
Last year, the Mahindra group firm started two delivery
centres, one in The Hague (Netherlands) and Brussels
(Belgium). Currently, it is present in 17 European
countries. For the quarter ended June 30, Tech
Mahindra reported a 8.1 per cent dip in consolidated
net profit to Rs. 630.7 crore, while revenue rose by 24.8
per cent to Rs. 5,121.5 crore.
Highlighting the upscale features, Manohar Bhat, Vice-
President, Marketing, Maruti Suzuki India said, “The
new Ertiga Limited Edition, with a sleek chrome grille,
plush interiors, aesthetically designed spoilers with
classy body graphics, decals, is a tasteful product.”
Bhat added, “Overall, we have sold over 150,000 units
in the domestic market. Ertiga was the fastest to
achieve this milestone in the B segment.” The Ertiga
Limited Edition will be available in an all-new Pearl
Blaze Blue, in addition to Superior White and Silky
Silver Metallic colours.
Pepe Jeans eyes single brand route
International premium denim brand Pepe Jeans, which
is operating in India through a joint venture in the
wholesale segment, is exploring the single brand
retailing route where 100 per cent FDI is allowed.
Madrid-based Pepe Jeans is holding a majority stake in
the Indian venture, while the rest is owned by a group of
investors under the name of Glen Marken. “We are
closely looking at single brand retail and are waiting for
the changes in local sourcing norms. Currently, we
operate as a wholesale company, but if the sourcing
norms were to change, then we can look at starting
retail operations directly,” said Kavindra Mishra, Chief
Executive Officer, Pepe Jeans. The denim brand began
operations in India through the franchise route in 1989
and later floated a joint venture. Read more…
Amazon goes one up on Flipkart, to invest
$2 billion in India arm
Whatever Flipkart can do, Amazon is promising to
outdo. A day after India’s biggest e-commerce company
announced that it had raised $1 billion ( Rs. 6,000
crore) in funding from private equity investors, the
world’s largest online retailer said it was pumping in
fresh investments of $2 billion ( Rs. 12,000 crore) in its
Indian arm, Amazon.in. “With this additional investment
of $2 billion, our team can continue to think big,
innovate, and raise the bar for customers in India,”
Jeff Bezos, founder and CEO of Amazon.com, said in a
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 Issue No. : 20
SSIM
press statement. Amazon will use the money to build
more categories, bring down costs and facilitate fast
and smooth delivery. Read more…
‘We are here to grow the market and be the No.1’
For Amit Agarwal, Country Manager of Amazon India, it
was indeed a very proud moment when his boss and
mentor Jeff Bezos said the Indian business has
surpassed the US-based online retail giant’s
expectations. Within a year, Amazon.in is close to clock
$1 billion ( Rs. 6,000 crore) in gross sales, a feat which
home-grown online player Flipkart took seven years to
achieve. With Amazon investing another $2 billion in
the Indian operations, the pressure to perform increases
for Agarwal. Read more…
IRCTC could be Govt’s Flipkart
Flipkart, India’s largest online retailer, is valued at an
astonishing $7 billion (over Rs. 42,500 crore) on the
basis of two key numbers: its 2.2 crore registered users
and the Rs. 6,000-crore revenue it earns annually. This,
via an estimated 33,000 sales per day, across the 15
million products it has on offer. But the Government
appears oblivious to the fact that it may be sitting on a
Flipkart of its own. And one that could be worth far
more. IRCTC, the Government-owned enterprise that
manages the online ticket booking portal of Indian
Railways, more than matches Flipkart in numbers. It
has 2.7 crore active users (and an even higher
registered user base of 3.5 crore people). And it has
logged peak transaction volumes of nearly 4 lakh ticket
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bookings per day on its website — more than 10 times
Flipkart’s volume. Tickets account for just a fourth of
IRCTC’s revenues. It also earns a big chunk from
catering services.In 2013-14, IRCTC’s earnings on
ticket bookings alone — via the service charge levied
on each ticket booked — were almost Rs. 247 crore. Its
total revenues are estimated at Rs. 1,000 crore, though
results have not been released for the previous fiscal
year. IRCTC could turn out to be a hidden jewel in the
Government’s asset basket, with market experts
valuing it from a conservative Rs. 6,000 crore to Rs.
12,000 crore. Other travel portals have been valued at
five to ten times their revenue by private equity players,
who typically look to get three-five times of returns on
equity in five to seven years, said sources. While
redBus.in was valued at 10 times its revenue,
makemytrip.com is valued at five times its revenues.
Read more…
Soon, Americans, Britons will get to sip Tatas’
Himalayan water
The Tata-owned Himalayan natural mineral water will
soon be sold through Starbucks outlets in the UK and
US. Himalayan belongs to NourishCo Beverages, an
equal joint venture company between Tata Global
Beverages and Pepsico. Having done a pilot for
Himalayan at the Starbucks stores in Singapore, the
brand is now poised to travel to the UK and the US,
adding distribution muscle for the premium label, as
well as making it a global entity.
The Tatas can leverage Starbucks’ network for its
Himalayan brand, through Tata Global Beverages’ joint
venture with Starbucks.Harsh K Rai, CEO, NourishCo
Beverages, said: “Singapore was the first market where
we started distribution through the Starbucks stores.
We are now evaluating London as the next market,
while the US launch will happen later.’’ Starbucks has
17,000 stores across the world with the US being its
largest market. NourishCo was formed to handle sales,
marketing and distribution of Himalayan natural mineral
water and other water products through the PepsiCo
distribution network.
In terms of international distribution, NourishCo is
already helping the Himalayan brand reach markets in
West Asia such as Dubai and Saudi Arabia. The
Starbucks outlets in these markets are also expected to
stock the brand. In the domestic market, however,
Himalayan’s distribution has been restricted to the
metro markets. “Himalayan is sold in a few top cities.
We are planning innovations like sparkling water as
variants,’’ added Rai. Pitted against brands such as
Vedica (from Bisleri International), Catch, Ava and
international brands such as Evian, Himalayan is a part
of the natural mineral water category, which is still a
niche segment in India.
7
 Issue No. : 20
SSIM Business News Letter

Most car, two-wheeler manufacturers register increase in July sales

Most carmakers reported growth in July sales, thanks to new launches and continued demand for the models rolled
out earlier this year. While market leader Maruti Suzuki India sold 90,093 units in July (75,145 units in July 2013),
second-ranked Hyundai Motor India sold 29,260 units during the month (25,260 units a year ago). “The demand pull
created by successful product launches and strong channel spread has brought down discounts and the greenshoots
of growth are visible with the stabilisation of macroeconomic factors and a near-to-average monsoon,” said Rakesh
Srivastava, Senior Vice-President, Sales and Marketing, Maruti. Read more…

MARKETS
RCom unit to raise Rs. 1,800 cr through bonds
Reliance Communications, the country’s fourth largest
telecom operator by subscribers, is raising about $300
million (Rs. 1,800 crore) through bonds via its submarine
cable unit.
The company, controlled by billionaire Anil Ambani, is raising
the amount through its subsidiary Global Cloud Xchange
(formerly Reliance Globalcom) from global markets.
The company will use the proceeds to pay off GCX’s
debt of about $250 million, and the rest will be used for
capex requirements. GCX had announced setting up of
two submarine cables — Mumbai-Singapore and
Tokyo-US links — and capex could be used for part
funding of these cables.
RCom was looking at paring its debts. The telecom
company, which straddles both CDMA and GSM services,
had a net debt of Rs. 40,000 crore as of March 31.
Biocon sinks on weak outlook
The stock of biopharma company Biocon fell over 7 per
cent on Friday. This was in reaction to near-term
concerns which may temper growth over the next two to
three quarters. Revenues from the core
biopharmaceuticals segment, which constitutes over
three-fourth of Biocon’s overall business, declined in
the June quarter (after adjusting for the licensing
income). Read more…
DLF seeks nod to raise Rs. 5,000 cr via NCDs
Real estate major DLF on Monday said it has sought
shareholders’ approval to raise up to Rs. 5,000 crore by
way of private placement of non-convertible debentures.
The company in a statement to the BSE said, “In order
to augment long-term resources for business needs
through issue of NCDs, the company may offer to invite
subscription for NCDs in one or more tranches.” DLF
has also sought approval through postal ballot to reduce
the borrowing powers of the company’s board to Rs.
30,000 crore from Rs. 50,000 crore earlier. It has also
approached shareholders for their consent to authorise
its board of directors, from time-to-time, to grant loans,
give securities and make investment in securities up to
Rs. 20,000 crore. This amount of Rs. 20,000 crore, at
present, is higher than the limits specified in Section
186 of the Act. “The company operates some of its
businesses through subsidiaries, joint ventures,
affiliates and associates. The funding obligation of such
subsidiaries, joint ventures and associates are funded
primarily out of the company’s cash-flows,” DLF said.
Arvind gains investors’ fancy on growth, revamp
Denim maker
Arvind is back on
investors’ radars.
This is thanks to the
company’s diverse
businesses and the
recent demerger
announcement of
its real estate
business from the
flagship company to
the infra arm, Arvind Infrastructure Ltd (AIL). The rising
level of confidence in Arvind is evident from the figures
of foreign institutional investors’ holding in the company,
and a near-four-times surge in its share prices on the
bourses over the last one year. Arvind’s shares surged
from a 52-week low of Rs. 65 on the BSE on August 8,
2013, to a 52-week high of Rs. 247.40 last month. FII
investment in the company has surged to 23.13 per
cent in June this year from 15.97 per cent in June 2013.
Read more…

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 Issue No. : 20
SSIM Business News Letter

MERGERS AND ACQUISITIONS

RPower to buy Jaypee group hydro projects Arvind to demerge infra arm
for Rs. 15,000 cr The board of Arvind has approved a scheme of
Reliance Power Ltd, an Anil Ambani Group firm, has arrangement with its wholly owned subsidiary Arvind
acquired the entire hydro power portfolio of Jaiprakash Infrastructure Ltd (AIL) for demerger and transfer of its
Power Ventures for an estimated Rs. 15,000 crore. The real estate undertaking to AIL. AIL will issue to the
announcement made on Sunday comes on the heels of shareholders of Arvind Ltd one share of Rs. 10 each for
Abu Dhabi National Energy Company (Taqa) backing every 10 shares of Rs. 10 held by them in Arvind. AIL
out of the Rs. 10,500-crore deal to buy two hydro plants will be separately listed on stock exchanges. While
of debt-laden Jaiprakash Power. Reliance Power will commenting on the demerger of the real estate
now be executing the deal through its 100 per cent business, Jayesh Shah, Director and Chief Financial
subsidiary Reliance CleanGen. Jaiprakash Power is a Officer, said Arvind sees an opportunity and strategic fit
subsidiary of Jaiprakash Associates Ltd. SBI Capital in real estate development. The demerger will allow
Markets was the advisor for the transaction. Arvind to deploy its resources fully in its core activities
Read more… and allow AIL to raise further capital and debt as
required for its
growth. Shares of
Arvind jumped 15.2
per cent at Rs. 242.9
on Wednesday.
During intra-day
trade, the stock
registered a high of
Rs. 244.95 on the
NSE. Read more…

MONEY AND BANKING

Indiabulls, Dewan beat bigger housing violation of its instructions/directions/guidelines. The

finance companies in Q1 central bank imposed the maximum penalty of Rs. 40
The pace of growth set by the country’s largest lakh on ICICI Bank; followed by Rs. 15 lakh each on
standalone housing finance company, HDFC, has been Axis Bank and IDBI Bank. A penalty of Rs. 10 lakh each
bettered by its two smaller peers — Indiabulls Housing has been imposed on seven banks — Andhra Bank,
Finance Limited and Dewan Housing Finance Limited. Canara Bank, Corporation Bank, IndusInd Bank, Kotak
Despite the overall slowdown in economic growth, Mahindra Bank, State Bank of Hyderabad and Yes
there seems to be good demand for housing loans from Bank, the RBI said in a statement. HDFC Bank and
individuals in the tier-II and tier-III cities of the country. Ratnakar Bank have been slapped with fines of of Rs. 5
lakh each. The Reserve Bank said it had carried out a
For Indiabulls Housing Finance Ltd, first quarter net
scrutiny of the loan and current accounts of the
profit grew by 21 per cent, while for Dewan Housing
Hyderabad-based Deccan Chronicle Holdings Ltd
Finance Company (DHFL), net profit jumped 22 per
(DCHL), in certain branches of the above-mentioned
cent during the quarter. The Mumbai-based lenders
banks in late 2013. “After considering the facts of each
bettered the growth rate achieved by HDFC, which
case and the individual bank’s reply, as also, the
logged a profit growth of 15 per cent in the April to June
personal submissions by some of the banks before its
period. In the reporting quarter, Indiabulls posted a net
Committee of Executive Directors, the apex bank
profit of Rs. 424 crore against Rs. 351 crore, a year
concluded that some of the violations were substantiated
ago. In the same period, DHFL’s net profit grew to Rs.
and warranted imposition of monetary penalty,” the RBI
147 crore from Rs. 120 crore, a year ago. Read more…
said.
RBI slaps total of Rs.1.5-cr penalty on
Central Bank of India profit surges to
12 banks in Deccan Chronicle Holdings case
Rs.192 cr
The Reserve Bank of India has imposed monetary
entral Bank of India has reported a nine-fold rise in net
penalties, ranging from Rs. 5 lakh to Rs. 40 lakh, on 12
profit at Rs. 192 crore in the April-June quarter
banks including ICICI Bank, HDFC Bank, Axis Bank,
compared with Rs. 22 crore in the year-ago period.
Canara Bank and IDBI Bank, in the case of the
Profitability of the public sector bank was aided by an
financially troubled Deccan Chronicle Holdings Ltd for

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 Issue No. : 20
SSIM
18 per cent rise in net interest income at Rs. 1,821.47
crore ( Rs. 1,538.02 crore) and improvement in net
interest margins to 2.87 per cent from 2.68 per cent in
the same quarter last year. “Our net profit has moved
up continuously for the past three quarters based on
profitability parameters of higher NIMs, yield on
advances and lower cost of deposits,” said Rajeev
Rishi, Chairman and Managing Director. During the
quarter, total provisions declined 34 per cent to Rs. 645
crore (Rs.983 crore), including provisions of Rs. 8 crore
towards unhedged foreign currency exposure.
Read more…
DCB Bank aims to double balance sheet in
3 years
DCB Bank aims to double its balance sheet size in next
three to three-and-a-half years. This is despite the
private sector lender avoiding large-ticket advances
and being cautious in offering loans to sectors like
infrastructure to preserve the quality of its assets. “We
feel there is enough opportunity in the four big business
segments that we are working on — mortgages, agri
inclusive banking, corporate banking and SME-MSME
(micro, small and medium enterprises)... Now we are
targeting to double our balance sheet in three to three-
and-a-half years. This would mean loan book growth of
about 23 per cent to 25 per cent,” Murali M Natrajan,
managing director and chief executive officer of DCB
Bank, told analysts in a recent interaction. The bank
had closed the first quarter (April-June) of this financial
year with total assets of Rs 12,884 crore. Its net
advances increased by 28 per cent from a year earlier
to Rs 8,291 crore at the end of June, 2014.
Read more…
Top public sector banks shed bulk deposits
last fiscal
Bulk deposits, that is, those above Rs. 1 crore, are a
significant resource for banks, often constituting 10-30
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Business News Letter
per cent of the total deposit base. Public sector banks
compete with each other in mopping up such deposits,
especially towards the end of the fiscal, in a bid to
increase their balance sheet size. Such deposits are
provided by corporates, cash-rich public sector units
and high net worth individuals. The incentive for them is
a premium of 0.5-1.5 per cent on the rates they would
get at the retail level. For banks, however, these
deposits often raise costs and squeeze their margins.
But banks go for them for administrative convenience
and to avoid the hassle of building a retail depositor
base. However, last fiscal, top public sector banks such
as State Bank of India, Punjab National Bank, Bank of
Baroda, Bank of India, Canara Bank and Union Bank
shed a considerable amount of bulk deposits. One
reason for this was the lack of deployment opportunities,
as no major projects took off and there was no need to
raise such huge funds. According to an SBI official,
“Bulk deposits are generally for a shorter time and are
volatile. Currently, since the credit offtake is not very
significant, we don’t really need to raise funds which are
volatile, high cost and which can impact our net interest
margin and profitability.” The country’s largest lender,
SBI, cut its bulk deposits by about Rs. 14,000 crore last
fiscal. As on March 31, 2014, the bank’s share of bulk
deposits came down to 10.11 per cent from 11.63 per
cent in end-March 2013. SBI’s total deposit base as on
end-March this year stood at Rs. 13.95-lakh crore.
Read more…
Andhra Bank plans Rs. 1,000-cr infrastructure
bond issue
o build up a diversified investor base, Andhra Bank is
planning to issue infrastructure bonds not just for
institutional investors but also for retail investors. While
the Hyderabad-headquartered public sector bank is
actively considering private placement of infrastructure
bonds, its Chairman and Managing Director CVR
Rajendran said an issue of such bonds for retail
investors is also in the works.
The bank is currently talking to investors for an
infrastructure bond issue aggregating Rs. 1,000 crore.
The bonds will be of 7-10-year duration and the coupon
rate being quoted is around 9.30 per cent. Rajendran
said his bank will seek the central bank’s permission to
issue infrastructure bonds to retail investors. “The
subscription for infrastructure bonds for institutional
investors usually closes in a day. But for retail investors,
the subscription period has to be kept open for a longer
period,” he said. Rajendran said his bank is making
efforts to reduce the geographical concentration in
business. Currently, 52 per cent of its business comes
from Andhra Pradesh (AP) and Telangana.
Read more…
10
 Issue No. : 20
SSIM
PERSONS IN NEWS
Jethabhai Patel elected as Amul chief
The board of directors of
India’s largest milk
federation, Gujarat
Cooperative Milk
Marketing Federation
(GCMMF) on Friday
unanimously elected
Jethabhai Patel, a co-
operative leader from
north Gujarat, as their
new Chairman. The
GCMMF owns the Amul brand. Patel’s election as the
new head comes after a long-drawn legal battle
between the former Chairman Vipul Chaudhary and the
rest of the board members, who had forcibly ousted
Chaudhary by passing a no-confidence motion against
him. All the 17 board members including Chaudhary
himself were present at the election held on Friday at
Anand. They unanimously elected Patel to head the
Rs. 18,000-crore milk federation.
START - Ups
Monetising innovative solutions
Sanjay Deshpande, 43, is the brain behind Uniken,
which works with banks and financial institutions to help
them interact with their customers on a scalable, secure
private network platform called REL-ID, Uniken’s
flagship product. The platform provides enterprises
with templates for creating standard business apps,
with a secure digital user experience across devices
(desktops, tablets, laptops, mobiles) and operating
systems (Windows, iOS, Android.)
REL-ID supports multi-factor authentication and provides
enterprise users with remote access to all business
critical apps, user information and sensitive data through
a private, closed network. “REL-ID ensures that both the
bank and its customers involved in online transactions
are protected 100 per cent against identity thefts and
phishing attacks,” says Deshpande.
A first generation entrepreneur, Deshpande studied
B.Tech at Veermata Jijabai Technological Institute and
received his Masters in Computer Science from the
University of New Brunswick, Canada. He is the founder
CEO and Chief Innovation Officer of Uniken, and has a
team of 120 people. He started the company in 2003
as an R&D lab in Pune, and bootstrapped it with ₹20
lakh of his savings and $100,000 in angel funding from
Ajay Dubey of Infosys.
“Science is about personal creativity while sales are
about understanding the customer,” says Deshpande.
SOURCE: Business Line, Business Standard & Economc Times
ISSUE: August, 2014
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Business News Letter
SK Sayal, appointed as MD & CEO of Bharti
Realty
Real estate firm Bharti
Realty has appointed SK
Sayal as Managing Director
and CEO, the company said
in a statement on Monday.
With over 30 years of
experience, Sayal will be
responsible for
conceptualising and
implementing a scalable
business strategy, besides
providing overall leadership. He will also explore and
seek new business opportunities via joint development
models to scale up the realty business.
Shop smart! Let this online platform get you
the best price
With a laptop each and Internet connection, Sulakshan
Kumar and Sitakanta Ray tried what they believed was
a smart idea, in 2010. They launched an online portal to
get consumers the best price. In just under four years,
the duo is close to realising that the venture –
MySmartPrice Web Technology – indeed is living up to
its name. The site, mysmartprice.com, compares prices
for products across categories and attracts 12 million
visitors a month, with the numbers growing.
“We pitch as marketer or lead generator for companies.
Users from our site have a higher conversion rate to
product buying,” says Sulakshan Kumar. The team is
now 40-strong and the venture has sharpened its core
engineering. In their mid-30s, the first generation
entrepreneurs were batch mates at NIT, Rourkela. They
met again during their Oracle days in Hyderabad.
During long chats, they narrowed down on the online
space to start their entrepreneurial journey. The two did
a trial run for a few months after quitting their jobs
towards the end of 2010.
“In hindsight, I can say that choosing e-commerce for
our entrepreneurship was purely based on a gut feeling
that it was the sunrise sector,” recollects Sulakshan. He
worked in Oracle and Infosys, while Sitakanta Ray, who
handles the engineering side, studied at IIM Bangalore,
worked in ICICI Bank, before coming to Oracle.
Read more…
11