18.09.2006

Virtual wheels spell big bucks for design companies
Auto industry’s search for faster product development may spell billions of dollars in offshoring revenues for Indian software and design prototyping companies.
And estimates currently peg its value at just $100 mln.
Virtual manufacturing can cut product development time by 25%.

Citi, HDFC working to build deeper ties
Citi group holds over 12% equity in HDFC, after it acquired 9.27% in the company from the secondary market last May.

Telangana liberation day
September 17, 1948 was the day when Telangana was liberated from the rule of Nizam of Hyderabad. The Nizam agreed to merge his state with the Indian Union.

New horizons in pharma sector
Global pharma market is estimated to be $550 billion. Of this Indian market size is estimated to be $6 billion. India’s share is estimated to be growing at 10% per annum.
One estimate puts the Indian pharma industry size at Rs. 50,000 cr.
Vaccine sales in 2004 were placed at $386.3 million.
The diagnostics market was placed at $138.2 million.

Philips to setup new HQ in NCR by 2008
Philips has 5 divisions operating in India – lighting, consumer electronics, domestic appliances, medical systems and semi-conductors.
All the divisions currently being operated from various places are proposed to be brought under one roof in Delhi.

Future group ropes in McKinsey to script growth
Future group (Pantaloon) is aiming to take its turnover to Rs. 30,000 crore by 2010 from the current Rs. 2000 cr.
Proposes to increase its manpower strength to 1,50,000.

India’s demand for wind energy is placed at 45,000 mw. Of this currently only about 4000 mw is in place.

Private and foreign banks feel the pinch as wage climb
The average operating expense for foreign banks has shot up from Rs. 564 cr to Rs. 707 cr per bank.

Indian Railways has managed a U-turn to earn profits of Rs. 15,000 cr in 2005-06 – the second largest profit earner after ONGC.

Gem and Jewellery exports are slated to touch $20 bn by 2007.

Labour reforms are back on radar
Right now industrial units employing more than 100 workers have to mandatorily seek government approval for closing down their operations.
According to a World Bank study introduction of contract labour system increases the employment opportunities in the manufacturing sector by 30%.
There are around 154 labour laws meant to ensure the welfare of workers. Majority of these laws affect the workers in the organized sector who constitute around 3 cr workers out of the total workforce of 40 cr.
The previous NDA government appointed a Labour Commission headed by Ravinder Verma, the second since independence. It submitted an exhaustive report on labour reforms about three years ago. However consensus eluded in effecting labour reforms.

PM moves to bring power projects on track
Against the targeted capacity addition of 41,110 mw in 10th Plan, the country was able to add only 26,997 mw.
In the 11th plan, the target is likely to be fixed at 60,000 mw.
PM asked his Economic Advisory Council Chairman Mr. Rangarajan to take charge of monitoring achievements against targets and resolve problems in the sector without further delays.

Big company is better for lower interest costs
According to an RBI study, it was found that companies with turnover of more than Rs. 1000 cr could manage to contain the rise in interest costs to about 2.3% only.

RBI weekly statistical supplement as of September 1st 2006
Forex reserves $165.13 bn
Aggregate deposits mobilized by scheduled commercial banks Rs. 22,51,701 cr.
Bank investment in government and other approved securities Rs. 7,68,491 cr.
Credit extended by scheduled commercial banks Rs. 15,92,628 cr.
Total stock of money in circulation Rs. 28,90,535 cr.

NELP VI (New Exploration and Licensing Policy) for oil and gas exploration
165 bids received for 55 blocks
Total investment in the pipeline is pegged at $8-10 bn
Innovation in this round is the move to do away with the practice of assigning maximum bid weightage to upfront commitments in drilling and seismic surveys.
Most of the country’s sedimentary basins remain unexplored.
Estimates suggest that up to 10 bn tonnes of crude and 1 tcm of gas may be waiting to be discovered.

An emerging interactions economy: John Chambers
Consumer spending in India is growing at 9%.
India’s telecom network is the 5th largest in the world and 2nd largest among developing economies.
The telecom industry directly contributes 2.7% of India’s GDP.

Is the commodity boom peaking?
The US is currently running a current account deficit of 6% per annum.
Index funds have $80 bn under management from close to negligible funds in the 1980s.
Total investible funds in the world are a whopping $150 trillion. Of this amount, roughly half is held by banks, slightly more than a quarter in bonds and a little less than a quarter in stocks.
Alternative investments where most hedge funds, commodity trading advisers and index funds reside, currently comprises a mere 0.2% of total investment funds.

FIIs and the convertibility hurdle: Rajrishi Singhal
FIIs have pumped in close to $45.20 bn in Indian stock markets.
Under the current regulations FIIs cannot cancel and rebook their forward contracts. Once they have booked a contract, they cannot wriggle out of the pact, even if the market moves the other way.
This resulted in movement of the hedging mechanism offshore, to Singapore where there is a ‘non-deliverable forwards’ market. In this market the FIIs can hedge their exposure.
At last count the daily turnover for rupee dollar deals in the NDF market was over $100 mn