A blog of blogs

The first market of India – Retail Financial Services and Banking

zyakaira — Sat, 06 Feb 2010 16:37:15 +0000

The first market of India- Retail Financial Services and Banking

Random Tweets from a Saturday

Saving Media http://ow.ly/14wL1 , Also IPL and Indian Financial Services Advertising..stretching the rupee into hinterland access

Lady Kidwai taking TV Opp with Bloomberg as opportunity to push women’s agenda.. duh! women in I banking. HSBC rdy for ABN ..will RBI oblige

Even in India HSBC does need a leg up in tech when compared to Citi but its brand equity is much better than any other. http://ow.ly/14wIq

HSBC Invest India looking like a distress sale candidate http://ow.ly/14wGF

HSBC’s new branches in Nagpur, Nasik take it to 50 branches plus 30 from ABN? Micro Lending, Retail & Bancassurance lead http://ow.ly/14wFM

HSBC picked itself up for another day in India. ABN adds $10 billion in India , biggest player in India after ICICI, SBI http://ow.ly/14wEv

I have to be away but the game lives on http://ow.ly/14wqJ Down Colts! It’s Drew Brees who’s the best #saints #SB44 #superads

Losing PIIGS would be a scary prospect, but Euro zone can’t cough up money for them in Greece, Spain, Ireland or Italy and Portugal #Europe

Choose and click through to your favorites from our best as ranked here http://ow.ly/14wkl#postrank #marketing

Typing customers in China and Dubai to super previews for supersunday! We’ve come up a lot last week http://ow.ly/14wjp #postrank #marketing

Eye Openers dot the Global Markets across the DOW the Euro Zone and even China and India.. Feverish February? http://ow.ly/14wdW

Blankfein settles for $9m in 2010 ( stock saleable in 2015 after the next bust ;lol ) JP Morgan pays $17m all stock bonus http://ow.ly/14wc7

LIC, ICICI Bank only investors in the French Auction (at 209/210 rumored yesterday) NTPC scrapes through http://ow.ly/14waE

IPL got into the live streaming game pretty early. Ustream gets funded $75mhttp://ow.ly/13vZ4

Online video viewership http://ff.im/-fsTL5

With each viewer watching 187 videos per month in the U.S…Live streaming could be the catchall | Advantage Social http://bit.ly/99sO8J

HSBC’S NAINA LAL KIDWAI IN INTERVIEW ON BLOOMBERG UTVi , Tweetstorm aired at ADVANTAGE ZYAADA properties after bank results week was over

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India’s growth meme fires 2010

zyakaira — Wed, 03 Feb 2010 13:02:01 +0000

ENERGY

Kirit Parikh report released today, recommends freer market pricing and a longer term solution for the Indian Oil Energy majors. The implementation and adoption by Pranab’s government of course is dependent on political and economic convenience.

The Oil Industry cannot support the burden of subsidies with the internal prices of Oil fluctuating in a wide band. Mr Parikh pegs losses at Rs 40000 Crs annually for the Oil companies. A Rs 6 increase in the price of Kerosene ( lower end derivative) is recommended. As losses on petrol are Rs 3 per liter, a price rise of Rs 4.70 per liter on Petrol and Rs. 2.30 per liter on Dieel are likely if free pricing is implemented ( State owned Oil companies)

ONGC and OVL to share the burden of subsidy with the government to the extent of early blocks granted by nomination and funded by the government

GAIL free from subsidy sharing formula because it has no production facilities

Rail Freight to catch on as the cost of diesel per Kilo Tonne per Kilometer is 20% of Road transport costs

KP recommends freeing of Petrol and Diesel Pricing at Retail

Also, Kerosene subsidy should be granted to families based on Smart Card and UID

AVIATION

Aviation major Jet negotiated a 11% stake in GMR MAS Hyd Airport Engg Company for fleet maintenance of Jet as per an MOU signed earlier in January

Jet Airways also improved Domestic yields by 24% in the final Quarter of 2009 and the industry is hoping for business and premium class demand revival in the coming two quarters. supply side controls and lower fuel prices also contributed to the increased yield

POWER / DIVESTMENT

NTPC issue pricing should flummox investors even as Power Grid and REC get in line. SAIL has got approval for a 10% Offer for sale and a 10% issue of new shares in the coming year and next. Steel Authority performance is no longer an industry benchmark, while NTPC’s lead in the Power sector is also likely in question as Power Distribution and Transmission become central to Policy.

MUTUAL FUND INDUSTRY

The Mutual Fund Industry’s innovative Liquid Plus schemes that now constitute 40% of the Rs 735000 Crore ( INR 7.35 trillion) Industry may soon be switched out as Government takes cognizance of the differential tax treatment ( Individuals 14%, Corp 22%) vs. Liquid Schemes 33%. Also RBI had earlier challenged banks on parking excess cash in these money market schemes with Mutual funds as more than Rs 1.35 trillion is parked in such schemes.

RETAIL LIFESTYLE

ITC Fortune has reported 2000 new rooms planned under the budget franchise in the next 2-3 years. 9 new hotels are coming online in 2010, 25 by 2014 which will be close to 6000 rooms

Maruti Suzuki led a great Indian Auto revival bringing sales of 175000 Cars in January domestically. Adding at least 50 K in Exports from Hyundai and Maruti alone, the figure, if repeated through the year could finally break the hold of 2- 3 wheelers in economic reporting, lol

INOX bought 200 additional screens into its fold with a 43% investment in Fame Cinemas, each screen costing them between 1.3 to 1.7 crores or $300K much below the market cost of $500K of setting up a new screen. It is increasingly looking unlikely that PVR will complete its purchase of DT Cinemas.

We have tweeted and carried in-depth analysis of each of these deals, subjects and factors in India’s new journey. Call us on ‘hyperchat’ if you need a breaking tweet.

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NTPC Divestment – II | Advantage Infrastructure

zyakaira — Sat, 30 Jan 2010 10:37:20 +0000

Roadshow update

NTPC gets on the road for bidding (price INR 200- 220)

( WSJ>com, NTPC Secures Debt )

[ INR 100 billion = INR 10000 Crores ] [India's Current Total Power Capacity = 75 GW (Peak)]

NTPC Ltd. has arranged 450 billion rupees ($9.74 billion) in loans to help raise its power generation capacity to 75 gigawatts by March 2017 from the current 30.6 gigawatts.

The funds will be used to build new plants and to modernize existing ones, Chairman R.S. Sharma told Dow Jones Newswires late Friday.

He didn’t specify exactly how much the expansion will cost in total, but he said that 70% of the money will come from debt and the rest from the company’s cash reserves.

The company plans to invest 250 billion rupees to add 4.5 GW of capacity in the next financial year that starts April 1, up 41% from this fiscal year’s 177 billion rupees.

But NTPC will miss its target of adding 3.3 GW of generation capacity this fiscal year, and may end up adding only 2 GW, Mr. Sharma said.

“We have planned a little bit aggressively. There were slippages. But next year it will be 100%, no slippages are going to take place,” he said, speaking from New York.

NTPC’s capacity expansion plan is in line with the federal government’s aim to improve the nation’s infrastructure.

[tag India, India Infrastructure, IPO]

[category india]

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Going Private, Going Public

zyakaira — Thu, 21 Jan 2010 20:39:12 +0000

Max grows healthcare, insurance

Goldman Sachs owns information rights only for 9.4% stake

Max India, the Delhi-based company with interests in healthcare, insurance and telecom, have secured another round of major funding from a private equity arm of Goldman Sachs. The company's board has approved a proposal to raise $115 million (about Rs 540 crore) by the global investment bank, according to a report in Business Standard, which quoted a stock exchange filing.

The company will dilute 9.4% stake post money, valuing Max India at $1.2 billion (about Rs 5,743 crore). According to the report, Max India promoter Analjit Singh would also pump in money during the course of one year to retain his current stake 34%. ”I don’t want to dilute my stake. I will be trying to increase my shareholding in one year,” Singh has been quoted as saying by Business Standard.

The funds will be used to expand the company’s interests in insurance, healthcare and specialty plastics businesses, the report added. The investment will be from the $20.3 billion GS Capital Partners VI fund formed in 2007 to invest in a broad range of industries globally.

Goldman Sachs will get a seat on the board, though it will not have any affirmative rights but only with information rights, the report added quoting an official.

Max India will issue fully and compulsorily convertible debentures (FCDs) of the face value of Rs 867 each amounting to a total of Rs 540 crore to Goldman Sachs, which will carry a coupon rate of 12% a year. This will have to be converted within 15 months from the date of allotment into four equity shares of Rs 2 each at a premium of Rs 214.75 per share.

Singh will be issued 2 million warrants of the face value of Rs 867 each for Rs 173.4 crore, representing about 3% of the post-issue share capital of the company on conversion. Each warrant will be converted into 4 equity shares of Rs 2 each at a premium of Rs 214.75 per share within 18 months.

About half of this investment – Rs 87 crore – will be paid upfront by Singh, though the stipulated minimum upfront payment required is just 25 per cent, BS report added.

The company already has a treasury corpus of Rs 330 crore, and with Goldman Sachs and Singh's new investment, the corpus will reach about Rs 1,000 crore. These funds are expected to meet its funding requirement for the next two years.

The report added that about Rs 520 crore would be invested in life insurance firm Max New York life, about Rs 200 crore in new health insurance business, and Rs 150 crore for the healthcare business.

via Max India Dilutes 9.4% Stake To Raise $115M From Goldman Sachs | VCCircle.

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GMR Infrastructure: This airport is now busy

zyakaira — Thu, 21 Jan 2010 18:56:40 +0000

It’s not the fog

GMR has emerged as a leader in aviation infrastructure space wiht commissioned projects in Hyderabad, Delhi and Turkey. Despite the recent L&T stake sale to GVK in Bangalore ( that probably GMR should also have bid) and with the opening of more than 20 mid tier airport projects plus another 5-6 metro airport modernisation projects, GMR cannot be choosy but also cannot afford to ive away the farm. Each Aviation project Capital requirement will run into 2-3K Crores that’s a $500m each time. Even if it foots only 10-15% of its equity, it crrently cannot affor to take any of its earler projects public and the infrastructure spending requirement is NOW.

After the Temasek deal for 10% of GMR Energy was announced yesterday, GMR has pulled a virtual second and third consecutive cheer, with the SBI Macquarie infra fund picking up $200m stake in the Aviation Infrastructure bids. 3i which earlier in the week announced its deal for toll highways has also flown in to GMR Airports with a $200m tab

http://economictimes.indiatimes.com/markets/real-estate/news-/GMR-in-talks-with-3i-Macquarie-SBI-Infra-to-raise-450-mn/articleshow/5277152.cms” style=”padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font-weight: normal; text-decoration: none; color: rgb(38, 80, 163); border-bottom-width: 1px; border-bottom-style: solid; border-bottom-color: initial;”>From ET: GMR want(ed) to sell a minority stake in the airport subsidiary to raise cash for investments in infrastructure and power. The airports business, which includes the Hyderabad and Delhi airports, account for 45% of the group’s revenues.

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YES Bank raises cash

zyakaira — Thu, 21 Jan 2010 05:21:28 +0000

YES Bank came for a quick $250m QIP gathering INR 1200 crores from the market today with J P Morgan, Capital Est and the Merchant Banker Morgan Stanley subscribing to the issue. 60% of the order book has been reported as finalised on UTV.

Yes Bank’s SME results indicate its bullishness on Infrastructure and Healthcare as well as Agri businesses. Yes Bank has decided to concentrate on smaller tickets and should thus not be leading credit mandates this year. At the current price of INR 272, the market is expecting a lot from this wunderkind.

The bank is going in for a capital raising even as its capital adequacy ratio as on December 31,2009 was at 16.19%. According to Yes Bank MD & CEO Rana Kapoor, “We are expanding at a fast pace. Our loan growth is 71% while our deposit growth has been 62.8%. We want to maintain a 45% CAGR for the next two years and 35% for the next three years thereafter.”
via ET – Earnings – Banks

Yes Bank has grown credit at 71% in the December Quarter and would target a CAGR of 45% for the next year, that would leave a lot of interest in the stock..but they need more interesting customers , with most expansion on hold and branch infrastructure costs rising without acces like PSB banks and even ICICI Bank, which is otherwise becoming a laggard in financial and retail banking market share performance

[Tag Banks, Indian Banking, Banking, Bank-stocks]

[Category India, Banking]

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Another quick doodle on Power Infrastructure | NTPC, REC

zyakaira — Wed, 20 Jan 2010 21:53:13 +0000

GOI plans a French Auction from Feb 3-5 for the NTPC IPO. The FRench Auction will enable best price discovery but trading will be halted for the period because of government concerns about quality of FIIs and QIBs in the country. The Market Price ruling at 240, means the FPO could even take the bids higher, but unlikely as a common cut off is in place per the rules of the French auction to be announced on Saturday Feb 6. Retail Investors get a discount of 5% as last month in Jindal Energy. NTPC is one of the heaviest weighted Sensex scrips. In a separate development GMR got thru to investors for its Power unit’s 15% stake. Again it looks as if we have short-sold the plot for less than 10000 Crs while disallowing retail investors frm participating. The volumes continue to be dry.

NTPC has a commissioned capacity of 30K MW . Dabhol may also get a 2000MW unit from NTPC in the current premises. NTPC will also be selling 10% of its Power in Market Auctions/Contracts (Merchant Power) where prevailing prices go as much as Rs 17 per unit for distribution companies and Corporates for their requirements. This will increase NTPC profits by approx 5 million units of Power sold at a Profit of Rs 8-10 or Rs. 5 Crores

Also two Transcos have been approved for bidding by REC for Kpatnam run by AP Transco and Tiliana. Companies like Jindal had also planned Transmission projects over Rs 600 Crores for the Bellary plant. REC currently earns a 300 bp spread on its loans with lending capped at an easy 11.5%. Though there is no legal limit on its lending rates.. REC also manages the bidding process on behalf of Power Transcos and Distcos ( state-owned) K’patnam plant for example would be part of AP Transco’s 800 cr 2010 disbursal. In AP over 5 lakh villages have been electrified. (REC Interviews on Bloomberg UTV, ETNOW with NTPC FPO, Other research includes sources at our India http://zyaada.info archives and the India Brand Equity Foundation)

[tag NTPC, india, India infrastructure, Infrastructure, Power, Power Infrastructure, Power, Divestment, 2010]

[category india, India infrastructure, Infrastructure, Power, Power Infrastructure]

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ISEC is running this mandate with Morgan Stanley. ICICI Securities results tomorrow may show some gains from such large mandates of 2009 and will continue to get traction in 2010 but Government has already asked Merchant Bankers to bid for all issue costs in a baket before the mandate is awarded and that may not be cofortable for Kotak, I-Sec and other domestic players

India Budget 2010 – What will ensue? Part I (Personal freedom)

zyakaira — Wed, 20 Jan 2010 14:35:47 +0000

The previous Budget document isn’t very old yet. Those of you who still need to refer back may get a copy from us. those who got the analysis document from us last time are again invited to write in on Twitter and request the new one in six weeks from now.

What will Fiscal Reform portend for India next year? Well, the GST would be the primary weapon of choice for Pranab da and MSA but they may not make it again..GST roll out would require more agreement from states and the buffers of Rs 30000 Crores made available for it being rejected by the states because of no wish to get into GST , ‘is a canard from motivated sources’. GST may be still round the corner, given the cooped federated model that we have, not the disturbed Russian state model that collapsed. The budget will also remember Jyoti Basu of course. At the age of 96, one may just wish his soul lives in peace, but how much of the reform and coalition nation that we ran in the nineties would have been possible without him?

As far as the GST rate is concerned even 20% would not be enough. I don’t think they can even try going beyond 16%. The unreasonableness of it might even cost us some dinner diplomacy and we do not want the headache.

There is the successful new Direct Tax Code. Yes sir, we will now have the tax slabs that recognize true stratas of income in this country, capping the maximum rate to a minimum of 25 lacs. That one provision has not changed. However, effective Tax for Corporates being 20%, the Corporates haven’t agreed and there may be changes there but not in this budget

So now your CTC mirage may start losing a leg or two and you may actually not be the few elite to file a 25 Lac tax return for it is still at 20% rate, while amounts higher may reflect a 30% tax rate. Some of us still have perquisites at those ancient rates that just our local tax commissioner recognises like that Non Taxable Conveyance of 800 Rs per month and the car leases rebate of Rs 1200 per month. Despite the roll back of the FBT and no consumption tax, tackling these and the EET exemptions are still like playing with fire. By EET i mean those LIC and PF savings that are curently EEE. At least the obvious thing would be not to touch the amounts already invested assuming a EEE treatment for my gratuity, PF, insurance savings and other such.

Most of the benefit of the new tax code will accrue to those who were filing annual income of Rs 10L in the Personal categories and also continue for professionals and tiny entrepreneurs who have been allowed a taxation on 8% of their turnover without filing any financial statements. Those above 20L will also reap great enefits but they were anyway rid of the surcharge from this year onwards which really hurt those who had to file beyond Rs 10 Lacs

The art and chance of Fiscal Stimulus

Many fiscal experts have counted the drop in excise slabs from 14% to 8% as a stimulus measure. Even if no one noticed, they are part of the FRBM targets from the last regime ( also the same govt) and will remain. Also, the hurry to bring the deficit back to 5.5% may not induce any such hurried roll backs that might be long term measures for the Economy. The other one that is likely to stay is the Service tax at 10%

On the supply side, The Government will have to maintain or increase Defence, Infrastructure, Social Services, Healthcare and Education. Rather like a known NDTV Film critic and a regular animated/big actor Hindi pot-bolier, I have dropped the ball here for all supply side targets in one go. I must go back to my stockpicking.

Also the Mid Term Five Year plan review is coming in too late for corrections in spending to begin in this budget.

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Pepsi gets social

zyakaira — Mon, 18 Jan 2010 19:32:05 +0000

You can read here about their new Refresh everything Idea campaign

But this picture should still burn you up, from an ad premiere for Pepsi in Barcelona. The ad is set in the Hongkong underworld

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Aussie missed it!

zyakaira — Thu, 14 Jan 2010 09:17:55 +0000

KFC tries racism on Aussie TV

If you need the India that is winning and now beating China, the branding that comes from Sports is too astounding to be missed. The Aussies tried it with KFC??? but didn’t make it as the rip off got ”’posted”’ in a cul meme.

IS MONEY IN THE GAME, INDIA’S EXCLUSIVE PRESERVE?

A racist meme from America carried down under, lock stock and barrel, Australians openly accepting it and the Americans denouncing it..in fact only 27% denouncing it. “Fried Chicken” does get you into colored soup. Wondering about other YUM brand spend?
]

Pete Cashmore broke the story socially here

THE KFC T20

Ofcourse, more germaine to Asia is that game called Cricket! This KFC campaign was for the IPL’s early ancestors that feature the Australian provinces fighting for the cup.

The Eight Ball Over

OUR NEED TO KNOW IN THIS IPL ROCKET TURF FOR NEXT MONTH

Dot Ball.. IPL auctions and brand spends have rocketed at ne’er before ratecards in Marketing rich India ratcheting a featured campaign from Coke with cinekhiladi Akshay.

It’s a Four #1 .. Indian Brands splurging on Cricket may well be contained with losses regularly borne by NEO , SET MAX and now Udaya on namma KPL with flummoxed ‘Big Brother’ ESPN watching idly by.

It’s another Four #2.. ESPN’s KFC T20 has budgets similar to KPL and the Bangalore Rural Providence Team, but manages to draw global memes from US to beat Asia…

Dot Ball..Dot Ball..Dot Ball..Support in India for the travesty has recently gone missing with China busy with portfolio sales and defaulting commodities and India finally catching up on the GDP ramp after a couple of misses.

No Ball..Free Hit.. Australian business practices have at best been ‘questionable’ with their archaic tomes in reporting for reporting sake and a obstinacy in allowing games, regulations and corporates in after a proverbial Viking bash on the druids

Single.. IPL is going thru its next auctions on the 19th, details tweeted yesterday

DLF Maximum.. The Indian Soccer Championship has snagged a Rs 194 crs sponsorship , a first of its kind in early season, while the World Cup headed Indian Hockey team a non starter, PHL having brought IHF down in 0h Eight

Get the Game! Happy 2010

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