Indian Shares

 Inflation in India rose more than expected in early February to a six month high on rising food prices and fuel prices. Inflation remains below the Indian central bank's target rate of 5% but economists say it could breach that level in the near future"

More info food and fuel.

India's economy is growing faster than expected, according to official data, on the back of steady farm growth and strong manufacturing and services. Gross Domestic Product (GDP) grew 9.3% in the April to June quarter from its level a year earlier.

The figure, from the Ministry of Statistics, had been expected to fall to 8.9% from the 9.1% recorded in the quarter between January and March. The central bank expects growth of 8.5% for the whole of this year.

 

"The Asian Development Bank (ADB) has raised its forecast for Asian growth, saying that stronger consumer spending will help offset weaker exports." Full Article....

Shareholders in the steelmaker Corus have overwhelmingly voted to accept a £5.75bn takeover offer from Indian firm Tata Steel. More than 97% of its shareholders backed the deal at an extraordinary general meeting, creating the world's fifth-largest steel group. More than  97% of Corus shareholders backed the deal.

• Letter to stock Exchange - Corus Shareholders approve Scheme of Arrangement
• Tata Steel Offer

"No longer is India seen as one of investment's wild frontiers, where you can make big bucks if you take big risks. Increasingly, Western companies are viewing India as a market in which they simply can't afford not to be present."

Source: The Independent

Various news articles are reporting that UK giant Tesco is looking to expand into India with Mahindra & Mahindra rather than the Tata group.

"Some 36 Indian billionaires led by Lakshmi Mittal, the steel magnate, now feature on the list, boasting a total wealth of $191 billion between them."

Source: The Times

The BBC reports that:

"The Argos retail name is to be taken to India through a franchise deal with two of the country's leading store chains. Argos will license its brand and product catalogue for use in retail outlets in India, with the first due to open in Mumbai later this year. Argos, which is part of the Home Retail Group, said the deal would give it a "foothold" in a fast-expanding market."

Several other British retailers including Mothercare have used the franchise model to enter India.

Renault and Nissan are setting up a joint venture with India's Mahindra & Mahindra to build a new $900m (£458m) car plant in the city of Madras (Chennai). Mahindra, India's fourth-largest car firm, will own 50% of the venture with its partners controlling the rest. Production is expected to start in 2009 with the target of producing 400,000 cars a year.

Foreign firms are flocking to India because of the economy's strong growth and low costs. With Ford and Hyundai having already opened plants in Madras (Chennai).

Vodaphone has completed the purchase of 67% of shares in Hutchison Essar, beating off a bid from Reliance Communications. The capture marks a shift in strategy as Vodaphone moves away from the Swiss and Belgian mobile phone markets to emerging economies. The Indian mobile phone market is witnessing fantastic growth at present.

Related Articles:
Vodaphone battling with Essar for Indian Mobile Phone Company
Vodaphone looking to expand in India

In a detailed article on Multinationals investing in India and the growing variety of service which can be performed from India the BBC highlight some interesting facts.

• More than 500 major international companies have IT operations in Bangalore alone
• India, exports $25bn per year worth of BPO services, a figure that is expected to rise to $60bn by 2010
• Foreign IT investments in India over $1bn during 2006 were made by IBM, Intel, SAP, Accenture, Cisco Systems, AMD, Microsoft and Dell

Read the full BBC article here and here.

The BBC is reporting that "Industrial production in India grew at its fastest annual rate in more than a decade in November, spurred by capital and consumer goods, figures show. India's industrial production, including output from factories and mines, rose 14.4% year-on-year"

Full Article : BBC

Vodafone is reported to be facing competition in its bid for he Hutchison Whampoa from Indian conglomerate Essar, which has 33% of Hutchison Whampoa Mobile Phone business. Unlike Vodophone Essar is not affected by the 74% limit on foreign ownership of Indian mobile phone providers.

More Info.

Vodafone has said it is considering a bid for a majority stake in Hutchison Whampoa's Indian mobile phone business.  Vodafone which already owns 10% of Bharti Airtel, the market leader in India and sees the mobile market in India as having great potential, more so than in Europe. However foreign firms are limited to owning 74% of Indian mobile phone providers.

"India will soon have a dedicated global facility to convert passenger airplanes to cargo planes, with state-run aerospace major Hindustan Aeronautics Limited (HAL) planning a full fledged conversion centre for Boeing aircraft. This proposed facility will cater to the requirements of the international market as well as domestic demands"

Source: Business Standard India

With the Indian economy growing at staggering pace and more and more goods need importing and exporting.

The demand for skilled IT professionals in India is so high that companies are starting to find it hard to find suitable recruits. Infact some India companies (such as Intel) are setting up programmes to attract Indian's working abroad back to India. Software industry body Nasscom has warned that India faces a shortfall of half a million skilled workers by 2010

 

 

The main stock market in India for Indian shares closed at a record high today as it passed the 13,000 mark. The SENSEX has risen 36% during 2006 despite a turbulent patch earlier in the year. The rise is attributed to strong earnings from key banks and technology firms like (InfoSys, Wipro, Satyam and TATA Consulting).

"The Confederation of Indian Industry (CII) has said the Tata Steel-Corus deal is a sign of a confident India Inc and reflects the consolidation of the Indian industry in the global economy.

CII president R Seshasayee said the Tata Steel-Corus deal is a sign of India Inc being recognized as a very significant global economic player."

Source: Zee News

Anglo-Dutch steel firm Corus is reported to be close to accepting a formal £4.1bn ($7.7bn) takeover offer from Indian rival Tata. Corus encompasses what was formally British Steel. Corus is an international company, providing steel and aluminium products and services to customers worldwide with an annual turnover of £9 billion.

TATA Steel formerly TISCO - Tata Iron and Steel Company Limited) is Asia's first and India's largest integrated private sector steel company. Tata Steel produces 4 million tonnes of steel, annually. In 2005 the company was recognised as the world's best steel producer. The company is listed on Mumbai and National Stock Exchanges of India

New research has found that shares in the major India-based IT services providers have vastly outperformed their western rivals so far this year, despite falling sharply in May and starting from valuations based on much higher multiples of earnings and revenues.

Full Article

"India’s overall rank of 43 demonstrates remarkably high scores in capacity for innovation and sophistication of firm operations.This is especially true of the quality of scientific search and the number of scientists and engineers, which are increasingly supplying highly skilled professionals to the private sector. Firm use of technology and rates of technology transfer are high, although penetration rates of the latest technologies are still quite low by international standards, reflecting India’s still low levels of per capita income and high incidence of poverty." - WEF 2006

India recieves a positive but details assessment of it's strengths and weaknesses, whereas the review of China is more critical in the World Economic Forums (WEF) Global Competivitiveness Index Ranking report for 2006.

Indian IT companies such as Infosys, Wipro, and TCS are having to respond to the increase rate of staff turnover by increasing salaries by upto 20%. The trigger being the likes of IBM and EDS investing heavily in India and luring staff to new positions. Some analysts are predicting that India will see more and more work move to countries like China and Vietnam as the wages of Indian IT staff increase.

Andy Mukherjee at Bloomberg takes a closer look at the issue.

With over 70% of India’s population not having access to fixed line telephone services according to Maravedis there are significant possibilities for WiMax in India.

The WiMax forum defines WiMax as a standards-based technology enabling the delivery of last mile wireless broadband access as an alternative to cable and DSL. WiMAX with a range of up to 30 miles. The technology is ideal for India and explains why big telecoms companies like Nortel, Alcatel, BT and AT&T are getting involved.

Source: Maravedis predicts WiMax subscribers to reach 13 million in India by 2012

Source: WiMAX in India: Opening New Frontiers Through Broadband Connectivity

Tiffinwalas are responsible for delivering hot lunches to Indian workers. The BBC has an interesting article about the role of Tiffinwalas, the supply chain management they run and there initiative to use Web and SMS technology.

Full Article

"The Indian economy is growing at staggering pace and more and more goods need importing and exporting. Ceasing on this oppourtunity Flyington Freighters has launched a cargo airline. Flyington Freighters of India placed an order for 4 Boeing 777-200F aircraft at the Farnborough Airshow."

Source: DigitalAirliners.com

NASSCOM have announced the top 20 IT service and computer software exporters in India for 2005-06.
During the period exports rose by 32% to US$17.3 billion.
  
The top 5 companies are:

1. TATA Consultancy Services (TCS)
2. Infosys
3. Wipro
4. Satyam Computer Services
5. HCL Technologies

See the Full NASSCOM list.

The data does not include contributions to the Indian economy by US listed companies like IBM, HP, and EDS.

The UK and India have reportedly reached a landmark Intellectual Property Rights (IPR) deal. Paving the way for greater co-operation between UK and Indian companies. Glaxo-Smith-Kline (GSK) is given as an example of a UK company that is now forging links with Indian Phamacetical companies.

The affect of India's growing economy and what it means for the US is explored in the main story in Time magazine this week. An interesting read, explaining just how dependant the US is on India and explaining India's potential in the coming years.

Inside the New India Inc. (Time Magazine)
India's influence soars (CNN item promoting Time article)

"Intel's Andy Grove is more blunt. "America ... [is going] down the tubes," he says, "and the worst part is nobody knows it. They're all in denial, patting themselves on the back, as the Titanic heads for the iceberg full speed ahead."  

"China and India are different from all previous competition because their sheer size—2.3 billion people!—means that they have an almost limitless supply of low-skilled labor on the one hand and a fairly large group of highly skilled workers on the other, both extremely cheap by Western standards. No worker from a rich country will ever be able to equal the energy and ambition of people making $5 a day and trying desperately to move out of poverty."

An interesting and thought provoking read: How Long Will America Lead the World? by Fareed Zakaria for Newsweek. Makes you realise why all the Sunday Papers have full page adverts about investing in portfolios in China or India.

TESCO has grown immensely in the UK market and internationally in recent years, to the point that concerns are being raised by British MPs about its sheer size.
To support its phenomenal growth the company has turned to India, where it has created its own business support centre instead of turning to Business Process Outsourcing (BPO). The Business Support Centre in Bangalore will be used for IT development and Business Process support.

The Business Support centre will initially focus on TESCO financial services and online customer service activities.

Tesco Hindustan Service Centre (HSC)

As mentioned earlier the Indian Domestic IT marketplace has massive potential for IT Consultancy and System Integrators. An example of the type of projects being implemented can be found in the case studies provided by Microsoft India.

Some of the projects undertaken in India using Microsoft Technologies include:

SREI Infrastructure Finance Limited : Deployed a cost effective ERP sploution using Microsoft Business Solutions Axapta, where the deployment of Microsoft Business Solutions Axapta helped streamline business processes.

ICICI Lombard : Used Microsoft Consulting Services to implement a variety of solutions using BizTalk 2004, Microsoft SharePoint and Microsoft .Net technologies

Chembur Nagarik Sahakari Bank : Migrated from a legacy system to a Microsoft .Net and SQL Server based solution

The Shamrao Vithal Co-operative Bank (SVCB) : Implemented a BizTalk 2004 solution to allow the banks systems to interface to the Reserve Bank of India (RBI)

NCDEX : Migration from Microsoft SQL 7.0 to Microsoft SQL 2000

Ashok Leyland Finance Limited (ALF) - Implementation of Microsoft Windows Server 2003 within enterprise

NSE.IT : Visual Studio .Net and .Net Framework used to build an application for brokerage firms to provide online to key customers

ICICI Bank : Used BizTalk 2002 as an enterprise application integration solution

Further information about these and other projects can be found at Microsoft India Banking and Finance Case Studies

When thinking about India and Information Technology projects most people currently think about the projects being off shored from America and Europe to India. However with a population of 1.2 billion and a significant section of that population rapidly gaining in wealth, many Indian companies and government departments are facing similar IT projects as there European counterparts.

Research by IDC highlights the growth within the Indian Domestic IT market:

IDC India: Domestic IT Market to be Driven by Dynamic IT in the Enterprise, Space and Digital Drive the Consumer Space

It is expected that as part of honouring a clause in the contract when Indian Airlines purchased new Airbus aircraft last year, Airbus will be outsourcing and estimated $400 million of AEROSPACE work to India. The work will go to a consortium of Indian companies headed by Hindustan Aeronautics Limited (HAL) and will include Wipro, Tata Consulting Services (TCS) and InfoTech.

Hindustan Aeronautics Limited (HAL) is a public company backed by the Indian Ministry of Defence, who have manufactured planes and components under license. At present Hindustan Aeronautics Limited (HAL) builds under license the Sukhoi Su-30MKI is preparing to start production of the British Aerospace (BAe) Hawk.  

The importance of the accuracy of data filed to the Security and Exchange Commission (SEC) was highlighted a couple of years ago by the cases of Enron and WorldCom. After Sarbanes-Oxley as part of a series of steps to combat this the SEC announced at the end of March that 17 companies would be taking part in a pilto program to use interactive financial data in their filings. Amongst the 17 corportaions named was InfoSys.

The 17 companies taking part in the SEC pilot are:

• 3M Company
• Altria Group
• Brazilian Petroleum Corporation
• Bristol-Myers Squibb Company
• The Dow Chemical Company
• Gol Intelligent Airlines
• Infosys Technologies Limited
• Microsoft Corporation
• Mobile Reach International
• Net Servicos De Comunicacao SA
• Old Mutual Capital
• Pfizer
• R.R. Donnelley & Sons Company
• South Financial Group
• United Technologies Corporation
• Xerox Corporation
• XM Satellite Radio Holdings

 
The eXtensible Business Reporting Language (XBRL) XML format will be used to submit the data.

The BBC web site has an article today about how the some of the education establishments in Asia are delivering students with better skills than European institutions. The Asian countries mentioned specifically are China, India and Korea, whereas parts of Europe are failing to deliver students with the same level of skills.

Some of the top education establishments in India are:

• Birla Institute of Technology and Science, Pilani
• Christian Medical College, Vellore
• Delhi College Of Engineering, Delhi
• IIT, Delhi
• IIT, Chennai
• IIT, Karagpur
• IIT, Mumbai
• JIPMER, Pondicherry
• King Edward Memorial College, Mumbai
• NIT Warangal
• Presidency College, Calcutta
• Presidency College, Chennai
• St Stephen's, Delhi

The article is based on a report by the Organisation for Economic Co-Operation and Development written by Andreas Schleicher

 

The BBC web site was today carrying a story about the growth in the number of billionaires in the world according to a report by Forbes. The snippet which caught my eye was the following statisitic about India.

"India's 23 billionaires have a combined net worth of $99bn, surpassing former Asian leader Japan's 27 billionaires with their total worth of $67bn"

At the end of 2005 the BBC published an article highlighting the fact that in 2005 the Indian Stock Market rose by 40% to over 10,000 points. Some analysts are predicting that in 2006 the market will rise to 12,000 points.

Seven weeks into 2006 the Bombay Stock Exchange (BSE) SENSEX continues to tread water at closing just below the 10,000 mark at 9981 today.

When Air India placed an order for 68 Boeing aircraft earlier this year it was announced that US $2 billion would be invested back into the Indian economy. An example of this re-investment and outsourcing of work back to India was illustrated with the announcement this week of collaboration between InfoSys and Spirit AeroSystems, a Boeing contractor.

The two companies will set up an aerospace engineering centre in Bangalore.

 

In 2004 74 Indian companies had a market capitalisation of $1 billion. In 2005 that figure rose to 99 as 25 more Indian companies obtained a capitalisation of $1 billion.

The Business Standard has an in-depth article

India and Saudi Arabia have signed an energy co-operation deal. The deal referred to as the ‘Delhi Declaration’ was signed during a visit by King Abdullah to India. The deal will see both pubic and private companies in the two countries co-operating on projects. As part of the deal Saudi Arabia will invest in oil handling facilities in India. The declaration will also see the two countries work together on Information Technology, Energy, and bio-technology and education.

The energy agreement follows on from a similar deal signed between China and Saudi Arabia earlier in the week.

Following on from similar investment deals in India in the IT industry from Microsoft and Oracle. Boeing will be putting up to $2 billion dollars into the Indian economy in the coming years via the Aerospace sector. The investment is part of a counter trade agreement between the US and India following a $11 billion order for Boeing aircraft placed by the Air India the national carrier. The majority of the investment will come from outsourcing of aerospace work to Indian companies but Boeing will also be setting up maintenance/overhaul facilities and pilot training centre in India.

Source: Boeing confirm Air India Order

"The economy of India is the fourth-largest in the world as measured by purchasing power parity (PPP), with a GDP of US $3.36 trillion when measured in USD exchange-rate terms, it is the tenth largest in the world, with a GDP of US $691.87 billion (2004). India was the second fastest growing major economy in the world, with a GDP growth rate of 8.1% at the end of the first quarter of 2005–2006"

Source: WikiPedia

Some of India's biggest companies have dual listings on the Bombay Stock Exchange (BSE) and other stock exchanges like the National Stock Exchange of India (NSE). These companies include:

• ONGC - Oil and Natural Gas Company
• State Bank of India Group
• Indian Oil Corporation
• Reliance Industries Limited
• National Thermal Power Corporation

Other stocks trade on the US Markets:

• Wipro (WIT)
• InfoSys (INFY)