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Lowering the bars

     Print Edition: May 15, 2011

Lowering the bars
Surendra Pipara of Reliance ADAG, Unitech Wireless MD Sanjay Chandra are among the latest businessmen to join former telecom minister Andimuthu Raja in jail.

Corporate

Aditya Birla Group Chairman Kumar Mangalam Birla runs a bunch of cash-rich companies. Even so, his buying binge within a week in April would count as a walletbuster anywhere. Just after swooping up the chloro-chemicals unit of Kanoria Chemicals & Industries for Rs 830 crore in cash, he sealed a deal for Swedish pulp maker Domsjo Fabriker paying $340 million, or Rs 1,530 crore. Three months earlier, he had bought Columbian Chemicals for $875 million. Growth through buyouts, it seems, has become a way of life for the 43-year-old AV Birla chairman.

Diversified conglomerate Tata Group has matching ambitions, too. Its goal is to double its revenues to $150 billion in five years, says Tata Industries MD Kishor Chaukar. At today's prices that is one-sixth of India's GDP. To get there, the group will invest Rs 1.2 trillion (one trillion = 100,000 crore) across power, steel, automobiles, telecom and steel.
 
Anil Agarwal of Vedanta Resources can be in a hurry at times. So, without waiting for the government's nod for its $9.6 billion buyout offer, Vedanta has bought 10.4 per cent in Cairn India from Malaysian state oil company Petronas.
 
The world's largest mobile phone firm by revenues, Vodafone Group is keen on listing its Indian arm. The caveat: CEO Vittorio Colao says the company's dispute with income-tax authorities over a $2.6 billion claim must be settled.
 
If India is a booming auto market, it must be one for tyres, too. Continental AG, with sales of $37.5 billion, certainly thinks so. It has inked a pact to buy Modi Rubber. Terms not disclosed.
 
In what is becoming a routine affair, another Indian executive has taken the corner room in a global firm. Rakesh Kapoor joined the ranks of CEOs PepsiCo's Indra Nooyi and Vikram Pandit of Citigroup when Reckitt Benckiser gave him the top slot. An alumnus of BITS Pilani and XLRI Jamshedpur, Kapoor worked at India's CEO factory of the 1980s and 1990s, Hindustan Computers Ltd - called HCL today.
 

Mark Zuckerberg
Mark Zuckerberg
Leela Group's C.P. Krishnan Nair is all panache and guts. Add candid to that. Nair says his hotels empire and he will not hesitate to reach out to Reliance Industries's Mukesh Ambani if faced with a hostile takeover by cigarettes-to-hotels group ITC. An overleveraged Leela has left Nair, a 89-year-old retired army captain, and his family in control of less than a third of the group. Ambani will have to be a friend in deed not to take over Leela.

Mark Zuckerberg
Mark Zuckerberg
Facebook founder Mark Zuckerberg won a case against him by two Harvard ex-mates. Twins Cameron and Tyler Winklevoss, who say Zuckerberg filched their start-up idea for a social network. They wanted to reopen a 2008 $65-million settlement. When a idea is worth $50 billion, it hurts.

From Aston Martin With Love. No, that is not the name of the next James Bond flick. The MI6 spy's favourite car will sell in India at a range of Rs 1.35 crore to Rs 20 crore. Aston Martin hopes a quarter of its sales will come from Asia in five years.

Talking of big brands and big hype, Apple has filed a patent infringement suit against Samsung. Subject: iPhone and iPad design. Apple is not flattered that Samsung's Galaxy line is, in the US firm's eyes, a copy.
 
Economy
It's monsoon time again. The India Meteorological Department says there is low probability of deficient rainfall between June and September. That is good news, but wait for further updates from the weatherman.

The crusade by anti-corruption activists looks like it is running out of steam with details emerging of prime movers Shanti Bhushan and son Prashant being allotted government land bypassing auctions. The Bhushans were at the forefront of the Lokpal Bill agitation.

Reverse brain drain will be one of the top trends in the world in the coming years, says Frost & Sullivan. This will benefit India as a steady flow of foreign nationals and migrants return home to fill senior-level positions, Prime Minister Manmohan Singh wants exports to China, India's biggest trading partner, to cross $100 billion by 2015. The two countries along with Brazil, Russia and South Africa at a recent summit favoured trade in local currencies, not the US dollar.

37.5 % Markets Surge in India's exports in 2010-11. The record exports at $246 billion, surpassed the target of $200 billion.

$934.3 bn The value of global M&A deals so far this year. At a four year high, it is seen as an indication that a global recovery is firmly underway. Telecom was the targeted sector.

$1.4 bn Or 23 per cent projected growth of India's domestic market for business process outsourcing this year, according to Gartner.

1 mn The number of millionaires in China, says a report by GroupM.
 
Markets
The Standard & Poor's downgrade of long-term ratings on US sovereign debt, citing worries about the country's mounting budget defi cit, came as a shocker to President Barack Obama all right, but it is good news for emerging markets where global fund fl ows are expected to head. Grim Obama, grin India.

Barack Obama
Barack Obama
Still, private equity fl ows are yet to pick up. PE fi rms have invested $1.5 billion in India in the January-March period, according to Ernst & Young, compared to $2.2 billion during the same period last year. A majority of the 96 deals is in the infrastructure sector. Now, wait for the smooth ride to offi ce, fewer power cuts, better water supply....

State Bank of India, the country's largest lender, meanwhile, has hiked its benchmark lending rates by 25 basis points. The move will make all loans, including home finance, more expensive. And, yes, SBI has wound up its teaser rates finally under pressure from the Reserve Bank of India.

Coming up
The big fat royal wedding is due on April 29 and business is warming up. The Prince William-Kate Middleton union is estimated to fetch millions as spending on food, drink, tourist, merchandise rockets.

Analysts predict a rise in interest rates when the RBI announces its monetary policy on May 3. Deputy Governors Shyamala Gopinath and Subir Gokarn have already said inflation is a concern.

The finance minstry will hold its annual review of public sector banks in Delhi on April 26. Agenda items: financial inclusion, nonperforming assets.

The Insurance Regulatory and Development Authority's guidelines to allow life insurers to raise funds from the capital market are likely by April-end.

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