Cover Story

When bad loans are sown in good times
Indian banks may not be prepared to deal with the non-performing assets that are slowly but surely piling up. Is Indian banking’s own subprime crisis in the works? As of now, the good news is that banks still have time to clean up their acts and their balance sheets. Anand Adhikari goes into the details.The global financial crisisSo, where is the money?Panic grips Dalal StreetIs something wrong with ICICI Bank?Economy in eclipseWhen exotic turns toxicWall Street woes, India’s opportunityThe Rs 60,000-crore time bomb

The Rs 60,000-crore time bomb
India has its own share of exotic products, although their scale and complexity pales in comparison to those that brought down Wall Street. Will they blow up in the face of the mutual funds that have lapped them up in the hope of higher returns? Answers Anand Adhikari.The global financial crisisSo, where is the money?Panic grips Dalal StreetIs something wrong with ICICI Bank?When bad loans are sown in good timesWhen exotic turns toxicEconomy in eclipseWall street woes, India’s opportunity
Wall Street woes, India's opportunity
Much has been said in recent times about the reasons for the credit crisis that has hit Wall Street. But little has been said so far about what it means and what investment opportunities this crisis presents, especially for Indian investors and Indian companies.
Sense of rumour
ICICI Bank’s share price erodes by nearly half over 30 days. Is something wrong with India’s second-largest bank, or is it a victim of financial crisis? Anand Adhikari finds out. The global financial crisisSo, where is the money?Panic grips Dalal StreetWhen bad loans are sown in good timesThe Rs 60,000-crore time bombWhen exotic turns toxicEconomy in eclipseWall street woes, India’s opportunity
Bear hug
With global markets losing between a fifth and, in some cases, close to half of their value, fear, pessimism and panic grip the Street.
So, where is the money?
Liquidity had been tight since the beginning of this fiscal. In India the liquidity crunch is less about undercapitalised banks or bad assets. The deficit is more of trust. Puja Mehra reports. The global financial crisisPanic grips Dalal StreetIs something wrong with ICICI Bank?When bad loans are sown in good timesThe Rs 60,000-crore time bombWhen exotic turns toxicEconomy in eclipseWall street woes, India’s opportunity
Economy in eclipse
The global crisis will eclipse the Indian economy, but only partially. And recession is nowhere in sight. That's because the country's economy was already in a slowdown and India is also one of the least globalised economies among the emerging markets. However, will the financial crisis prolong the slowdown and make it more painful? Answers Shalini S. Dagar.The global financial crisisSo, where is the money?Panic grips Dalal StreetIs something wrong with ICICI Bank?When bad loans are sown in good timesWhen exotic turns toxicWall street woes, India’s opportunityThe Rs 60,000-crore time bomb
When exotic turns toxic
It doesn’t have to. With the perils of playing with complex derivatives instruments now amply visible, the lesson to be learnt is clear-cut: Keep it simple.

2008-11-02

Digital

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Editors note

From the editor

Our primary task was to understand the magnitude of the crisis and give you the most updated assessment of its impact on India. The cover stories (divided into eight small and easy-to-read features) attempts to do exactly this. The spread of our offering ranges from a country-by-country assessment of the financial crisis to the diagnosis and prognosis of the liquidity shortage (including stock market) and a small pointer to the opportunities the crisis has opened up for Indian companies.

Features

UTV production

Movies may be the biggest part of UTV’s portfolio, but founder-chairman & CEO Ronnie Screwvala has also turned the spotlight on television, gaming and the digital medium. Screwvala has believed in multiple revenue streams and is close to achieving his goal of making UTV a 360 degree media company even as it grows at 100 per cent a year, reports Anusha Subramanian.

Social networking: Waiting to explode

An overwhelming 94 per cent of corporate executives in India are aware of the social networking phenomenon and 79 per cent are actually members of one or more social networking sites. Although social networking accounts for only a miniscule share of the ad pie, it could well become the 'next big thing' for advertisers. A report by Shamni Pande.

Fright checks in

What can go wrong? they asked last year. Well, this year, what hasn’t gone wrong? Result: fewer foreign tourists are visiting India this year.

BT More

Butch Cassidy's legacy

Benefactors like Paul Newman are becoming an extinct species in our narcissistic world. Do you recall any of our actors having a charitable bone?

The wedding planner

Want to make your wedding an event, that’s truly an affair to remember? Preston Bailey, Hollywood’s favourite wedding designer, tells you how.

A walk in the clouds

Avoid the tourist trail in Mussoorie and this land of rain, mist and stunning peaks continues to exert its magic.

Chalk and cheese

At the end of the day, they’re not ‘just phones’.

The new seduction

With its three-mode drive select system, getting behind the wheels of the Audi A4 3.2 Quattro will give you an adrenaline rush like no other. Blaze the roads in this beauty and fall in love all over again.

Ooh La lamian!

What does it take to make a noodle? We ask Chef Wu Zhang Qiu, a noodle master from China, to give us a demonstration.

Mix it up

Solidcoloured shirts and ties? liven up your wardrobe with patterns and take a walk through the nation’s capital.

Get up and get active!

When it comes to exercise, only one question matters —what kind of man do you want to be?

Three weeks to a better life

It’s hard to start. When you haven’t done a scrap of exercise for ages, the biggest battle you face isn’t on the treadmill, it’s in your head.

Marathon mania

Expected to be the biggest in the country with over 30,000 participants. we tell you why you should join up, and what it takes to go the distance.

Kit bag

We track the best and most stylish equipment you can buy to start racking up those miles.

Mind your tees & Qs

The Augusta National Golf Club has a zero tolerance policy towards mobile phones during the Masters. Being caught with one means instant eviction and blacklisting for life. You would wish more places would adopt such a stringent line of action.

Buy buy time

From watches to limited edition ‘Ganesha’ pens, there’s plenty out there to check out this fortnight.

Late night bites

Late night is when a city truly shows its colours. When you’ve done a bar or three, and it’s past midnight and you really, really need a meal, what are your options?

The pleasure's all yours

Grand Marnier—the cognac-based liqueur from France—has given birth to some of the world’s most potent cocktails. We asked the brand ambassador in Asia, Gulliaume Jubien, to whip up exotic cocktails for six different moods.

A legend passes

Paul Newman succumbed to cancer recently at the age of 83. We remember the man and his movies.

A life worth reading

The story of Lt. General Inderjit Singh Gill is one worth recounting. And veteran journalist S. Muthiah does it well.

The bullet from Bangalore

A chemistry student who started in advertising and then moved to IT, Sandeep Menon prefers to take the road less travelled, both at work and play.

In This Issue

Cotton's second coming

N. Madhavan travels to Perambalur district of Tamil Nadu to check out how BT cotton has changed the lives of farmers there.

Capitalism, CPI(M) style

In Kerala, the CPI(M) is turning entrepreneur and in turn, acquiring a new image.

Hitting the brakes?

The job market has taken the biggest downturn in the past eight quarters.

Crunch time

The green signal for a $700-billion bailout of US banks wasn’t enough to turn the tide in global financial markets. Even six of the world’s central banks coming together to release hundreds of billions into the system couldn’t stem the panic. It has to get worse before it gets better. Puja Mehra reports.

Money

On the right track

You should accumulate exchange-traded funds in the coming months. And the best ones are those that have low tracking errors.

Avoid your own financial crisis

The global financial crisis has highlighted the ruinous effects of over-spending and over-borrowing. Here’s how to avoid your own financial crisis.

Fix it right

FMPs are offering higher yields, but not all of them might turn out good investments.

Back in business

Corporate FDs are making a comeback, but do your homework before you park your money in them.

Special

Beyond the obvious

We visit two emerging IT-ITES centres—Lucknow and Coimbatore—and discover that despite the initial buoyancy, they still have a lot of ground to cover. Report Shalini S. Dagar and Nitya Varadarajan.

BPO 2.0

Buffeted by the financial services meltdown and competition from other locations, the Indian BPO industry is facing its toughest challenge. Kushan Mitra goes into the details.

Re-inventing Indian IT

With the financial services sector in a tailspin and the slowdown in the US market spreading to Europe, India's booming IT industry finds itself directly in the firing line. In fact, it is facing its toughest challenge in years. How will the industry cope? Rahul Sachitanand goes into the details.

Giants on the prowl

With the Indian IT market expected to grow at an estimated CAGR of 18 per cent over the next five years, foreign IT giants aren't just dominating the market, they're opening up new segments and setting the agenda for some categories. Rahul Sachitanand and Kushan Mitra tell you about the twists and turns.

60 minutes

There is no dearth of opportunities in India: Kathleen Taylor

Second only to Four Seasons Hotels & Resorts' Chairman and CEO Isadore Sharp, Kathleen Taylor is responsible for Global Operations since being promoted to President & COO in 2007. In her nearly two decades with the company, she has played a key role in the expansion of its portfolio. Anusha Subramanian spoke to her recently in Mumbai. Excerpts from the interview:

Trends

The big fall

The turmoil in the stock markets has taken a heavy toll on India’s billionaires. The fortunes of the 10 richest Indians at the beginning of the year have shrunk quite dramatically.

Just wondering...

What happened to Dilip Chhabria’s plans of launching a made-in-India sports car? Well, the plan is on track.

New launches

Loan crisis?  Market slowdown?  Commodity price out of control?

The 6 most over-hyped gadgets

At a time when the Google phone is generating a lot of hype, we look at what happened to six gadgets that were supposed to change the world.

To be precise

“The fellow on the other end, usually the CEO, says: ‘The market looks at us as a toad. Berkshire Hathaway is looked at as a princess. And if you would just kiss us, we would turn into this handsome prince.’ And I say: ‘No, we would turn into a toad’”

India slips on competitiveness

It is in the midst of a full-blown financial crisis, but the United States continues to top the rankings of the best countries for global business for the second year in succession, according to the annual report Global Competitiveness Index (GCI) 2008-09, published by the World Economic Forum.

Talebearer

Economy watch

Tugging at your heart strings

Just consider a recent example: A Union Bank of India ad (created by Mudra) shows a little girl who has lost a tooth, being consoled by her older brother. The ad drives home a message of dreams that are shared.

Out in the open

Now, get paid to receive SMSes

What is it? A free SMS service from YouMint, started by Ankush Johar, who claims to have pioneered the concept in 2002. Since then, Johar has moved to England and YouMint is his third entrepreneurial venture in the telecom space.

Numbers of note

The gap Is growing

The rising rupee is negating the gains from falling oil prices and increasing the trade deficit.

Instan tip

The fortnight’s burning question.Does the meltdown in the US and in Western Europe present an opportunity for India Inc. to shop for big-ticket assets?

'We will dominate the Indian market'?

Hamish Mclennan, Global CEO, Y&R Advertising, believes that advertising agencies have to widen their horizons. BT's Anusha Subramanian met him in Mumbai, when he came to attend a meeting with his partner Rediffusion.

Event

Power of women

Or should that be Women of Power? It doesn’t matter: at BT’s annual event to honour the most powerful women in Indian business, both were on ample display.

How the west was won

The Western round of BT’s Annual Acumen Quiz and Debate contest set pulses racing in Mumbai.

Letters

Women on top

As a working woman myself, it gladdens my heart to know that all of these businesswomen have not only successfully broken through the glass ceiling, they have also proven themselves to be as professionally smart and competent as the best business leaders in the corporate world.

Current

Another airport expansion

Modernisation of the Chennai airport finally gets off the ground.

IBM's discovery of India

Big Blue is now driving innovation and breakthrough research from India.

Divided we stand

The Hyderabad-based Sanghi Group appears headed for a split.

TCS rides to the Citi

TCS’s acquisition of Citigroup’s captive BPO arm may signal the beginning of such a trend.

Modi hosts India Inc.

What is it about the Gujarat Chief Minister that draws Corporate India to him?

Khattar's second innings

The former Maruti MD moots a unique business model for his start-up.

Savvy investor

Wipro chief Azim Premji is quietly picking up stakes in companies with strong business models.

Opera's challenge

The company believes its browsers are already the best in business.

Book

Code green for survival

Thomas Friedman’s new book sets the agenda for combating climate change.

Editorial

Time to dream really big

Immense power is acquired by assuring yourself in your secret reveries that you were born to control affairs.

Leadership Spotlight

Lessons for corporate leaders

If Sourav Ganguly’s captaincy had to be judged on how he appeared on a Cricket field, the words, which most accurately describe him, would probably be late, dishevelled and overwrought.

People

In August company

It is an honour from his Alma Mater, but Anand Mahindra, 53, Vice-Chairman & Managing Director of Mahindra & Mahindra, calls it “a recognition of the India growth story, and of Indian entrepreneurialism in general”.

Top Mind

Now, shop online for loans

What is it? It’s an online financial marketplace, called www.bankbazaar.com, which individuals can visit for home loans and personal loans.

Policy Watch

Liberal ECB norms on the cards

A bird's eye view of what's hot an what's not on the goverment's policy radar.

Reprieve for ad industry

The advertisment industry will soon be exempt from press note 1 regulations. This will make mergers and acquisitions involving foreign companies simpler.

How times have changed

Noted