27-Oct-2014

Govt to Fuel Up 91k mw of Stuck Power Projects: After clarity on natural gas prices and an
ordinance on coal, the government is set to decide on pooling of imported and domestic fuel prices to
help stressed power stations with a combined capacity of 91,000 mw generate electricity thats badly
needed as India tries to revive its economy. The Cabinet Committee on Economic Affairs is likely to
decide on pooling gas and coal prices at its meeting this week, sources said. The proposals include a
bailout package for pow- er plants that are idle due to the acute scarcity of domestic gas and a plan to
meet the needs of coal- based power plants till 2017. Of the 24,148 mw gas-based projects set up at an
investment of about. 1, 50,000 crore, those that can generate about 16,000 mw arent running while the
rest are operating at sub-optimal levels. The Supreme Court on September 24 cancelled 204 coal mine
allotments of which 59 were to supply power plants with nearly 67,000 mw capacity. The 59 include 20
producing blocks supplying projects of more than 11,000 mw capacities. Plants that can produce
another 7,200 mw have stalled as Coal India supplies have dried up.
25 Banks Fail ECB Stress Test: Twenty-five banks including Italys Banca Monte dei Paschi di
Siena SpA failed a stress test led by the European Central Bank, which said almost half of them must act
to raise more capital. The central bank in Frankfurt identified a 25 b-euro shortfall ($32 billion) for the
regions lenders
28-Oct-2014
Govt Reveals 3 Names in Black Money Case: The government disclosed the names of three
entities in the Supreme Court in the black money case, the first time it was doing so. The administration
said it had done this after following the due process of law and that more names will be revealed once
prosecutions have been launched once investigations are complete. No information will be with- held
but due legal process would be followed, a finance ministry official told ET. India also wants to be
careful that it doesnt violate confidentiality clauses that are part of bilateral tax treaties. Finance
Minister Arun Jaitley made clear that only the names of those against whom the authorities get
prosecutable evidence will be revealed. This was in response to criticism by the Opposition, including
Congress, demanding dis- closure of all names of black money holders. The three names given by the
government on Monday were those of Pradip Burman, a Dabur India promoter and bullion trader Pankaj
Chimanlal Lodhiya besides Goa miner Timblo Pvt Ltd and five of its directors. The names figured in a 16-
page affidavit. All those named denied any wrongdoing. In addition, ET had reported earlier this year
that members of the Burman family paid taxes after their names cropped up in the so-called HSBC list of
overseas ac- count-holders. The official cited above said names would be revealed in line with the
provisions of bilateral accords. Wherever cases have been completed and prosecution launched, names
could be given out, the official said without elaborating on such cases. The government is also in the
process of understanding how much secrecy clauses allow it to reveal without compromising treaties.
UK Net Service Provider Picks up 70% in Nimbuzz: $175-m deal values co at 8
times expected revenue. New Call Telecom, a UK-based internet service provider, has acquired a
70% stake in India-headquartered Nimbuzz for about $175 million, valuing the popular instant
messaging, voice-over-internet call and mobile advertising services provider at more than eight times its
expected revenue for this fiscal year, underlining the huge interest in the segment. We see huge
potential for new revenue streams and very large expansion of broadband in India through this, Jerome
Booth, chairman of New Call Telecom and the principal investor in the company, told ET. He added that
the company is planning more acquisitions in the Indian market.
29-Oct-2014
BJP Legislature Party Elects Fadnavis Maha CM-Designate Mumbai: Maharashtra will
have its first BJP chief minister take charge on Friday evening. State BJP president and Nagpur MLA
Devendra Fadnavis was unanimously elected the chief minister- designate at the BJP legislature party
meeting held at the Vidhan Bhavan on Tues- day. The core committee of BJP under the leadership of
Fadnavis met the state governor and staked claim to form the next government as the single largest
party. The governor has given BJP 15 days to prove majority in the House. A legislature party meeting to
choose the CM-designate got over in about 15 minutes.
Envisioning Indias Century Having invested $1 b in Indian startups, SoftBank
chief says India could produce Internet heroes if it creates a digital
superhighway: Masayoshi Son is searching for the next Jack Ma, a quest which he thinks might meet
with success amidst the ranks of Indian entrepreneurs selling to consumers and businesses through the
Internet. Son, 57, the founder of Japanese Inter- net and telecom group SoftBank, says he is constantly
on the lookout for entrepreneurial heroes who create jobs in the manner of Alibabas Jack Ma, who
has created employment for 25 million. Sons investment in Alibaba, the Chinese online marketplace, is
the stuff of legend with a $20 million investment made 14 years ago now worth $80 billion after the
Chinese company went public earlier this year. SoftBank owns 37% of Alibaba, which had a market cap
of $250 billion on Tuesday. Such local heroes could emerge in India as well provided Asias third-
largest economy manages to create the digital super-highway envisaged by Prime Minister Narendra
Modi. I think India will be one of the top two economies in this century it has over a billion people,
good education and engi- neering skills. This is Indias century. It could be among the top two economies
in the world, he said in an interview on Tuesday. With that belief, if you can invest (at a) low price and
harvest high price, its a good investment, he added, sitting alongside Nikesh Arora, the Google ex-
ecutive he poached recently. Arora, who joined as vice-chairman and CEO of SoftBank Internet and
Media in July this year, is spearheading the groups US business, as well as its foray into the media and
entertainment industries. On Monday, SoftBank announced a $627 million investment in Snapdeal, be-
coming the largest investor in the fast- growing online marketplace. It also announced a $210 million
investment in Olacabs, a transport aggregator that competes with Uber. Cumulatively, Soft- Bank has
invested $1 billion in Indian startups, becoming the largest investor in that space. In the interaction with
ET, Son enthused about Snapdeals prospects, pointing to its growth of 800% per year. The SoftBank
founder is in India on a three-day visit that started on Monday with an hour-long meeting with Prime
Minister Modi. Son, whose stated goal is to head the largest company in the world, was wooed by the
Indian prime minister on his recent trip to Japan. Last month, Prime Minister Modi visited Tokyo. We
had a face-to-face meeting. He gave us more confidence that India is going to be more transparent and
deregulated with lot of focus and passion to improve India as the environment for investment, he said.
The diminutive Son, famous for some- times setting outlandish goals (and even achieving some of
them), was born in a poor South Korean family. His father was a pig farmer who brewed illegal alcohol.
In explaining SoftBanks investment philosophy, Son likens himself to the conductor of an orchestra.
We would like to be the conductor of the in- formation revolution by looking at the total landscape and
understanding which parts are growing to grow more quickly. He will be listening to the pitches of
nearly two dozen startups over Tuesday and Wednesday, in an attempt to identify future Alibabas. Soft-
Bank has grown more than 600 times since its founding in 1981 and the $66-bil- lion (revenue for the
year ended 2013) company could potentially grow a hundred-fold, according to Son.
Hedge Funds close in on Consumer Startups: Global hedge funds and top technology funds
are making a beeline for India, drawn by the countrys booming consumer Internet sector, boosting
valuations and expectations across startups. These funds include New York-based Falcon Edge Capital,
Technology Crossover Ventures, DST Global and Tybourne Capital Management. According to sources,
hedge funds such as Steadview Capital Management, Hillhouse Capital Group, Think Investments and
Tybourne Capital are actively chasing startups. Venture capital investors focused on the Internet space
such as In- sight Venture Partners and VY Capital are also looking at these companies, which are growing
at over 15-20% month on month. Emails sent to TCV, Tybourne, Steadview, Hill- house, VY Capital, In-
sight Venture by ET did not elicit a response.
30-Oct-2014
Diesel, Petrol to Get Cheaper by INR 2.50: Diesel and petrol are likely to be cheaper by
about INR 2.50 a litre soon, which would dampen inflation as diesel rates would be down 11% in less
than two weeks, and cheer consumers ahead of assembly elections in Jharkhand and Jammu & Kashmir,
government and industry sources said. This will be the sixth consecutive reduction in petrol prices since
August and the first cut in diesel rates after the government deregulated the fuel. The Cabinet on
October 18 allowed state oil firms to align pump prices of diesel with market rates and announced . INR
3.37 per litre price cut. Petrol price was deregulated by the previous UPA government in June 2010. The
planned reduction in auto fuel rates in the next few days would bring down petrol prices to a 16-month
low and diesel prices to a level where it existed a year ago. The steep price cut is because of a sharp fall
in inter- national oil prices. Brent crude dropped to a four-year low of $82.60 per barrel two weeks ago
from above $115 in June. It was trading at $87 per barrel on Wednesday. According to international oil
price data, companies are having margins of about $7-8 per barrel on petrol and diesel in the current
pricing cycle compared to previous fortnight and the rupee dollar exchange rate variation minimal,
sources said. But, a definite figure would be known only by the weekend after we get figures for
remaining three days. This could change the average and pump prices would change accordingly, an
industry executive said.
B-schoolers get a Haversack of Happiness: Big recruiters at leading B-schools are hiking
stipends for summer internships by 30%-40%, sending out a strong signal that they expect the economy
to rev up and the job market to turn red hot in FY16 and FY17. Companies are offering as much as INR
4.2 lakh for a two-month internship and large and established companies are jostling with upstart
ecommerce startups for fresh talent. Online retailer Snapdeal which just raised $627 million from
SoftBank has already made offers to over 50 interns during summer placements compared with 15
last year. It is offering stipends of Rs 1 lakh for two months. Goldman Sachs will be offering stipends of
around Rs 1.55 lakh; HUL, Marico and Castrol around Rs 1.5 lakh; Barclays Shared Services around Rs 1.6
lakh and Dabur approximately Rs 1.4 lakh, campus sources said. The Boston Consulting Group (BCG) has
offered a stipend of Rs 3 lakh, said a member of the IIM-Indore placement team. Companies started
picking candidates from IIMs, MDI, IMI, XLRI, NMIMS and XIM- Bhubaneswar this month, for internships
in the summer of 2015. Summer internships are now a key component in the campus recruitment
process with most companies likely to roll out PPOsat the end of the internships. BCG, for example,
offered jobs to 80% of the 48 students who interned with it this summer. We will make at least 15-20%
more summer internship offers this year, says Suresh Subudhi, partner and director, BCG India. In all,
many companies now find almost 60- 70% of their total campus hires through the internship and PPO
route. Snapdeal, which offered only two profiles to in- terns last year, headed to campuses with nine
profiles this year, across marketing, supply chain, finance, HR and product development. We have
covered around 8-9 campuses so far and by the time we finish with the three IIMs at Ahmedabad,
Bangalore and Calcutta, we would have made close to 70 offers, says Saurabh Ni- gam, VP-HR at
Snapdeal. B-schools are cruising through the summer placements despite almost all of them having
larger batch sizes to place. At IIM-Indore, 153 companies snapped up the 557-strong batch for
internships this year.
The Drug Wars: Novartis, Cipla in Patent Fight: Cipla the countrys fifth-largest drug-
maker by revenue, has asked the government to revoke Novartis five patents on its respiratory drug
Onbrez (Indacaterol) and has launched a generic version of the medicine at a fifth of the price at which
the Swiss company sells this drug, triggering another confrontation between an Indian generic company
and a foreign innovator firm. The domestic drug maker has sought cancellation of these patents on the
ground that the Swiss innovator has held these patents for the past six years but has neither
manufactured nor imported the medicine in sufficient quantity. It has alleged that Novartis imports only
about 54,000 units (a unit consists of a bottle of 30 capsules) annually, and deprives 99.9% of the 1.5
crore people in India who need this drug. Novartis products do not satisfy even 4,500 patients annually
and our feedback shows the product is urgently needed by the doctor and patient community, said a
Cipla spokesman. An email sent to a Novartis India spokesperson went unanswered. Ciplas decision to
demand revocation of patents is likely to open a new front in the conflict between domestic drug-
makers and MNCs that goes back several decades. The government will be forced to take notice of all
such cases and will have to take a stand on how it should monitor the situation, said a patent head of
another top generic firm.