Roundup: Events of the fortnight
The 165.54 km long six lane concrete Expressway from Delhi's satellite
town of Greater Noida to Agra was inaugurated by Uttar Pradesh Chief
Minister Akhilesh Yadav on August 9.
Fast Forward: The 165.54 km long six lane concrete Expressway from Delhi's satellite town of Greater Noida to Agra was inaugurated by Uttar Pradesh Chief Minister Akhilesh Yadav on August 9. Built by Jaypee Infratech Ltd. at a cost of Rs 12,800 crore, it is the longest toll road in the country, and raises hopes that other such ambitious highway projects, many of them stuck due to land acquisition issues or lack of environmental clearances, will also be completed soon.
CORPORATE
Cognizant, led by Francisco D'Souza, is now second in the Indian IT pecking order, behind Tata Consultancy Services. It posted revenues of $1.8 billion in the second quarter of 2012, a 4.9 per cent increase over the previous quarter. Cognizant's revenues exceeded Infosys's by about $43 million. It has maintained its 20 per cent growth forecast for the year till December, as compared with Nasscom's 11 to 14 per cent. Also see businesstoday.in/cognizant-rise.
BT RETRO
Private equity giant Bain Capital Partners is buying a 30 per cent stake in India's biggest business process outsourcing firm, Genpact, for $1 billion. The deal values Genpact at $3.29 billion (Rs 18,095 crore). Bain, cofounded by US presidential candidate Mitt Romney, edged out Apax Partners to emerge as the single largest shareholder in the NYSE-listed company. After the stake sale, longtime shareholders Oak Hill and General Atlantic will continue to hold a 10 per cent stake in Genpact. Also see businesstoday. in/genpact-rise.
The fiscal deficit for the first quarter of financial year 2012/13 stood at Rs 1,90,460 crore, accounting for 37.1 per cent of budget estimates for the year. In an effort to get a better handle on costs, the finance ministry has asked every ministry to provide monthly expenditure plans and quarterly expenditure allocations.
Revenue Secretary R.S. Gujral, seen as the architect of the controversial tax proposals in the last Budget, has swapped roles with Expenditure Secretary Sumit Bose. Finance Minister P. Chidambaram is expected to effect more changes in the ministry.
According to Kaushik Basu, the finance ministry's outgoing Chief Economic Adviser, GDP growth is likely to fall below six per cent in the first half of 2012/13. Rating agency CRISIL has slashed India's growth forecast to 5.5 per cent for the financial year ending March, just two months after pruning its projection to 6.5 per cent from 7 per cent. Moody's has revised its India forecast too. Poor rainfall and weakness in the Euro zone contributed to the dismal outlook.
Industrial output fell for the third time in four months in June, shrinking 1.8 per cent following a sharp decline in manufacturing, while capital goods slumped 27.9 per cent. It means factories are running below capacity, businesses are not making much money, while employees cope with stagnant wages and high inflation.
55 The total number of promoter group entities in Reliance Industries. The figure has come down from 62 at the start of the current financial year. Among the 30 Sensex companies, Bajaj Auto (81) has the largest number of promoter entities followed by Jindal Steel (56).
24.5% Corporate India's estimated net profit growth in 2012/13. It recorded a decline of 0.6 per cent in 2011/12, according to the Centre for Monitoring Indian Economy. Softening commodity prices and steady interest rates may boost growth.
MARKETS
Indian stocks are on the verge of a bull run, according to Morgan Stanley. The US investment bank believes three conditions will be critical: a bullish sharpening of the Indian yield curve, expanding profit margins and attractive valuations. The spread between the 10-year bond yield and the 91-day treasury bill is already reversing its steep inversion and stock valuations are attractive, says the bank.
The National Stock Exchange has become the world's largest bourse in terms of the number of equity trades during the first six months of 2012, according to the World Federation of Exchanges. NYSE Euronext was second while Nasdaq OMX was third.
COMING UP
Finance Minister P. Chidambaram will meet the chiefs of public sector banks and financial institutions in Delhi on August 18. The meet comes in the backdrop of rising bad loans and human resource problems confronting the banking industry. The threat of drought in several parts of the country impacting bank balance-sheets adversely in the second quarter may also be discussed.
Air India is likely to resume most of its international operations by August 31. The stateowned carrier will also add more services to the busy Southeast Asian region by mid-August.
CORPORATE
Cognizant, led by Francisco D'Souza, is now second in the Indian IT pecking order, behind Tata Consultancy Services. It posted revenues of $1.8 billion in the second quarter of 2012, a 4.9 per cent increase over the previous quarter. Cognizant's revenues exceeded Infosys's by about $43 million. It has maintained its 20 per cent growth forecast for the year till December, as compared with Nasscom's 11 to 14 per cent. Also see businesstoday.in/cognizant-rise.
- Bharti Airtel, India's largest mobile operator, has reported lower than expected profits for the quarter ended June 2012. Its net profit fell 24.23 per cent quarter-onquarter to Rs 762.2 crore. This is the tenth straight quarter that the company has posted a decline in profit, despite an increase in its subscriber base.
- Reliance Industries has received a conditional nod from the petroleum ministry to invest over $1 billion to raise the output of its KG-D6 block off the Andhra Pradesh coast. Relations between the company and the ministry appear to be improving after RIL agreed to share its D6 accounts with the Comptroller and Auditor General (CAG).
Private equity giant Bain Capital Partners is buying a 30 per cent stake in India's biggest business process outsourcing firm, Genpact, for $1 billion. The deal values Genpact at $3.29 billion (Rs 18,095 crore). Bain, cofounded by US presidential candidate Mitt Romney, edged out Apax Partners to emerge as the single largest shareholder in the NYSE-listed company. After the stake sale, longtime shareholders Oak Hill and General Atlantic will continue to hold a 10 per cent stake in Genpact. Also see businesstoday. in/genpact-rise.
- Standard Chartered has been accused of hiding about 60,000 transactions with the Iranian government, involving $250 billion. New York state's financial watchdog has accused it of exposing the US financial system to terrorists, weapon dealers and drug kingpins. The UK-based bank has also been found to have deficient money laundering controls in its Indian outsourcing operations.
- The MIST (Mexico, Indonesia, South Korea and Turkey) grouping of countries may well become the favourite investment destination for Goldman Sachs N-11 Equity Fund. The fund rose 12 per cent this year, compared with a 1.5 per cent gain in the investment bank's BRIC (Brazil, Russia, India and China) fund.
The fiscal deficit for the first quarter of financial year 2012/13 stood at Rs 1,90,460 crore, accounting for 37.1 per cent of budget estimates for the year. In an effort to get a better handle on costs, the finance ministry has asked every ministry to provide monthly expenditure plans and quarterly expenditure allocations.
According to Kaushik Basu, the finance ministry's outgoing Chief Economic Adviser, GDP growth is likely to fall below six per cent in the first half of 2012/13. Rating agency CRISIL has slashed India's growth forecast to 5.5 per cent for the financial year ending March, just two months after pruning its projection to 6.5 per cent from 7 per cent. Moody's has revised its India forecast too. Poor rainfall and weakness in the Euro zone contributed to the dismal outlook.
Industrial output fell for the third time in four months in June, shrinking 1.8 per cent following a sharp decline in manufacturing, while capital goods slumped 27.9 per cent. It means factories are running below capacity, businesses are not making much money, while employees cope with stagnant wages and high inflation.
55 The total number of promoter group entities in Reliance Industries. The figure has come down from 62 at the start of the current financial year. Among the 30 Sensex companies, Bajaj Auto (81) has the largest number of promoter entities followed by Jindal Steel (56).
24.5% Corporate India's estimated net profit growth in 2012/13. It recorded a decline of 0.6 per cent in 2011/12, according to the Centre for Monitoring Indian Economy. Softening commodity prices and steady interest rates may boost growth.
MARKETS
Indian stocks are on the verge of a bull run, according to Morgan Stanley. The US investment bank believes three conditions will be critical: a bullish sharpening of the Indian yield curve, expanding profit margins and attractive valuations. The spread between the 10-year bond yield and the 91-day treasury bill is already reversing its steep inversion and stock valuations are attractive, says the bank.
The National Stock Exchange has become the world's largest bourse in terms of the number of equity trades during the first six months of 2012, according to the World Federation of Exchanges. NYSE Euronext was second while Nasdaq OMX was third.
COMING UP
Finance Minister P. Chidambaram will meet the chiefs of public sector banks and financial institutions in Delhi on August 18. The meet comes in the backdrop of rising bad loans and human resource problems confronting the banking industry. The threat of drought in several parts of the country impacting bank balance-sheets adversely in the second quarter may also be discussed.
Air India is likely to resume most of its international operations by August 31. The stateowned carrier will also add more services to the busy Southeast Asian region by mid-August.
