Of course terrible tuesday grew into terrible november after the you tube renditions of barkhagate, mediagate and mostly  the late but timely revelations on market financing of 15% of the indian banking's  book in real estate kept market participants busy in a beariish and feverish month of twice the turnover. I have had ( in my first confessions on current trades, positions and things about mundane work ) a hard time keeping my hands off picks as they keep falling and it becomes easy meat to pick the winners.

The stocks are going to different this time and bit players like india infoline and even bloomberg utv and ashu ( equally influential and stymied, from different edges of the market spectrum ) become redundant with a possibility that this consumer booms auto stocks and midcaps also change the face of business tv with ET trying a facelift and Barkha trying out her public voice till the sixteenth 5 year plan..

More notably the media was silent on the whole sting controversy again busy hopefully figuring out who knows the new canvases which will be painted for India inc India has a long way to go though towards being a world power and here insider trading may have a whole new board game to play with 120 active traders and the derivatives market hopelessly skewing market directions and volume at will. (120 traders account for 50% of trading volume, out of 9000 active trader universe and a tick size of $ 0.001 cent We still to manage direct th hot money propah , ya! 

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To put things into perspective at the beginning, India's Capital Markets received an unprecedented $25 billion and more in inflows in the first 10 months of 2010. In the same period China received $82 billion and while Indian WPI and Food related inflation has just started coming off its highs coming below double digits at 8.58% and 14.5%(Food). In the meantime, the Chinese Economy has nearly careened as Chinese government has been trying to tell everyone who would listen as Food related inflation hit double digits and WPI came at 4.4% for the reference data that caused a landslide in China. Our own landslide in the markets is admittedly correlated with China by want of value even as Sensex PE powers on unprecedented growth and $2 trillion in Market cap ( $1.75T + growing). That is we have run out of value picks in our universe of 5000 companies and that is where this interesting phenomenon must find a mention. 

The phenomenon is not just the ugly face of a bear operator or ill advised stayer away from Capital Markets looking for the eternal bugbear of the markets just to light fire to it. IT sounds churlish, it is, and it is unlikely it happened. It is a quest for risk premium in our growing Futures and Options segment. What we have seen since July is that every month this play( to be explained verbatim following)  is made in the second week of the monthly options series where the indices based puts written or bellwether stock based puts written; even naked out of the money calls bought during the bullish begin of the series are put out mercilessly by concentrated bear action in a single session and then the next week; witness today the act is completed as the bullish fervour of the market/stock is lost midstream after the act of the first week. This month it was State Bank of India , when an opportunity in weaker than expected results cost the markets millions as it lost the plot completely having assessed no hope for the identity stock options or indices in the series even two weeks before expiry. As the derivatives markets score 8 times the cash based turnover daily, the effect is traumatic leading to as today a loss of almost 5% in market cap in the market or INR 3 lakh crores ( $75 billion) in under 5 minutes. 

If it can be ascribed to opportunist hot money plays and we are thence proven to be a banana republic I would not venture to say as it seems to be hyperventilating, but that tactic of tackling hot money seriously with FDI taxes could actually be mandated anyway for us to get due power in emerging markets forums and push the envelope of growth to reach 10% and more in annual growth. 

IF it can be ascribed to immature markets where only foreigners are now making money, it would be a travesty but the act described above is more of a herd and not of any group of investors only making money. However there seem to be shallow camps on both sides ( the bulls and the bears) with the bulls having somehow found due logical reason to take our markets due north without limitations because of the presence of this pecuniary element from the bears while the bears are so frustrated at not having bought into an earlier rally, and just feeling left out. Market technicals, fund flows and scheduled options pricing models and simulations all fall prey to such patently ill harmonious and shallow tactics deciding the fate of the entire $2 trillion almost daily unless logic is given the due place as king in the mad world of big money.   

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In a remarkable development, SBI tanked after results as the NPA surge matched time cycles with Dollar bursting out of its "bearish reverie" Though undue analysis is unwarranted as we had factored this correction in our analysis yesterday, SBI in particular is just suffering integration pains as its NPA book or Gross quantum of Non performing credit/loans is a humongous $6.5billion ( almost $7) or Rs 27000 Crores up from 17000 Crores 

Given that the NIM is 3.45% it is unlikely to do much more than bring eons of other investors to the bank ( We are invested in the monthly gyrations of the stock now, for example) However, serious readers would have gleaned as much. We do believe India's re rating in MSCI indices is near as India ETFs have been in the Top 10 and investment inflows are a likely $35 billion by the time 2010 comes to a close, having already crossed Rs 1.2 T ( Lakh crores) or $25bln in October

SBI has slowly but surely been removing impediments to growth since its last restructuring exercise but with OP Bhatt stepping out after a long innings, the bank will be looking to find the key replacement for him due support in policy and leadership of the banking sector as governments get serious about expanding Indian Banking's spread corollary to the 30 year funds for infrastructure as evidenced by new likely quasi public investment funds in the space. Given the same another keen development worth watching would be the PE sale of Axis Bank which is duely hanging fire with public bank sponsors unlikely to give up their prerogative easily

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Q2 results in the next hour are expected to put SBI firmly in the saddle as far as policy leadership and collaboration with FinMin and RBI is concerned. The maket is already disappointed that the numbers were not live during the markets session presumably, but the after mmarket will see a surge in demand for the bank as the bank gets to a 3.3% NIM and establishes double dgit growth in credit much ahead of earlier leaders ICICI or new wannabes Kotak. We'll be here as close tol live as possible as we do have a vested interest in the bank and no conflict of interest. With Capital ramp up to come to the extent of $4 bln, the growth augurs well esp as profits are good and estimats likely beaten.

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In a virtual statistical coup, India's opinion leader bank came back with half the NPAs at 1.37% from 2.2% and 8% increase in CASA deposits to 44% i.e INR 0.98 T against a Total deposits of Rs 2.24T or $50 bln in Q2 results published at the fag end of the market today. We were quite taken aback at the sudden recovery of fortunes so long ket in cover by the banks ongoing process of statistical rehashing of provisions and org structure where it lost key accounts in corporate investment banking and key people in insurance and PE segments.

Expected profit of $190 mln was dwarfed by a result though only 18% up yoy of $315 mln almost double the street numbers. Consolidated profitss across the goup endeavurs are a modest $349 mln ( Rs 1395 Crores) allowing HDFC Bank to cock a snook at it in a few quarters as the smallnes sof the number starts hitting the policy makers inside the bank.  

The bank also tom toms its high CAR numbers with Tier I ratio up to 14% but credit growth remained sluggish at 5.3% unnoticed by the bank's stakeholders or investors

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A decade ago when the Universal Bank model was championed (by us, among others) and caught the imagination of banking leaders and adopted globally for a feverish unending good times, IDBI Bank had missed the bus by a whisker as they remained plagued by NPAs and chose to go 100% technology driven in urban centers where ICICI and HDFC Bank were already invested and ramping up. Even now they are plagued by NPAs but the size factor looks much more on IDBI side. Q2 2011 saw them make Rs 4,200 million in profits a 100% growth over last year's 230 odd crores.

The $100 million quarterly profits and 1400 ATM strong bank can easily lead the new breed of banks this period will spawn with adequate distribution strengths and a more than adequate trust dividend available to it from its customers and a largely surplus word of mouth in its constituency which includes salary account holders, professionals, businesses. The bank in positioning terms seems almost merged with the other midcap going large cap player in ING Vysya Bank and this augurs well for both players.

Till now the bank has been considered part of the pack of public sector banks but that is unlikely to stay easy to maintain going forward, though no longer do they have an option to merge with parent IDBI or otherwise grow there constituency inorganically as larger PSBs come into play and dominate size.

QOQ results are larger by almost 70%. Q11 result was a $60 million which in itself was a 50% over the previous year's $45million. Advances were a respectable INR1.35T($34bln) as of June and deposits Rs 1.60T($ 40bln) and would have grown in double digits Q-o-Q . ON Total assets of $56bln, returns on assets come to a healthy 1.8% on Quarterly rates of $1.2 bln in Income. NIM has been low becaause of NPA but is steadily improving ( 1.64% as of June) The government is infusing $750 mln as capital in the bank. setting it up for an ipo as that would be up to 25% new issuance if common equity is purchased by the government. IDBI  just raised a $100 mln in overnight money out of a target $2bln issuance this year in October in the debt space

The FII investment has been growing steadily in the bank and likely twice the March 2010's figure of 5.7%   

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India has done it again. With April to September mirroring the First quarter of the Calendar year, and another          Rs 25000 Crores adding in the magical month of October even before the series is out, we have reached a stage where a much awaited ( 20 years to the day) benchmark for portfolio nflows has finally been shattered. Hopefully this will continue to translate into FDI flows as investors usually follow the liquidity traders if the story is good and finally the India story has cleared the hurdle mark for its weightages to go up in foreign folios and for Walmart and global giants like Goldman Sachs to not take it lightly on the ground as an investment destination. 

The year is still bullish after the current festive profit booking season releases its energies. It is apparent that the Indianmarkets are more comfortable this time around with FII profit booking as the story of this mini peak of 20,000 is no longer the mega boom stroy from 2007 that caused the collapse globally. The denominator is higher now and people are buying despite the daily hiccups caused by a trenchant market not used to such volatility caused by directional trades even as others exit after a year long profit for handsome 200-300% profit (http:///next.advantages.us) setting up unequal fights between bullish investors and unwinding traders

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The bellwether and the favorite of true belieers in the India story the bank ha stayed away from any strong growth plans and plateaued in most businesses. September quarter profits went up to a mere INR 2.6 bn or $650mln maintaining the 30% secular corporate growth rate, just maintaiing itself in the leader  pack while ripe for being dropped off most hyper growth portfolios.

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YES bank team rightly feels jubilant at having made it 8 quarters in a row when Return on Equity exceeds 20% and Return on assets exceeds 1.5%. A phenomenally efficient player, Yes has been show casing a cost to income ratio of 36% and continued the trend in September as well. Looking forward the bank can probably manage hyper growth easily growing advances by 86% and thus bringing net profits to a healthy $44mln for the quarter. 

In the meantime the bank also raised a cool $250 mn in capital additions from QIBs 

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HDFC Bank has effectively scuttled its argument of supremacy with ICICI Bank by being omnipresent in rural / small town India to prop up the regional growth imperatives for the hyper paced India story of growth in the double digits. As we wait for results, it is likely that the bank will build on its Net Interest margins of 4.3% and a CASA of almost 45% to grow loans and Net interest income by another 30% in the September Quarter 2010

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HDFC has effectively scuttled its argument of supremacy with ICICI Bank by being omnipresent in rural / small town India to prop up the regional growth imperatives for the hyper paced India story of growth in the double digits. As we wait for results, it is likely that the bank will build on its Net Interest margins of 4.3% and a CASA of almost 45% to grow loans and Net interest income by another 30% in the September Quarter 2010

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A $350 million, $200 mn up front is good money for a new insulin product from Biocon. Research has started paying for India's iconic thrust in Biotechnology, long after it had plateaued its range of outsourcing agreements for US manufacturers. Probably fortunately for Biocon's promoters, it would not have to carry the tag of a Mid cap company any more, with its drugs earning a good marketing partner globally and a lot of hard cash for the company's new candy

Pfizer will have exclusive rights to commercialise Biocon's drugs -- recombinant human insulin, Glargine, Aspart and Lispro -- globally with certain exceptions, such as Germany, India and Malaysia, where Biocon will have co-exclusive rights. 

Shares in Denmark's Novo Nordisk , the world's biggest insulin maker, were down 1.76 percent on Monday. 

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That is what makes the Indian markets one of the few with enough steam to last the complete decade despite China, the US recession and other up coming challenges. Results from majors HDFC and L&T (Infrastructure/Construction) underlined the basic sustenance derived from hyper cycles set in motion more than two decades back. Growth exceeding 30% is just about enough to sustain India's growth expectations and nothing more.

With Year on year growth of 22% HDFC was on the verge of being an underperformer but the underlying number gave away the strength of the plot. We would do well to remember we are on the verge of a double digit growth decade, starting with the recommended 9.7% from IMF in 2010. L&T managed a humongous $2.3 billion quarter while HDFC's profit number of $200million was just from one quarter of mortgage and life insurance business, with the firm sitting on a highly conservative portfolio with a nearly 2/3rds Loan to Vlaue ratio, unheard of in super leveraged times everywhere else. The megalith is also able to demand higher rates and higher collateral in its business while staying the preferred lender for doing business with.

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Likely, the bulls will return to the markets tommorrow morning when Coal India hoping to raise $3.75 billion ( We just switched to our early Rupee rate of USD=INR40 across all Advantage zyaada properties) This is so because apart from the No go zones defined by the MEA (Environmental Protection) the Coal India property is actually the last strategic tool deployed by the Indian Government in this uyear when everything points to double digit GDP growth, and stock markets have responed in kind rewarding FIIs who brought in $22 billion till September with supercharged profits and great investments in the India story.The India storyis now fully deplyed with India ETFs growing in size and global investment weights likely to grow even as India plays catch up with China and Brazil in super IPO sizes with this one of the few $ billion issuances. However in terms of fund size supersizing, India has witnessed a nearly 20 fold growth in IPO issuance tickets since the nineties when most of the issues were less than INR 100 million or 10 crores making $3 million in each public offering :)

This $4 billion is by itself nearly two fifths of the $10 billion government divestment target where leading investment bankers have toiled without fee except for underwriting, and because of the liquidity gone missing over the second half of the week, a needless battering of the indices after a distinct lack of investor interest underlined the mammoth importane the investors laid door upon this issue from Coal India. Thee is further large issuance likely from NTPC and even MMTC while the PSBs led by State Bank of India and the Infra Cos are also out in the debt capital markets in this quarter mopping up the sanctioned capital increases from the retail / institutional players

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Though the Indian Markets had a terrible tuesday and a Wednesday failed to hold Thursday or Friday, audiences especially from SEC A and SEC B that matter were glued to their sets all week. Arguable this post could have been part of our package on marketing and advertising in India at HOTSHOTS.ADVANTAGES.US but I think we gave the financial analysis a chance to put that roadmap out front that shows where the retail lifestyle juggernaut from india is headed as the cookie factories literally open up that rural ad relevantly hyper-growth market in the country.

As backgrounds, Most international media has not noticed that car sales have been declining in Continental Europe for more than a year and almost going off a cliff even in September while the US Auto market has recovered strongly. But the linkages to emerging markets are still restricted to portfolio inflows and nothing much has happened in terms of concretising growth plans banking on India and China even as advertising budgets in the area and on Facebook and Twitter have grown three-fold. The quantitative inputs in the US later this year will however ensure liquidity and a mandatory inflation rate in both US and Europe markets once the Euro stops climbing. 

Closer home, and to the subject of this review is the veritable explosion much per expectations in India in the Auto markets where sales have nearly doubled year on year, mobiles where 1 in 2 Indians are connected by mobile and villages in China and Kenya are quadrupling number of connections year on year. in this scenario it is an almost believable and certainly true that three of the top rated bollywood stars grossing between $10million to $40million per movie, namely Akshay Kumar, Salman Khan and Amitabh Bachchan are now on the small screen at the same time grossing TRPs of over 5, hitherto restricted to Cricket extravaganzas like IPL and despite the winning ways from India in the CWG and in he Cricket series vs Australia. The Big Boss show on the weekend grossed a TRP of 6 showing in 12 million Indian households and more while the Big Bachchan starrer Who wants to be a millionaire repeated an iconic 5.3 for more than 10 million homes in Kaun Banega Crorepati's 4th edition. 

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Results just in from wannabe 'mid-cap' bank Axis Bank and wannabe 'banker' and potential applicant for new bank licenses kicked off earnings season with a health 40% and 35% rise in net profit. Both Loans and Deposits have grown 36% for the bank but there does not seem to be any supernormal contribution expected from a company reining in management and actively restructuring its corporate structures and values. More of the same really but catching up in line with India's potential Not really an out-performer out to catch Industry Leaders..LIC Housing Finance will likely be a banking license holder but unlikely to provide much value in its stock than its current stable management practices based run unable to satisfy the global arena's size and ambition fueled requirements. 

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Well, this could well be the nex in the series of how regulation is going to disappoint reform in the World's greatest democracy. Yes, India is still awaiting the new Company Law but the IFRS calendar is still planned for April 2011 for the Top 50 and staggered tll 2013. Yes, the only inflows coming from FIIs are from unknown hedge funds and atleast 197 and 350 FII sub accounts have been identified as being deficient on measures to stop round tripping between schemes of a hedge fund and rebadging portfolio profits as inflows. 

However, other events have proved SEBI to be a challenged regulator. The bureaucratic strucure and the wishy washy dealings from the institution show a lack of cognisance of current realities with day to day affairs leaving it less than plausible bandwidth to enunciate, let alone implement adequate reform. MCX is left rudderless in the illusion that NSE is a national institution or monument with exclusive rights to the equity investor while changing norms have already made 12 FIIs and 10 sub accounts surrender registration.

Recent changes include the upgrading of retail investor limits to Rs 200k or $4,545 in Initial Public Offers while steps to upgrade the minimum required investments to be a HNI to $22,500 was stymied when the Portfolio performance based fee guidelines came with changes upgrading regulation of PMS schemes without changes in amount of investment.

Just too much to handle at the same time in the face of a ever charging but secular bull market now in play. While October flows indicate the FII inflow story is still intact after a $5.5 billion September, SEBI has finally update Portfolio Managers with a requirement to charge Performance fee only when there is performance on the portfolio, thus allowing PMS schemes to upgrade to variants of the 2-20 formula while currently they are free to charge everything on the base investment.

Thus now the basis fee will also ideally be capped like Mutual funds to a 2% or other reasonable sum while Performance fee has already been upgraded to a "High Watermark" based investment charge implying I have charged a performance share/bonus on the portfolio

In the meantime the Indian Markets are marching not just on the indices but also in growing asset classes precluding a retail hyper market that partakes of goods across 4 commodities exchanges, multiple divestment mandates, new debt and currency plays and secondary market investing

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ET repeated this news, discussions for the same have been on since 2007. meanwhile HDIL has been able to sell 3-4 million sft in Mumbai Airport retail space as TDRs which are a pretty useful device when used with legal redress.  Reliance Infrastructure which has a $5 bn book going to $20 billion iin highways alone is also doing well in the Mumbai metro projects. GMR had earlier withdrawn a non project specific fundraising tranche but that should not be a red flag as they have enough funding support in queue for any new projects unless there is an India specific Black swan event. As can be seen below, this phase in Delhi Airports is likely to make the GMR Aviation operations rich nd deliciously sweet for a ride. Unitech is in play for divvying up and operating its infra assets independently with the Noida amusement park near commission. 

There's even been good news on our public services infrastructure support with the UIDAI taking off and Nandan Nilekani also catching the Tax Information Networks pojects on GST

ADAG Reliance big brother Mukesh has kicked off events in Telecom and is buying Power plants to kick its group off in infrastructure with RIIL stuck with the one mono project while ADAG has started increasing its stake in Trent retail stores. 

GMR Infrastructure, the Bangalore-based power and infrastructure major, plans to unlock the value of its airport land holdings by monetising them and thereby grow revenues. 

The GMR Group, which operates the Hyderabad International Airport and Delhi International Airport, has a total of around 5,705 acre of land at these two airports. “Land is like a gold mine and we are unlocking its value now,” said GM Rao, chairman, GMR Group. 

The firm, which has about 250 acre for commercial activity at the Delhi airport, has already monetised 45 acre at a total cost of 2,500 crore in the form of deposits from private developers. 

The company has given out parcels of land to private developers such as Bluecoast, Pride Hotels, Bharti Realty and Shweta Estates for setting up commercial and hospitality projects. The hospitality projects are expected to be operational by the 2011-2012 fiscal. 

The company further plans to monetise a 70-acre land parcel in the coming fiscal. “We plan to increase the traffic which will also up the value of the land which we hold at both the airports,” said Mr Rao. (ET)

Also, : GMR Infrastructure said on Tuesday that it has refinanced its bridge loan of $737 million with a five-year debt. The company said the refinancing was done by a combination of senior and mezzanine debt from a consortium of banks led by Axis Bank and ICICI Bank, and comprising, among others, Bank of India, Bank of Baroda, Canara Bank, Exim Bank, Indian Bank, Indian Overseas Bank, and Syndicate Bank. 

In October 2008, GMR successfully bid for a 50% stake in InterGen for $1.2 billion. A part of the acquisition cost was funded by the short-term bridge loan for two years. 

“InterGen’s debt rollover was a huge liability on the company and it is a positive thing for the company that the debt was refinanced,” said Inderjeet Singh Bhatia analyst with Macquarie Research. 

Unlikely that GMR will dispose off Intergen in a hurry, though Macquarie clears that the debt load will rise to 3.6x after consolidation of Intergen statements.

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ET repeated this news, discussions for the same have been on since 2007. meanwhile HDIL has been able to sell 3-4 million sft in Mumbai Airport retail space as TDRs which are a pretty useful device when used with legal redress.  Reliance Infrastructure which has a $5 bn book going to $20 billion iin highways alone is also doing well in the Mumbai metro projects. GMR had earlier withdrawn a non project specific fundraising tranche but that should not be a red flag as they have enough funding support in queue for any new projects unless there is an India specific Black swan event. As can be seen below, this phase in Delhi Airports is likely to make the GMR Aviation operations rich nd deliciously sweet for a ride. Unitech is in play for divvying up and operating its infra assets independently with the Noida amusement park near commission. 

There's even been good news on our public services infrastructure support with the UIDAI taking off and Nandan Nilekani also catching the Tax Information Networks pojects on GST

ADAG Reliance big brother Mukesh has kicked off events in Telecom and is buying Power plants to kick its group off in infrastructure with RIIL stuck with the one mono project while ADAG has started increasing its stake in Trent retail stores. 

GMR Infrastructure, the Bangalore-based power and infrastructure major, plans to unlock the value of its airport land holdings by monetising them and thereby grow revenues. 

The GMR Group, which operates the Hyderabad International Airport and Delhi International Airport, has a total of around 5,705 acre of land at these two airports. “Land is like a gold mine and we are unlocking its value now,” said GM Rao, chairman, GMR Group. 

The firm, which has about 250 acre for commercial activity at the Delhi airport, has already monetised 45 acre at a total cost of 2,500 crore in the form of deposits from private developers. 

The company has given out parcels of land to private developers such as Bluecoast, Pride Hotels, Bharti Realty and Shweta Estates for setting up commercial and hospitality projects. The hospitality projects are expected to be operational by the 2011-2012 fiscal. 

The company further plans to monetise a 70-acre land parcel in the coming fiscal. “We plan to increase the traffic which will also up the value of the land which we hold at both the airports,” said Mr Rao. (ET)

Also, : GMR Infrastructure said on Tuesday that it has refinanced its bridge loan of $737 million with a five-year debt. The company said the refinancing was done by a combination of senior and mezzanine debt from a consortium of banks led by Axis Bank and ICICI Bank, and comprising, among others, Bank of India, Bank of Baroda, Canara Bank, Exim Bank, Indian Bank, Indian Overseas Bank, and Syndicate Bank. 

In October 2008, GMR successfully bid for a 50% stake in InterGen for $1.2 billion. A part of the acquisition cost was funded by the short-term bridge loan for two years. 

“InterGen’s debt rollover was a huge liability on the company and it is a positive thing for the company that the debt was refinanced,” said Inderjeet Singh Bhatia analyst with Macquarie Research. 

Unlikely that GMR will dispose off Intergen in a hurry, though Macquarie clears that the debt load will rise to 3.6x after consolidation of Intergen statements.

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Nokia, the telecoms giant, and Colgate, the oral care specialist, are the two most trusted brands in India, a survey has found.

Business title the Economic Times partnered with research firm Nielsen to identify which products enjoyed the highest levels of awareness, familiarity and equity among shoppers.

Finnish handset maker Nokia entered India in 1995, headed the rankings for the third successive year.

The company claimed 71st place upon its chart debut in 2004, climbing to 44th in 2006 and fourth in 2007, and suggested such pre-eminence relies on a mixture of consistency and innovation.

"I would argue that the tougher the economic and social context, the more consumers reach out to comfortable, honest and authentic choices like Nokia," said D Shivakumar, its managing director in India.

"Trusted brands invariably respond to increased competition by focusing on what they do well and also by building something new for the future."

Colgate, active in India from the 1930s onwards, retained second spot behind Nokia, as it has in every annual study since 2008.

Previously, it had occupied first position four times in a row.

Wow, can't imagine we could soon be without Bata and Colgate, if Pepsodent and Reebok get their way...but will Indian handsets and the Chinese edge out Nokia?

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Now is the time, many participants in the Indian markets would like a breather. The internecine bickering in trades when whole days go by in dull 5 point bands and new bullish levels are lost by a whisker because of the shorts thinking the market is over priced, it is a well nigh trading battle in the markets. But the world outside the market ( if you sday so!) trying to ccreate a new level of mature regulation for India Inc as a flourishing property and  a thriving market and regulation is being recreated at different fronts. We had the foreshight to table a new Direct Tax Code, GST Law, the new Company Law and settle some disputes between IRDA, SEBI and RBI as well. We did not however, have the where withal to turn any of them into viable laws, the watered down versions of Direct Taxes, GST, and even new FDI in Retail and Defence about to bring down the crumbling edifice it suddenyl looks. All the new regulation discussed in 2009 , started at a very different all things ready kind of deal but all of them were seeming threats to established corporates and auditors and could not stand the evracity of their ideas for even one draft. A revenue positive Tax code required bringing the new code to much the old edifice, a GST law and a retail FDI law are being blackballed by states whio do have enough of their own cash but cannot face up to overpowering change from a strong center.

As Rajan Mittal also mentioned, going back on retail FDI after proposing such a wonderful workaround in terms of back office/ procurement support for local businesses and even exclusive licensing shows that a "Bombay Club" is alive and kicking and well in control in the bureaucracy and the reform agenda is going along only slower than it did in the previous decade. Time to move on though, India is still one of the luckier ones with a functioning government and a direcion which is still a secular upside, one that will come and go in hiccups without any new ideas being born. Retail FDI will not clear for more than 49% Foreign ibnvestment Cap, GST will be a very high amount and services will not transition in the first instance, subsidy outgo is will remain and direct taxes will net the same as they did last year with cosmetic 5% shavings off the top not good for the store to get much more. Enough has been achieved and unfortunately ther e will always be a umbrella comparison with other markets whence the Indian Economy and its markes will continue to be pulled into unnecessary restraint. Life goes on.

New Company Law already has five or ten different handshaekes with SEBI where there is going to be internecine argument on turf. RBI still has to clarify its position in the nations Economic decision making and inflation is wel land truly out of control, interest rates likely to end up inn the double digits before market amnalysts turn around on their hypothese and figure out what works.

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Well, yes, Geoffery Ching's got the right mix of countries to get by simply taking this month's ETF lists. The right time, theright place and the right ones to tend and grow:)

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After weeks of a search for adding large shale gas assets, Reliance Industries still had surplus cash left over to decide on a new diversification for the group. Through its wholly owned subsidiary company Reliance Investments and Holdings , Reliance announced a $217 million deal or INR 1020 crore to buy a 14% stake in the most prestigious and most Indian of retail lifestyle and luxury hoteliering brands, the Oberois' East India Hotels.

Thanks to the purchase from Reliance and Mukesh Ambani, MAX's Analjit Singh can bid goodbye to their hotel ambitions, ITC have a reasonable stopper in acting against the existing promoters and the existing promoters now holding a commfortable 46% stake in the company can take it to a higher 52% in both EIH Hotels and EIH Associates that carry the mid market brands.  

ADAG group and Reliance have recently ben stopped from growing their own multiplex' franchise in the same manner with BIG watching as Inox and Fame made equity sales disregarding their ownership interest from ADAG. In the EIH case Mr Oberoi has seemingly been proactive to fend off a possible ownership play from ITC which owns 14.98% stake and can trigger an open offer any time while now Reliance would also be in play to trigger such an open offer with its purchase of a 14.1% stake at 33% premium to $4 per share where the shares were yesterday at $3 per share on the bourses. However as with Analjit Singh / Goldman's purchase of 4% last time their might be a plan to give Reliance management interest and say going forward as the next round of equity consolidation is played out in the company.

Max and Analjit Singh were to hold 26% in the final arrangement and a veto on the board (Bloomberg UTV) while here Reliance is already only INR 70 crore away from an open offer  based on this purchase price. Another 3.72 million shares added and Reliance would be announcing  an open offer, but more likely Oberois would be issuing more shares to themselves now that they have the money to buy a bigger stake in both EIH and EIH Associate Hotels 

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GMR Infra could never make good on its Intergen purchase with IFRS brining threat of on balance sheet recognition of $12-13 billion of debt, but the latest news is that Tata Power may buy that 50% stake off GMR Infra's hands, even as the next round in the India Infrastrcuture story is set to begin after equity investors dumped the big play infrastructure stories in the August series exits. Tata Power, never a darling of the indian exchanges may yet find a new leverage a source of brand recognition as investors spread out their canvas for a selection of the best plays to keep in their portfolio

(Reuters) - Tata Power Ltd is in talks to buy a 50 percent stake in U.S.-based power utility InterGen NV for $1 billion to $1.2 billion, a source with direct knowledge of the situation said on Thursday.

Tata Power plans to buy the stake from GMR Infrastructure(GMRI.BO), an Indian builder of roads and airports.

GMR declined comment. A spokeswoman for Tata Power was not immediately available for comment.

GMR Infrastructure, based in Bangalore, bought 50 percent of InterGen in 2008 for $1.1 billion from a fund owned by American International Group Inc. The rest of InterGen is owned by Ontario Teachers' Pension Plan.

News reports earlier this month had said China Huaneng Group, the nation's biggest electricity producer, was in advanced talks to buy a 50 percent stake in U.S.-based power utility InterGen NV for about $1.2 billion.

InterGen is a power generation firm and owns 12 power plants in the United Kingdom, Australia, the Netherlands, Mexico, and the Philippines. The company's plants have a generation capacity of more than 8,000 megawatts.

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The Indian FAO series closed out amidst lots of groans and desi shakedowns including yours truly as the fundamental nature of arbitrage linked opportunity creates a dynamic investor landscape. While metros have stopped growing their pie for equities, the recent SEBI bulletins highlighted by ET indicate equities may be finding favor in new pockets now.

Cities like Kochi, Rajkot, Hyderabad and Pune accounted for 5.4% of the total cash turnover of the National Stock Exchange (NSE) in June this year compared to 4.9% in ’09-10 and 4% in ’08-09, according to city-wise data on the cash market turnover published in Sebi’s bulletin for July ’10. Many other smaller cities, which are categorised as ‘others’ in the data, recorded an improvement in their share to 8.1% from 7.4% and 5.7%, respectively. 

Unlike the trend in tier-II and III cities, the four metros have not seen much improvement in their share even though the stock exchanges recorded a sharp rise in securities turnover during the period. While Mumbai continues to dominate the broader picture with the share of 56.2% in June compared to 55.9% in 2008-09, the other three — Delhi, Kolkata and Chennai — saw their contribution decline substantially to 12.2%, 7.3% and 1.7%, respectively, from 15%, 9.2% and 2%. They recorded a fall despite a sharp rise in NSE’s turnover from Rs 27.5 lakh crore in ‘08-09 to Rs 41.2 lakh crore in ‘09-10. The figure amounted to Rs 11.3-lakh crore in April-July this year. 

What August underlined was the growing disaffection amongst investors with the 9000 strong investor club that seems to manage all price points on the Indian exchanges. Well, having had an eventful month ourselves with 25 days of gains marred by one last week of gainsaying and abject failure we have much to say on the indian price discovery mechanism. 

My secrets are thus: DIIs are the most inconsequential class of investors and have already exited these markets almost completely having counted their gains from the Day 1 post crisis in June/July 2009 or even in Jan-March 2009 when the markets spiralled to the bottom. The FIIs on the other hand are fresh and hungry still for investment plays and so is LIC amongst others who have a fat chequebook. But while I have no objections with the broker club on the bourses as I have said quite a few trend making notes and they have borne fruit, I find that the way lack of interest and weakness during the 7 days to expiry in F&O was used by a dozen bears to drive down the 5500 series of the Nifty totally OTM and wasted a real derogatory comment on the maturity of the Indian bourses. Stocks had fundamentally discovered 5580 as the new level and just because of a phantom of expiry, the index lost momentum and nearly changed direction. These unfortunate occurences will never be seen as coincidences as players might wish them to be and neither are these event any basis or triggers for the sell down witnessed,. It has still dented the principles of fair play and is unlikely to stand good for one of the largest public markets in the world. 

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While Cairn is happy enough exiting the country in less than three years, with Mangala having just ramped up this year, Vedanta is unlikely to get away with the audacious offer very quickly as the government vets its options. Cairn has shared Mangala fields with ONGC ( Interest in one block of 30%) and also the field in KG Basin is 51 owned by ONGC 

ONGC, GAIL and OIL in consortium to bid for Cairn stake

Because of the ownership interest ONGC is likely to practice its right of first refusal as the Vedanta sale may make its own part-shares worth much less and limited to the oil take everyday. Having made such momentous finds and being a specialist ONGC would be well within its rights to exercise its option for control. It has already received $3 billion worth of credit lines in the newly created consortium

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Reliance and ICICI Bank gave way to Unitech, PNB and Infosys as networks reviewed the Stock markets great climb back, recovering to its January 2008 levels. Even as the Nifty loses Unitech again as the company demerges and splits. Unitech may come back along with new peers GMR and JP associates and DLF may also try a bit of recovery with ICICI Bank and Reliance nearly losing 30% each from 2008. PNB Unitech and Infosys were among the 6 that nearly doubled in the same period. Infrastructure may now lead the regeneration for the Economy, India in relentless pursuit of double digit growth, after a reckoning for reality and construction led global happenstance of 2008.

As Dr Reddy and Bajaj come back to the National Stock Exchange Nifty index, the index also scaled a 2 year high led by these new market champions. Also evident is a supersizing of economic criteria and increased appetite in the financial markets even as credit growth remains sluggish and inflation becomes hard to control. Public Sector Banks, Lifestyle scrips like Talwalkars, Dominos' Jubilant Foods and much more threats of competition from USE and MCX in derivatives and commodities and new bank licenses that demand $250mn net worth tabs mark a new maturing of these financial markets still making do with a not more than 25 million investor population and 5% weightages in Emerging Market Indices and ETFs

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With Vedanta hooking up into the energy sector without prior experience, likely red flagged by the DGH/MoE for immediate follow up, the valuation for Cairn at $8.5 Billion for 40% of Cairn Energy's stake seems set to end up as the total outgo for a new entrant like Vedanta, policy riding rough shod over private exit ambitions. But as I am told Vedanta will be one of the only apart from BHP Billton to straddle mining and Oil interests. With three fields including Mangala in India, Cairn is fairly valued at $16 billion, which comes to around Rs 400 per share for the listed Cairn India, currently moving at a 10% discount, thus making $8 billion the asking price for a 50% stake covering the promoter purchase and the first open offer from VEdanta. After that the mandatory open offer for 20% will kick in and if completed Vedanta will end up with 75% of Cairn, LIC holding 2.5% and another holding 15%

Even IDFC has one share in Oil E&P fields thru its Private Equity Arm in a state owned GSPC/Andhra find and the p revailing prices of oil and gas are only likely to rise despite limitless capacity additions in NELP VII, or acquisitions by Reliance. 

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We already know Advertising forms bulk of Indian M&E revenues. In fact for TV it is 3 out of 4 revenue dollars that come from sponsorship and advertising. Indian M&E is INR 600 billion ( latest PWC report) and of course Cnema and TV are the major bearers of revenue till the social web converts its minutes into Dollars too.

The Indian Shampoo advertisers are about to g for another jugular to remind us of the tenuous connection with L'oreal roping in the Bachchan Bahu and Miss World Ashwarya Rai and P&G roping in belles by the dime, with all the slow mo specialists in light hearted Salman and abhay Deol  'sequels' ( seemingly originals but quiet elemenatrily lots of the same things :( ) Katrina, Neha Dhupia and Shilpa Shetty joining Dove for the up and coming campaign. Wonder, like sportsmen, bollywood belles will also get to testimonials for banks, with DeutscheBank and Stanchart making their intentions known in retail and HSBC busy as the World's local bank. The feminine allure or even the attractiveness allure is quite a tab for everyone's get rich dreams as the inflation brakes may finally be scrubbed off your ankles too.

Cadbury's payday has come and gone for a good 2010 there was no Canon in canon's campaign and Coke was forgotten in the Modi aftermath. But it is high time we got rid of the shampoo and the DTH from our eyes and got to some good new advertising, with India and Facebook competing for the same global dollar :)

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For some it would measure the robust nature of the Capital Markets, for most concurrently it would also show case the unidirectional progressive trends in the Indian Economy and the Fiscal Reforms Mechanisms, budgetary or other wise. When I just reviewed my first post MBA portfolio in India's sunrise sectors, I found a loss of many midcaps to corporate governance issues and the growth of some sectors as well as some timely exits after 5 years. The last first, the portfolio was anchored on two bellwethers, first BSES Ltd an epitome of efficiency, now part of Rinfra and exited at a 1000% gain in 1998/9 providing me much impetus during my early youth A INR 50K or $1700, the investment was worth INR500k at exit or $10k.

The other, part of the dot bust, was worth INR 32K when i bought it in 1995, and worth INR350K to me when I exited in May 2000, was NIIT Ltd, the Education sector now seeming to take off on its promised charter in 2010. I also had INR 25K-50K in upcoming promoters like S&S Power ( Circuitbreakers) , NEPC Micon ( Wind energy , ignonimous exit) Reliance Capital ( worth 10k in 1995, Now INR 77K so $320 now worth $1639 and ATV Projects in which I could only invest the residual INR 4k now worth INR 700/- worth a few OTM lots in the Options exchanges

The surprise of the pack, though my Capitaline software could never tell me if its turnkey projects were Oil customers at the time was my investment worth $1k in Aegis Logistics. Today, Cum Bonus and still invested I am looking at $1K growing into a $17,872K as of Friday's closing. Thus the $12k portfolio of that time after counting a 150% rupee depreciation to INR47,has still yielded more than $240K without including any reinvestments as the money was well spent. Also we are moving into new residence today, which my wife is taking care of. Only I wonder,w with all this reform, why they could not find me a formal leadershi p position in time and how I can grow this on my own, all alone.

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Much as the diffuseers on a Red Bull F1 engine, IDFC has been accumulating kinetic energy leading with Rinfra and GMR in growing FDI in Indian infrastructure plays. Now that it has been a consistent performer, IDFC would necessarily use the uptick in investment banking and asset management revenues to greater branding in the institutional circuits, esp for getting maximum pricing benefits in European borrowings.

As an infrastructure NBFC, it has much more advantages despite the 15% CAR requirement which for its 26% current par score is nary a problem. Even as Button and Webber continue the tournament conquest, IDFC can easily double its book of assets with a great infrastructure project pipeline in the country across aviation, toll highways, ports and power. PFC in fact has already established targets for lebnding more than it could in its incipient charter in the last 5 years. FIIs are discerning investors and as accumulation in key infra plays and midcap lifestyle plays continues in August, the Indian dream is slowly plodding its path to glory, waiting for some quick additions to the larger infrastructure portfolio of the nation in India and internationally thru Reliance, Adani Enterprises and others.

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For any special situsations strategy fund manafgers out there, Indian markets have had screaming opportunities in the three strategies above which while not signalling turnarounds do signal sector wide up ticks and great unlocking of value in the businesses. 

Unitech is demerging its "non core" assets worth $1 billion into a new Unitech Infra company which will own three amusement parks in Delhi, Noida and Chandigarh, 11 hotels with 2100 rooms and 10msf in real estate going to 35 msf in three years. It also has an order book  going from a $100 million in Power transmission projects now to $1 billion in the pipeline by end 2010. That is one great piece of value you must own. The real estate industry conditions have finally moved after months of inactivity and a particularly brutal bout of credit sdqueeze from banks' real estate credit overexposure. Strong Management and direction and also the take off of its telecom business ( again in a separate company as Uninor) will keep this flagship of the group a great builder of value in the new lifestyle economy ethos.   Unitech has also bought back its London AIM listed Unitech Corporate Parks for $159.6 million under Unitech Ltd as part of the plan last week.

Credit rating agency Fitch on Tuesday placed four real estate companies — Unitech, Omaxe, Ansal Properties and Parsvnath — on rating watch positive, in view of the improvement in industry fundamentals. Rating watch positive reflects the possibilities that the ratings can either be upgraded or affirmed at the current levels, Fitch said.

Fitch said sustainable operating performances, continued de-leveraging by developers over a longer period could lead to rating upgrades in the second half of the year. “The fundamentals of the domestic realty sector are improving, as seen by better liquidity and improved demand,” Fitch said.

 

IDFC is the consolidation play, managing an asset book already as much as $8.080 Billion in the preferred Infrastructure sector. Infrastructure financing / refinancing is fail safed by government regulation and lets this industry pioneer to establish value leadership with current lending net capital adequacy standing at a high 26% even against the speciality NBFC requirement of 15% 

The bigger lifestyle play, as also under professional; management and deeper roots that preclude private equity investment, ITC has just split its stock this week and is trading at alittle below $4, The business has the largest investments in retail distribution and rural retail as also the expertise and the brand valuations in Tobacco, Foods , Paper and Hotels where it remains an acclaimed international brand with the Taj from Tatas and the last of the Oberoi/Trident franchises. 

Just a heads up, a lot of current research is available for these blue chip plays.  

Meanwhile the ADAG company Reliance Media World, now Reliance Broadcast Networks is doing well in radio and outdoors, owning 21% of the radio market with a 64% ad inventory utilisation signalling the good times. Radio is 50% of this Reliance Media play. RBNL is planning its first profits in 2012 and is a PE play with high 7% QoQ growth in June 2010

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Not much fun, i admit, wesp when you are busy guiding the world's destiny..but signing up at Postrank connect is a must and we want to say that at the top of our  voice. The new world is here. The boat ghas sailed. In true digital tradition, you can will yourself on the bus at any place you want..

mpos

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Portfolio investment in Indian companies has gone up significantly, July adding between $3.6 to $ 4 billion in FII investment which is continuing in the first few sessions in August 2010 as well. Midcap stocks seem to be holding special interest in this accelerating economy, esp the few available in real estate and infrastructure like IRB, IVRCL and JP Infra (JPINFRATEC) Also there are the usual under the surface speculations on increasing FDI limits in real estate to compete with official moves in updating FDI status in Telecom, Media and Defence. 

The corresponding Net FDI number in June was a little over $2 billion. In June FIIs had stocked up on Oil Marketing Cos land BPCL is continuing  good run even now. Check out our top 1% portfolio at http://next.advantages.us Last year FII purchases were easier with consistent QIPs from issuers in tough but remunerative real estate and infra sectors as well as PSU divestment candidates

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Meanwhile RPOWER reported a good rise in net profit on a lowly INR 1390 million in sales,

Current industry focus is around its not being in the top 6 Gas based plats to be completed raising concerns over timelines for the Sasan, Dadri, Tilaiya and Krishnapatnam plants.

UMPPs are being marked for the upcoming production increase from KG D6  Only fresh projects with 4GW new production are considered umpp status. 16 were originally demarcated in a 2005 notification. Four were then awarded after a gap of four years. Now there are 2 in an ongoing 2010 bid.

Alongwith RPOWERs three UMPPs and Tata's Mundhra plant, The Reliancce Power trio at Sasan, Tilaiya and K'patnam were allotted after 4 years of delay and continuing delays focus on the government industry interaction on the subject. The Planning commission only expects a Phase I completion at Sasan and Mundhra during the Eleventh Plan till 2012

PFC is awarding the project titles in Bedabahal(Orissa)  and Sarguja(Chhattisgarh) on the east coast currently and the oiginal deadline seems to have been extended twice. 

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ICICI Bank vs HDFC Bank : Whither from here?

With Corporate revenues down 25% and Net Interest Income down 2% the bank continues to grapple with a changed milieu after the chapter was declared over earlier in 2008. The bank continues to move from quarter to quarter managing lowering down market expectations, shouting down growth as lack of discipline in the ranks is seen as the overall market perception of the bank. Seemingly well poised to recover, the bank yet again promises a miniscule 15% corporate credit growth.

Subsuming bullish expectations midway in the July series, the business of the bank refused to play catch up with the markets and is trying to recover its poise after an embattled 2008 and 2009.  The new control structure at the bank is not a satisfactory answer for the problems at the bank's courtship with nationalism in guise of RBI policy and indisciplined retail outbursts of growth at the expense of operational discipline. 

RBI has also fined it for a nominal amount for violating KYC guidelines in new accounts and existing account updates. While HSBC has quit Investment Banking in India earlier, ICICI Bank is well on its way to either shape up or ship out, probably unable to satisfy larger relationships or bring value to syndicates for such arrangements and the same has to be investigated.

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Master Card polled 10920 people across the Asia pacific, in 24 emerging markets and all hands showed up in favor of saving more and decreasing consumer spending going forward. While Philippines, Australia and Thailand lead in ayes for saving at 74%, 52% and 52% India still has only 24% in favor of lesser discretionary spending while 96% of us Indians are anxious for the uncertain economic conditions.

Indonesia and Philippines showed extreme gender variations on the question too, with Indonesian women vying with Filipino men for saving more for the home and hearth. If one goes by the Master Card spenders, Indians should only be subjected to more informed adverising about electronic goods, shopping on digital stuff being a continuing drain on the purse here. Australians by contrast mostly want to save for traveling abroad.  Also, though the Warc push of the article did not say, we think likely that the age pyramid where 56% Asian youth want to save vs 20% senior citizens is likely inverted in India where more youth have their wallet out to spend on big ticket items than the rest

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As of course we still do not have a client list for our research reports, I just thought I should verify with other brokers on what reports look to end customers and in most cases prospects. Everyone knows that brokers and qualified research desks from Bombay and Delhi target hedge funds investors and others qualified financial institutions directly or thru sub-ledger accounts.  

Broker Research is as always dull and dry and like us it does not partake much else than analyst calls , in  terms of investee company presentations or meets with senior management.

Each research report is a carefully completed data sheet with very little space for opinions on effectiveness and quality of management performance and market discussions, giving us this continued edge in helping decision makers beyond such reports. Though having said that, hese broker reports are an essential part of your repertoire when you can lay your hands on them, esp if you are on a distribution list. Typically, however there are no fixed time frames off these reports for the stock move to start/complete as expected. 

Some brokerages do however need to get back from increasing investment in institutional business and focus on the domestic retail business, that has been at a plateau but fundamentally an under penetrated market with India only having 15 million investors at best overall. Retail business focus lets firms like IIFL and Kotak securities a chance to operate an effective business model without over concentration in proprietary trading, or an a patchwork of Grade B Institutional clients that do pose a measurable investment risk in themselves.  

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Reliance ADAG further cemented its intentions in another round of grandiose plans, backing out f the deal with INOX and announcing its theme park effort with Universal and Disney land. The park comes with a likely tab of INR 7000 crs and features Hollywood hits on NBC as a theme, including the Harry Potter and Spider Man series. The park will not feature any Disneyland attractions. This will be part of Reliance Media World

Universal executives travelled to Mumbai to meet Mr Ambani’s Reliance Big Entertainment and are close to signing an agreement to build a $1.5bn resort based on the films produced by the Hollywood studio arm of NBC, according to people familiar with the negotiations.

The Indian park would be similar to the ones Universal has in Florida and Singapore, but with an Indian “masala” twist, to attract India’s fast-growing young, energetic and consumer-oriented middle classes.

“Harry Potter, Jurassic Park and Spider-Man will blend with classic Indian movie [blockbusters],” said a person close to the Indian group. “It will be something never seen in India.”

Reliance has received preliminary government approval to go ahead with Universal to create what is expected to be a 500-acre entertainment resort, which could host about 50,000 visitors a day, said a senior official.

 

Similar Parks in Bangalore and Delhi however currently do 50000 visitors a month with revenues of up to INR 500-1500 per head. 

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The market is abuzz, and the promoters were holding on to their 70% share or 42 crore equity shares for a Rs 140 price. Inox has a significantly higher enterprise value and the valuation of INR 740 Crores or INR7400 million is much better pricing the company's screen and customer goodwill assets.

Despite a high Gross margin 42% at reliance Media Works, the Enterprise value of the company of 14 times ts Gross Profit compares badly with Inox's likely 23 times its higher gross profit.

After the War with Fame, Reliance Media Works need the arsenal of screens to underline its large footprint to prepare for the retail lifestyle juggernaut and an EBIT margin of 7.5% (fourstocks.com) 

The current enterprise value of Inox is a Cool INR 102 per share and the price of Rs 120 per share is already being deined by both parties true to worries of over  valuation plaguing the multiplex deals from Fame to earlier deal for Adlabs itself from whence ADAG created the largest share of footprint for BIG partner company REliance Media Works, BIG TV franchise belongs to Reliance Media World

INOX carries a premium in the industry for its significant traction in customer footproint from better location, great franchisee support in food malls and value pricing models and flexibility adopted by the firm at various end points when producer disputes and recession's impact on footfalls plague the industry during the course of each year

With the acquisition Reliance Media Works can go on to realise its enterprise value of the company (value of its assets thus Equity + Debt + any working capital advances add to the value of the firm for the cash it generates. Reliance Media Works has now been trading at 4% higher since the news broke as it tries to cross the rubicon and generate net positive margins ofrom its current March 2010 value of -5.9%

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The August edition of the report should carry more details as the Planning commission website has already updated with Capacities and promises to update quarterly on the international and sublime rate of 65% of completion rate on Infrastructure projects from China and Brazil to India itself. HDIL in the mean time is finally getting the hang of the 6 million sft and the TDRs for the Mumbai Airport and other commercial real estate has also been released in June. Power Infrastructure in the country has yet to move on from the 86000MW available in 2007 but it seems more and more likely that with modernization projects falling by the wayside in performance reporting not much will be added immediately from already installed plants and that more private plants will now start dotting the landscape as Merchant power availability and selling on the grid becomes more likely. India may not talk smart grid but it is well on course to adding 10GW this year, 7000MW according to the Planning Commission..More later, as markets remain dull and activity is restricted to personally targeting me :D 

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Land acquisition snafus, Retail FDI delays and the exit of Foreign Partner

DLF partner and Dubai World company limitless inc, left Indian shores yesterday, finally selling its 50 percent share in Bidadi knowledge City on the State Highway 17 between Bangalore and Mysore.

The plans for the 9178 acre city with shopping vistas and residential co location for corporates looking to exit the congested Bangalore urban zone were shelved after HDK laid claim to most of the property and DLF could not get land acquisition underway thru Government or private effort.

Business expansion in Bidadi and Bangalore has revived thence and Bangalore real estate is still offering a lot of value to incoming businesses as witnessed in MoUs signed in the Global Investor Meet. Bangalore still leads in new room capacity from the 50000 rooms to be added in India in the next 3 years with a couple of new 5 star properties planned apart from ITC and Nitesh ( the second is yet to open)

Also price realisation in luxury hotels in Bangalore has also improved the most nationally though the resulting gaps in real estate inventory are taking a toll on the banks partnering real estate in the city.

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Land acquisition snafus, Retail FDI delays and the exit of Foreign Partner

DLF partner and Dubai World company limitless inc, left Indian shores yesterday, finally selling its 50 percent share in Bidadi knowledge City on the State Highway 17 between Bangalore and Mysore. The plans for the 9178 acre city with shopping vistas and residential co location for corporates looking to exit the congested Bangalore urban zone were shelved after HDK laid claim to most of the property and DLF could not get land acquisition underway thru Government or private effort. Business expansion in Bidadi and Bangalore has revived thence and Bangalore real estate is still offering a lot of value to incoming businesses as witnessed in MoUs signed in the Global Investor Meet. Bangalore still leads in new room capacity from the 50000 rooms to be added in India in the next 3 years with a couple of new 5 star properties planned apart from ITC and Nitesh ( the second is yet to open) Also price realisation in luxury hotels in Bangalore has also improved the most nationally though the resulting gaps in real estate inventory are taking a toll on the banks partnering real estate in the city.

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Singapore Parkway Holdings, earlier commented here for going for a song three months ago, are now again an important subject matter for the Indian markets, especoally veteran dealmakers and Godhwani's favorites, Malvinder and Shivingder Singh.

Fortis Healthcare, ready to make a new offer for equity for a little over $500 million actually S$ 850 million, is now in play at that price you have on the soup you love most when you are not eating an indian lunch in the Central Business District in Singapore. Fortis has actually thence decided in true blooded business man manner that they have shpown with perspicuity in the last 2 years, selling their 23% to Khazana at $3.95 making a tidy profuit for their fledgling concern, though now it is much a case of sour grapes as they have been unable to get a deal without stretching their pockets from the Ranbaxy deal. Nevertheless, a reat decision for Fortis Healthcare, and a renewed focus on the group in 2-3 months

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YES managed to bring pretty good results to the table improving growth in Advances to even 42% over last year June. Net profits are a `1.56bn with a 56% growth and while NIMs at bigger competitor Kotak have fallen to 5.7%. YES Bank management prides itself on a greater than 20% ROE, where the March 2010 fiscal closed at 23%. This quarter advances have shot a 76% growth from `1.57bn to `2.62bn which is still a small $56 bn. Transaction Banking and CASA ratios have more or less maintained March quarter growth of 62.8% growth in deposits, 77% growth in CASA ( 10% in March 2010) Tier I Capital has become a concern for the bank according to us already down to 9% in March while Net Interest Margin continues to have scope for growth. We might come back after the conference at 1600 hrs when more details are available. `1.56bn `1.56bn `1.56bn

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YES Bank is probably the only one after HDFC Bank and Axis that still has the secular growth number in sight and crossed with ease. Kotak was stuck with PAT growth of 27% to $69 million, showcasing the kind of size Goldman Sachs was playing with in the unbridled Indian market. Again size does matter. Net UInterest Income has been capped at $147 million now in this June 2010 result. Similar numbers are expected from its Mutual funds, securities and even insurance businesses. Kotak Wealth Management would be some great assets to pick up instead of hankering after "mid cap" bank stocks unless Axis Bank is mistakenly being counted as a mid-cap proposition. 

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The first one is about Positive Control, showing us that we have more to spend on the digital mnedia, spending just 5% against 14% worldwide which itself is less than half the money it deserves at a final stable state ( and Accenture Insights and Mckinsey knowledge Institute do agree as well, if it matters ) of 30% of global consumer spend on advertising. For the Worlds Top 10 FMCG and Non Durable Consumer Goods brands that would probably translate into $300 million digital spend for a $1 bn year ( J&J, Nestle, P&G, Coke)  Out of this $300 million probbably $100 million for the India leg, once hey have all agreed to divvy up the net by geography for the related brand spend. Thgat is $100 million for digital medium alone another $120 million for big brother China, when now P&G';s mega hygiene factors launch itself was a total of $500 million over 12 months in India today.

Marketing spends in  India will undoubtedly grow as one of the last refuge of brands after the dull showing in US domestic markets consumption related ad spending and a total white labelling of Europe. Thence, the second question of the step motherly treatment meted to world sport like Soccer in India and presumably in the US too, but then we at hotshots are ekkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk

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Bank results season by themselves seems to be a great positive for the Indian dream. With HDFC Bank maintaining Tier I capital of 12.3% and NPLs of 0.3% , their inevitable comparisons to J P Morgan with much the same stats may no longer be tenable for the management to showcase as J P Morgan faces a challenging prognosis from dropping revenues in June 2010. 

Back to Deepak Parekh's legacy, however, Aditya Puri's HDFC Bank surprised the market with an expansion in Net interest Margin of 4.32% despite increased effective tax rate of 32% ( against 29% last quarter). Maintaining a growth trajectory from Q-o-Q com parisons has been shown to be effectively possible by both Axis Bank and HDFC Bank . HDFC Bank continues in the 30% secular growth trjectory defined by Indian companies in the last decade for Year on year comparison remaining one of the few large markets where large quarter on quarter growth figures are even expected especially in the first few quarters after a slow year. Scaling those expectations has been a tough task and the no. 2 and the new no. 3 Axis Bank leave a big challenge on the table for the erstwhile nimble ICICI Bank to surpass on its way to a recovered 2011

However the SBI PNB wars for PSU supremacy and the HDFC Bank and AXIS BANK encroachment on the numero uno in the private sector may well define 2011 and 2012 for Indian Banking. Of course more attention is now showered on the new investment candidates in the infrastructure sector like IDFC and Rural Elec Corporation or even the Power Trading Corporation

HDFC Bank's Operating income run rate of $750 million must have created a definite plan in the Bank for a $1 billion year for the bank especially after having succeeded in keeping the  kingdom's keys with sustainable high net margins and a great Cost to Income ratio of 47.7% bringing with it more news of award winning performance from India's Banking and Finance stars globally.

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T3 was big news with Jet Awys alone managing 11,90,000 passengers in June. T3 alone adds 34 million at Delhi Airport and Jet airways will be a big beneficiary. Jet has been delivering significant double digit cost savings in any quarter it can breathe and with a 17% margin leads a troubled sunrise sector to 'greener pastures'

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The first 2011 results for Axis Bank under its new management direction, seem to be a vote of confidence with the bank scoring INR 1500 Crs or $330 million in Net Interest Income and almost 50% or $162mn in Net Profits, beating the highest estimates proferred, with no significant contribution from Proprietary Trading. I-Sec is expected to run aground, true to form with growth slowing to 14% more to come..Non performing assets are still 0.35% and that is quite good.

LIC Hsg also reported a 60% rise in PAT to $45 mn in the quarter, rooting for becoming a member of the biggies club with the rate. 

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'Ubuntu' much like its bigger cousin Vuvuzela, is an African import from the recently concluded Soccer fest. And before we get on to discussing the deeper meanings of life (and soccer), kudos to DNA India for some great world cup content, esp as TOI decided to act tired and reported the important midnight games a day late. Crest keeps pulling some stellar super premium research content on Saturdays though.

The ubuntu or the 'aspirational' interconnect has been with our younger siblings or Gen Y since Madagascar in 2006/7 but Disney could not have half achieved what the Soccer Cup did, overtaking the tools and the platforms from network TV to Radio and the 'social' Facebook and Twitter. 

But before Ubuntu becomes an obscure Linux world again, we must all keep the dream alive, not just for Rio in 2014, but here and now in Delhi for the CWG fest. Dhoni has a great kick off as the highest paid Sports icon, for a three year contract $5million more than the master blaster, apparently on Safari.  There are local manifestations of Ubuntu as well, with a lot of Africa making it as themes after the cup, giving Slumdog advertisers a new 'field of vision'. 

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In an oft repeated saga in India, HSBC walked away with $2.5 billion of crown jewels, paying $95mn for the net assets in premium. HSBC has not yet got any licences from RBI for the new branches added to its portfolio.  Though the bank had a not so significant presence in India, its goodwill is positive and it has some great retail accounts in this country of 130000 owners of INR 50 million and more in assets.

HSBC and Stanchart had been negotiating for RBS assets in Asia but India had come unstuck because of RBI restrictions. Also, Stan Chart never wanted any of the China assets.

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$2.5 bn in Market Cap, 37 Institutional holders with 8.3% stake and a new 10 mmscmd gas supply agreement will easily merge into the new Reliance Power/ Reliance energy behemoth and get to the business of creating assets and revenues..

REUTERS INSIGHT Reliance Power Limited (RPower) is part of the Reliance Anil Dhirubhai Ambani Group. RPower is engaged in the development, construction and operation of power generation projects with a combined planned capacity of 33,480 megawatts. The Company is developing 3,960 megawatts Tilaiya Ultra Mega Power Project located in the State of Jharkhand. RPower is developing 16 large and medium sized power projects with a combined planned installed capacity of 33,480 megawatts. The Companies subsidiaries include Sasan Power Limited, Rosa Power Supply Company Limited, Maharashtra Energy Generation Limited, Vidarbha Industries Power Limited, Tato Hydro Power Private Limited and Siyom Hydro Power Private Limited. In May 2010, the Company acquired three power plants with a total capacity of 433 megawatts from Reliance Infrastructure Ltd.

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 Power Grid Corporation of India Ltd., manages around 20GW power on a legacy grid. Its IPO will be for a nominal 10% divestment. The mandate for Power Grid is to create nine high capacity corridors primarily from sikkim, Jharkhand and Chhattisgarh to AP and Tamil Nadu and another in the west from Delhi to Maharashtra and Karnataka. The proposed cost is already more than half a trillion INR at Rs 50,000 Crs. or nearly $12bn. It seems likely that financing for the same will be closed with the help of ADB and the World Bank.

On our India Infrastructure series, Power Corridor | Power Grid Corpn | The Banking and Strategy Initiative http://bit.ly/pwrgrid

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