India/Indian stuff

[Cobra]

Satyam invites bids by Thursday (12 March) from investors wanting to acquire a majority stake in the company.
By John Ribeiro (09 Mar 2009)
 

BANGALORE, 9 MARCH 2009 - Indian outsourcing company Satyam Computer Services announced Monday (9 March) the start of a competitive bidding process that could lead to an investor acquiring a majority stake in the company.

Only a few selected bidders will have access to detailed financial data and other information about the company, and the information available is also likely to be limited as the company's accounts are being revised after a financial scandal at the company.

Interested bidders have to register their interest online with the company by 5.00 p.m., local time, on Thursday. They will then receive a request for proposal from the company and are asked to submit a detailed expression of interest by Friday.

Bidders will have to provide proof of access to at least 15 billion rupees (US$292 million) in funds.

Satyam said on Friday that it had received permission from the Indian regulator, Securities and Exchange Board of India (SEBI), to sell up to 51 percent of the company's equity in a global bid. While 31 percent of the stake will be offered by way of a preferential share offering, another 20 percent will have to be purchased in an open offer from other shareholders of the company, in line with Indian regulations.

Some companies who had shown interest in buying out Satyam said that they would bid only if information on the company's financials and the company's clients are made available to them.

Satyam's accounts are being restated following a statement in January by the company's founder, B. Ramalinga Raju, that its profits have been inflated for several years.

The company said on Monday that access to certain business, financial and legal diligence materials will be provided to bidders on the short list after they have executed several agreements, including a non-disclosure agreement.

After completion of the due diligence process, all short-listed bidders will be asked to submit their bids and an executed copy of the share subscription agreement, the company said.

The company did not list the procedure by which bidders will be short-listed, and did not specify what type of financial and business information will be released to bidders on the short list. A company spokeswoman said no further information on the bid process is available at this point, apart from the company statement.

The process for selecting a bidder will be overseen by a former chief justice of India or a former Supreme Court judge appointed by the company, Satyam said.


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http://mis-asia.com/news/articles/satyam-invites-investor-bids-by-thursday

[Vorsprung durch Technik]

good time to reap the situation

[Cobra]

Satyam sale in question

Doubts are emerging over the feasibility of the proposed sale of disgraced Indian technology giant
By Paul Smith (MIS Australia) - (11 Mar 2009)
 

Doubts are emerging over the feasibility of the proposed sale of disgraced Indian technology giant Satyam Computer Services after it invited bids from companies interested in taking a majority stake.

Speculation has suggested that IBM is an early front runner to acquire the company, but local experts with close ties to the Indian outsourcing industry said a break-up of Satyam was the only sensible option.

The director of independent consultancy Mindfields, Mohit Sharma, claimed the acquisition process had been set up to fail, as bidders would only have access to Satyam's re-stated accounts for the last three years once they had been shortlisted as potential buyers. A lack of clarity around the enormous liabilities tied to the company as a result of US class action suits and problems in assessing the true worth of the Satyam made a sale highly unlikely, he said.

A local spokesman for IBM refused to comment on the speculation, but Indian software services provider Tech Mahindra has said it is evaluating Satyam and Indian engineering firm Larsen & Toubro and the Hinduja Group have been touted as potential buyers as well.

"The IBM takeover rumour has been there for the last three years, even before this scandal happened, but an acquisition would not add anything to its current portfolio of service offerings," Mr Sharma said.

"Indian companies like TCS [Tata Consultancy Services], Wipro and Infosys would not be interested in buying the whole of Satyam either as it would dilute their margins, and Satyam's customers are already approaching them anyway."

He said second-tier Indian players like Tech Mahindra would not have the ability to provide the scale of services needed following a complete acquisition, but that it would be more likely to succeed in buying portions of the business.

Satyam's Australian business would be a very appealing target for both Tech Mahindra and TCS as an avenue into doing business with Telstra, one of Satyam's biggest clients.

Mr Sharma said about 35 per cent of Australian revenue for Indian firms like Satyam, Wipro, Infosys, HCL and Tech Mahindra came from Telstra, and that TCS was the only Indian IT company which did not have any Telstra business.

Mr Sharma said he believed Indian government officials wanted any secrets within Satyam's books to remain hidden until after national Indian elections next month. Allegations abound in Satyam's home state of Andhra Pradesh that the company's founder, Ramalinga Raju, financed the business of the chief minister's son.

The founder of Swamy & Associates, Sri Annaswamy, said he was surprised that Satyam's board continued to reject the idea of splitting the company up for sale. It was pointless for politicians to delay the sale to avoid the issue, he said.

"There will be an enormous electoral backlash if Satyam remains unsold and fails. If 50,000 people are suddenly out of work, it will be a huge problem," said Mr Annaswamy, whose Sydney-based company gives advice on offshore outsourcing.

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[zuoom]

sounds like there's more skeletons in the closet for Satyam.

either that, a viral news in the market to drive down the price of Satyam in order for the potential buyer.

but if i'm reading this article right, it's basically saying no one wants Satyam, and it would probably be split into smaller units.

[zuoom]

more indian stuff. nothing to do with Satyam though.

India Food Prices Climb 19.95%; the Most in 11 Years (Update1)
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By Kartik Goyal and Manish Modi

Dec. 17 (Bloomberg) -- India’s wholesale food prices rose at the fastest pace in eleven years, raising concern that the central bank may increase borrowing costs to curb inflation.

An index of food articles compiled by the commerce ministry increased 19.95 percent in the week ended Dec. 5 from a year earlier, following a 19.05 percent gain in the previous week. A measure of fuel and electricity prices rose 3.95 percent, the ministry said in a statement in New Delhi today.

The central bank may tighten monetary policy to help contain a spillover from food-price inflation after gauging prices in December, Chakravarthy Rangarajan, economic adviser to Prime Minister Manmohan Singh, said Dec. 15. The Reserve Bank of India is scheduled to review interest rates on Jan. 29.

“When growth is subdued, inflation can be ignored,” said Sonal Varma, a Mumbai-based economist at Nomura Holdings Inc., Japan’s largest brokerage. “However, with both growth and inflation surprising on the upside, we believe that a policy action is imminent.”

India’s economy expanded 7.9 percent in the three months to Sept. 30 from a year earlier, the fastest pace in 1 1/2 years, the government said Nov. 30. India’s exports rose 18 percent in November - the first increase in 14 months.

Parliament Disruption

Opposition lawmakers yesterday accused the government of being ineffective in tackling soaring food prices and disrupted parliament, forcing the speaker of the lower house to adjourn for the day.

Inflation in India is accelerating as the weakest monsoon since 1972 and floods in some parts of the country hurt farm output and caused shortages. Varma expects inflation to accelerate to 8 percent by March 31, more than the central bank’s 6.5 percent estimate.

Reserve Bank Governor Duvvuri Subbarao said last week that action may be needed to stabilize inflation expectations if food-price increases persist for “a long time.” The central bank could reduce liquidity or raise policy rates, Rangarajan said Dec. 15.

Subbarao started to withdraw India’s monetary stimulus in October by ordering lenders to put a greater proportion of deposits in government bonds, even as he kept the reverse repurchase rate unchanged at 3.25 percent since April.

Tighter Policy

“Rising inflation tends to immediately fuel expectations of policy tightening,” said Siddhartha Sanyal, an economist at Edelweiss Capital Ltd. in Mumbai. “Irrespective of whether RBI touches first the repurchase rate or the cash reserve ratio, it will try to ensure that the impact on lending rates is not much,” to protect growth.

India releases weekly inflation data for wholesale food and fuel prices and an aggregate monthly wholesale index, which rose 4.78 percent in November, the most in 10 months.

To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net.
Last Updated: December 17, 2009 01:36 EST

via : http://www.bloomberg.com/apps/news?pid=20601091&sid=a.r2R8NWzab0

[zuoom]

Temasek To Invest Rs 300 Cr (US$60 Mil) In India's Micro Finance Institution Spandana Sphoorty Financial Ltd

http://www.vccircle.com/500/news/temasek-to-close-rs-300-cr-investment-in-spandana

Vvcircle.com, 3 Sep 2009

Temasek To Close Rs 300 Cr Investment In Spandana

Singapore government-sponsored investment house Temasek Holdings is close to investing $60 million or Rs 300 crore in Hyderabad based Spandana Sphoorty Financial Ltd. According to sources, the deal is being closed at $400 million or Rs 2,000 crore valuation.

VCCircle had reported last week, quoting Spandana's CEO Padmaja Reddy, that the microfinance institution would be closing a $60 million deal this week. When contacted, Manish Kejriwal, Senior Investment Director, India & International, Temasek Holdings, told VCCircle, “We haven’t closed the deal.” Reddy was not available for a comment.

If the deal goes through, this would be third investment by Temasek in financial services space. It had earlier invested in non banking financial services company Fullerton India and also in ICICI Bank.

In Spandana, Temasek could be buying out half the stake of Lok Capital, which holds 5% stake in Spandana. Lok Capital is looking at divesting 50% of its interest, Reddy had told VCCircle last week. The other stakeholders in Spandana include JM Financial PE fund (18%), Valiant (11%) and senior employees (15%).

Spandana, like many other MFIs like SKS Microfinance, has been aggressive on the capital-raising front. It has already raised debt to fund its growth plans. In June, it raised Rs 80 crore via non-convertible debentures. Also, it recently concluded Rs 50-crore ($12 million) loan deal with Rabo Bank, a Dutch cooperative.

Private equity and venture capital investors have taken a serious shine to the MFI sector, although there is a refrain that the sector is overvalued.

Earlier this year, SKS Microfinance raised Rs 75 crore ($15.8 million) through a one-year non-convertible debenture issue at a coupon rate of 10%. In late 2008, SKS raised Rs 366 crore ($75 million) with investments from Sandstone Capital, Kismet Capital and SVB India Capital partners. Fellow Andhra Pradesh MFI player Share Microfin is also in the process of raising $50 million from International Finance Corporation, the private equity fund of World Bank, and others. In April, Bhartiya Samruddhi Finance Ltd raised $10 million.

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Asia
HOME > BREAKING NEWS > ASIA > STORY

Dec 3, 2009
$1.4b loan to clean Ganges

The World Bank has agreed to loan India US$1 billion (S$1.4 billion) to help clean the Ganges river, sacred to hundred of millions of Hindus and also one of the most polluted rivers in the world. -- PHOTO: AFP

NEW DELHI - THE World Bank has agreed to loan India US$1 billion (S$1.4 billion) to help clean the Ganges river, sacred to hundred of millions of Hindus and also one of the most polluted rivers in the world.

'The bank would be honoured to help and support India's renewed endeavor to revitalise this uniquely important river,' World Bank President Robert Zoellick said.

The loan to clean up the 2,490-kilometre river will be spread over the next five years, he said in a statement released late Wednesday.

Scientists say massive amounts of human and chemical waste have devastated the river, which spills from a Himalayan glacier and cuts through India's plains before flowing into the Bay of Bengal.

Earlier this year the Indian government set up a National Ganga River Basin Authority as part of a plan to ensure that by 2020 no untreated sewage or effluents will be discharged into the river. The government estimates that nearly $4 billion will be required to meet the target.

More than 350 million people across several Indian states live in the river's watershed. -- AP

Home > Breaking News > Asia > Story
Sep 23, 2009
US$4.3b loan for India
WASHINGTON - THE World Bank on Tuesday announced US$4.3 billion (S$6.06 billion) in loans to India, including US$2 billion for the banking sector, to help strengthen its economy amid the global economic crisis.

LOAN IS FOR 30 YEARS
THE loan is for 30 years and includes a five-year grace period in which India is exempt from repayments.


A 28-year loan of US$1.195 billion was aimed at increasing the availability of long-term financing for the India Infrastructure Finance Company to provide public-private financing of infrastructure projects.
... more
The World Bank said its executive board approved loans for projects in five countries, with the loans for India by far the largest.
The four projects worth US$4.3 billion to India are 'designed to support the government's infrastructure agenda and bolster its economic stimulus program,' the Washington-based development lender said.

The bank noted that after a period of high economic growth - which reached 9.7 per cent in 2006-07 - the onset of the global financial crisis in 2008 saw a decline in India's growth rate to about 5.0-6.0 per cent in the fourth quarter of 2008-2009.

The bank projected a 'realistic' growth rate of between 5.5 and 6.5 per cent for 2009-2010 for Asia's third-largest economy, after Japan and China.

'This is a crucial time to support India,' Roberto Zagha, World Bank country director for India, said in a statement.

'While the worst of the crisis seems to be behind us, doubts linger about the strength of the comeback, partly because the strength of the global recovery is uncertain. Today's support will help maintain credit growth and continued infrastructure investments,' he said.

Mr Zagha said supporting infrastructure development was crucial to 'lay the foundations for stronger future growth.'

The World Bank said it had extended a two-billion-dollar loan to support the banking sector, in response to a request from the Indian government to support stimulus measures to counter the worst global downturn in six decades.

'This will help maintain the confidence of the public in the banking sector, prevent shortages of capital from leading to a slowdown in credit growth, and provide a capital buffer to public sector banks to absorb the possible increase in non-performing assets resulting from the global financial crisis and its impact on India's economy,' it said. -- AFP

Fullerton India set to wind up sub-prime lending
December 17, 2009 07:25 PM |
Sucheta Dalal & Yogesh Sapkale

When the liquidity crunch began, some of the large NBFCs found themselves squeezed by rising defaults as well as ballooning collection costs, forcing them to scale down operations.

Fullerton India Credit Co Ltd, an indirect subsidiary of Singapore-based Temasek Holdings, was among the last financiers still willing to bet on India's sub-prime or unsecured borrowers. According to sources, it is now set to join the ranks of Citi Financial, GE Money, ICICI Bank and others who have bailed out of this market because of losses suffered due to the difficulty in loan recovery.
The exit of these lenders has however deprived a big segment of the low-income market, which comprised tiny, independent entrepreneurs.

The root cause of the demise of this business is the misbehaviour of recovery agents which led to a few suicides and attracted enormous bad press. This led to police action against the lenders as well as warnings of stringent penalties by the Reserve Bank of India. Another big setback in the recovery process is the lack of sympathy for lenders from the judiciary as well. Some finance companies had attempted to dispense with uncouth recovery agents and use the judicial route (filing Sec 138 complaints against cheque bouncing); however, this only meant long delays, high legal costs and judges who would not look at the entire repayment but focus on specific bounced cheques. Clearly, this route too was unworkable and created an environment where it was an advantage for borrowers to fudge and default on repayments.

While many exited the business, those like Indiabulls, Bajaj Finance, Shriram City Union Finance and Fullerton India had attempted to struggle on for a while. When the liquidity crunch began, these large players found themselves squeezed by rising defaults as well as ballooning collection costs, forcing a few to scale down operations.

During FY09, Citi Financial brought down its branch network from 450 to 170 branches, while GE Money reduced its branches from 180 to 80. Earlier in March, Fullerton India gave pink slips to nearly 3,000 employees (20% of its workforce) and also shut down around 50 branches owing to the liquidity crisis. At that time, the credit company had 800 branches across the country and employed around 14,000 people.

As of March 2009, Fullerton India had disbursed about Rs5,000 crore and had an asset book of Rs2,500 crore. About 70% of Fullerton India\'s lending portfolio constitutes loans to the self-employed segment; the remainder consists of loans to salaried individuals and two-wheeler loans.

Fullerton India provides financial support to customers through Fullerton India Parivaar and Fullerton India Vyapaar. Fullerton India Parivaar caters to the needs of salaried individuals while Fullerton Vyapaar provides finances to self-employed people in small and basic businesses.

In October 2009, Fullerton India appointed Ruben de la Mora as its chief executive and managing director, replacing GS Sundararajan. Mr Sundararajan was instrumental in leading a team of professionals at Fullerton India in building from scratch a network of over 800 branches across 400 towns and cities with over 12,000 employees.

[zuoom]

http://online.wsj.com/article/SB10001424052748703369704575462770053958664.html?mod=googlenews_wsj

By MUKESH JAGOTA and ANANT VIJAY KALA

NEW DELHI -- The Indian economy grew 8.8% from a year earlier in the April-June quarter, driven mainly by the strong performance of the manufacturing sector and services such as trade, hotels and communications, according to data issued by the Central Statistical Organisation Tuesday.


A laborer welds metal in an industrial area of Mumbai on August 12, 2010.

The growth was higher than the 8.6% expansion in the previous quarter and a tad below the median 8.9% forecast in a Dow Jones Newswires poll of 19 economists.

India's gross domestic output had increased 6.0% in the April-June quarter a year earlier.

For the fiscal year ended March 31, the economy expanded 7.4% and the government projects it will grow more than 8.5% in the current fiscal year.

Write to Mukesh Jagota at mukesh.jagota@dowjones.com and Anant Vijay Kala at anant.kala@dowjones.com

[zuoom]

Here is Times of India article on 31% drop in FDI.  Investors looking elsewhere?

Global FDI flows to India down 31% in 2010: UNCTAD
PTI, Jan 17, 2011, 10.31pm IST
Tags:UNCTAD|James X Zhan|Global FDI flows to India GENEVA: Global foreign direct investment (FDI) flows into India dropped by over 31 per cent in 2010 despite robust economic growth, according to the United Nations Conference on Trade and Development (UNCTAD).

However, China and other countries in South-East Asia continued to witness massive FDI flows, UNCTAD said in its Global Investment Trends Monitor report issued on Monday.

UNCTAD says global FDI flows remained almost stagnant in 2010, increasing by 1 per cent to USD 1.122 trillion.

UNCTAD forecasts that global FDI flows are likely to remain between USD 1.3 trillion and USD 1.5 trillion in 2011.

FDI inflows into India amounted to just USD 23.7 billion last year, as against USD 34.6 billion in 2009. "In India, we have seen a sharp decline and we can't explain why this has happened," said the UNCTAD's investment and enterprise division chief, James X Zhan, who prepared the investment report.

"We don't have the analysis," he said, maintaining that the decline in global FDI flows into India was based on the figures compiled by the central bank.

However, in sharp contrast, China received FDI worth USD 274.6 billion last year, compared to USD 233 billion in 2009. There is a "structural change," Zhan said in regard to the higher FDI flows to China, which is receiving huge investments on services and research and development activities.

Many Western companies have shifted their research facilities to China and there is rapid development in the hinterlands of the Communist country as well.

The sharp increase in global FDI flows to East and South-East Asian countries and Latin American nations in 2010 marked the first time that developing countries outpaced rich nations in attracting foreign investments.

China, Hong Kong and other South-East Asian countries like Indonesia, Malaysia, Singapore and Thailand were the main beneficiaries of the heightened FDI flows in the form of mergers and acquisitions (M&As) and greenfield investment.

Part of the reason for the stagnant investment flows the world-over was largely due to the poor performance of the developed economies, especially European countries, which were the worst-hit by the global financial turmoil.

The United States, which was the epicentre of the global economic meltdown in 2008, is gradually recovering from the crisis, with FDI flows increasing by 40% last year to USD 186.1 billion from USD 129.9 billion in 2009.

"The quarterly fluctuations during 2010 indicate that the worldwide FDI recovery is still hesitant," said the report.

Several risk factors such as the slow global economic recovery, investment protectionism, rising sovereign debt and continued volatility in the currency markets are likely to slow down the pace of foreign direct investment across the globe in 2011, it said.




Read more: Global FDI flows to India down 31% in 2010: UNCTAD - The Times of India http://timesofindia.indiatimes.com/business/india-business/Global-FDI-flows-to-India-down-31-in-2010-UNCTAD-/articleshow/7307111.cms#ixzz1BhAq5mVd

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