Fin Weekly 2nd August - 8th August

group no. 7 (Cashonova Members 2012)

Ankit srivastav

Parndeep ahluwalia

Aatish kumar

Maneet tendon

Akshay subramaniam

Krishna kaushal

Industry wise analysis

1. Telecom Industry:

a) GSM operators owe Govt Rs 451 Cr: Bharti Airtel, Vodafone, Reliance Communication and other GSM telephone operators owe government over Rs 451 crore in license fee and spectrum charges.

Bharti Airtel owes the highest amount of Rs 135.11 crore in spectrum charges and another Rs 0.44 crore in license fee dues. Vodafone had an outstanding of Rs 71.77 crore towards spectrum charges while R-Comm owes Rs 48.54 crore towards license fee.

The Govt has so far collected Rs 70,000 crore from telecom operators in license and spectrum fee.

b) Zain receives $295.4 mn from Bharti for Africa sale: In June, Zain and Bharti closed a $9 billion deal for the Kuwaiti firm's African assets excluding Sudan and Morocco. Zain had received $7.87 billion after the closing, and said it would receive a further $400 million within 12 months after completing other formal requirements. The amount received is part of the $400 million, a Zain spokesman said. The remainder $100 million is expected to be received within the next ten months, the statement said.

c) Android set to overtake iPhone: Android is taking the smartphone market by storm. Android would have a 19.4 percent share of the market, compared to 15.9 percent for the 62 million iPhones that are predicted to be sold by 2012.

d) For MNCs, India's artificial intelligence is hard to ignore: For the first time in the history of IBM, a non-US lab was asked to lead a Big Bet. The mobile platform is a huge focus area for IBM with 60-80 research projects under way globally. The Indian Lab was chosen to lead this effort due to both the size of the local mobile phone market that adds nearly 10 million users every few months and the innovative research that has come from local centres.

e) Rival brands see opportunity in BlackBerry, Nokia woes: According to estimates by Strategy Analytics, the installed base of smartphones in India is about 7 million. The segment constitutes around 3% of India’s total mobile phone market. The government’s scanner on BlackBerry’s and Nokia’s messaging services may have ignited security-related concerns about the future of push email and messenger services on mobile phones in India, but the industry believes such services will not take a hit.

On the contrary, mobile phone brands like HTC, Samsung and Acer feel this could be a blessing in disguise for smartphones with similar capabilities.

2. Auto Industry:

a) Hyundai to ramp up production capacity by 12 pc: The country's second largest carmaker, Hyundai Motor India said it will increase production capacity by about 12 per cent to 6.7 lakh units per annum at its Chennai facility. The company is expecting to sell 3.4 lakh units in the domestic market this year compared to 2.9 lakh units in last year.

Earlier this week, the country's largest carmaker Maruti Suzuki India launched a 1,000cc variant of its best seller Alto, mainly to lure customers opting for Santro, i10 and General Motors' Spark. It, however, decided to continue with the 800cc Alto to offer more choices.

b) Mercedes plans to enter small towns to drive sales: On a roll following its highest-ever sales in a month and for the first seven months, luxury carmaker Mercedes Benz will aggressively target Tier II and III towns across the country as well as Indian corporates.

There is pressure building in top Indian companies like Infosys, TCS, etc, for a change in their car policies. When senior executives of these companies go abroad, they routinely use luxury cars but not in India. For Benz, the two major drivers for sales in India in the future are this mindset change among Indian companies and demand from Tier II and III towns. 15-30% of total sales is expected to come from upcountry (Tier II and III) cities. Among the states, with strong demand from smaller towns and cities are Gujarat and Kerala.

3. Service Industry:

a) Indian IT industry slams US move to hike visa fee: The Indian IT industry slammed the US government's proposal to sharply increase visa fee to raise funds for its border security needs.
The Border Security Bill, which was passed by the US senate will have a significant impact on the Indian IT sector, as it aims to raise about $600 million by increasing fee for H-1B and L-1 visas.
The proposed hike is expected to be about $4,500 per visa from $2,500 currently.
The impact on Indian IT firms is estimated could be as high as $200-250 million per year.

b) CAT 2010 duration to be increased: The test will be held over a longer test window of about 20 days in 33 cities this year. Since the duration of the test will be longer, the number of centres in which it will be conducted will come down.

c) Shortage of 1.2 mn teachers in India: Sibal: In some states, it was found that all deployment (of teachers) is done in one school while there are no teachers in others. We need to redeploy teachers so that there is equal distribution of teachers

4. Banking & Finance Industry:

a) ICICI, HDFC Bank violating norms on recovery agents: Govt: The Govt has received several complaints against private sector lenders including HDFC Bank and ICICI Bank of violating RBI guidelines on engagement of agents to recover loans. On the remedial measures, RBI has issued detailed guidelines to banks on engagement and training of recovery agents. Banks have been advised to ensures that the recovery agents are properly trained to handle with care and sensitivity particularly in aspects like hours of calling, privacy of customer information etc.

b) Banks not following RBI norms for opening no-frill accounts: FM: Government today admitted that certain banks were not following guidelines on opening no frill, zero balance accounts in rural areas and said efforts were being made to make banking facilities available to remotest part of the country through various means.

c) Govt asks banks to speed up loan disbursements under PMEGP: The government on Wednesday asked banks to speed up disbursement of loans under the Prime Minister's Employment Generation Programme (PMEGP) to meet the target of financing over 59,000 projects in the current fiscal. Under the PMEGP, urban and rural entrepreneurs in the general category can avail a subsidy of 15 per cent and 25 per cent on the project cost. In the case of weaker sections of society, a 25 per cent and 35 per cent subsidy is provided to urban and rural businessmen.