Monday, August 01, 2011

Can the new take over norms turn the tide for plunging Indian M&A?

The M&A scenario in India has been plummeting off late, due to various reasons like tattered stock market sentiments, concerns over India’s GDP growth and the burgeoning inflation. But with SEBI now coming up with new takeover norms, it will be interesting to see how the next quarter pans out for M&A in India.

Read my new blog on the M&A scenario in India in the scond quarter of 2011 and the new norms laid down by SEBI to boost and simplify M&A in india.

Can the new take over norms turn the tide for plunging Indian M&A?

Notes: Includes deals announced in the period of April-June 2011; Includes acquisitions, joint-ventures and stake sales.
Source: ISI Emerging Markets Database

Sunday, July 24, 2011

Opportunities for Australian businesses in India

The Indian growth story is well known to all, yet economic growth in India has not been uniform. Growth has been primarily driven by the services sector leaving glaring gaps for investment in the areas of infrastructure, agriculture and manufacturing. Meanwhile with the global recession, growth in developing economies has slowed down considerably and countries like Australia are looking for newer avenues of investment. India’s stable political government, rapidly growing middle class and high domestic savings rate make it a good investment bet for Australia. India and Australia have enjoyed a healthy trade relationship with bilateral trade between the two countries increasing from less than USD 3bn in 2002-03 to around USD 20bn in 2009-10.
While numerous opportunities for investment exist in India for Australian companies, navigating through the large and diverse Indian market is not an easy task. Typical challenges for companies include inadequate infrastructure, inefficient bureaucracy, corruption, limited market information and the presence of a large, unorganized market. In such a scenario, having the right market information is the key to unlocking the big, fat Indian market.
This white paper discusses in detail:
  • The India-Australia story so far
  • Current investment opportunities in India for Australian companies
  • Challenges of doing business in India
  • The key to a successful investment in India

To download the white paper, please follow:

Sunday, June 05, 2011

Jhoom Jhoom Jhoom Baba

When a simple old man in white kurta-pyjama and a Gandhi cap stood up against corruption in India, the entire nation stood behind him. Anna Hazare found support from the masses as well as the classes. But when Baba Ramdev stands up to corruption, how come he doesn’t get the type of support that Anna got?

If you really consider the difference between Anna and Baba, Anna is as an affable straight forward honest social reformer who has transformed Ralegaon Siddhi from being a village afflicted by drought, poverty and illicit liquor to a model village where he carried out programs like tree planting, terracing to reduce soil erosion and digging canals to retain rainwater. He has no political aspirations, no religious followers and no hidden agenda. His organization does not even accept donations. His simple Gandhian principles struck a chord with Indians when he took up the crusade to fight against corruption. The educated lot, especially people form the middle class and college students put their hand up in his support, as social network sites went into frenzy. Anna even had support from eminent citizens such as social activist and a retired Indian Police Service (IPS) officer Kiran Bedi, Ramon Magsaysay Award winner Arvind Kejriwal and former Law Minister of India Shanti Bhushan who stood solid behind him.

And then we have Baba Ramdev on the other end. The one eyed bearded Baba runs a multi crore yoga and Ayurveda empire and flies around in a private jet. He has soared to celebrity status on television with crazy ideas and huge ambitions. He has hordes of religious followers and now his empire is expanding to far away locations like Scotland. There was a current news in the papers, where one of his associate claimed that the last balance sheet filed by Baba Ramdev was for more than 1,000 crore Rupees. Not to mention his political aspirations, where he has his own party called Bharat Swabhiman and wants to field candidates in all the 543 Lok Sabha seats.

So it’s not surprising that the educated rational Indian feels that the Baba is a distrustful attention seeker whose crusade against corruption is nothing but a sham to garner more publicity. His campaign appears to be a RSS-BJP backed strategy to corner the government. People do not want him to hijack their mandate for personal gains. I think it’s high time these self proclaimed gurus realise that you can’t take the common man for a ride anymore! Baba Ramdev should stick to his “Jhoom Jhoom Jhoom Baba” routine on Astha channel. Not everyone can be Anna Hazare . . .

Saturday, May 28, 2011

Will the Lokpal bill boost India's waning investor confidence?

Today corruption is one of India's biggest problems. India's business and investment climate is perceived abroad as at grave risk from corrupt practices. In 2010 India was ranked 87th out of 178 countries in Transparency International's Corruption Perceptions Index. So how is corruption affecting investor confidence in India?

As per the seventh wave of Investment Confidence Index (ICI) survey report by JP Morgan and ValueNotes, after inflation, corruption is second most negative economic indicator currently for Indian investors.

Follow the below link to read more about how corruption is affecting investor confidence in India.

Source: JP Morgan and ValueNotes Investment Confidence Index (ICI) survey, 7th wave

Saturday, April 16, 2011

Macroeconomic factors dragging down M&A in Q1 2011

Though experts had expected a huge rise in Mergers and Acquisitions deals in 2011, the first quarter has been a drab, with only 40 M&A deals being announced. This was mainly due to high valuations and increasing uncertainty about macroeconomic factors such as fiscal deficit, interest rates and inflation made corporates watchful.

But going ahead, I expect a much better performance, as cash-rich Indian companies continue to hunt for strategic bargains globally. We could see a particular focus on Indian public sector companies targeting global oil assets as well as domestic companies looking to acquire iron ore and coal for their growing steel and power operations.
Please follow the link below to see my analysis of the M&A sector in India for the first quarter of 2011.
Source: ISI Emerging Markets Database

Sunday, March 20, 2011

Do we really need to play cricket in the night?

The Cricket World Cup is in full swing and the entire nation is gripped with fervour. We’r having matches everyday and the cricket crazy public is lapping it up.

Nearly 40 out of the 50 matches will be day-night affairs. Thousands of watts of electricity is used for these day night matches which can easily be diverted for better usage. Most cities in India still have power shedding everyday. I understand that cricket is a huge revenue generating business today. But we need to be realistic and think about the bigger picture.

Some time back there was a report in the papers which said that Dhaka the capital of Bangladesh faced a blackout because a day night match was being played at the Shere Bangla stadium! Further factories in Bangladesh were asked to shut down to prevent power cuts during big matches! I mean is the game more important than the people?

I can understand a big match being played under lights. But matches like Canada v/s Netherlands? Do we really need such matches under flood lights? Who’s really gonna watch those matches? I’m sure even people in Canada and Netherlands don’t spend their entire day watching these matches!

Also why do we need matches played on the weekends to be day nighters? Can’t we have at least those matches in the day?

Some people argue that the days are too hot to play cricket. But test cricket is played during the day and that too for 5 days in a row! So surely we can’t complaint that playing in the day is not possible.

We'll have the IPL 3 starting next month which means another 74 day-night matches! I think one solution could be that the stadiums which host day night matches should install solar panels and generate their own electricity. The cash rich BCC can surely afford that and contribute to the society.

Thursday, February 17, 2011

Onions making the Indian markets cry

Some time back there was this interesting quote in the newspapers: “Onion Rs 65/kg, Petrol Rs 65/litre, Beer Rs 65!”, where in for the first time need, comfort and luxury demanded the same market price. That is assuming onions are still a basic need!

Inflation has been one of the biggest worry for Indian investors. Please see the below link to access the blog which I wrote to understand how inflation has affected Indian financial investors in the last quarter of 2010.

I have used some findings from the Investment Confidence Index survey report by JP Morgan and ValueNotes.

Tuesday, January 18, 2011

M&A back with a bang in 2010

The year 2010 saw the mergers and acquisition sector back with a bang as Indian M&A activity increased by nearly 80% over the last year and by more than 100% over calendar year 2008. I have tried to analyze the trend in the Indian M&A sector for the last 3 years and also looked at the top deals for 2010.

Please click on the below link to read my analysis on the M&A scenario for 2010:

I have used ISI Emerging Markets Database for the analysis.

Interview Bloopers

Over the last few years that I have been conducting interviews at VN as well as at my earlier jobs, there have been many memorable inst...