How to make IPL a brand

IPL has generated lots of debate not only among the marketers but also among the common people. One thing is for sure-you can love IPL or you can hate IPL but you cannot ignore IPL. Since day 1 IPL has been in limelight. Be it the cheerleaders or the infamous ‘tamacha’ incident-all these have ensured that everyone is talking just about IPL.

Remember those old days when people patiently used to watch a cricket match for complete five days and at the end of the fifth day they were informed that neither side has won. It was the “one day” format which made cricket popular. “Twenty 20” is the shortest version of the game and today its popularity is increasing every day.

The IPLT20 format is a new product which has been launched for the existing customers. In order to be relevant it is important that a product adapts itself to the changing circumstances. Today people lead a very busy life so spending 5 day or even one complete day just for watching a match is not possible. So there was a need for the shorter format.

In fact this shorter version of the game will find wider acceptability in the American and European market in the future. Initial excitement of the tournament can be gauged by the TV ratings and packed stadiums. IPL has the potential to become a brand (may be an iconic brand).

The marketer should focus on four important elements if they want IPL to become a Brand.

• Differentiation
• Relevance
• Esteem
• Knowledge

DIFFERENTIATION: The IPLT20 tournament can be easily differentiated from the other version of the game. The IPLT20 tournament is different from test or one day because it has speed, glamour, action, drama, excitement-all these in just 3 hours. Here the players do not play to save their wickets instead they play to score more and more runs. Fours, sixes and quick singles make the match interesting. In fact action is there whenever a ball is bowled. It suits people’s hectic lifestyle.

RELEVANCE: In order to make the brand more relevant it is important that the club players should participate proactively in the local activities. This would help them to get connected to the people. The club players should give a feeling to the people that they are committed to the club for which they are playing.

Club Issuing Shares:

• However I have a different opinion on this matter. In my view each club can act as an individual company and should issue shares. People should be allowed to purchase the shares. Market capitalization of the club will depend on the valuation of the shares which in turn will depend on the performance of the club.

• Once people purchase share of a particular club then they will be easily able to associate themselves with that particular club. The player’s compensation will also depend on the valuation of the company which in turn will depend on the performance of the club.

• Moreover a resident of Delhi will always prefer purchasing shares of Delhi Daredevils. He will definitely not go and purchase share of a rival club. However people of cities like Patna, Lucknow, Ranchi etc. which do not have a team will be open to back any club depending on their personal preferences.

• If money will be involved then definitely a desire will be there that their club does the best. This will help in developing loyalty for the club. The players too will become more accountable and will endeavor hard to produce better results.

ESTEEM & KNOWLEDGE: This talks about the past performance and hence will start playing a major role once IPL gets older.

Differentiation and Relevance which constitutes the brand strength helps in determining the brands future value. Esteem and knowledge constitutes the Brand Stature. Since the brand is new so emphasis on differentiation and relevance should be more and in due course of time esteem and knowledge about the brand will develop.

Along with the above mentioned measures better promotional strategy is a must. These steps will definitely make IPL an iconic brand.

25 Business Capsules

Date: 30 th May, 2008

1. Vodafone’s revenue in India has increased by 50% in the fiscal year 2007-08.

2. Vodafone’s revenue for the fiscal year 2007-08 which ended in March was Rs 15,288.3 crore.

3. However Bharti Airtel’s & Reliance Communications revenue was higher than that of Vodafone.

4. Bharti Airtel’s revenue for the given period was Rs 27,025 crore & that of Reliance Communications was Rs 18,827.4 crore.

5. Vodafone’s global operation has grown by a margin of 14% during this particular period.

6. India at presents accounts for 5% of Vodafone’s global revenue.

7. Vodafone’s subscriber base till March 31st 2008 was 44.1 million.

8. At present this UK based mobile company is adding 1.5 million subscribers per month in India.

9. The subscriber base of Airtel during the given period was 64.3 million & that of Reliance communication was 45.8 million.

10. Mahindra & Mahindra of India is planning to invest about Rs 2000 crore in its automobile business.

11. Nissan Motor and Ashok Leyland have decided to invest $575 million in their three joint venture companies.

12. Earlier (7 months back) both the companies had decided to invest $500 million.

13. The three joint ventures are in-manufacturing vehicle, technology development and the manufacturing of powertrain.

14. Nissan is a Japanese automobile company.

15. India’s Tata Motors expect to complete the Land Rover and Jaguar deal by this years June.

16. Tata Motors had agreed to purchase both the companies for $.2.3 billion in March 2008.

17. Life Insurance Corporation (LIC) of India is planning to recruit 3 lakh agents.

18. LIC is the biggest insurance company of India.

19. Government of India has decided to relax the External commercial borrowing (ECB) norms; as per the new norm companies can now borrow up to $ 50 million.

20. For the infrastructure company borrowers the limit of ECB has been raised to $ 100 million.

21. Earlier the borrowing limit as per ECB norm was $ 20 million.

22. Telecom Regulatory Authority of India (TRAI) has decided to lay down norms for Value Added services (VAS) in India.

23. Currently 10%-14% revenue of telecom companies comes from VAS.

24. It is expected that within 5-7 years the revenue from VAS will cross 30%.

25. All non-voice services such as SMS, GPRS, entertainment, music and mobile commerce are classified as VAS.

Business Updates

Videocon’s New Move:

Owing to increase in purchasing power Indian consumers are now consuming more and more. Venugopal Dhoot, chairman Videocon Group, does not want to be left behind. He has decided to foray into new markets in India like power, retail, DTH and telecom. How much success he gets only time will tell? One of the biggest ambitions of Videocon is to become one of the top five brands in the consumer electronics segment. The group is to face stiff competition from Sony, LG and Samsung.

• Videocon (India): $2.74billion.

• Sony (Japan): $52.87billion.

• Samsung (South Korea): $63.4 billion.

• LG (South Korea): $47. 45 billion.

Business of Steel

• The demand for steel is growing very rapidly in India. It is estimated that by 2012 India will require 124 million tones of steel as against 50 million tones which is being consumed annually now.

• ArcelorMittal, Tata Steel, BlueScope Steel and Essar Steel are planning to buy a stake in the PT Krakatau Steel of Indonesia.

• ArcelorMittal, Luxembourg based world’s largest steel producer, sold 509.8 million shares (17.4%) of China Oriental to Deutsche Bank and ING Bank NV. The move was meant to ensure that the company remains listed in Hong Kong. It is mandatory for any company to make a quarter of their shares available to public to remain listed in Hong Kong.

Foreign Direct Investment For Financial Year 2007-08

• India: $ 24.57 billion

• China: $82.70 billion.

• Brazil: $ 37.40 billion

• Russia: $27.80 billion.

Microsoft vs. Yahoo

• Microsoft gives up its plan to buy Yahoo.

• Microsoft had offered to pay $47.5 billion i.e. $33 per share.

• However Roy Bostock, Yahoo Chairman demanded $37 per share which Steve Ballmer, Chief Executive of Microsoft, refused.

Business of Banks (SBI)

• Net profit of State bank of India (SBI) was Rs 6729 crore in the financial year 2007-08 as against last years Rs 4541 crore.

• SBI declared a dividend of 215% for the year 2007-08.

• Deposits in the year 2007-08 was Rs 5, 37,406 crore as against Rs 4, 35,521 crore in the year 2006-07.

• The credit card business is a 60:40 JV between State Bank of India and GE.

25 Business Capsules

Date: 28th May, 2008

1. Ban on non-Basmati rice export from India has forced the rice exporters to knock the doors of the court.

2. Ban on export of non-Basmati rice came into effect from 31st March 2008.

3. According to the study done by HSBC, India’s GDP growth for the year 2008-09 will be 7%.

4. Last year India’s GDP growth was 8.5%.

5. ABN Amro to be re-branded as RBS in India.

6. ABN was acquired last year by a consortium led by Royal Bank of Scotland (RBS) along with Santander (Spain) and Fortis (Belgium).

7. ABN was bought for Euro 70 billion.

8. Arun Sarin who will complete his 5 years term in Vodafone has decided to step down as Vodafone’s CEO in July 29, 2008.

9. Vittorio Colao who at present is the deputy chief executive of Vodafone will become the company’s chief executive.

10. During his tenure Arun Sarin focused on emerging market like India.

11.He helped the company to acquire controlling stake in Hutchison Essar in India.

12. Satyam Computers and GE Healthcare have decided to join hands to provide Healthcare IT solutions.

13. Indian Government is planning to levy cess on income tax and corporate tax to bail out oil companies which are reeling under pressure due to steep increase in global oil prices.

14. If petrol, diesel, kerosene and LPG are sold at current rate then the state run oil companies in India will suffer a loss of Rs 2,00,000 crore in this fiscal year.

15. The state run oil companies are suffering from liquidity crisis.

16. Although Indian Oil has cash to import oil till September but HPCL and BPCL can finance import only till July.

17. Petroleum ministry wanted the custom duty to be brought to zero from the current rate of 5%.

18. It wanted the customs duty on petrol and diesel to be lowered to 2.5 % from the current rate of 7.5%.

19. Apart from customs duty the petroleum ministry also wanted a cut in the excise duty.

20. However P Chidambaram, India’s finance minister, refused any cut in excise or customs duty.

21. Oil companies in India are daily losing Rs. 580 crore.

22. Getting LPG connection in India has become costlier; now for new connection a customer will have to pay Rs 1250 per cylinder.

23. The previous rate was Rs 850 per cylinder; increase in the price of steel has been attributed as the reason for increase in price of the cylinder.

24. In the northeast region of India one will have to pay Rs 900 per cylinder as against Rs 500 which they paid earlier.

25. 10 million kitchens use cooking gas cylinder in India.

Controlling Inflation

Inflation has political ramification. If corrective measures are not taken at right time to rein inflation then it has the potential to bring down the government.

The government along with the central bank takes several steps to control inflation. Controlling inflation is Herculean task because sometimes there is very little which a government can actually do. Moreover inflation has spiraling effect i.e. it has overall impact on the economic growth of the country.

There are three types of inflation:

Cost-push inflation: It is due to supply side constraint.

Demand-pull inflation: Demand for product increases due to excess liquidity in the system.

Built in inflation: It occurs due to hike in wages which results into price increase.

Steps taken to control inflation:

Cost-push inflation: In case of cost-push inflation the government can do very little. It is not easy to increase the supply of the commodity overnight. However government takes certain measures to ensure that the essential commodities are available to its people. Ban is imposed on the export of certain items which is essential for the people and which are in shortages. Certain administrative measures are taken to see that the hoarders have not accumulated essential items.

Built in inflation: It carries the legacy of the past. It results into price/wage spiral. To curtail it certain price and wage control mechanisms needs to be adopted.

Demand pull inflation: If there is excess liquidity in the market then it also results into inflation which is termed as demand pull inflation. When people have excess cash they are ready to pay extra to buy products. This leads to overall increase in the price of the product. Both the government and the central bank intervene to control price rise. Central bank takes certain monetary measures to suck out excess liquidity from the market. It is done either by increasing the CRR (Cash Reserve Ratio) or by increasing the repo and reverse repo rate. It ensures that the excess liquidity from the market is sucked out which helps in controlling inflation.

Repo rate is the rate at which the central bank borrows money to flush out excess liquidity from the market. Reverse repo rate is the rate at which the central bank lends money. CRR is the statutory amount which any bank has to keep with the central bank.

Central bank has to be very cautious while taking these steps. Increase in interest rate will make money costlier and may control inflation but it may derail growth in the long run. Similarly increase in CRR will suck out liquidity from the market and in turn will decrease consumer demand. So, whatever monetary measures the central bank takes to rein inflation it has to ensure that it does not have catastrophic effect on the economy of the country in the long run.

Increasing the tax or reducing the government spending is certain fiscal measures which the finance ministry takes to control inflation.

Inflation cannot be controlled overnight. Whatever steps the government or the central bank takes will show results only after a month or two.

Measuring Inflation in India

Amongst the major economies of the world India is the only country which still uses WPI (Wholesale Price Index) to measure inflation. This method of measuring inflation has been criticized by many economists. Recently the government of India has decided to take certain corrective steps in measuring inflation.

WPI was first used in 1902. However by 1970 many developed countries like China, United States, Japan, Singapore, France, United Kingdom and Canada replaced WPI by CPI (Consumer Price index). But India preferred to stick to WPI.

In WPI the price changes in those goods and services are considered which are traded in the wholesale market for measuring inflation. In CPI only those goods and services are taken into account which is purchased by the people. The CPI lists are modified after every 4-5 years to keep it more relevant but such flexibility has not be shown in case of WPI.

There are about 435 commodities in WPI in India at present. The base year for calculating WPI in India is 1993-94. Economists assert that WPI is used to measure the impact of prices on business but in India it is used to measure the impact on consumers and moreover there are certain commodities in WPI which people do not even consume.

There are about 100 commodities which at present have become irrelevant to the people but are still there in WPI. An example is given of coarse grain which is used to feed the livestock but is still a part of WPI.

Shifting from WPI to CPI is not an easy task in India. First in India there are four types of CPI: CPI Industrial Workers, CPI Agricultural laborers, CPI Rural labor and CPI Urban Non-Manual Employees. Secondly there is lag in reporting the CPI figures. WPI is reported on a weekly basis whereas CPI is reported on a monthly basis.

Recent Initiative:

The need for change is being felt in the government circle. Government of India has decided to take corrective measures to make WPI more realistic. As part of the initiative the government has decided to release the actual price of the commodities on a monthly basis for the common people from May 2008.

The service sector tariffs such as hospital fees, railways and airlines fares which at present are a part of CPI will now also be included in WPI.

WPI will now comprise of 980 items instead of 435 and the base year for calculating WPI will be changed from 1993-94 to 2004-05. Items which have become irrelevant will be removed from WPI and new items will be added.

Later on WPI will be phased out and will be replaced by PPI (Producer Price index). PPI will comprise of the cost which the producers pay to procure raw materials and the output price which they receive on produced items. Taxes and exports won’t be a part of PPI but imports will be taken into account.

Such realistic approach will be highly effective in measuring inflation. Realistic and more relevant figures will help the common man. The government and the central bank will also be more pragmatic in devising policies.

Inflation

Inflation or price rise affects the common man directly and has devastating effect on any country’s economy. Inflation has spiraling effect and if not checked at the right time it would slow down the economic growth of any country.

Inflation is measured by monitoring the price index; the price index consists of thousands of products and services. Some of the key components of price index are:

Cereals, vegetables, pulses, meals, milk, milk products, oil, housing, fuel and light, education, transport and communications, medical care, personal care, recreation and amusement etc.

In every country the government keeps a close watch on inflation along with the central bank. Measures are taken to bring down the inflation to a certain tolerant limit so that the common man does not suffer.

Inflation is determined by calculating the rate of change in the price index. There are different ways to measure inflation. CPI (Consumer Price index) and WPI (Wholesale price index) are the two methods widely used to measure inflation. WPI was used previously but was later replaced by CPI by many developed nations to measure inflation. However there are few countries like India which still uses WPI to measure inflation.

Retail Price Index (used in UK), Cost of living indices, Producer price indices (similar to WPI), commodity price indices, GDP deflator, Capital goods price indices are few different ways by which inflation can be measured.

The three different types of inflation were described by Robert J. Gordon in his triangle model:

Cost-push inflation: Occurs when there is supply side constraint. Supply side constraint may occur due to several reasons like low production, increase in input costs, international conflicts etc. Generally there is little a government can do to increase the supply.

Demand-pull inflation: Occurs when the demand increases significantly. The increase in demand is attributed to the fact that there is excess liquidity in the market and people have high purchasing power.

Built in inflation: Most of the time employees force the employers to increase their wages. Due to increase in the wages the cost of production increases. In order to minimize loss the manufacturer passes on the cost to the consumers resulting in increase in the prices. This further leads to demand for more wage hike. Thus the increase in wage is linked to increase in price and vice versa. It results in vicious cycle and the government faces lots of difficulty in getting out of it.

In India WPI is used to measure inflation and not the CPI. Four different types of CPI which are applicable in India are:

· CPI-UNME: Consumer price index for urban non-manual employees.
· CPI-IW: Consumer price index for industrial workers.
· CPI-AL: Consumer price index for agricultural laborers.
· CPI-RL: Consumer price index for rural laborers.

Inflation is not just an economic phenomenon but it is also political in nature. Inflation has the potential to bring down governments. This is why the government proactively takes measures to cool down the prices.

25 Business Capsules

Date: 27th May, 2008

1. Iran may increase the production of oil to 4.3 million barrels per day by next year March.

2. Currently Iran produces 4.2 million barrels per day.

3. Among the Organization of Petroleum Exporting countries (OPEC), Iran is the second largest producer.

4. At present Iran’s reserve oil is 136 billion barrels.

5. India’s Videocon in talks with Motorola, a US based company, to acquire its mobile handset business.

6. Motorola’s handset business has about 15 % market share worldwide.

7. Motorola’s handset business is considered to be worth $ 3.8 billion.

8. Videocon is planning to launch its telecom services in India in a big way; it has already got license to operate in 22 circles in India.

9. Videocon will launch its service through its subsidiary Datacom.

10. The company wants to have over 10 % market share in India in the next five years.

11. India’s Communication minister A Raja has said that the foreign players will be allowed in the 3G auction.

12. Trai had previously opposed the move to allow the foreign players in 3G auction.

13. Moser Baer has suffered a net loss of Rs 78.90 crore in the fiscal year 2007-08 which ended on March 31st.

14. Moser Baer, an optical storage device manufacturing company, had posted a net profit of Rs 109.78 crore last year.

15. As per the survey done by Assocham and PricewaterhouseCoopers India’s telecom services will have revenue worth $ 35 billion by the year 2010.

16. The Indian telecom sector had revenue worth $22 billion in 2007.

17. India is the 2nd biggest wireless market of the world.

18. Spice Communications is planning to invest around $200-$300 million in India.

19. At present Spice Communications operate in two circles-Punjab and Karnataka- and expects to start its operation soon in Andhra Pradesh.

20. Spice has got license to operate in six circles but due to unavailability of spectrum the company is facing difficulty in starting operations.

21. Spice’s subscriber base on March 31st 2008 was 4.2 million.

22. Telekom Malaysia has 39.2% stake in Spice Communications.

23. Koita Manufacturing Co is in talks with Tata Motors to get contract for manufacturing the headlight of Nano, Tata’s 1 lakh rupee car.

24. Koita is the biggest manufacturer of headlamps in the world.

25. According to a report published by HSBC, rupee’s fall down against the dollar is due to increasing trade deficit which have occurred because of steep rise in the crude oil prices.

25 Business Capsules

Date: 26 th May, 2008

1. Reliance Communications (RCOM) of India may soon open talks with South Africa’s MTN for an alliance.

2. As per the initial reports MTN wants RCOM to transfer its 66 % shareholding to MTN.

3. After the transfer RCOM will become MTN’s largest shareholder by having a stake of 34 % in MTN.

4. However in such an alliance RCOM will become a subsidiary of MTN.

5. Talks between Bharti Airtel and MTN ended when MTN wanted Bharti Airtel to become a subsidiary of MTN.

6. The Indian government is planning to sell petrol at the market prices.

7. If petrol is sold at the market price in India then petrol will become costlier by Rs 16 –Rs 17.

8. RCOM has decided to buy Vanco which is a UK based Mobile Virtual Network Operator (MVNO).

9. The buyout will be 100 %.

10. Vanco has operations in about 200 countries.

11. Reliance industries Ltd may start is expected to start to start drilling in the KG block in the current year.

12. Vedanta Group is planning to set up a 5mt steel plant in Orissa (India).

13. To set up the steel plant Vedanta Group is in talks with 3 partners: Japanese, Indian and a European.

14. Vedanta Group is considering either to buy back all the shares in Madras Aluminum Company Ltd. (MALCO) or to dilute its five percent share.

15. Vedanta Group has 80 % share in MALCO.

16. Singapore is the largest container handling port of the world.

17. The throughput of the Singapore port has risen and at present it is 27.9 million TEUs.

18. Shipping Corp of India Ltd is planning to borrow $1.3 billion in order to purchase 28 vessels.

19. Export from India in the fiscal year 2007-08 which ended on March 31st was $155.5 billion.

20. The export had increased by 23% from the last year.

21. Imports too have increased by 27% in the fiscal year 2007-08. .

22. Import for the fiscal year 2007-08 was $ 236 billion.

23. Andhra Pradesh (AP) aims to increase the production of rice by 30% by 2011-12.

24. At present AP produces 1 lakh tonnes of rice which would be increased to 1.3 lakh tonnes by 2011-12.

25. In the year 2007-08 India produced

· Wheat:76.78 million tonnes.

· Rice: 95.8 million tonnes.

· Sugarcane:27 million tonnes

25 Business Capsules

Date: 23 rd May, 2008

1. Wheat procurement for the year 2008-09 (May 15, 2008) in India was 19.55 million tonnes.

2. During this period wheat procurement from Punjab was highest (9.7 million tonnes) followed by Haryana (5.16 million tonnes).

3. In the year 2007-08 the total wheat procurement in India was 11.13 million tonnes.

4. Vietnam is the world’s second largest exporter of rice.

5. $42 million agreement has been signed by India with United Nations Industrial Development Organisation (UNIDO) for the production of industrial units in an environmentally friendly manner.

6. The state of Kerala (India) has decided to set up hyper market in the state.

7. The cost of setting hyper market will be around Rs. 6.50 crore.

8. Hyper market will be set up at Ernakulam, Thiruvnanthapuram, Thalassery and Kottayam.

9. Telecom Regulatory Authority of India (Trai) is in favour of Mobile Virtual Network Operators (MVNO) services in India.

10. The controversy regarding MVNO started when Tata Teleservices and Virgin group entered into a Joint Venture wherein Tata Teleservices started offering services under the brand name of Virgin.

11. The public sector oil companies in India want to stop all new connections of (Liquefied Petroleum Gas) LPG.

12. Pidilite Industries is looking for acquiring majority stakes in the US and European countries.

13. CavinKare, a Chennai based FMCG company, is looking for acquisition of small food companies.

14. CavinKare had acquired Maa and had entered into the packaged fruit juice market.

15. Rising crude oil prices have forced Indian Oil Corporation (IOC) to reconsider its investment plan.

16. At present IOC is suffering a loss of Rs. 300 crore daily.

17. The loss in prices due to subsidy provided by the Indian government in the prices of diesel, petrol and kerosene.

18. At present there is a borrowing limit of Rs 50,000 crore for the oil companies from bank.

19. IOC has till date borrowed Rs 35,000 crore from banks.

20. Kabul is planning to ask for $50 billion at a conference in Paris for reconstruction in the next 5 years.

21. Japan’s GDP grew by 3.3% this quarter up from 2.6 % in the last quarter.

22. ArcelorMittal reported an increase of 5.4 % in its net income in this first quarter of 2008.

23. Lakshmi Mittal has become the chairman of ArcelorMittal after the retirement of Joseph Kinsch.

24. Lakshmi Mittal has the highest stake of 45 percent in ArcelorMittal.

25. The edible oil import in India has increased by 31% during November-April period.


Website: http://www.ebiz16c.blogspot.com

25 Business Capsules

Date: 22nd May, 2008

1. State Bank of India has decided to suspend loans for purchasing tractor and other farm equipments; however the measure is temporary.

2. The tractor loan at present is to the order of Rs. 7000 crore out of which 15% is NPA according to SBI sources.

3. SBI has agreement with leading tractor manufacturing companies like Mahindra & Mahindra, TAFE Ltd and Sonalika Group for tractor financing.

4. Pressure from Carl Icahn, a leading investor in Yahoo, has forced Yahoo group to reopen talks with Microsoft.

5. ONGC Videsh Ltd. has decided to give up its block in Ghadames basin, Libya.

6. The decision was taken because the block had become unprofitable for ONGC Videsh Ltd.

7. Lakshmi Machine Works (LMW), a textile manufacturing firm in India, has decided to set up a Greenfield project in China.

8. HCL Technologies, India’s software company, has said that the company expects to earn revenue of $100 million in next two years from West Asia.

9. In West Asia the company operates in the UAE, Kuwait, Saudi Arabia, Bahrain and Egypt.

10. At present HCL earns over $1.8 billion from abroad out of which 55% comes from US.

11. Microsoft had over 95% market share in the desktop market of India in 2006-07.

12. Windows 2000, Windows XP Home, Windows NT, Windows XP Pro, Windows 95/98, Windows Vista were the operating systems of Microsoft which were sold in India in 2006-07.

13. Personal Computer (PC) sales in India in 2007-08 were 5.75 million units.

14. The total installed base of PC in India is considered to be over 25 million units.

15. RPG group is planning to spend around Rs. 1000 crore in India for retail expansion.

16. Central retail brand of stores which is owned by Future Group is planning differentiated product and pricing strategy for different market.

17. Indian Railways has launched a new scheme called Dial-a-ticket.

18. According to Dial-a-ticket scheme, railway ticket will be provided to the doorstep of the customers.

19. Waitlist e-ticketing service has been started by Indian Railways.

20. This new scheme is available on the website http://www.irctc.co.in/.

21. The net profit of Chennai port for the year 2007-08 was Rs 302 crore.

22. As compared to previous years profit of Rs 197 crore the profit this year has increased by 54%.

23. India-Russia trade to be worth $10 billion in next two years.

24. At present the trade turnover between the two countries is $5 billion.

25. India and Russia has also signed a pact for the development of titanium plant in Bhubaneswar, India.

Website: http://www.ebiz16c.blogspot.com

25 Business Capsules

1. The processed food industry of India will attract an investment of Rs 95,000 crore in coming three years.

2. BG India which is a part of British Gas group is to spend $1 billion for oil exploration.

3. Educomp Solutions of India to spend Rs 125 crore in setting up 500 tutorial centers by the year 2010.

4. Berkshire Hathaway of United States registered a loss of $1.6 billion in the derivatives in the Q1-2008.

5. Rites, an Indian public sector undertaking, to spend Rs 200crore in the rolling stocks in coming 18 months.

6. Profit After tax of PTC India for Q4 2007-08 was Rs 19.22 crore, an increase of 231% when compared to Q4 2006-07 which was Rs 5.80crore.

7. Microsoft is not planning to buy Yahoo completely but is looking for other options.

8. Network 18’s in-house unit Cell will now be a separate division and will be known as Cell 18

9. Inox leisure, a multiplex chain, to spend Rs 400-450 crore to increase its screen from 76 to 264 by the year 2011.

10. IT and BPO revenue of India to reach $132 billion by the year 2012.

11. IT export to Mideast is set to grow by 30%.

12. To rein inflation RBI, India’s central bank, increased CRR by 25 basis point (8.25%) to suck out Rs 9000 crore from the system.

13. Reserve Bank of India to launch an India Pay credit card by 2009.

14. Wadhawan group of India which is in real estate and retail business is to spend Rs 3500 crore to launch new restaurants and open luxury retail outlets.

15. Steel Authority of India (SAIL) pulls out of Indian Steel Alliance (ISA) to distance itself from the controversy of forming cartels.

16. State governments of India along with retail and real estate players is to invest Rs 1000-1500 crore in the financial year 2009 on the self –serve technology.

17. Every year about two million obsolete computer units originate in India.

18. Actuarial process outsourcing (APO) in India will grow by 100% by the end of year 2008.

19. Department of Telecom (DOT) of India favors existing telecom operators for 3G license.

20. ULIP sale in India decreases in the year 2007-08.

21. Private life insurance companies in India registered a growth of 74% in 2007-08.

22. Reliance Communications, Bharti Airtel, Infosys and TCS posted profit (PAT) of more than $1 billion in the financial year 2008 according to Economic Times.

23. Spice Mobile of India to invest Rs 100cr in brand building.

24. Telekom Malaysia which at present has 39.2% stake in Spice Communications (India) wants to increase it to 51%.

25. Bharat Heavy Electricals (Bhel) to use IT to automate its process to improve delivery

25 Business Capsules

Date: 20th May,2008

1. Aircel of India which is a 74:26 JV between Maxis Communications Berhard of Malaysia and Apollo Hospital Enterprises is planning to raise about $1.6 billion by issuing an IPO.

2. Financial engineering course will be launched by Indian School of Business (ISB), Hyderabad along with University of California, Los Angeles (UCLA) for middle level and senior level executives who are in the financial services from July 2008; the course fee will be Rs 5 lakh per participant.

3. DLF, a real estate player in India, to enter into a JV with Piquadro, an Italian luggage and leather accessories maker, as a part of its retail strategy.

4. Air India is planning to increase its domestic fare by 10%.

5. Tata motors Indigo sedan sale has increased by 43% to 3763 units in April 2008 as compared to April 2007.

6. French Luxury watch and jewelry maker Cartier to open a boutique in Delhi.

7. Reliance communications has signed a deal with GSM handset players Samsung, Spice, Sony Ericsson, LG, Fly Mobile, Motorola and HTC for handset retailing in the existing 8 circles in India; agreement with Nokia will also be signed shortly.

8. The handset market in India is all set to cross 100 million in 2008 as against last year’s 70-75 million units.

9. Reliance Communications is planning to sell 15-20 million GSM handsets in its 2500 retail outlets.

10. From January to March 2008 about 27 million new mobile subscribes were added in India.

11. Koutons Retail of India is planning to open about 30 stores in Middle-East by the end of 2008.

12. Techled and the consumer durable industry in India is estimated to be Rs 35,000 crore; the organized sector contributes Rs 2500 crore.

13. In spite of rupee becoming stronger against dollar in India, total exports may still rise by 25-30%.

14. 65% of leather products are exported to European countries from India.

15. Despite high inflation consumption of products by Indian consumers is growing.

16. Recruitment in sectors like retail, FMCG, entertainment and media is growing rapidly in India.

17. The growth in the world economy will slow down to 3.7% according to International Monetary Fund (IMF).

18. The number of BlackBerry service users in India are 1, 14,000.

19. Research-in-motion (RIM), a Canadian firm, is the maker of Blackberry.

20. RIM has total subscriber base of about 14 million worldwide.

21. BlackBerry services in India are provided Vodafone Essar, Bharti Airtel, BPL Mobile and Reliance Communications.

22. There were 261.09 million wireless subscribers in India according to Trai by the end of March 2008.

23. Vodafone to sell Apple’s iPhone in 10 countries including Greece, South Africa, Australia, Italy, Egypt, India, Turkey, New Zealand, Czech Republic and Portugal.

24. Spice Visa Status launched by Spice telecom will provide visa status to its subscribers.

25. Subscribers can get the Visa status on Spice by sending an SMS; the charges per SMS will be Rs13 and both the prepaid and the post paid customers can avail the service.

25 Business Capsules

Date: 19th May, 2008.


1.Hyundai is planning to launch a new car which will be priced at $ 3500 in the Indian market by 2012.

2. Indian car dealers have decided to sell different brands of car under a single roof.

3. This new multi-branded retail outlet for cars will come up in Bangalore; however government approval is awaited.

4. Audi is expecting to sell 1000 units in India in 2008.

5. Audi, a German car, is sold in India in Gurgaon, Delhi, Bangalore, Mumbai, Hyderabad and Pune.

6. General Motors is planning to enter into used car market segment in India.

7. At present the used car outlets in India are Maruti True Value, Honda Terrace, Ford Assured and Hyundai Exchange.

8. Indica V2 Xeta LPG has been launched by Tata Motors which is India’s largest automobile company in the Indian market.

9. Tata Motors revenue in the year 2006-07 was $ 7.2 billion.

10. Department of Telecom (DOT) of India has directed the service provider to provide all the details of the value added services 15 days prior to launch.

11. DOT wants Tata Teleservices Maharashtra Ltd. to pay a penalty of Rs. 2015 crore for defaulting on payment of license fee.

12. 73.21 % stake has been acquired by HSBC group in IL&FS Investsmart Ltd.

13. The deal was worth $ 261 million.

14. OnMobile Global Ltd has decided to buy French Company Telisma SA.

15. OnMobile provides data solutions and VAS for landline, mobile and media service providers.

16. Yahoo has signed a deal with WPP group for advertisement partnership.

17. Despite soaring fuel prices British Airways net profit has doubled; this is due to the cost cutting measures adopted by BA

18. Indian Railways has decided to spend Rs 2 lakh crore in the 11th plan for capacity augmentation, modernization and completion of new projects.

19. Export duty on Basmati Rice in India hits the exporter.

20. 6.25 lakh tonnes of Basmati Rice is imported by Saudi Arabia; India supplies 5.75 lakh tonnes of basmati to Saudi Arabia.

21. Government of India is planning to issue more oil bonds.

22. State of Orissa (India) is aiming to collect commercial taxes worth Rs 6100 crore during the current fiscal year.

23. During 2007-08 the Orissa govt. collected taxes worth Rs 5222 crore.

24. Tourism industry in Orissa is flourishing; during 2007 about 62, 53,897 tourists came to the state.

25. Out of these 43,311 were foreigners.


Website: http://www.ebiz16c.blogspot.com

25 Business Capsules

Date : 18th May, 2008

1. Indian Space Research Organization (ISRO) is planning to launch three satellites for Direct to Home (DTH) television market.

2. There are about 10 million DTH subscribers in India at present.

3. Doordarshan, Dish TV, Tata Sky and SunTV Network Ltd. are the DTH providers in India.

4. Doordarshan is government owned; Dish TV is owned by Zee group; SunTV is dominant in South India; Tata Sky is being promoted by Tata Sons Ltd and Star India.

5. Anil Ambani led Reliance and Bharti is planning to enter into the DTH market.

6. DTH business is estimated to grow by 40% per year in the next 10 years.

7. For the fiscal year 2007-08, Steel Authority of India (SAIL) had annual sales of Rs.45, 555.34 crore.

8. SAIL’s profit for the fiscal year 2007-08 rose by 21.52 %.

9. BRIC countries have decided to work together to fight global food crisis.

10. BRIC accounts for over one-tenth of world’s GDP.

11. Goldman Sachs had coined the term BRIC.

12. Russia is the second largest oil exporter of the world and China is the second largest oil importer of the world.

13. About 40 % of the world’s population is confined in the BRIC countries.

14. Brazil, Russia, India and China constitute BRIC.

15. Hewlet Packard (HP) will buy Electronic Data Systems corp. (EDS) for $12.6 billion.

16. HP will pay EDS $ 25 per share.

17. This will be the second largest acquisition for HP after Compaq which it acquired 6 years back for $ 20 billion.

18. Acquisition of EDS will help HP to take on IBM and also to increase its share in the global service business.

19. The global service business is growing very rapidly and is valued to be worth $748 billion according to Gartner.

20. In the global service business IBM is the market leader having revenue of $ 54 billion, followed by EDS which has revenue of $22 billion and HP which has revenue of $16.6 billion according to 2007 data.

21. According to the Wall Street Journal Research In Motion (RIM), which manufactures BlackBerry, has decided to launch touch-screen mobile phone to counter Apple’s iPhone.

22. The phone will be known as Thunder.

23. In US Thunder will be sold by Verizon and outside US it will be sold by Vodafone.

24. About 50 new BPO centers will be opened in rural India.

25. These new rural BPO centers will be opened in the states of Tamil Nadu and Andhra Pradesh.



Website: http://www.ebiz16c.blogspot.com

25 Business Capsules

Date : 17th May, 2008

1. Crude oil price reached to a record high of $127.43 a barrel on May 16, 2008.

2. Inflation rate in India was 7.83% for the week ended May 3, 2008.

3. Reliance Natural Resources (RNRL) which is controlled by Anil Dhirubhai Ambani has said that the commercial production of gas from the Krishna Godavari (KG) basin will commence only from 2009.

4. Newly built Bangalore International Airport will become operational from 23rd May, 2008 according to Bangalore International Airport Ltd. (BIAL).

5.Maharashtra Chief Minister has said that the Navi Mumbai airport will be completed by the year 2012.

6. The number of domestic passengers who preferred to travel by air was 38.92 lakh in April, 2008.

7. With 8.39 lakh passengers (21.6%) Jet Airways had the largest number of domestic passengers.

8. Air India carried 5.86 lakh passengers (15.1%) and was at the second position.

9. Consumption of steel in India has increased by 12 %.

10.At present 6.6 million tonnes of steel are being imported in India.

11.Global steel prices have increased by 50-70% in the last six months.

12.Whereas steel prices in India has shot up by 30-50%.

13.Larsen & Toubro (L&T) and GE Energy have entered into an agreement to explore the power generation market of India.

14.Aptara, which is in technology publishing, is for sale.

15.Aptara was the brain child of Rakesh Gupta, a US-based Indian.

16.The company which was established in 1988 was initially known as Techbooks.

17.It was named Aptara in the year 2007.

18.The Aptara deal is pegged to be worth $150 million.

19.United Nations new report says that the world economy will grow by 1.8 % during 2008.

20.Just three months back UN had predicted the growth to be 3.4% for 2008.

21.Export from India has grown by 26 percent (in rupee term) in the month of April, 2008 as compared to April, 2007.

22.In terms of dollar the export has grown by 31 % during the same period.

23.India expects to achieve the export target of USD 200 billion during 2008-09.

24.The core infrastructure industry of India grew at the rate of 9.6% during March, 2008;

25.During March, 2007 it had grown by 10.5 %.


Website: http://www.ebiz16c.blogspot.com

25 Business Capsules

Date : 16th May, 2008


1. Tech Mahindra has won a deal of worth $ 700 million from British Telecom.

2. Tech Mahindra is India’s 6th largest exporter of IT solutions.

3. This is the third major contract which the company has bagged from BT.

4. The two other contracts from BT includes: $ 1 billion deal and $ 350 million contract.

5. BT is Tech M’s biggest client accounting fro 60% of its business.

6. Other clients include AT&T, Alcatel-Lucent and Motorola.

7. The company has also entered into Mobile Virtual Network Operator (MVNO) business by partnering with FRiENDi mobile.

8. The MVNO business will be in the North Africa and Middle East region.

9. Europe contributes 70% of Tech M’s business while US accounts for 20%.

10. The software and services exports from Software Technology Park of India (SPTI) are estimated to be Rs187, 478 crore during 2007-08.

11. In the year 2006-07 the export were worth Rs 1.41 lakh crore.

12. There are 9718 units registered in STPI.

13. About 95% of software exports from India are from STPI.

14. Carl Icahn, a Yahoo investor, wants Yahoo board to reopen talks with Microsoft.

15. Microsoft had abandoned the plan of purchasing Yahoo as Yahoo wanted $ 37 per share while Microsoft was willing to offer $ 33 per share.

16. Reliance Industries is not talk with three major foreign oil companies Devon Energy, AARCO and Santos to bid for oil and gas block in India.

17. Santos is an Australian company while AARCO and Devon Energy is a US based company.

18. Bharti Telesoft is planning to acquire companies to expand its base in Latin America and Eastern Europe.

19. Bharti Enterprises, Cisco Systems and Sequoia Capital are the promoters of Bharti Telesoft.

20. India would require USD 320 billion (2005-06 price levels) for the development of infrastructure in coming five years.

21. USD 320 billion will be distributed among different sectors in the following way:

· Power: USD 130 billion

· Railways: USD 66 billion

· Highways: USD 49 billion

· Ports: USD 11 billion

· Civil Aviation: USD 9 billion

· Remaining sectors: USD 55 billion

22. The government of India wants private companies to be a part of infrastructure development.

23. Landmark Group, a real estate developer, will be investing Rs 4000 crore for the development of about 12 properties in the northern region of India.

24. Ferrari will be unveiling its new car California in Paris.

25. Nissan is planning to introduce an entry level car in India by 2010; it will be its solo initiative.



Website: http://www.ebiz16c.blogspot.com

Growing Demand for Natural Gas in India

In 2004, 996 billion cubic feet (Bcf) of natural gas was produced in India. However consumption of natural gas was 1089 Bcf, so net import was 93 Bcf. This was the first time that the natural gas was imported in India.

38 trillion cubic feet of natural gas is present in India. India’s natural gas reserves are present in Mumbai High Complex, Andhra Pradesh, Assam and Gujarat. Panna, Tapti and Mukti fields which are present in the Mumbai High basin produces 300 million cubic feet per day.

Government owned companies like ONGC and Oil India Ltd and private companies like Reliance Industries are the significant players in the natural gas production.

In the transmission and distribution of natural gas, Gas Authority of India Ltd. (GAIL) has complete monopoly. In the year 2004, 88 percent of natural gas consumed in India was piped by GAIL. Transmission network of GAIL which at present is around 1900 miles will be increased to 6200 miles to cover maximum part of India.

In 2006 the Government of India allowed the private and foreign players to have 100 percent stake in the pipeline projects.

In 2006 ONGC found natural gas reserves in Krishna Godavari Basin and Mahanadi Basin. Reliance Industries too had found large natural gas reserves in the Krishna Godavari Basin in the year 2002.

Dahej LNG facility and Surat LNG facility in Gujarat are at present the two LNG import terminals in India. Dahej can handle 5 million metric tons per year (MMt/y) and Surat can handle 2.5 million metric tons per year; however the capacity of Surat terminal will be increased to 5 MMt/y in future. Another LNG import terminal is being developed at Kochi by Petronet LNG; it is expected to be completed by 2009 and will be able to handle 2.5 MMt/y.

Despite having large reserves of natural gas, it is estimated that the demand will outstrip supply. So, India has been exploring various alternatives to meet the demand for natural gas in the coming future. Some of the alternatives being explored are:

Iran-Pakistan-India Pipeline: It will run from South Pars fields of Iran to Gujarat (India) via Pakistan. It will be around 1700 mile with a capacity of 2.8 Bcf/d. Instability and terrorism in Pakistan is the major threat.

Turkmenistan-Afghanistan-Pakistan-India Pipeline: It is a 1050 mile pipeline project. The pipeline will originate from Dauletabad-Donmex of Turkmenistan and will run through Afghanistan, Pakistan and India. Initially India was not the part of the project but was invited in 2006.

Imports from Myanmar: India entered into an agreement with Myanmar for the supply of natural gas to India. The pipeline will originate from Myanmar and will terminate in Tripura (India).

The discussions are being carried out by the respective governments. As these countries are politically sensitive and prone to religious extremism, India will have to be very cautious in the dealings. However it is a fact that India being the second fastest growing economy of the world requires secure and steady supply of natural gas to meet its ever growing demand.


Sources:
Energy Information Administration
Oil and Gas Journal
Times of India


Website: http://www.ebiz16c.blogspot.com

Crude Oil demand in India

Demand for crude oil in India has increased significantly. State owned oil companies have been a dominant player in this sector; however private players like Reliance industries too has forayed into the sector in a significant way.

India has the second largest oil reserve in the Asia-Pacific region after China. India had 5.6 billion barrels of oil reserve (January 2007). India’s crude oil reserve is located in the western coast (Mumbai High) and in the northeastern region. However significant oil reserves are present in the state of Rajasthan and Bay of Bengal but at present they are undeveloped. India consumed around 2.63 million barrels per day in 2006. Demand for oil grew by 100,000 barrels per day in the year 2006 according to EIA.

As per the New Exploration License Policy (NELP), India allowed foreign companies to hold 100 per cent equity stake in the oil and natural gas projects in 2000. Indian Oil Corporation which is the government owned company is the dominant player in the downstream sector. Out of 17 refineries in India IOC has 10; three-quarter of India’s oil transportation is controlled by IOC. Reliance industries, which started operating in 1999 is also becoming a major player in the downstream sector.

The refining capacity of the 17 refineries is 2.25 million barrels per day (January 2007). Reliance industries two refinery project in Jamnagar will have a capacity of 660,000 barrel per day (bbl/d) and 580,000 bbl/d. Upon completion it would be the world’s largest refinery. India replaced Administrative Price Mechanism (APM) by Market Determined Price Mechanism (MDPM) in 2002. Private companies have been granted permission to price and market their own product.

Indian government has started Exploration and Production (E&P) projects to find oil reserves within the country to meet the ever growing domestic demand for crude oil.

ONGC floated ONGC Videsh to explore the possibilities in Asia, Africa, the Middle East and Latin America. ONGC Videsh is operating in 15 countries. ONGC Videsh has 25 percent share in Greater Nile Petroleum Operating Company (GNPOC); it also has 20 percent stake in the consortium which is involved in the Sakhalin-I project in Russia- the consortium is being led by Exxon Mobil.

Public and Private participation will help India to reduce its dependence on other countries for crude oil. However unless and until a huge oil reserve is explored India will have to depend on import especially from OPEC to meet its oil needs.

Sources:
Energy Information Administration
Oil and Gas Journal
Times of India

Website: http://www.ebiz16c.blogspot.com

25 Business Capsules

Date : 15th May, 2008

1. In 2006 the total revenue from IT services worldwide was $677 billion.

2. Revenue from IT services all over the world in 2007 was $748 billion.

3. India’s top six IT companies are:

TCS
Infosys
Wipro
Satyam
HCL
Cognizant

4. Market share of these six Indian IT companies in the global IT service sector grew from 1.9 percent to 2.4 percent.

5. Market share of US IT companies in the world IT service sector is 55.4 percent.

6. Research in Motion, provider of BlackBerry services, may allow the Indian government to monitor non-corporate e-mails.

7. The present row started when the revenue intelligence of India where not able to track the deal between the terrorists and the hawala dealers because of the use of BlackBerry devices.

8. RIM, a Canada based firm, operates in 135 countries.

9. In India RIM has around 1, 14,000 customers.

10. BlackBerry services in India are provided by Bharti Airtel, Vodafone, Reliance Communications and BPL Mobile.

11. India has been ranked 29th among the list of 55 countries assessed for competitiveness by IMD, a business school of Switzerland.

12. There were 331 competitiveness criteria set up by IMD with 4 basic parameters viz. government efficiency, economic performance, infrastructure and business efficiency.

13. India fares worst in infrastructure but fares well in the other three parameters.

14. The demand for natural gas in India will increase to 270 million cubic metres daily by 2020-a three fold increase.

15. 200 million cubic metres will be met from the existing domestic and foreign reserves.

16. At present India has contract with Qatar for the supply of natural gas.

17. Some of the other alternatives being explored by India for the supply of natural gas are:

· Iran-Pakistan-India Pipeline,

· Turkmenistan-Afghanistan-Pakistan-India Pipeline

· Imports from Myanmar

18. There are 15.65 lakh frozen demat accounts (April, 2008) in India for want of PAN card details.


19. Low plantation of sugarcane crops in the Indian states of Uttar Pradesh and Maharashtra may hamper the supply of sugarcane to the sugar mills in 2008-09.

20. Farmers prefer wheat, paddy, pulses and cotton to sugarcane as the return on these crops are higher.

21. Moreover sugarcane mill owners have soon apathy in the past in the payments to the farmers, so there is no incentive for the farmers to go for cane plantation.

22. Ready Mix Concrete (RMC) business of Larsen and Toubro (L&T) has been acquired by Lafarge for $349 million.

23. The deal will make Lafarge India’s number one RMC maker.

24. Lafarge is the second largest cement maker of the world.

25. The company is based in France.



Website: http://www.ebiz16c.blogspot.com

Increasing Demand for Crude Oil

Soaring crude oil prices have disrupted the economic fabric of the entire world. Rapid increase in demand for crude oil is considered to be the pivotal reason for the increase in price. As the supply has not been increased by OPEC, so the price rise is inevitable. Moreover US recession which has resulted into a weak dollar is also regarded as one of the major causes of price rise.

World’s fastest and second fastest growing economies are thought to be the culprit behind the increase in demand. Demand of crude oil in China and India is increasing rapidly. Rapid urbanization and increase in the number of vehicles have ensured that crude oil remains in great demand here. TATA Motors 1 lakh rupee car, NANO, is also soon going to hit the Indian market which will further increase the consumption of oil in India.

World’s energy demand is growing at an average annual rate of 1.7 percent. Fossil fuels will be providing over 85 percent of world’s commercial energy needs as there is no alternative available at present. Oil and gas will be accounting for 60 percent of the total energy mix. If we just take into account that the demand for oil grows at an average annual rate of 1.4 percent then the demand for oil will be 118 million barrels a day by the year 2030.

Majority of the demand will be from the developing countries where the consumption is expected to reach to 58 mb/d. Half of the demand will emerge from the Asian countries like India and China. Transportation will be the major contributor in increase in demand.

OPEC Secretariat has estimated that by 2020 OPEC will have to expand its capacity by 32 mb/d to 41 mb/d to meet the global demand. To increase the capacity to such extent the member countries will have to invest around $ 230 billion to $ 500 billion.
OPEC member countries are also to invest around $ 50 billion in crude oil distillation refinery projects in order to increase the capacity by 3 mb/d by the end of 2012.

Too much dependence on OPEC does not augur well for the global economy. This is why alternative means are being evaluated to decrease the dependence of the world on crude oil. If the soaring price is not checked then it will adversely affect the global economy. Poor countries will be the major sufferers.

Biofuels are considered to be an alternative fuel but it is still in its nascent stage. It is also marred with serious controversies. Due to scarce water resources and limited land, production of Biofuels is quiet difficult. Moreover use of agricultural land for the production of Biofuels can have adverse impact on the food prices.

Although there are enough oil reserves to meet the demand for decades but still alternative means needs to be evaluated. This would not only decrease the dependence of the world on OPEC but the discovery of alternative renewable fuels will ensure cleaner and greener environment.

Website: http://www.ebiz16c.blogspot.com

25 Business Capsules

Date : 14th May, 2008

1. 1.6 billion People across the world have no access to electricity.

2. 2.5 billion People across the world still rely on traditional biomass for cooking.

3. Maruti Swift sales crosses 2 lakh in just 36 months in India.

4. Swift was launched by Maruti Suzuki on May 25, 2005 in India

5. Initially Swift’s petrol variant was launched, the diesel variant was launched in January 2007.

6. Reliance Retail and Citibank to form an alliance for consumer finance in India.

7. At present Reliance Retail has more than 1000 store all over India.

8. Bharti Airtel of India is planning to enter into an alliance with Cisco for services.

9. Reliance and Alcatel-Lucent have formed a Joint Venture (JV) to offer managed network services to both the national as well as international telecom operators.

10. Alcatel-Lucent is a French-US equipment firm.

11. According to Gartner network IT services will be worth $ 7 billion by 2011in India.

12. To lower cost Japan Airlines Corp (JAL) is planning to cut its employees salary by 5 percent.

13. Cutting of salary by 5 percent will help JAL to save $96.4 million.

14. By revenue JAL is Asia’s biggest airline company.

15. Money assigned for IPO will now remain in investor’s bank account in India.

16. Thus the investors will no longer have to wait for the refund of their IPO money.

17. Finance Ministry of India will be issuing bonds to cover the 50 percent losses suffered by the Public Sector oil marketing companies (OMCs).

18. OMCs of India are: Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Indian Oil Corporation.

19. The losses suffered by OMCs in India are:

· Rs 14 per litre on petrol

· Rs 21 per litre on diesel

· Rs 306 per cylinder on cooking gas

· Rs 28.72 per litre on kerosene.


20. Mahindra & Mahindra is planning to purchase Kinetic Motors.

21. Kinetic Motors is a Pune (India) based two wheeler manufacturer.

22. Kinetic Motors has been valued at Rs 150 crore; however both the companies declined to confirm the news.

23. India is world’s second biggest two-wheeler industry; the first being China.

24. Tata’s Nano which is priced at $ 2500 is expected to be a threat for the auto manufacturers of North America.

25. ICICI bank of India is planning to set up a branch in Canada.


Website: http://www.ebiz16c.blogspot.com

Decrease Dependance on OPEC

Increase in the price of crude oil has beaten all expectations. In September 1999 crude oil was below $ 20 per barrel; in March 2004 it was around $30 per barrel; in April 2007 it reached to $60 per barrel; at present the price is somewhere around $125 per barrel and it is expected to cross $ 200 per barrel in near future.

Demand for crude oil has increased considerably in recent years. Rapid urbanization of developing countries and increase in the use of vehicles (public and private both) are considered to be the major cause of the increase in demand of crude oil. Supply has not increased as compared to increase in demand so the price of crude oil is increasing rapidly. Besides, weakening of dollar too has resulted in rise in price of crude oil.

World’s energy demand is growing at an annual average rate of 1.7 percent. Organization of Petroleum Exporting Countries (OPEC) has agreed to invest over $150 billion to increase the production of crude oil by 5 mb/d by 2012. Although the OPEC member countries are giving some signal of increasing the supply of crude oil but they are apprehensive to do it on large scale. Certain uncertainties which haunt the OPEC member countries are:

Future economic growth of the world.

Performance of non-OPEC countries

Policies of individual countries regarding the consumption of oil.

Technological development.

More than three-quarters of recoverable crude oil reserves of the world is with OPEC. OPEC which at present has 13 member countries is world’s one of the most successful cartels.

For OPEC member counties crude oil is the major contributor in their economic development. In the year 2006 crude oil accounted for 75 percent of total export revenues for OPEC member countries; however for majority of the member countries the contribution exceeded 90 percent. This is why these countries look for secure oil market and predictable demand and supply to ward off any uncertainty. And whenever they get an opportunity to maximize their profit they do it at any cost.

During 1980’s demand for crude oil had decreased to half which had adversely affected the OPEC member countries. Proper and reliable demand forecasting will help both the supplier and the consumers. Joint Oil Data Initiative is a new concept which is now being practiced wherein both the producers as well as the consumers equally participate in forecasting demand.

Although enough crude oil reserves are there to meet our demand for oil for decades to come, it is important that effort should be made to find an alternative means. The world should not be completely dependent on OPEC member countries for crude oil. Alternative fuels should be developed which will decrease our dependence on crude oil. Political initiative should be there so that OPEC does not take undue advantage of consumers.

Website: http://www.ebiz16c.blogspot.com

25 Business Capsules

Date: 13th May, 2008

1. Essar Global Ltd, an India based company, to invest $ 2 billion in power projects in India.

2. Essar is planning to build 6000 megawatts power plant in India.

3. Nissan will launch 8 new models in Indian market by 2012.

4. Nissan which is the third largest automaker of Japan is planning to sell 100,000 vehicles in India annually.

5. Besides government pressure to cut prices, cement companies in India has been hit by sharp increase in raw material costs according to Assocham.

6. Fuel cost and power cost, which constitutes 60 percent of the operating expenditure of cement firms, has increased by 24 percent according to Assocham.

7. Venugopal Dhoot is the president of Assocham.

8. Arvind Mills Ltd of India will now be known as Arvind Ltd.

9. Arvind Mills which belongs to Lalbhai Group is Ahmedbad based.

10. The company was established in 1931.

11. Domestic Brands of Arvind Mills are:

· Flying Machine
· Newport
· Excalibur
· Ruf & Tuf

12. It has also got license for international brands like:

· Lee
· Wrangler
· Arrow
· Tommy Hilfiger


13. At present about 6.5 lakh people travel by Delhi metro daily.

14. The number of people traveling by metro will increase to 20 lakh by 2010.

15. Tokens have been provided to the commuters by Delhi Metro Rail Corporation (DMRC).

16. Initially tokens were brought from France at the cost of Rs 98 each; now the tokens are produced in India at the cost of just Rs 20.50 each.

17. ICICI, an Indian bank, has decreased EMI (Equated monthly installment) on home loan and has increased the tenor for the payment of the loan.

18. The new EMI will be applicable from April 2008 according to the bank.

19. Ashok Leyland of India has entered into an agreement with JBM Auto, a component maker firm.

20. Both the companies will be investing Rs 100 crore to set up a manufacturing unit in Uttrakhand.

21. JBM will have 74 5 stake while Ashok Leyland will have 26 % stake.

22. SpiceJet of India has decided to start cargo operations.

23. Initially the operation will begin in 8 cities which will be later increased to 18.

24. 118 flights are daily operated by SpiceJet covering 18 destinations.

25. Government of India has decided to allocate Rs 40,000 crore for the implementation of e-governance in the country, Union IT and Communication Minister A Raja said on Monday.

Website: http://www.ebiz16c.blogspot.com

25 Business Capsules

Date: 12 th May, 2008

1. The fourth quarter net income of Reliance Energy Ltd. rose by 31 per cent.

2. Reliance energy Ltd has orders worth Rs 78.5 billion for this financial year.

3. Reliance Energy Ltd will now be known as Reliance Infrastructure Ltd.

4. Reliance infrastructure will be engaged in projects like:

· Power generation
· Transmission and Distribution
· Highways
· Bridges
· Metro Rail
· Airports
· Real Estate

5. Government of India has decided to impose export duties on steel.

6. Shocked by the move steel companies decided to hold back the reduction in price of steel which they had announced.

7. Bajaj-Nissan-Renault has formed a JV for the production of 1 lakh rupees car in India.

8. Bajaj will have 50% stake while Nissan and Renault each will have 25% stake.

9. The production of the 1 lakh rupee car will begin by 2011.

10. The plant will be set up at Chakan which is near Pune (India).

11. P Chidambaram, India’s finance Minister, to persuade the coalition allies to allow the foreign investments in insurance, pension and banking.

12. 80 percent of Indians do not have insurance cover according to Lehman Brothers LLC.

13. 88 percent of Indian workforce does not get involved in pension schemes according to Lehman Brothers LLC.

14. Foreign investors can have a maximum of 26% stake in Indian insurance market.

15. The Indian government is planning to increase the limit for foreign investors in Indian insurance to 49%.

16. The Indian government is planning to divest its remaining 26% stake in VSNL, now known as Tata Communications.

17. The Indian government will get Rs. 3,650 crore by divesting its stake in Tata Communications at present market price.

18. 67 million children in India (about 53%) aged below 5 years do not get basic health care according to the report published by the organization ‘Save the Children’.

19. About 1 million Indian children die during their first month annually according to the report.

20. Industrial production in India during the month of March (2007-08) was just 3 percent.

21. The growth was bad if we compare it with the Industrial production during March (2006-07) which was14.8 percent.

22. Industrial production during the year 2007-08 was 8.1 percent whereas it was 11.6 percent during 2006-07.

23. According to Cyber Media Publication for the outsourcing industry, the mid-sized IT and BPO companies in India are likely to suffer more because of US slowdown than the bigger IT or BPO companies.

24. The weakening of rupee against the US dollar has boosted the confidence of Indian IT sector which was fighting against the US recession and stronger rupee.

25. Indiabulls is planning to invest about Rs 10 billion in retail in India in the coming 2-3 years.