MERGERS /ACQUISITIONS/TIE UP AND DISINVESTMENT –UPDATES

Tata Communications Unveils Technology Partnership With Formula One Motor Racing To Boost Brand

India's Tata Communications, seeking to raise its profile around the globe, unveiled a technology partnership with Formula One motor racing on Thursday, a further sign of the sport's growing appeal in emerging markets.

Tata Communications will use its undersea cable and its IT networks to transmit data and live video from the 20 Grand Prix locations as the circuit tours the globe. It will also host the Formula1.com website in a multi-year deal for which financial terms were not disclosed. 

Il&Fs Investment Managers Ltd May Buy Out Hershey Company's Stake

IL&FS Investment Managers Ltd (IIML), the private equity arm of Infrastructure Leasing & Financial Services, is in advanced stages of negotiations to buy out The Hershey Company's 51% equity stake in its joint venture with the Godrej group, top investment banking officials said.

The deal, if completed, will allow IL&FS to regain ownership over the company as its PE arm was the financial investor from whom Hershey had bought a 40% stake in 2007 for a reported $60 million (Rs 270 crore at that time). Another 11% was bought from Godrej Industries. 

Sanjeev Narula To Sell Debt-Ridden Lilliput

Lilliput, the country's largest kid swear brand, is heading towards a slump sale. Founder Sanjeev Narula, embroiled in a bitter public battle with private equity investors Bain Capital and TPG, will sell the brand and its retail assets, along with his two estranged partners.

"I have no option but sell," said Narula who holds majority stake in the company. "The company can't service the debt anymore,'' he added.

At least five firms including Mahindra & Mahindra, and private equity funds Kohlberg Kravis Roberts & Co, Blackstone, L Capital and India Value Fund have signed non-disclosure agreements to enter into negotiations to buy Lilliput, said a person with direct knowledge of the development. 

Reliance Industries Ltd Finalises $450-M Jv With Russian Rubber Giant Sibur

Reliance Industries (RIL) and Russian rubber giant Sibur, Eastern Europe's largest maker of petrochemicals, on Tuesday announced the formation of a joint venture company called Reliance Saber Elastomers that aims to become the fourth largest supplier of butyl rubber - an input for tyres - in the world.

"In the first year of production the company could target a turnover of 2,500 crore," said Nikhil Meswani, executive director, RIL. 

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EMPLOYMENT WATCH

Only 25 Pc Of Engineering Graduates Directly Employable

Coordinated efforts should be taken by the IT industry and academic for making fresh engineering graduates employable as only 25 per cent of those passing out of the colleges at present met the requirements of the firms, according to the Member of Scientific Advisory Council to the Prime Minister Kiran Karniks

Noting that India's educational system was traditional, he said "The communication skills of our students, even the bright ones are not adequate. Today you (a candidate) have to articulate well. That is a very important in IT industry". 

Favoring setting up of more BPO units in rural areas, he said talent was available in villages and the prospectus was phenomenon (for an IT company). 

Indians To See 12% Rise In Salaries

Indians are projected to see a 12 per cent raise in salaries in 2012, according to Aon Hewitt, a global human resource consulting and outsourcing business of Aon Corporation.

It says the increase will be marginally lower than the hike of 12.6 per cent in 2011. As compared to other markets, India has outpaced Asia Pacific yet again with the highest salary increase in the region, followed by China and the Philippines, projecting a 9.5 per cent and a 6.9 per cent salary increase in 2012, respectively

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ECONOMY UPDATE!!

India's FY12 GDP Growth Revised To 7.1%

The Prime Minister's economic advisory panel projected 7.5 to 8 per cent growth rate for the next fiscal and said the country can achieve a higher economic expansion if the global environment turns favorable.

"We might be able to achieve 8 per cent growth on our esteem , if the world environment is favorable, we will be able to achieve high growth rate," the Chairman of the Prime Minister's Economic Advisory Council (PMEAC), C Rangarajan, said.

Govt Releases Retail Inflation Numbers; CPI Up 7.65%

Inflation based on the all India Consumer Price Index stood at 7.65 per cent in January, as per the first nationwide retail inflation data released by the government on Tuesday.

While 'food and beverages' reported a moderate rate of price rise of 4.11 per cent year-on-year in January, the inflation numbers for fuel and light, and clothing, bedding and footwear segments were in double-digits.

Overall retail inflation in rural and urban areas stood at 7.38 per cent and 8.25 per cent in January, respectively.

India Least Resilient Bric Nation To Global Risks: Survey

 Robust economic growth seems to have made little improvement to India's ability to withstand major external shocks, making it the most exposed and least resilient BRIC nation to the global risks.

According to a study conducted by risk analysis firm Maplecroft, India has been ranked as the 19th most exposed and least resilient country worldwide to the global risks.

On a list of 178 countries, Somalia has been named on the top with highest exposure and least resilience, while other BRIC countries, Russia, China and Brazil have been ranked 30th, 58th and 97th, respectively.

January Consumer Price Inflation 7.65 Per Cent

Indian annual consumer price inflation touched 7.65 percent in January, higher than wholesale inflation for the period but still suggesting price pressures are moderating, adding weight to views that the central bank has room to cut interest rates.

The Reserve Bank of India signaled last month that it was ready to cut rates to stimulate a flagging economy if there was a sustained decline in inflation.

The wholesale price index, long India's main inflation gauge, eased to 6.55 percent over the year to January, the slowest rise since November 2009, data showed last week. 

Euro Zone PMIS Slide, Heightening Recession Fears

The euro zone's service sector shrank unexpectedly this month, reviving fears that the economy risks sinking into recession, a business survey showed. 

The bloc's economy contracted 0.3 per cent in the dying months of 2011 so a second quarter of contraction would meet the technical definition of recession. A Reuter’s poll suggested it will probably wallow in a relatively mild downturn until the second half of this year. 

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News Update -I.T/ ITES/ BFSI Sector

24th February 2012: Government Encourages IT Companies To Focus On Emerging Markets

 The government is encouraging Indian IT companies to focus on emerging markets for steady growth in the sector, Ministry of Commerce joint secretary J K Dadoo said.

"The emerging markets offer huge potential and they are growing very fast. Indian companies, especially small and medium, should focus at new markets and emerging markets," Dadoo said.

He was speaking at Electronics and Computer Software Export Promotion Council's (ESC) curtain raiser for India Soft 2012.

23nd February 2012: IT Market Has Passed The Low Point: Logica

 Logica , the Anglo-Dutch IT services provider hit hard by Europe's economic woes, said trading had improved since a low point in December when it warned on earnings and announced 1,300 job cuts.

Logica posted an expected 11 per cent drop in full-year profit and said that while growth in 2012 remained in doubt, it was restructuring to meet clients' cost-cutting demands.

Chief executive Andy Green said 2011 had been more difficult than he had expected. "I would say things feel a little bit better, just a touch better, now than they did in December. But the key is the huge uncertainty," he said.

22nd February 2012: Sbi Shares Plunge 8 Per Cent On Kingfisher Exposure Concerns.

Shares of State Bank of India plunged sharply by over 8 per cent on on concerns about its exposure to Kingfisher Airlines and reports about public sector lender giving fresh loans to the debt-ridden carrier.

Shares of Kingfisher also plunged by over six per cent on continuing financial and operational troubles at the company.

Heavy selling was witnessed in SBI shares, pulling it by 8.55 per cent to an intra-day low of Rs 2,242 at the BSE. After paring some of the losses, the stock settled 7.91 per cent lower at Rs 2,257.80.

21st February 2012: Us Clearly Denying Visas To Indians: Chamber Of Commerce

 There has been a dramatic increase in denial of visas to Indians by the United States, according to a non partisan organization.

"It is a concern for us, but is a manageable one. Since the rejection rate is quite high in case of L1 visas than H1, it is a big concern for companies that use more of L1s. As far as Infosys is concerned, we use more H1s than L1s. Also, we have started hiring locally, and the number of workers hired every year range between 1,000 and 1500," said V Balakrishnan, CFO and Member of the Board, Infosys.

20th February 2012: Banks To Soon Decide On Kingfisher Request For Working Capital

A consortium of lenders led by State Bank of India (SBI) will soon take a call on providing the working capital to cash-strapped Kingfisher Airlines

According to sources, the airline has requested the consortium for a working capital support of Rs 200-300 Crore (Rs 2-3 billion) and individual banks are expected to take a call on this in the next few days.

Kingfisher Airlines in a statement on Saturday had said, "We have had a good meeting with our consortium of banks who have accepted, in principle, the viability study prepared by SBI Capital Markets and independent consultants.

19 Feb, 2012: “$26 Bn Invested By India Inc In Us In 5 Years“: Nirupama Rao

Indian companies are now contributing strongly to local State economies in the US with a presence in 43 states and having invested over $26 billion in the last five years in several key areas of the economy.

Indian IT companies employ over 100,000 people in the US and the Indian IT industry supports over 280,000 jobs indirectly out of which about 200,000 are with US residents.

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