XED NEWSLETTER a weekly news bulletin

11 Pages 21st JULY 2011 27th JULY 2011 www.xedintellect.com

IN BRIEF
COVER STORY
LAND ACQUISITION - LANDMINES ON THE PATH OF GROWTH

ECONOMIC INDICATORS
BSE SENSEX 18,249 NSE NIFTY 5,487 RS/$ 43.94 th (as on 28 July 2011)
PERSONALITIES OF THE WEEK

INDUSTRY ANALYSIS

NEWS DIGEST
BUSINESS NEWS

INTERNATIONAL & MISC NEWS

FINANCE NEWS

COMPILED BY

TCS, Wipro in race for Tirupati temple project to provide IT solutions ECONOMIC INDICATORS 2 INTERNATIONAL NEWS 9

Apple No 1 international brand in China

Reliance Life exploring strategic equity partner

COVER STORY 3 PERSONALITIES OF THE WEEK 4 BUSINESS NEWS 5-8 MISCELLANEOUS NEWS 10 GENERAL AWARENESS 11

TOP 10 HEADLINES OF THE WEEK

1. TCS, Wipro in race for Tirupati temple project to provide IT solutions. 2. Microsoft opens new R&D facility in Bangalore. 3. 2,800 companies vanish from bourses in last ten years. 4. Cognizant set to replace Wipro as India's third largest IT Company. 5. Infosys chairman Narayana Murthy backs Kaushik Basu's proposal to make bribe-giving legal. 6. 2G case: Raja drags in PM, Chidambaram. 7. Apple pips Google, Facebook to become No 1 international brand in China. 8. Samsung pips Apple, Nokia in smart-phone sales for first time. 9. Chinese drivers trapped in 100-kilometre traffic jam. 10. In 10 years, urban Indian women's average income doubles.

ECONOMIC INDICATORS
Current Market Rates as on 28th July11 Rupee/US Dollar Rupee/Pound Values 43.94 72.12 Stock Market Indices as on 28th July11 BSE SENSEX NSE (NIFTY) Values 18,249 5,487

Public spending on education is higher in India in comparison to China

An analysis on Education and the Asian Surge by RAND Centre for Asia Pacific Policy reveals China has better efficiency in utilization of resources. India spends a higher percent of its GDP on education compared to China. However, per capita expenditure on education (public and private) is higher in China.

India lags behind education indicators

China

for

most

China and India have made progress in education. Both the countries have followed different developmental paths. An analysis by RAND Centre for Asia Pacific Policy reveals that India lags behind China for most access, delivery and quality of education indicators. China has nearly 100 percent enrolment for primary schooling and gender equality in access to education.

LAND ACQUISITION - LANDMINES ON THE PATH OF GROWTH

Verdict is out: In a recent development the Allahabad high court quashed the acquisition of 589ha of land in Patwari village, where several projects were coming up. Later the Supreme Court upheld the Allahabad high courts order to return 156ha of land to farmers of Shahberi village. Before this verdict, the high court had de notified acquisition of 170ha and 70ha of land in Gulistanpur village and Surajpur village, respectively. This is a noteworthy development in the mess that is the land acquisition process in India. Why such fiasco: The science behind land aggregation is extremely opaque, thanks to lack of proper land records and archaic laws governing land-related issues. The value of land depends upon the potential of income it can generate. Typically agricultural land is much cheaper as potential income is lower than any land which is made available for real estate development. The fact that the land records and local area master plans can be manipulated encourages some policymakers and private land aggregators/developers to colludeagricultural land is then aggregated at low prices in areas with an inside knowledge of an impending change in land use which later drives the price up. The farmers and land owners of course do not have this valuable information. As a result, farmers sell land at prices which are cheaper and therefore end up feeling cheated when prices soar after change of land use. Public realm, private gain: Presently, land acquisition in India is governed by the Land Acquisition Act, 1894. According to the Act, the government has the right to acquire private land without the consent of the land owners if it is acquired for a public purpose project such as development of towns and village sites, building of schools, hospitals and housing and state run corporations. The Land Acquisition (Amendment) Bill, 2007 redefined public purpose to allow land acquisition only for defence purposes, infrastructure projects, or any project useful to the general public where 70% of the land had already been purchased from willing sellers through the free market. As per the latest proposed bill by the government, the landowners will be paid six times that mentioned on the registered sale deed of any plot in the area in the previous six months. And if anyhow the land price goes up between the time of acquisition and that of possession by the industry, 20% of the increased price will be paid to the landowners. Uphill task ahead for authority: The going for the Noida Authority is getting tougher with each passing day. It was struggling to allot developed land plots, besides increased compensation to the farmers of a handful of villages. Now farmers from all the 54 Noida villages have made the same demands. Nithari village farmers allege that land was acquired from them in 1976 at Rs4 per sq yard and sold in 2010 at Rs1, 07 Lakh per sqm. It was one of the biggest land deals of India. Now the place is known as City Centre. What is irking the farmers is that the authority had acquired the land under the urgency clause but sold it after 34 years at exorbitant market rates. Give share in developed land: The crux of the Noida farmers' agitation is their demand for developed plots in lieu of their acquired abadi (inhabited) lands. Noida Authority was supposed to give villagers developed plots equaling 5% of their acquired abadi lands. However, a large number of claims for rehabilitation and compensation of owners of abadi lands could not be settled as the built-up clusters surveyed before acquisition kept expanding illegally. In the spate of recent pro farmer verdicts by the Supreme Court, villagers have now grown more optimistic about settling their long pending land disputes and getting adequately compensated. What is the impact: The loopholes in land related laws are detrimental to the economy. The landlords get inadequately compensated in some cases, and the soaring price of land after change of land use hurts the end-users who purchase real estate after development of the area. In cases where farmers protest and get a favorable judgment like it happened in Singur or Shahberi, the general confidence for future investment into new areas necessary for the larger economic development of the country suffers a huge setback. Solution: The solution to the problem lies in driving transparency in the market. Fair market competition will create healthy bidding for land, ensuring adequate compensation to land owners and ensure quality and delivery of products at competitive prices to the end-user, benefiting the economy as a whole. View: The protests by farmers in Noida have reached absurd levels. Seeking to reopen an acquisition that happened 35 years ago is grossly ridiculous. If the principle is established that those whose lands have been acquired can demand enhanced compensation even decades after the event, it would set a dangerous precedent. This fallacy serves as a lesson that development without a good land acquisition bill can always be hijacked on petty issues and we a country who aspire for inclusive and sustainable development can least afford it.

PERSONALITIES OF THE WEEK

Grandhi Mallikarjuna Rao: G. M. Rao is the founder and chairman of GMR Group, a leading infrastructure developer in India. He was ranked 198th in the world's richest list by Forbes, and his wealth was valued at $2.6 billion. G. M. Rao is a Komati coastal Andhras traditional merchant-moneylender caste. He was among the first few to diversify from sugar into ethanol and power, using the latest technologies. His Chennai plant was among the first to use sewage as a coolant, thus saving on water consumption. A Visionary: A visionary businessman, G. M. Rao recognized the huge business potential in entering the infrastructure space, with the opening up of the power sector in the 90s in India. Within a decade, he successfully established three greenfield power plants in the country, one each in the state of Tamil Nadu, Karnataka and Andhra Pradesh. In 2007, the GMR group won a bid to privatize India's third busiest airport, Indira Gandhi International Airport. GMR group has also completed a $200 million Hyderabad airport project, which was bid on in May 2000. Under G M Rao's visionary leadership, the Group commissioned the brand new Sabiha Gokcen International (SGA) airport terminal at Istanbul, Turkey on 31st October, 2009 In April 2009 he was linked with a 500 million takeover of English Premier League side Liverpool F.C. He owns the Indian Premier League Twenty20 cricket team Delhi Daredevils. Cherished values: His cherished values are: humility, team-work, willingness to learn, ensuring delivery, respect for individuals, and being socially responsible. GMR is a stickler for detail and he always keeps a close eye on quality control, on technical processes, on the nitty-gritty be it in the sugar mill he runs in his home district of Srikakulam in Andhra Pradesh, or the power plant on a barge in Mangalore. Larry Ellison Larry Ellison is the co- founder and chief executive officer of Oracle Corporation, he is the fifth richest person in the world as of 2011, with a personal wealth of $39.5 billion. In 1977, he founded Software Development Laboratories (SDL). In 1979, the company was renamed Relational Software Inc., later renamed Oracle after the flagship product Oracle database. Formative years: As a boy, Larry Ellison showed an independent, rebellious streak and often clashed with his adoptive father. From an early age, he showed a strong aptitude for math and science, and was named science student of the year at the University of Illinois. He enrolled at the University of Chicago, but dropped out again after the first semester. His adoptive father was now convinced that Larry would never make anything of himself, but the seemingly aimless young man had already learned the rudiments of computer programming in Chicago. For eight years, Ellison bounced from job to job, working as a technician for Fireman's Fund and Wells Fargo bank. As a programmer at Amdahl Corporation, he participated in building the first IBM-compatible mainframe system. ORACLE: In 1977, Ellison and two of his Amdahl colleagues, Robert Miner and Ed Oates, founded their own company, Software Development Labs. Ellison had come across a paper called "A Relational Model of Data for Large Shared Data Banks" by Edgar F. ("Ted") Codd, describing a concept Codd had developed at IBM. Codd's employers saw no commercial potential in the concept of a Structured Query Language (SQL), but Larry Ellison did. Ellison and his partners won a two-year contract to build a relational database management system (RDBMS) for the CIA. The project's code name: Oracle. They finished the project a year ahead of schedule and used the extra time to develop their system for commercial applications. They named their commercial RDBMS Oracle as well. IBM itself adopted Oracle for its mainframe systems, and Oracle's sales doubled every year for the next seven years. The million dollar company was becoming a billion dollar company. Ellison renamed the company Oracle Corporation, for its best-selling product. Desire to win and stay ahead: Larry Ellison has long desired to undo Microsoft and become, as he has put it, the "number one" software company in the world. He's not there yet, despite having spent some $40 billion to buy up 75 hardware and software companies over the years. Microsoft claims a market capitalization of $226 billion compared with Oracle's $169 billion.

BUSINESS NEWS
1) TCS, Wipro in race for Tirupati temple project to provide IT solutions-ET 27 July TCS and Wipro are among three companies vying to bag the prestigious Sri Seva Project of the Tirumala Tirupati Devasthanam (TTD) to provide IT solutions that will help devotees. Currently TTD offers four main e-services such as e-seva, e-accommodation, esudarshanam and e-hundi to the devotees and the Sri Seva project would help the administration in offering services like providing rooms, 'laddus' as well as in tonsuring. There are as many as 48 departments which need to be automated and brought under one platform for better services to pilgrims, TTD had said. The project is estimated to cost between Rs 30 crore to Rs 35 crore, with an additional maintenance cost of around Rs 12 crore every year in the first phase, a senior official earlier said. 2) Microsoft opens new R&D facility in Bangalore-PTI 26 July Microsoft today announced its new state-of-the-art R&D facility here. The 1,54,000 sq ft building would house the Bangalore Microsoft India Development Centre (MSIDC) team that contributes to Microsoft Corp's ad Center technologies, as well as the researchers from Microsoft Research India. Microsoft's first R&D centre was set up in Hyderabad in 1998, while Microsoft Research India was established here in 2005. Inaugurating the building, Qi Lu, President, Online Services Division, Microsoft Corp, said for the last one decade, India has been a key player in Microsoft's strategy of global shared development. "The availability of world class talent, advanced infrastructure and proximity to the booming emerging markets of the world are key reasons behind this. The decision to set up our second R&D centre in Bangalore reinforces Microsoft's commitment towards India," Qi said. 3) 2,800 companies vanish from bourses in last ten years- Hindu Business Line 23 July You may not be surprised by the fact that 786 companies have got listed in the Bombay Stock Exchange in the last ten years. But do you know that in the same period, 2,800 companies have disappeared from the bourses. You can neither buy nor sell shares of any of these. Of the 1,600-odd companies that de-listed from the Bombay Stock Exchange, 53 per cent was because of compulsory delisting. SEBI specifies a set of reasons why a stock may be compulsorily delisted: Loss-making companies with negative net-worth, securities suspended from trading for more than six months, infrequent trading in the preceding three years, conviction of company/promoters/directors for violation of the SEBI Act, addresses of company/promoter/directors not known, and shareholding below minimum level according to listing agreement. Much of the compulsory delisting happened in 2004, when the BSE drew up a list of companies that were already suspended for more than three years and chose to delist them. 4) Cognizant set to replace Wipro as India's third largest IT company-ET 22 July IT major Cognizant is all set to replace Wipro to become the country's third largest IT services provider when it announces its results on August 2. Wipro reported IT services revenues at $1.408 billion for the April-June quarter. This is about $40 million less than Cognizant's April-June quarter revenue guidance of $1.45 billion. JP Morgan analyst Tientsin Huang, in a report on Cognizant dated July 15, drew a revenue estimate of $1.46 billion for the company in the April-June quarter. The underlying business fundamentals for the IT sector are healthy as the recently announced strong quarterly earnings of TCS , IBM and Accenture suggest. Therefore , Cognizant is expected to meet if not beat its guidance. The weakness that Infosys's and Wipro's results exhibit is more a reflection of company-specific issues as against market fundamentals. 5) Infosys chairman Narayana Murthy backs Kaushik Basu's proposal to make bribe-giving legal-ET 21 July Narayana Murthy says If bribe giving is made legal then givers can file complaints against takers without fear. N.R. Narayana Murthy, chairman of Infosys, said he fully supported proposals from economist Kaushik Basu to make paying bribes legal because this would help members of the public blow the whistle on corrupt officials. Under Basu's proposals receiving a bribe would remain illegal. Transparency International, the global anti-graft body, puts India 87th on its corruption perception index - 10 places below China. Basu had argued that his policy would ensure that "the bribe giver will be willing to cooperate in getting the bribe taker caught. Knowing that this will happen, the bribe taker will be deterred from taking a bribe.

6) 2G case: Raja drags in PM, Chidambaram- Hindu business line 25 July Mr A. Raja, former Telecom Minister, dragged the Prime Minister, Dr Manmohan Singh, and the then Finance Minister, Mr P. Chidambaram, into the 2G spectrum case. Defending himself, Mr Raja, a DMK MP, submitted before the Special CBI Judge, Mr O. P. Saini, on Monday that the issue of sale of equity by spectrum licensees was discussed with them (the Prime Minister and the then Finance Minister). Senior Advocate Mr Sushil Kumar, appearing for Mr Raja, said that Mr Chidambaram, then Finance Minister who is now Home Minister had said in front of the Prime Minister that dilution of shares does not amount to sale of 2G licence as per the corporate law. Mr Raja held that, When sale of equity does not amount to sale of licence, there is no question of earning profit. How can (then) be corruption there in this regard? He said there was nothing wrong in his decision of not auctioning 2G spectrum. He said he was merely following the policies pursued by his predecessors and the NDA Government. 7) India's exports remain buoyant despite competition from Chinese goods- ET 23 July Despite competition from Chinese goods & slowing world economy Indias share in merchandise world trade rose from 0.7% in 2000 to 1.4% in 2010. This is due to the exporters differentiating products and moving into goods higher up the value chain. India's share makes it the 20th largest exporter in the world, according to the WTO's 'World Trade Report 2011'. Rising share in world trade can be attributed to a shift towards better quality and high-value products - a strategy that has helped it grow alongside China in the array of products the emerging powers sell to the richer nations. India's exports of engineering goods in 2010-11 accounted for 38% of its total exports that year while textiles made up 14%. "China follows the assembly line production approach, i.e. on mass scale. India has small batch process, so it has the advantage of using services in manufacturing. In fact, even China is increasingly becoming an important export destination for Indian goods. In 2010-11, China was the largest importer of Indian engineering goods at $5631.66 million (April-Jan). 8) If India agrees to Saudi Arabias demand for removal of anti-dumping duty on the plastics raw material, Reliance will be the biggest loser- ET 26 July Indias lucrative polypropylene market dominated by Reliance Industries is occupying centre stage in diplomatic relations between India and Saudi Arabia as the oil-rich kingdom is mounting intense pressure on New Delhi to withdraw anti-dumping duty on the plastics raw material. The issue will be on the agenda in bilateral talks in September, when Saudi Arabia is expected to strongly pitch for the withdrawal of the duty as the worlds biggest oil exporter is eyeing markets for the giant petrochemicals plants it wants to build to diversify its oil-centric economy. Reliance, Asias biggest manufacturer of the key input for plastics, commands 70% market share in India with a capacity of 1 million tonnes and had successfully led the domestic industrys campaign for anti-dumping duty two years ago. Haldia Petrochemicals, which produces 3.2 lakh tonnes a year, also supports the levy. But Saudi Arabia resents this move and is relentlessly lobbying against it. 9) Rupee-denominated deals made easier-ET 23 July A year after the rupee got its Devanagari identity, the RBI has taken the first step to popularise it in international trade. The Reserve Bank on Thursday made it simpler for overseas buyers and sellers of goods and services to cut rupee-denominated deals while trading with Indian businessmen. It has permitted overseas traders to hedge their currency risks with local and offshore banks for trades invoiced in rupee. While invoicing in rupee was allowed a few years ago, foreign traders have not been accepting such export or import orders in the absence of a mechanism to cover risks arising out fluctuations in the currency. For Indian traders, however, invoicing in rupee eliminates exchange risks built into all crossborder transactions. Whenever rupee surged against dollar, exporters raised demand for rupee invoicing. But it never took off as most foreign buyers and sellers, often with more bargaining power, feared possible losses in a volatile currency market. 10) Heres a Lot of Bull for Your Milk Shake!- ET 23 July NDDB to create 900 superbulls for another white revolution. India may have the worlds largest population of cattle and be the top producer of milk, but the countrys bulls have a problem. Their pedigree is not good enough, raising concerns about the future of the dairy industry. So now, a new breed of superbulls will be custom made in laboratories so that their progeny become milch cows of the highest order. The project to genetically upgrade Indias breeding bulls will be taken up by the National Dairy Development Board starting October, with the aim of creating 900 of the finest bulls in about five years, NDDB Chairperson Amrita Patel said. The selective breeding will happen at 10 laboratories and is expected to be the successor to Operation Flood that ushered in the White Revolution. Bulls will produce 30-100% more milk than the average 6.5 litres produced by a quality crossbred cow today.

11) Music cos, not composers, own song rights: HC-ET 27 July In a setback to music composers and lyricists, the Bombay high court, in a landmark judgment, has upheld the right of music companies over a song recording. The order by Justice S J Vazifdar is a huge relief to FM radio stations and others who play recorded songs, including hotels and discotheques. Music composers and lyricists were demanding a separate royalty every time their music was played. The high court ruled that the Indian Performing Right Society Limited (IPRS), a body that safeguards the copyrights of music composers and lyricists, was not entitled to claim or demand royalty or licence fees from a private FM channel for the recorded song and music it plays on its radio station. This means that the FM stations will now have to only deal with Phonographic Performances Limited for obtaining a licence to play the music. The IPRS can claim royalty only when the song is performed live or another song is recorded, or the original song is remixed. 12) Indian traders learn Mandarin to strike business deals in China- ET 22 July There has been a sharp increase in small traders who have enrolled in Mandarin classes in the past two years, says Nitin Rao, founder of Career Crafters language institute in Mumbai. "For them, Mandarin is the language of money and opportunity." Three years ago, the Kolkatabased manufacturer of flex banners went to China on an impulse, accompanying a friend, a furniture dealer. And though he couldn't make any sense of the Mandarin when he walked through the wholesale tarpaulin markets in Jiangsu and Guangzhou, he understood the business potential well enough. "The second wave of learning Mandarin is here," says Reshmi Kumar, Mandarin tutor While the first wave was initiated by Indian corporates who sent employees to China, small and medium-scale businessmen are now learning this supposedly difficult language. Trade between the two countries touched $61.7 billion in 2010, marking a 43% jump from the previous year. For small Indian businessmen eyeing that pie, learning Mandarin is the key. 13) Sale of cosmetics by inducing negative feelings-ET 23 July University of Basque, Spain: Cosmetics adverts convince us that we are not good looking by using images of unusually beautiful people. Companies generate negative feelings in consumers so that they go for their cosmetic products to make themselves look attractive, says a study. The idea is to appeal to people's self-esteem and make them take "emotional decisions", said the study by the University of Basque Country in Spain. The unconscious desire "to be attractive to the opposite sex, to be sexually attractive" prods people to buy cosmetics, the African Journal of Business Management quoted the study as saying. "One way of achieving this is by subtly telling them they are ugly, something many cosmetics adverts achieve implicitly and very effectively by showing images of unusually beautiful women," says a study author. The study was carried out on products such as facial creams, anti-wrinkle creams and body lotions. A total of 355 women aged between 18 and 50 were surveyed. 14) Last year, Indians sent home $100bn TOI 22 July 27 million NRIs (2.2% of Indias population) have remitted $55bn (4% of GDP) & invested $45bn in 2010. According to World Bank figures, $55 billion poured in from overseas Indians in 2010, a dramatic increase of over 150% that the country had received in 2003 when nearly $21 billion was remitted. The $55 billion remittance, along with other forms of investments, worked out to around $100 billion coming into the Indian economy. According to the World Bank, India is followed by China ($51 billion), Mexico ($22.6 billion), the Philippines ($21.3 billion) and France ($15.9 billion). Kerala and Punjab are among states that receive the highest remittances from overseas residents. Didar Singh believes that the big increase in remittances has much to do with the great degree of faith that people have in the Indian banking system, coupled with a lack of trust in American banks. Remittances may be in many forms, such as domestic consumption, property, health and education. This is real money that is very much part of the local economy, not money that is simply parked in a bank, he said. 15) Apples profit grows 125% to $7.3bn, revenues grow 82% to $28bn (equivalent to 30% of Indias GDP)- ET 21 July Triple-digit growth is normally associated with start-ups and not a 36-year-old company whose market value is more than 30% of Indias GDP. Yet Apple produced such astonishing results, largely on the back of its two red-hot sellersiPad and iPhone. Reason? The storied Apple is the only large company that keeps innovating and re-inventing itself like a start-up.

16) Benami deals in name of spouse & kids to be legit-TOI 22 July In an attempt to put a lid on benami transactions, the Union Cabinet on Thursday approved of the replacement of the Benami Transactions (Prohibition) Act 1988 with a new law, Benami Transactions (Prohibition) Bill 2011, which will make benami properties liable for confiscation. Under the new law, properties bought in the name of a spouse or siblings will be allowed under benami deals, but a benami property will be liable for confiscation once the person involved has been given due opportunity of being heard. Speaking after the Cabinet meeting, information & broadcasting minister Ambika Soni said properties held by a coparcener (one of two or more persons sharing an inheritance) in a Hindu undivided family and properties held by a person in fiduciary capacity would be excluded from the definition of benami transaction. Properties acquired by an individual in the name of spouse, brother or sister or any other lineal ascendant or descendant are benami transactions which are not prohibited, she said. 17) Difficult to Avoid Taxmans Glare ET 21 July A fortnight ago, three businessmen from the same family were summoned by tax officials in Mumbai and Kolkata to appear with their tax returns and passports. In a world where tax sleuths carry out fishing enquiries to trace undisclosed income of wealthy individuals, jewellers and builders, the summons may have looked innocuous. But they weren't. For book keepers, tax practitioners and the well heeled with offshore, secret bank accounts, it surfaced a lurking fear: some tax havens are slowly, but surely, beginning to share specific information with Indian authorities. Around March-April, the three businessmen had moved money from their bank accounts in Isle of Man, Cayman Islands and Guernsey. "We understand tax authorities have come to know of these transactions. This is possible only if these jurisdictions have shared information," said a person aware of the transactions. "This was unthinkable in the past when money changed hands and moved from one account to another without anyone getting a whiff of it," he said. Perhaps, not anymore. 18) Govt Under Pressure to Release Airwaves- TOI 21 July The government is squatting on a valuable hoard of 2G mobile spectrum, wrestling with dilemmas about its value and how best to apportion it, as pressure mounts on the telecom department to release it to desperate operators. The Department of Telecom (DoT) last allotted 2G airwaves in late 2008 and has since maintained it has exhausted spectrum in most regions. But a recent admission on the DoTs website that it has some 211 MHz of 2G spectrum for GSM operators and another 75 units for CDMA carriers has triggered demands to release it quickly to the industry. The ministry can easily hope to raise around Rs. 25,000 crore from a possible sale or auction of 2G spectrum. A DoT official said the Telecom Commission, the top decision-making body of the communications ministry, will meet to examine the issue and to debate whether 2G airwaves can be handed out at prices recommended by Trai. 19) Indians spending more on kids education, less on food-TNN 25 July Indian families are investing heavily in their childrens education and spending more on healthcare at the expense of basic needs like food, reveals a NSSO survey on spending patterns of households. Between 1999 and 2009, expenditure on food increased by 70% among rural families and 78% among urban ones. But the spending on education jumped up by 378% in rural areas and 345% in urban areas. Compare this to the overall household expenditure on all items, which increased by a mere 8% in rural areas and 20% in urban areas after adjusting for inflation. And, it is not the same people who are spending more on their childrens education. In 2004-05, when the previous such survey was carried out, 40% of rural and 57% of urban families said they were spending on education. The new survey records a big jump in these numbers63% of rural and 73% of urban families were getting their kids educated. 20) Walt Disney offers to buy out UTV's rest 49.56% stake for Rs 2,000 cr-ET 27 July Walt Disney Co plans to buy the rest of UTV Software Communications (UTV) it does not own and delist the company in a deal potentially valued at $454 million, or Rs 2,014 crore, as the US entertainment giant seeks to expand its presence in Bollywood, media and gaming. The buyout will give Walt Disney control over five businesses. UTV Software, a holding company, makes and distributes movies, broadcasts a clutch of movie and entertainment channels, produces content for television and other digital media, and also has a presence in gaming. India is the world's third-largest TV market trailing China and the US with nearly 138 million TV households, according to a March 2011 report by KPMG and industry lobby FICCI. The media and entertainment industry is likely to expand 14% annually until 2015, with segments such as TV, gaming and animation expected to outpace the industry growth, the report said.

INTERNATIONAL NEWS
21) Apple pips Google, Facebook to become No 1 international brand in China- New York Times 26 July A year after opening a flagship store here, Apple has a problem that any retailer would envy: The huge 16,000-square-foot space is already too small. Huge crowds descend the store's glass staircase, only to discover legions of mostly young Chinese crowding around spare displays of Apple's devices. Another Apple Store, four miles away, is also packed. To cope, Apple says it is now planning a third, even larger Shanghai store, as well as dozens of other stores throughout the country. Apple says its Chinese outlets - two in Beijing and two in Shanghai - are now the four most heavily trafficked Apple stores in the world. They also generate the most revenue, outselling even the Fifth Avenue Apple Store in New York, which is open around the clock. Apple's push into China may be important for other reasons: It shows the depth of this country's fast-growing upper middle class. Foreign brands can absorb another lesson as well. Apple's success shows that with products that are not so easy to counterfeit, Chinese consumers are willing to pay a premium. China has become the second-largest market after theUS for apps that run on the smartphone and tablet, according to Distimo, a Dutch company that tracks the popularity of apps. 22) Samsung pips Apple, Nokia in smartphone sales for first time- Bloomberg 26 July Samsung Electronics, maker of the Galaxy mobile phone, may have surpassed Nokia and Apple in smart-phone sales for the first time on demand for devices that run on Android software, a research company said. Samsung is estimated to have sold between 18 million and 21 million smart-phones globally in the April-June quarter, compared with 16.7 million for Nokia and 20.3 million iPhones, Neil Mawston, a London-based analyst at Strategy Analytics, a research company based in Boston, said in an e-mailed response to questions on July 22. The data exclude tablet-computer sales. The estimates show Google's Android is gaining ground on Apple in smart-phones as Nokia, which is turning to Microsoft for software support, struggles to keep up with the pace. Samsung, which also produces low-end phones that aren't capable of downloading applications, has said it aims to more than double sales of high-end devices this year. "Samsung stands a reasonable chance of capturing the top spot on a quarterly basis if it can continue expanding its Android portfolio across high-growth markets like China and Brazil. Samsung and Apple will be at similar levels in smart-phones by the end of the year." 23) Entire Apple stores being faked in China-ET 26 July China, a country known for its rampant piracy, has now reached a new milestone --fake Apple stores. An American blogger who lives in Kunming in southern Yunnan province said Thursday that she stumbled on three shops masquerading as bona fide Apple stores a few days ago. She says the employees told her they worked for Apple. She posted photos online showing the employees wearing blue Apple T-shirts. Apple has four company stores in China as well as various authorized resellers, who are not allowed to be Apple replicas. The manager of one authorized seller in Kunming, who gave only his surname Zhang, says some staff in the fake stores "can't even operate computers properly." Apple's Asia office based in Beijing would not comment. 24) Anshu Jain first non-European becomes head of Deutsche Bank -ET 27 July Anshu Jain becomes the first non-European to head up DB, and the first Indian among a handful of non-Europeans to head any large, listed European firm. As head of Deutsche Bank, he becomes, simply, the most powerful banker in the Eurozone's largest economy. Jain is no stranger to power. The Jaipur-born, America-trained Jain is the darling of Wall Street, the City of London and DB's shareholders. He's got an enormous power base and is considered the best banker who's not a CEO in London, and one of the most influential globally. Jain's appointment is proof that Germany is not, as is often portrayed by the US media, insular or anti-multicultural, or that the German government would have any problems with him. 25) US likely to lose 'AAA' credit rating, say economists-Reuters 27 July The United States will lose its top-notch AAA credit rating from at least one major rating agency, according to a poll that also found wrangling over the debt ceiling has already damaged the economy. A small majority of economists -- 30 out of 53 -- surveyed over the past two days said the United States will lose its AAA credit rating from one of the three big ratings agencies --Standard & Poor's, Moody's or Fitch. Downgrade and default would have vastly different consequences. A ratings cut might raise the risk of recession by hurting confidence, but might allow financial markets to muddle through the next few months without incident. A default, however, would send shockwaves through the global financial system that could kick-start a new financial crisis, analysts say.

MISCELLANEOUS NEWS
26) In 10 years, urban Indian women's average income doubles-TNN 26 July Reinforcing the growing financial independence of women in India, a survey says the income level of urban Indian women has doubled in the last decade. This increase has also led to the average urban household income doubling, according to a study by market research firm IMRB. The urban Indian woman who earned Rs 4,492 per month in 2001 was taking home as much as Rs 9,457 as of 2010. The rise in her income is directly reflected in the average monthly household income of urban India going up from Rs 8,242 to Rs 16,509 in 2010, says the IMRB survey. According to official data, India's per capita income rose from Rs 16,688 in 2000-01 to Rs 54,835 in 2010-11, a 228% rise. The IMRB figures suggest that urban incomes in the same period rose by 100% and incomes of urban women by 111%. What is significant in the survey is that with the woman's personal income doubling, she is increasingly outsourcing household work. From 91% women saying they did household work themselves, the number has dropped to 71% in 2010, according to the survey. 27) Chinese drivers trapped in 100-kilometre traffic jam- www.cnn.com 21 July A 100Km traffic jam in North China lead to a severe congestion because of construction to expand a section of the road. Cars continued to enter the highway, but there are no detours to get off. Coal truck driver Liu Jianjun told China Daily it took 40 hours to drive the 100-km stretch. This isn't the first time bumper-to-bumper traffic has plagued this highway. Last August and September, more than 10,000 vehicles plugged the highway creating a 120-km jam.Last summer, crews were working on a parallel route. Beijing News reported poor road design and bad traffic management was to blame for that jam that lasted off and on for more than 20 days.Local residents tried to make some money selling water and instant noodles at inflated prices, but many drivers were hoping local authorities would bring them enough water and food to endure the heat. 28) CAT 2011 takes on a new avatar: One section less, 5 extra minutes-TNN 26 July The Common Admission Test (CAT) is getting a format makeover. The test, which holds the key to admissions to the 13 IIMs and other major B-schools in the country, will be conducted between October 22 and November 18, 2011. Though the number of questions remains the same, CAT 2011 will have two sections instead of three, and students will get an additional five minutes to tackle them. According to a statement released by testing agency Prometric and IIMs, the first section will focus on quantitative ability and data interpretation while the second will be on verbal ability and logical reasoning. These two sections will be implemented sequentially with separate time limits. It will be a 140-minute exam. Candidates will have 70 minutes to answer 30 questions in each section, which will have an on-screen countdown timer. 29) Not one new student in 6 engg colleges in state-TNN 27 July In the thick of the admission season, there are some colleges that bear a deserted look. The admission counter is open but no ones queuing up. Pratap Institute of Technology and Management in Washim is one among them. When the first round of seat allotments closed, there were around half-a-dozen colleges which did not have a single student opting to join them. Ironically, they have all the popular streams on offercomputer science, electrical engineering, information technology. Data from theDirectorate of Technical Education (DTE), which conducts admission to engineering colleges in Maharashtra, reveals that 34,801 seats remained unfilled after the first round. This is a 75% increase compared to last year, when close to 20,000 seats were vacant after admissions closed. In fact, the state recently relaxed the eligibility criteria for engineering aspirants, from 50% in Class XII (in physics, chemistry, maths) to 45% for general category and 40% for reserved categories. 30) Ayurveda, unani under mediclaim umbrella-TNN 25 July Till some time back, health insurance policies used to cover only allopathy treatment while ayurveda, homeopathy, naturopathy and unani treatments were left out. Despite having a comprehensive health insurance plan in place, individuals who preferred such systems had to pay out of their own pockets. These policyholders can now breathe easy as some insurance firms have started including such alternative forms of treatment under their cover, especially ayurveda. Naturopathy treatments are excluded in all policies, while few cover unani and homeopathic. This is because other forms of treatments have no standard treatment protocols and highly varied costs thus making it difficult to actuarially compute the cost to be covered. Even under ayurveda, select procedures are covered to ensure people do not misuse a policy for a basic rejuvenation procedure.

Infrastructure is recognized as a crucial input for economic development and refers to installations that form the basis for any operation or system. Historically, the government has played a key role in supplying and regulating infrastructure services in India. However, due to the public sectors limited ability to meet the massive infrastructure funding requirements, private sector investment in infrastructure is critical. Overview: Construction is the second largest economic activity in India after agriculture. The governments success in infrastructure provision will be measured not by the quantum of funds invested, but on how infrastructure contributes to the achievement of Indias economic, social and environmental objectives. The Planning Commission of India has planned extensive expansion in roads and highways, ports, civil aviation and airports, and power infrastructure segments, with the Eleventh Five Year Plan (2007-2012) in progress. India has a very well established infrastructure developer market. Companies like Larsen &Toubro, Punj Lloyd, Reliance, GMR, Suzlon and Tata Power have evolved into fully-fledged national players (and in some cases international players). In certain sectors, such as highways, power and water, companies like Gammon, Bharat Heavy Electrical Limited (BHEL) and Thermax have significantly progressed on the technological front. Urbanization: With Indias urban population expected to increase from 400 million in 2011 to about 600 million or more by 2030, cities and towns will need to create adequate infrastructure to sustain economic activity. Investment required in urban infrastructure is estimated at Rs 60 lakh crore over the next 20 years. Power and Energy: Increased manufacturing activities and a growing population are also causing a surge in power usage. India has an electricity grid supporting 135 GW generation capacity and an expansive transmission and distribution network. The planning commission wants to target 100,000 MW capacity in 12th Plan (against likely achievement of 50,000 MW in Eleventh Plan). Commercial energy demand will increase at 7% p.a. if GDP grows at 9% requiring a major supply side response and also demand management. Energy pricing is a major issue as Petroleum and Coal prices are significantly below world prices and world prices are unlikely to soften. Roads and Highways: The Indian road network of 33 lakh km is the second largest in the world. About 65% of freight and 80% passenger traffic is carried by the roads. National Highways constitute only about 2% of the road network but carry about 40% of the total road traffic. The Golden Quadrilateral, a highway network connecting Delhi, Mumbai, Chennai and Kolkata, is the largest highway project in India, initiated by Atal Bihari Vajpayee. It is the first phase of the National Highways Development Project (NHDP) and consists of building 5,846 km of four/six lane express highways at a cost of 60,000 crore. The NHDP is a project to upgrade, rehabilitate and widen major highways in India to a higher standard (implemented in 1998). Its different phases are in various stages of completion. Railways: The railway freight traffic is projected to cross 1100 million tonnes by the end of 11th Five Year Plan but there are infrastructure gaps and capacity constraints in the rail system. For instance, the Dedicated Freight Corridor project is expected to now cost around Rs 77,000 crore, including the cost of borrowing and inflation. The project announced in 2005, involves building an exclusive freight line each in the west and the east to connect Mumbai and Kolkata with Delhi, to be completed by 2012, but is yet to take off due to delays in land acquisition and finalization of the alignment of railway lines. The Railways is banking heavily on DFC to decongest its clogged network and help substantially increase speeds of both passenger and freight trains, making it more competitive against airlines and snatching business away from road transporters. FDI in Infrastructure: Foreign players have greater technological expertise, deeper pockets and more extensive experience compared to domestic companies. Up to 100% FDI is allowed in respect of projects relating to electricity generation, transmission and distribution, other than atomic reactor power plants. There is no limit on the project cost and quantum of foreign direct investment. Challenges: Uncertainty, scarcity of funds and competing priorities present challenges to all governments in infrastructure planning and delivery. While many of the major Engineering & Construction companies have massive order backlogs, talent shortage is an issue in key skilled trades such as fitting, welding, masonry and plumbing. India is also facing shortages of construction equipment and machinery. Coal availability will be a major constraint. Long term health of power sector is being seriously undermined with losses of Rs 70,000 crore per year. Whilst the need for greater infrastructure investment is clear, equally important is the need to sustainably manage such investments. Sustainability requires that future generations are not compromised by investment decisions of current generations.

THE INDIAN INFRASTRUCTURE INDUSTRY

FINANCE NEWS
1. HSBC to sever ties with US clients having offshore accounts ET 21 July Under the scrutiny of the US authorities for its tax-evading clients, financial services giant HSBC has sent a letter to US customers who have accounts with HSBC India saying it is terminating private banking services to US persons and certain trusts and non-operating companies connected to US persons,. Customers have about a month to close their accounts. A spokesperson from HSBC said it will no longer offer wealth management services to US resident private clients from locations outside the US, and that American clients will be better served by our private banking teams in the United States. Those affected are hundreds of clients with accounts totaling as much as $100 million. This has been done as a way of cooperating with the US and avoiding the fate of rivals that were fined or threatened with prosecution for assisting tax scofflaws. The IRS is offering reduced, yet stiff penalties for US taxpayers with secret offshore accounts who voluntarily report them. 2. Reliance Life exploring strategic equity partner ET 21 July Reliance Capital is negotiating with Axis Bank and Syndicate Bank among others to sell a 23% stake in its life insurance business to boost distribution network. Reliance Life, a part of the Reliance Group led by industrialist Anil Ambani, ranks first among Indian companies in the business in terms of policies sold and fourth in terms of new business premium. Since Reliance Life - a subsidiary of the listed financial services company Reliance Capital - was a late entrant in the business, it had few options to tie-up with a commercial bank and relied on building its own network. The role of an intermediary - in this case a commercial bank - is of utmost importance to an insurance business with commercial banks contributing to some 20-30% of the life insurance business of private companies. At present, the Insurance Development and Regulatory Authority of India (IRDA), does not permit a commercial bank to have more than one partner each in life, non-life and health insurance businesses. 3. 7% account holders in India use net banking: McKinsey Business Standard 21 July According to a McKinsey India personal financial services survey 2011, by global management consultancy McKinsey & Company, use of the Internet for banking has seen a rise in 2010-11 with the overall number of bank consumers who use the internet being 7% of the total bank account holders. The percentage of online users of banking transactions was just about 1% in the agency's 2007 survey. As per the survey, India leads growth in Asia in mobile and Internet usage for banking. While there was a 15% decline in branch usage, the growth in Internet and mobile banking has almost tripled. There is also a full 40 percentage point drop in loyalty since 2007, though 95% people are seemingly satisfied with their main banks. The percentage of consumers using financial planners increased from 14% in 2007 to 43% in 2011. 4. Banks are hunting for best locations to expand their presence ET 22 July Banks like State Bank of India and Kotak Mahindra, among others, are looking to move into up-market locations across the country. While some of them have already taken up space, others are lining up aggressive plans to open new branches to step up presence. According to real estate consultancy Jones Lang La-Salle, commercial space absorbed 20 million sq ft in 2011, up from 13.7 million sq ft in 2010. Of this, about 15% was contributed by the banking, financial services and insurance (BFSI) sector. "A bank branch is perhaps one of the biggest reinforcement of the brand for the consumer," said Mahesh Balasubramanian, executive vice-president, Kotak Mahindra Bank occupying prime real estate space on Park Street, Kolkata. State Bank of India moved into a new property in Indiranagar, Bangalore and is looking for additional space in Mumbai. While identifying a location, banks also take into account the overhead cost vis-a-vis business expected from the new site over the next five years. 5. L&T Finance IPO to raise Rs 1,245 crore Business Standard 22 July The IPO (initial public offer) of L&T Finance Holdings, also the first listing from the diversified Larsen & Toubro (L&T) group in 60 years (which went public in 1950), opens on July 26 for anchor investors and July 27 for the public and will raise around Rs 1,245 crore at a price band of Rs 51-59. The proceeds will be used for meeting the growing business needs and capital adequacy requirements of the two subsidiaries, L&T Finance and L&T Infrastructure. The L&T Finance share sale is the largest such transaction this year. In the first 7 months of the current calendar year, 21 companies have raised Rs 3,356 crore, with the average being Rs 160 crore per issue. Muthoot Finance, the largest IPO to hit the market this year, raising Rs 900 crore, has disappointed and is barely hovering around its issue price of Rs 175.

6. Three attacks later, one-fourth of bullion traders still uninsured Financial Express 21 July Even after the terror blasts in Mumbais Zaveri Bazaar and Opera House last week, over 20-25% of the traders at the citys premier bullion and diamond hubs continue to remain uninsured. Zaveri Bazaar, which has been targeted by the terrorists thrice, had at least 5,000 bullion and jewellery shops and offices. After the earlier blasts, some of them had shifted to the Opera House area to avoid the crowds and congestion, but have ignored the need for insurance. Bharat Shah, a prominent diamond trader attested to the general laxity on the matter: The Opera House area, which accommodates over 2,000 bullion traders, is not 100% insured be it individual, auto, property or anything possessed by the trader. Most of the diamond merchants buy insurance, considering the high value of their raw materials. For instance, insurance for diamonds is available, but it is too expensive and out of bounds for the smaller traders. At the end of a normal trading day, brokers deposit the diamonds in the four or five safety vaults in the area. 7. Wall Street, companies brace for the worst, a US default Reuters 22 July American businesses, from Wall Street banks to major industrial corporations, are preparing contingency plans for the unthinkable: the United States defaulting on its debt and the loss of the nation's top AAA credit rating. Lawmakers and President Barack Obama need to agree to raise the current $14.3 trillion legal borrowing limit by August 2, to avert a default but the decision is being held hostage to arguments between Republicans and Democrats about how to cut the U.S. budget deficit. Top U.S. Republican, House of Representatives Speaker John Boehner, broke off talks with Obama, saying they had become futile because the U.S. President was demanding an increase in taxes. Companies are ensuring they have plenty of access to cash and investors are being told to hedge their portfolios, with gold as a favoured asset. In the financial crisis in September 2008 after the Lehman Brothers collapse, the failure of lawmakers to pass legislation to authorize a $700 bn government bailout of the banks had sent markets into a tailspin. 8. Gold hits all-time high ET 25 July Surpassing all previous records, gold roared to an all-time high of Rs 23,620 per 10 grams by adding Rs 200 on increased buying by stockers and investors, driven by a record rally in global markets. Silver also moved up by Rs 500 to Rs 59,500 per kg on increased offtake by industrial units and coin makers. Trading sentiment turned bullish as gold marched to a record of $ 1,624.30 an ounce overseas, after US lawmakers failed to reach an agreement on raising the federal debt limit, increasing concerns of a US default and boosting demand for the metal as a safe haven. 9. Retail stocks surge after secretaries panel clears 51% FDI Moneycontrol 25 July Most retail shares surged as investors cheered a recommendation by the Committee of Secretaries to allow up to 51% FDI in multi-brand organized retail. Indias total retail sector is estimated at USD 590 billion with the unorganized sector accounting for USD 496 billion, according to Edelweiss Securities. The fall in overall FDI in India last fiscal provides a strong case for the government to amend the retail policy to boost foreign investment and spur retail sector growth. It will also help in tackling inflation, as opening up of the sector can stimulate investment in improving the logistics, backend supply chain and cold chains, which will in turn reduce food wastage during its journey from farms to retail shelves. Although foreign direct investment is allowed in single brand stores like Marks and Spencers for instance, opening up the multibrand retail sector has been a contentious issue on the premise that such a move would push Indias large number of traditional kirana stores out of business. 10. Mukesh Ambani unlikely to turn Reliance Industries zero-debt by FY12 ET 23 July RIL chairman Mukesh Ambani's idea of making the firm debt-free company by March 31, 2012, may remain a distant dream as RIL with a debt of Rs 67,397 crore on its balance sheet is again seen raising billion of dollars of loans. With the tightening of the domestic interest rates, borrowing overseas is a good option. RIL is in the international market to borrow over a billion dollar term loan while its arm Reliance Port and Terminals is in process of raising another Rs 1,400 crore through private placement of bonds. US Exim Bank has approved loan of $1.4 billion to Indian firms, including RIL. Reliance has Rs 42,000 crore of surplus cash reserves, Rs 25,000 of cash generation during FY12 and Rs 32,000 crore coming out of the BP deal but all this is earmarked for the capital intensive businesses and RIL needs to borrow funds for new business initiatives. According to investment advisor S P Tulsian, Reliance spent Rs 4,800 crore in acquiring Infotel for broadband service licenses and needs to spend another Rs 20,000 crore for rolling out broad band services & similar amount of cash to acquire a telco for voice. So the idea of cash flow against debt doesn't hold good.

11. PE cos mop up $17 bn through IPOs in Apr-Jun: E&Y Business Standard 25 July According to an Ernst & Young report, 45 Private Equity-backed companies raised a whopping $17.2 billion through initial public offers (IPO) globally during April-June, 2011, highest quarterly total since the second quarter of 2007. It is also nearly twice the volume of January-March period of 2011 and up 24% on a value basis. Despite ongoing uncertainties momentum is continuing to build across the IPO markets, giving PE sponsors an ever-widening window to exit holdings, as investors move further out of the risk spectrum in search of companies with strong growth stories. Companies in emerging markets also saw elevated activity raising $7.7 billion across 17 separate deals. Emerging markets exchanges are becoming increasingly amenable to sponsored IPOs as investors become more comfortable with the PE model. Additionally, the growing availability of cross-border listings is providing emerging markets -based companies with a wider range of opportunities now. 12. Indian equities may spin a pleasant surprise ET 26 July Indian equities may spin a pleasant surprise in the second-half of the year, as inflation is beginning to peak and some positive policy initiatives are expected from the government in its upcoming monsoon Parliament session. Dixit Joshi, managing director and co-head, equities, Asia, Deutsche Bank, foresees a potentially bullish environment for Indian equities. Year-to-date, the market is down almost 10%, but we can see an upside of more than 13% by the year-end, if global factors don't deteriorate. The game changer is the new bailout loan that the European Union agreed to last week, infusing renewed optimism into global equities. "Valuations, which at the beginning of the year were at 16 P/E reflecting a higher growth assumption, are now at 14 P/E, as investors have now reduced their growth expectation," said Joshi. 13. India slips on global FDI chart from 8th to 14th slot ET 27 July India slipped from being the 8th largest recipient of foreign direct investment (FDI) in 2009 to the 14th in 2010, according to the World Investment Report 2011, by the United Nations Conference on Trade and Development (UNCTAD). FDI flows into India dipped from $36 bn in 2009 to $25 bn last year, even as global FDI flows recovered from the post-meltdown $1.19 trillion to $1.24 trillion. In 2010, US continued to be the largest recipient of FDI with $228 bn, followed by mainland China with $106 bn and Hong Kong with $69 bn. The report projected global FDI flows to touch between $1.4 trillion and $1.6 trillion this year, still below the $1.74 trillion recorded in 2008. The report also warned that risk factors like possible widespread sovereign debt crisis, fiscal and financial sector imbalances in some developed countries as well as inflation and signs of overheating in major emerging market economies could derail the projected FDI recovery. 14. Sensex plunges 1.96% after RBI hikes key rates ET 26 July The Reserve Bank of India hiked repo rate and reverse repo rate by 50 basis points in its first quarter monetary policy review for the fiscal. Indian markets ended sharply lower with the higher-than-expected hike and interest rate sensitive sectors were badly hit. Bank, realty and auto stocks were battered on the BSE as the rate hike is expected to dampen consumer demand and slow down sales. This degree of aggression in monetary policy will bite both into investment and consumption demand, as tightening is likely to end only if global commodity prices plummet or domestic agri-product prices crash. The BSE 30-share index Sensex ended at 18501.76, down 369.53 points or 1.96% while other indices BSE Realty Index, BSE Capital Goods, BSE Bankex and BSE Auto Index also fell. Market breadth was negative on the BSE with 1786 losers against 1065 gainers. 15. Funding squeeze pushes India Inc into PE's arms Reuters 27 July India is flooded with private equity firms looking for investments -- from global buyout shops like Blackstone and 3i Group, to homegrown firms like IDFC and ICICI and rising borrowing costs and dormant markets push companies towards private equity. A 10% slide in India's main share index and 11 interest rate hikes since March last year means companies have to look beyond markets and bank financing for capital. Unlike developed markets, India offers few buyout opportunities but more deals are emerging now as India's entrepreneurs slowly lower their valuation expectations. India has the highest deal count for private equity backed M&A in Asia, with 89 deals worth $4.2 billion launched so far this year, according to Thomson Reuters data. Earlier this month, Micromax decided to pull its planned stock market listing, expected to raise about $150 million, citing poor sentiment. Instead, it raised about $45 million from private equity firms, allowing it to avoid sharply lowering its share value to entice retail investors.