The Mint - 13th October

Submitted By
Deepak Rawat &
Chiranjeev Brahma

IIP (Index of Industrial Production) falls to 15 month Low of 5.6%
Page 1 Mint
• Drops from 15.2% during July’10, although is was revised from 13.2% on account of some correction
• This slowdown in growth suggests moderation of growth trajectory with the Reuters poll of analysts forecasted to be around 9.65%
Consequences
o This volatility will make it difficult for the policy makers (RBI) to assess economic conditions
o Stock market fell after the release of the data of IIP
Related story – on page 30,
• Slowdown sharp in sectors like manufacturing, especially machine and equipment grew by only .4%. Machine and equipment have a high weightage of 9.6 in the index and hence its growth value is important
• Electricity grew by only 1%
• Mining did better at 7% but still short of 11% last year

However it must be underlined here that the robust performance from late 2008 till August 2010 is attributed to the
• Low base rate adopted then
• Government had pumped monetary stimulus since late 2008
Hence money/ credit was cheap and there was no uncertainty, and hence the growth in the IIP

Related article pg 18
RBI doesn’t think the data is greatly reliable since it had shown a lot of fluctuations and hence expert think that a rate hike in light of the new data is unlikely.

Wall Stree to apy out record $144 billion

Topping its last year’s record of $139 billion, the public held securities and investment service firms such as banks, money management firms would pay out $144 billion as compensation and benefits (pay packages). This a 4% increase from last year.
Some more points:
• Revenue to rise 3% from $433 to $448 billion
• 32% of the revenue would be compensation
• Estimated profit for 2010 is $61.3 billion compared to $82 billion in 2006
These huge packages are due to the high focus on retailing top talent in the Wall Street.


CIL – set to take Indian in to the IPO big league

CIL – the largest coal reserve owner in the world plans to raise Rs. 15500 cr in its IPO, which is even larger Reliance Power’s RS. 11700 cr IPO in 2008. This will be the largest IPO by the government.
Some points
- Shares prices at Rs. 225 -245
- Rs 15470 cr is more than 1/3rd of the target of Rs . 400000 disinvestment by the government
- It’s about 1/20th of Brazils Petroleo Brasiliero’s IPO of $70 billion.

Maran raises stake in Spice Jet

On tuesdy, Kalanithi Maran and KAL airways acquired additional 7.42% stake in Spicejet increasing their stake to 53% from 45.46%.
The shares were bought at discount of 38.5% to market rates.
On Tuesday they bought 28.5 million shares at Rs. 47.25 and a week before they had bought 19 million at the same price.


IIMs to raise funds in Yale University Style
Elite IIMs which largely depend on government support may seem soon raise funds from the Alumni. The committee has suggested an initial plan for the 4 oldest IIMs, namely Ahmedabad, Kolkata, Bangalore and Lakhnow to raise Rs. 400 cr.
Some Important News
- India is looking to build capitive fertilizer capacity oversees
- 59 government department score an average 85% in the first ever evaluation
- Google pushes Android in India

Corporate News
- Suzlon Energy Ltd. India’s biggest wind turbine manufacturer plans to raise $1.1 billion by selling shares and debts to help fund expansion and repay loan.
- Atul auto limited aims to expand by earmarking Rs. 100Cr for expansion
- PNB expects Kazakh Bank buy by March
- Dena Bank raises deposit rates by .25 to .5 percentage points
- Volvo to launch SUV in India next month

CWG
- India beats England in Hockey semi-final
- India wins women’s relay gold
- Currently India is positioned 2nd with 32 gold, 25 silver and 32 bronze ahead of England.

Market
- Sensex falls in weak industrial production
- Sensex opened 20203.34 dipping by 136.55
- Nifty opened lower by 44.95 at 6090.90
- Rupee gained 26 paise against the dollar and valued at Rs. 44.66
- Gold gained by Rs. 50 to be at Rs, 19590
- Top gainers – BSE – 7 Seas Techno ---- NSE – DPSC
Losers BSE – Gallant ISPAT----- NSE – Cantabil Retail