Hindustanis.Org

For private equity (PE) players, mid-sized, family-owned companies in India still retain their charm. Leading PE firms are learnt to have evinced interest in a major fund-raising programme by Trichy-based Cethar Vessels, a Rs 1,100-crore boiler manufacturer, which has lined up an ambitious expansion programme to meet the growing demand for power generation.

Private equity players such as Chryscapital, CVC and UTI Ventures are some of the names that the closely-held Cethar is learnt to be talking to for offloading part of the promoter stake. The funds infusion could be in the range of $50-100 million, according to people close to the development.

The funds would be used up for Cethar’s expansion programme. The boiler maker had earlier said it would need about Rs 900 crore to build facilities for boiler auxiliaries and pressure parts. It also plans to raise Rs 500 crore from private equity funds and tie up with banks and institutions for the remaining amount.

When contacted, K Subburaj, chairman, Cethar Vessels, told ET: “We have mandated SSKI to find a private equity investor. We are meeting with Chryscapital. But it is one of the many meetings that SSKI is arranging for us. It will be at least a month before an investor is finalised.” Cethar is also likely to soon appoint an audit firm to do financial auditing and get another investment bank to help arrive at a valuation.

The company has been talking to a number of audit firms, including KPMG, for the purpose.Sources said Cethar intends to raise private equity money before March 2008 as it will help the company chip in with additional promoter’s equity for raising funds from banks and FIs. The company, which reported a revenue of Rs 1,100 crore last fiscal and has set its sights on about Rs 1,750 crore in the current year, has plans to go public before 2009.

Source - Economic Times 

As if the Federal Reserve didn’t have enough headaches these days, inflation appears to be on the march after a long period of relative quiet. Case in point: The release of the U.S. consumer price index for November on Dec. 14. The headline CPI surged 0.8% on the month, while the core rate, which excludes food and fuel, rose 0.3%. Markets expected tamer rates of 0.6% and 0.2%, respectively, according to S&P MarketScope.

Boosting the rate, not surprisingly, was energy, up a huge 5.7% after a 1.4% push in October. Gasoline prices climbed 9.3% and are up 37.1% year-over-year. Transportation costs were up 2.9%. Housing costs rose 0.4%, with a 0.3% increase in owners’ equivalent rents and a 1.5% gain in fuels and utilities.

Rounding out the ugly picture, apparel prices were up 0.8%, food rose 0.3%, and education increased 0.1%.

On a year-over-year basis, the headline rate accelerated to 4.3% from a 3.5% rate in October. The core rate was up 2.3% from 2.2%, and above the Fed’s implicit 2% ceiling for inflation. The stronger than expected data will be a major concern for Treasuries and restrict the Fed’s willingness to loosen, notes S&P Economics.

Action Economics expects the year-over-year headline CPI index to remain at 4.0% or above through at least February if energy prices remain at current levels. The figures proved as troublesome as the 3.2% surge in the November producer price index (BusinessWeek, Dec. 13) reported Dec. 13, accompanied by a firm 0.4% gain in the core PPI, and the jumbo November trade price gains released on Dec. 12.

Action assumes the same 0.8% headline gain for the personal consumption expenditure (PCE) chain price index in November with a 0.3% core gain. Huge gains in headline inflation will keep Federal Reserve policymakers on their heels regarding inflation risks, even if the market remains more interested in recession risks.

As could be expected, bond investors didn’t appreciate another round of hot inflation data after a big pop in the November producer price index on Dec. 13. The November CPI release drove Treasury yields sharply higher in early trading Dec. 14, though some of the news was discounted in advance of the CPI figures. The dollar firmed following the hotter than forecast CPI data, while stocks appeared headed for a negative start.

Source - BusinessWeek 

Russia said Monday it has begun fuel deliveries to an atomic power station in Iran that has been at the center of international concerns over Tehran’s nuclear program.

Atomstroiexport, Russia’s nuclear power equipment and service export monopoly, completed the first stage of deliveries on Sunday, the Russian Federal Atomic Energy Agency said.

The head of Iran’s Atomic Energy Organization, Reza Aghazadeh, was quoted by Iran’s Fars News Agency as telling Iranian state television that the shipment arrived Monday.

The United States, several European nations, and Israel suspect Tehran has been trying to acquire nuclear weapons, but Iran denies its nuclear program is for anything but peaceful purposes.

A recent U.S. intelligence summary concluded that, contrary to earlier suspicions, Iran halted its nuclear weapons development in 2003.

Atomstroiexport, the Russian monopoly, is building the $1 billion Bushehr plant under the control of the International Atomic Energy Agency (IAEA), the United Nations’ nuclear watchdog agency. The Russian foreign ministry and nuclear officials said the fuel delivery was under full IAEA safeguards.

“The Bushehr plant is 95 percent completed and I promise the Iranian nation that the electricity generated by this nuclear plant will enter the country’s electricity network next year,” Aghazadeh said, in comments carried by Fars.

A statement on the Russian Foreign Ministry’s official Web site Monday said Iran had provided additional written guarantees that the fuel can only be used at and for the Bushehr plant, and that the spent fuel will be returned to Russia for utilization and storage.

“The nuclear fuel is being delivered to Iran about six months ahead of the time when it will be actually used for producing energy, as stipulated by technical requirements,” the statement read.

The fuel deliveries will be made in several stages over two months, Russian nuclear officials said. The first stage was completed, officials said, when IAEA-certified fuel containers were delivered to a special storage facility, inspected by the IAEA, at the plant.

The United States supports the Russian plan to enrich uranium on its soil, which is a compromise effort to alleviate Washington’s concerns over Iran’s nuclear intentions and Russia’s support for Iran’s right to a nuclear energy program.

President Bush said he voiced his support for the program in a phone call to President Vladimir Putin earlier this month.

“One of the interesting tactical decisions that Russia has made — that the United States supports — is the notion that Iran has a sovereign right to have a civilian nuclear power program,” Bush said.

“What they don’t have is our confidence that they should be able to enrich uranium so that those plants would work. Why? Because they had a covert weapons program that they did not declare and have yet to declare.”

The U.N. Security Council has repeatedly demanded that Iran suspend enrichment of uranium and has imposed limited sanctions on Tehran for refusing to comply. Russia, France, and China — all permanent Security Council members — have voiced concerns about the proposed sanctions.

A recent U.S. National Intelligence Estimate said Iran stopped work toward a nuclear weapon while under international scrutiny in 2003 and is unlikely to be able to produce enough enriched uranium for a bomb until 2010 to 2015.

Iranian President Mahmoud Ahmadinejad hailed the report and declared that Iran is a “peaceful nuclear country.”

Aghazadeh expressed hope that with Iran-IAEA cooperation, there would no longer be any legal excuse for Iran’s nuclear case to remain at the Security Council and that it would be returned to the IAEA.

Last week, Russian Foreign Minister Sergei Lavrov said Russia wants to settle the situation.

“Certainly, we are interested in having all issues surrounding Iran’s nuclear program finally settled as early as possible,” he said in Moscow after talks with his Iranian counterpart, Manouchehr Mottaki.

This is possible “solely on the basis of the nuclear non-proliferation treaty, IAEA rules and principles, and certainly, with Iran proving its right to a peaceful use of nuclear energy,” Lavrov said.

Lavrov said there had been some progress in the talks between Iran and the IAEA.

“We encourage further advancement which will allow us to finally take this issue off the international agenda,” Lavrov said.

Construction of the plant was expected to be completed in September, Interfax said, but was delayed because of lack of financing and delayed equipment deliveries from other countries.

Atomstroiexport hopes to announce a new date for completing the construction in late December, Interfax said.

Source - CNN 

The Indian notebook personal computer (PC) market has grown by around a whopping 85 percent during the third quarter (July-Sep) of 2007, says a report.

The report was released by US-based IDC Ltd’s Indian subsidiary IDC India, a global research and market intelligence firm for IT, telecom and consumer technology.

The No.1 slot in terms of units sold was grabbed by Hewlett Packard (HP), commanding a market share of 21.6 percent, followed by HCL (12.3 percent) and Lenovo (10.3 percent).

“Portability rather than mobility has emerged as the number one driver for the sustained growth in notebook PC shipments in India,” Kapil Dev Singh, country manager, IDC India, said in a statement.

“Given the choice of portability, flexibility and ease of use and the narrowing of the price-performance gap that once existed between portables and desktops, consumers are almost overwhelmingly inclined to buy notebook PCs,” Singh added.

Notebook PC shipments to home and small office home office (SOHO) segment grew by a galloping 166 percent year-on-year and made up for 43 percent of total notebook shipments.

The next largest contributors to this trend were the enterprise and education segments, the report said.

“In an emerging market like India there still exist many untapped pockets of opportunity for desktops, as shown by the recent signs of revival of this market,” said Sanjit Sinha, associate vice president (research), IDC India.

During the period, consumer desktop PC shipments recorded a 10.5 percent year-on-year growth as compared to a percentage decline in shipments recorded during the previous quarter (April-June).

“The desktop market will aim to sustain market momentum by reaching out to the untapped small and medium business enterprises, e-governance projects and consumer infrastructure builds up in C, D and E class cities,” Sinha added.

Source - Tech2 

IBM Corp.’s expansion in developing countries shows no sign of relenting. The technology company revealed Friday that it now has 73,000 employees in India, almost a 40 percent leap from last year.

IBM did not provide updated figures for its work force in the U.S., which has held steady around 125,000 people in recent years.

Nor did IBM project its total head count. It had 355,766 employees worldwide at the end of 2006.

If the total has risen by the same rate as in 2006, almost one in five IBM workers now is in India, its second-largest center.

Like many other technology providers, IBM has rushed to take advantage of the lower labor costs India offers even for highly skilled workers. IBM’s base in India numbered only 9,000 people in 2003, but it was about 53,000 last year.

IBM has been stressing not only the lower expense of working in India but the potential of the Indian market. IBM executives told visiting Indian journalists last week that the company expected to see revenue from the Indian market jump to nearly $1 billion this year, from $700 million in 2006.

Armonk, N.Y.-based IBM is also ramping up in other key developing markets. Its chairman and chief executive, Sam Palmisano, recently formed a new organization that will spur IBM’s investment in emerging economies.

The plan is meant to capitalize on the higher growth rates in the so-called ”BRIC” countries of Brazil, Russia, India and China. IBM’s revenue from those countries rose 18 percent in the first three quarters of this year, even after discounting the benefit of currency fluctuations. IBM’s total employee count in those countries now is nearly 100,000, up from 70,000 a year ago.

IBM’s vice president of financial management, Jesse J. Greene Jr., would not forecast how much more hiring the company still might do in emerging markets. However, he said ”we see continuing good stability in the BRIC countries in general and good opportunity for growth in those countries as well.”

Source - Tech2

Amid a flurry of new product announcements, AMD took plenty of time during its annual meeting with New York financial analysts to flagellate itself over the manufacturing problems that made this a year it would rather forget.

The errata problems with the Quad-Core Opteron were front and center, as was the write-down of ATI assets announced yesterday. While the company did talk about 2008 shipment plans and a number of new processors and platforms, including a new eight-core processor, 2007’s financial problems dominated.

“We made some mistakes — shame on us — but with the success we had for four years of nearly flawless execution, we’ve done well,” said Chairman and CEO Hector Ruiz. “I have to say, looking back, we fell into complacency in one area: the difficulty and unpredictability of this increasingly complex technology we are building. So we blew it, we are very humbled by it and we are not going to do it again.”

He also expressed a little dissatisfaction with the low stock price, which many in the audience could do something to help change if they wanted.

“How can anyone conclude our company is worth 40 percent less today than it was a few weeks ago?” he asked.

President and Chief Operating Officer Dirk Meyer added that AMD has done a lot of things “very well” this year, but “we have done one thing very poorly. Namely, we haven’t delivered our quad-core product.”

The company denied claims that it stopped shipment of the Quad-Core Opteron due to the errata problem and said it’s currently spinning up new chips at its Dresden manufacturing facility that fix the problem. It will check those chips in January and begin volume shipments after that. Computers from OEM partners and system builder are expected in the second quarter.

For now, Meyer said he is “maniacally focused on being cash-flow neutral. We don’t want to have to go back to the market to borrow money,” he said, a reference to the 8.1 percent stake the company sold to a United Arab Emirates investment firm.

The company said it expects to break even in the second quarter of 2008 and be profitable beginning in third quarter.

The company also discussed “Montreal,” its first octal-core server processor, which will ship in 2009 along with AMD’s first server platform, codenamed “Piranha.” That platform will feature a new server chipset and HyperTransport 3.0 and support DDR3 memory.

The company also detailed its first notebook platform, called “Shrike.” Shrike is based on AMD’s first accelerated processing unit (APU), dubbed “Swift.”

The APU idea is a combination of a CPU and other processors in one core, such as CPU and GPUs. Swift, accordingly, combines CPU and GPU technology on a single processor die. AMD plans to begin shipping both Swift and Shrike during the second half of 2009.

The company also said it is on schedule to ramp up its 45nm production in first half of 2008, with products in market during second half of 2008. It also said it would reach 32nm in 2010, thanks to its partnership with IBM, which recently announced plans to offer 32nm production capabilities to processor designers.

AMD executives also described moving to a 55nm process for the company’s graphics processors and said it had made a number of wins in the notebook space, which will begin showing up in products starting next year.

In the consumer electronics space, AMD said it sees opportunities in LCD TVs, which continue to grow in popularity. It plans to release new MPEG video processors in 2008 for the HDTV market. It will also release new 2D and 3D graphics chips for the handset market.

Source - InternetNews

Web search leader Google is testing an Internet site for sharing knowledge about any subject under the sun, one that could eventually compete with the popular user-edited encyclopedia Wikipedia.

Google’s “knol” project started earlier this week and is working with a group of writers by invitation only, Google vice president of engineering Udi Manber wrote in a company blog post.

“There are millions of people who possess useful knowledge that they would love to share, and there are billions of people who can benefit from it,” Manber said in the post. “The goal is for knols to cover all topics, from scientific concepts, to medical information … to how-to-fix-it instructions.”

The word “knol” is used to refer to the project and to an entry on the shared Web site. Google’s site will identify the authors posting the information. It will not serve as an editor of the information or endorse what is written on the site.

The site will eventually be opened to the general public and allow users to submit comments, questions or edits, as well as rate posts. Knol writers will be able to include ads in their posts, sharing the revenue with Google.

Wikipedia founder Jimmy Wales is working on a community- developed Web search service that would compete with search engines such as Google and Yahoo.

Source - Reuters

The chill is on. Back in June, dealmakers gushed about the hot market after notching a record $2.7 trillion of mergers and acquisitions worldwide in the first half of 2007. With the number of deals down 49% in the credit crunch, sentiments have cooled: Nine percent of dealmakers are calling the M&A environment “excellent,” vs. 49% in midyear, according to exclusive research from the Association for Corporate Growth and Thomson Financial (TOC).

The groups’ biannual survey, which polled 813 private equity executives, investment bankers, lenders, entrepreneurs, and other players in M&A, found that the once-unbridled optimism has been replaced by more realistic expectations. Although the dreams of $100 billion buyouts are gone, most pros expect strong M&A activity. After all, private equity firms are sitting on huge piles of cash after collecting billions from investors in recent years. In the latest quarter they raised $30 billion, down from a record $60 billion in the fourth quarter of 2006.

Don’t expect the same type of deals, though. For one thing, it’s no longer a sellers’ market. Now that stock prices have dropped, 39% of dealmakers figure buyers have the upper hand, up from 13% six months ago.

Some 75% of the 212 private equity firms surveyed, a subset of the group, predict that the number of buyouts will shrink, while 93% figure distressed deals will be in vogue. Deals also may have a more international flavor. Some 43% of all participants think cross-border deals are increasingly important. Yet 46% of the private equity types say the U.S. is still the best place for their deals. Next best: China.

Despite the new mood, buyout firms don’t expect their day-to-day work will change much. Some 80% say they won’t change gears and modify their investment strategy. Of course, they may have to battle strategic corporate buyers over targets more than in the era of easy money. “The pendulum has shifted away from private equity,” says Robert Kaiser, vice-president at Thomson Financial. “In the future, private equity will be lucky to be 25% of U.S. M&A.”

Source - Businessweek