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Reliance to sell gas in India at an 80-per cent discount to global prices
12 June 2008

Mumbai: Reliance Industries Ltd will start selling natural gas in the country this year at $25.20 per barrel equivalent of oil - an 80-per cent discount to global prices of over $135 - helping the country reduce imports at record prices.

The Krishna-Godaveri basin gas field will produce 80 million cubic metres of gas a day, saving the country over Rs1,14,000 crore ($27 billion) in annual import bill, chairman Mukesh Ambani told shareholders today.

Reliance will also commission a transmission system for natural gas from the KG basin, off the eastern coast. The soaring cost of exploration and a cap on gas prices may, however, cut Reliance's profit margins.

The government has ordered Reliance to sell natural gas from the KG field for $4.2 per million British thermal units, less than the $4.5 it had sought.

Reliance aims to produce 240-350 million cubic feet of gas a day from the MA-1 field from the second half of the 2008-09 fiscal year, when gas production from two other fields in the block, D1 and D3, will also begin.

Reliance Gas Transportation Infrastructure Limited is setting up an East-West gas pipeline system to connect the country's cities for distribution of gas from the KG basin.

Reliance Industries, which is investing $5.2 billion to develop the KG basin oil and gas fields, the nation's largest, expects to more than double gas output in the country.

Reliance is also aiming to start oil production from its D-6 block in the KG basin in July-August, by the time it commissions its second refinery in Jamnagar, Gujarat.

Commissioning of the 580,000-barrel-a-day refinery will increase Reliance's crude processing capacity to 1.24 million barrels per day, equivalent to about 2 per cent of global capacity, Ambani said.

The new refinery is being built adjacent to Reliance's 660,000-barrel-a-day plant at Jamnagar and the combined facility will be the world's biggest.

Reliance would produce sweet oil with an API density of 43 degrees from two or three wells to meet initial targeted output of 20,000 bpd and has already started inviting bids for sale of the crude.
The country currently imports 70 per cent of its crude oil requirements and doesn't produce enough gas to meet local demand.

Reliance, meanwhile, reported over Rs15,000 crore in net profit for the year-ended March 2008.

Reliance, which enjoys a global market share of seven per cent in the polyester fibre and yarn business, plans to further consolidate its global leadership in polyester with the new 2.5 million tonnes per year Paraxylene manufacturing facility at Jamnagar.
 
India on the Maritime Map
by Jeni Bone
Sail World, Australia
Tue 17 Jun 2008 GMT

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[FONT=Verdana,Arial,Helvetica,sans-serif]'Kerala has long been popular for boaties, who have moored in the backwaters.' Jeni Bone[/FONT]

India is booming and its population is gradually catching on to the marine lifestyle. At a rate of growth of 9.4% per annum, India's economy has now swelled to a trillion dollars, making it only the 12th nation to reach this milestone.

Statistics show that the luxury goods market in India is growing at 30-32% pa.

Today’s affluent Indian consumer is going overboard in his urge to splurge.

Stats & Facts:

* In 2007, there were an estimated 120,000 Indians with assets over US$ 1 million.

* 13,000 new Indian US$ millionaires were added in the past year alone - a 15% p.a. increase over the previous year.

* With a population in excess of 12 million, Mumbai is said to have more millionaires per square mile than Manhattan.

For marine businesses, India is looking more like a potential boating hub every year. Mumbai is known as the ‘Gateway to India’ and its commercial and business epicentre. Mumbai has a natural harbour with miles of sheltered coastline with great places to sail to. The city houses the diamond, finance, IT and film industries – Bollywood is the world’s largest film producing centre.

India, Mumbai particularly, has a strong boating heritage with the third oldest yacht club in the world, the Royal Bombay Yacht Club, set up in 1846.

Yet, the first marina development is only just underway – the Bolgatty Island marina in Cochin, Kerala. Awarded through a global bidding process undertaken by KITCO the project was won by Gulf Marinas, a leading marina manufacturer based in Sharjah whose Indian partners are Ocean Blue Marinas.

Kochi (known in Colonial times as Cochin) is situated on the south-west coast of the Indian peninsula in the scenic and prosperous state of Kerala.

Its strategic importance over the centuries gave shelter to Arabs, British, Chinese, Dutch, and Portuguese sailors, all of whom have left indelible marks on the region’s development.

Kochi has emerged as the commercial and industrial force and is perhaps the second most important city on the west coast of India (after Mumbai/Bombay). Cochin boasts a world class port and international airport that link it to many major cities worldwide.

The entire 900km length of the Kerala coast is lined with sandy beaches, rocky promontories and coconut palms that definitely merit a visit in every tourist itinerary. Touring the beach sites of Kovalam can make any beach holiday a delightful one, as Kerala's beaches are renowned for the gentle surf and blue waters.

On 1 March, the chief minister lay the foundation stone for Bolgatty Island. The Kerala Tourism Development Corporation (KTDC) Chairman, Cheriyan Philip, announced the marina, situated between Marine Drive and Bolgatty Island, will have facilities for 50 yachts, a Marina House with all modern facilities, a Marina Museum and recreation and convention centres.

A golf course would eventually be developed adjoin it.

The total cost is Rs 8 crore (Rupees 80 million or AUD$2 million). Around Rs 4 million is from central assistance and the remaining is from the state government and loans.

The first phase will be completed this year and the second phase within two years.

The Marina will occupy five acres of land owned by the KTDC near the Bolgatty Palace Hotel. Supporting facilities like petrol stations, a restaurant, health club and car parking are likely to be built on land reclaimed from the backwaters.

Sailors – local and international – are said to be ecstatic over the project.
'So far, for many years, India has missed the boat, so to speak,' Howard Moon, an Australian yacht owner, was quoted as saying.

'Many yachts go to Sri Lanka because there is a small marina there. The Maldives has marinas. Malaysia, Thailand and every other country that I know has marinas. So, it is high time that India had a Marina.'

Kochi has a buzzing shipyard, so in addition to bringing tourists to the region, the marina will provide job opportunities to hundreds of workmen in repairing boats and communication equipment.

With the city already playing host to the Volvo Ocean Race in 2008, the government is sure the country’s first marina will attract significant global maritime attention.

At present the yachters mostly comprising of aged couples need to berth their vessels in the backwaters and reach the shore in inflatable boats. Seafarers from all over the world have visited the area and relied on the Bolgatty Palace Hotel for food, swimming and other needs.

It is estimated that yachters generally spend an average of two weeks in Kochi, sight seeing, relaxing and carrying out necessary maintenance.
 
India urged to focus on farming
By Brajesh Upadhyay
BBC News, Washington

India must focus more on its agricultural sector in order to sustain long-term economic growth, a leading industrialist has said.

Bharti Group boss Sunil Bharti Mittal called for "serious intervention".

He said the government, private sector and foreign investors all needed to play their part if they wanted to see India's economy grow at the same rate.

"Without agriculture, India cannot move forward," said Mr Mittal in an exclusive interview with the BBC.

'Change needed'

Mr Mittal said the biggest concern for the Indian economy today was not rising oil prices but the huge disparities that exist in India.

Some reform in this sector has meant that the country has gone from being unable to feed itself to being the world's largest producer of milk and second largest producer of fruit and vegetables.

Yet the average size of a farm is just four acres and at least 40% of the harvest is wasted.

"A significant policy change is needed in terms of land reforms, cold-chains, farming techniques, alternate cropping and so on,'' said Mr Mittal, who is a former president of the Confederation of Indian Industries.

PepsiCo boss Indira Nooyi echoed similar thoughts, saying one could not imagine a successful India unless its agricultural practices improved markedly with the application of new technologies and techniques.

"India needs a second green revolution," Ms Nooyi told a gathering of US and Indian corporate executives and opinion makers in the US capital, Washington.

But she said that, for all the importance of the high-tech revolution, India would not advance by new technology alone.

"We need to recognise that the future of large segments of the Indian population will rest, for years to come, on improvements in agricultural processes,'' said Ms Nooyi, whose company has major agri-initiatives in Punjab, Maharashtra, Uttar Pradesh and West Bengal states.

Mr Mittal's companies are also venturing into agriculture.

Both he and Ms Nooyi said India needed to protect subsistence farmers in trade talks.

"Any damage to the 700 million people tied with agriculture would mean India will have to pay a heavy price in the future," Mr Mittal said.
 
Mahindra Suddenly The Talk of The Town
David Kiley
Businessweek
June 17, 2008

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Indian pickup and SUV maker Mahindra & Mahindra has been quietly gearing up to launch its brand in the U.S. in early 2010. But the company has been anything but quiet this week.

First, just-auto.com reports that the company is in talks with General Motors about its Hummer brand. GM has said that it is exploring options on Hummer whose gas guzzling nature is suddenly very much out of fashion with American consumers. Too, GM is out to raise cash. The other news on Mahindra is that Wall Street investment bank Goldman Sachs reported that it bought a 3.72% stake in the Indian company last month for $172 million.

Mahindra had surfaced in the discussions with Ford about possibly buying Jaguar and Land Rover. But Mahindra rival Tata walked away with the two British brands.

Mahindra & Mahindra is planning on launching is diesel powered pickup and SUV in the U.S. in the first quarter of 2010. That scheme, of selling high fuel economy pickups and SUVs through more than 200 dealers who have signed up, is getting somewhat more complicated given the premium that oil companies are charging for diesel fuel relative to regular petrol.

The vehicles are being launched via Global Vehicles, an Alpharetta, Ga.-based company. Though Mahindra & Mahindra will be new to most vehicle buyers, it is a brand that is no stranger to tractor buyers. M&M tractors have been sold in the U.S. for about a decade, and they hold the no. 3 market share. Indeed, satisfied tractor owners are considered to be the likely first wave of buyers of Mahindra pickups and SUVs.

Buying Hummer may sounds like a bad idea. But Mahindra is a truck and SUV specialist, and could possibly manufacture them more cost effectively, and with diesel engines to make them more fuel efficient. And like Tata is going to find a lot of under developed markets for those two British brands in Asia, the Middle East, India and South America, so to might Mahindra make more out of Hummer than GM has been able to.
 
Scotland rolling red carpet for skilled young Indians
19 Jun, 2008, 0151 hrs IST,Ishani Duttagupta, ET Bureau

England may be among the most favourite destinations for Indian immigrants, but now Scotland too is becoming popular. The Indian community is, in fact, one of the better established and largest ethnic communities - around 10,500 people of Indian origin - there.

Scotland has been increasingly positioning itself as a hub for inward investing projects in the UK, and is attracting a large number of Indian companies that are setting up base there. This leads to a large number of highly skilled Indians migrating to Scotland.

Says Michael Cannon, India country manager, Scottish Development International: “There are leading Indian companies who have presence in Scotland such as Wipro, Hero ITeS, Usha Martin, Bharat Forge, Nicholas Pharma and Shasun to name a few. Our region has been named as the European Region of the future 2008, beating 38 other European Regions for the title.”

Scotland is perceived as a region with a large pool of highly skilled and specialised workforce. That, needless to say, gives companies a competitive edge. And now Indian immigrants are adding to Scotland’s human resources pool in a big way. Says Cannon: “We also have a very close and productive collaboration between government, business innovators, finance leaders and institutions of higher learning.
 
Why India's Reliance Is Going Hollywood
Reliance Big Entertainment is in talks to help finance the departure of DreamWorks SKG from Viacom's Paramount Pictures

by Nandini Lakshman and Ron Grover
Businessweek
June 18, 2008

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Anil Ambani of Reliance ADA, David Geffen, and Steven Spielberg
(L to R) Getty Images


Over the past 18 months, executives from Hollywood studios have been reaching out to their Indian counterparts in Bollywood, Mumbai's answer to Tinseltown. Studios such as Walt Disney (DIS), Sony Pictures (SNE), and Paramount have signed deals with ambitious Indian entertainment companies eager to take advantage of the booming Indian economy.

The No. 2 movie in the U.S., The Happening, was co-produced by Fox Searchlight and Mumbai-based UTV Motion Pictures, which financed half of the film's $57 million budget. On May 18, a division of Reliance Big Entertainment, a unit of India's giant Reliance group of companies, signed deals (BusinessWeek, 5/12/08) to produce and develop movies with A-list actors Tom Hanks, George Clooney, Nicolas Cage, and Brad Pitt. "If you have global ambitions, then Hollywood is the right starting point," says Rajesh Sawhney, president of Reliance Big Entertainment.

Now, comes possibly the biggest Indian move into Hollywood yet. Steven Spielberg and David Geffen's DreamWorks SKG is in talks with India's Reliance Big Entertainment, part of the Reliance ADA empire owned by Anil Ambani, to spin off a new movie joint enterprise. The $1.5 billion debt-equity deal, which Reliance is expected to partly finance, came after weeks of speculation that DreamWorks' team was looking for private equity after telling Viacom's (VIA) Paramount Pictures last year they intended to bolt from their three-year deal.

Soros Holds 3% Reliance Stake

Reliance insiders claim that the deal is "yet to be structured and too premature," but investment bankers in India believe the Reliance funding in DreamWorks could largely be private equity. In exchange, Reliance may pick up a stake in the new DreamWorks venture, and also sign a pact to make movies.

If the deal goes through, it will be DreamWorks' second association with an Indian company. In January, DreamWorks Animation (DWA), an independent unit set up four years ago, tied up with Paprikaas Interactive Services, an animation house based in Bangalore, for creative and technical services. The first animation alliance by DreamWorks outside the U.S., the partnership is part of the studio's pact with Thomson (TMS), the $9.3 billion French media house, to have a dedicated studio in Bangalore. Thomson's entertainment business arm Technicolor holds a controlling stake in Paprikaas.

DreamWorks' talks with Reliance come at a time when the Indian conglomerate, a fairly new entrant into the business, is firing on all the entertainment fronts. In February, George Soros invested $100 million for a 3% stake. The company said it would use the money for expansion. "We want more of every bit of the entertainment pie," says Reliance Entertainment Chairman Amit Khanna. "To be a significant global player, we believe that we need to raise the bar and aspire more."

Soros already owns the rights to 59 of DreamWorks' older films, which his Soros Strategic Partners bought in 2006 from Paramount Pictures. (Paramount continues to distribute the films for Soros.)

Casting a Wide Entertainment Net

Reliance scripted its Hollywood entry more than eight months ago. Last year, Reliance invested (BusinessWeek.com, 4/15/08) in Phoenix Theatres, a Knoxville (Tenn.)-based film management company. It bought Burbank (Calif.)-based Lowry Digital Images, a film imaging and restoration outfit, in April. Early this year, Reliance, which owns more than 170 cinemas in India, quietly acquired 250 cinemas from mom-and-pop operators in 28 cities in the U.S. including San Jose, Chicago, and Washington, D.C.

The U.S. isn't the only country where Reliance is expanding. In May, it bought a chain of 25 cinemas in Malaysia. Like the purchases in the U.S., the Malaysian cinemas were targeting the large Indian diaspora and also other Asian communities such as the Chinese, Koreans, and Japanese. The plan is to exhibit Bollywood movies, as well as regional Indian films in languages like Telugu and other Asian languages.

Reliance may be a newcomer, but it has already shown it can command attention from the film industry's elite. At the Cannes Film Festival last month, Khanna (an erstwhile Bollywood director and lyricist) announced that Reliance was spending $1 billion to develop films over the next two years. It struck deals with the production houses of eight Hollywood actors including Clooney, Pitt, Hanks, and Cage. The deal, brokered by Hollywood's Creative Artists Agency, allows Reliance to pay for the development of scripts and gives it the option to fund up to half the cost of making any film it develops—and thereby reap half the profits. The films would then likely be distributed by Hollywood studios, with Reliance retaining some foreign rights.

Reliance's global aspirations cut across every business category, with interests in power, telecom, and financial services, as well as music, broadcasting, social networking, and gaming Web sites. Reliance, India's second-largest telecom player, is also currently in merger talks (BusinessWeek.com, 5/27/08) with South Africa's MTN to create a $63 billion telecom juggernaut with 116 million subscribers, larger than AT&T (T) and many European players. In its bid for MTN, Anil Ambani's company is fighting against a rival bid by Reliance Industries, controlled by his elder brother Mukesh Ambani, with whom he has had an ongoing feud.

Lakshman covers India business for BusinessWeek. Grover is Los Angeles bureau chief for BusinessWeek.
 
Indian confidence
Assetz, UK
18th June 2008

Amid a world economy in which high inflation and the credit crunch have filled the financial headlines of late, many of those still keen to carry out some property investment will have been on the lookout for new opportunities, markets where the notion of economic slump is a distant one.

India certainly appears to be one of these. Although inflation is high at 8.24 per cent - prompting a recent interest rate rise from the central bank - economic confidence remains notably high. The Economic Times of India reported today that the country has come second in the Nielsen Global Online Consumer Survey table for consumer confidence, with only Norway ahead.

Explaining this, the survey concluded that optimisation and outsourcing are two key elements driving India's economy and enabling it and Norway to pursue economic policies that capitalise on decline elsewhere.

It stated: "Aside from consistently high consumer confidence, the two most optimistic nations in the world, Norway and India, share something in common: Their economies are benefiting from the by-products of economic slowdown."

So with India still booming, investors may be keen to see just how well the property market is doing out of all of this.

Andrew Fassnidge, managing director of independent property investment firm Navyroof.com, said the Indian property market can certainly offer something different and lucrative for investors.

He stated: "India is a great alternative for property investors looking to make substantial gains from their investments. With the UK market in decline and investors increasingly looking further abroad, India is an attractive proposition." For good measure he added the recent projection by Merrill Lynch of a 700 per cent rise in property values by 2015.

So who would be interested in investing in India? At the sort of figures Merrill Lynch is quoting, quite a few might. But British Indians in particular might want to "give back and profit by investing in their motherland", said Mr Fassnidge. This, he said, would be "emotional", but also "effective and profitable".

He concluded: "All the economic indicators project a bright, sustainable future for India. In the last two years alone, property prices in India increased by 70 per cent. Industry commentators are mooting that whilst the USA and Europe look to be involved in an economic downturn, emerging markets such as India, may be the 'crunch proof' economies."

If the talk of something being able to withstand the credit crunch might sound particularly attractive, it should be noted that there are, of course, problems in some sectors. For example, the Financial Times reports that Kishore Biyani, chief executive of India's biggest retailer Pantaloon, has warned that commercial rents in many large cities are making life very difficult for retailers. But Mr Biyani went on to say that a correction in this area was already happening. He suggested that this could mean some new shopping malls failing to be a success.

Those with ancestral connections to India may be able to make the most of close cultural, family and extended community ties to gain knowledge about the best way to proceed in Indian property investment, while avoiding any pitfalls. For those without these connections, in-depth research and the tapping of information from those who are in the know could be the key to success.
 
Tata Motors eyes Hummer as it seeks £1.5bn war chest
Rhys Blakely, Bombay
Times Online, UK
June 11, 2008

Tata Motors, the Indian group that owns Land Rover and Jaguar, has approached shareholders to ask for permission to raise a £1.5 billion war chest to use on further acquisitions. Potential targets include Hummer, the struggling off-road carmaker that General Motors has put up for sale.

In a notice sent to shareholders, the company said it was scouting for further deals similar to the acquisition of the two British luxury marques, which it bought from Ford for $2.3 billion (£1.2 billion). "The company has major growth plans for expanding its product range and presence in the domestic and global markets in commercial and passenger vehicles, including through strategic alliances and acquisition opportunities," it said.

Tata Motors outlined plans to raise as much $1 billion from overseas debt and stock markets – about $500 million of which will be through equity. It is also asking shareholders for permission to raise its borrowing limits by about £1 billion

The new fundraising moves come on top of three rights issues launched last month, which will raise $1.7 billion to finance the Land Rover-Jaguar purchase. At that time it said it would raise up to £300 million more through an overseas float.

At the time, analysts reacted negatively to the prospect of existing shareholders' stakes being diluted through the issue of new shares. Some suggested, however, that Tata, India's largest maker of heavy trucks, had little choice but to tap the stock market. Balaji Jayaraman, an analyst with Morgan Stanley, said: "Tight credit market conditions made raising debt an expensive proposition."

Expensive financing risks rubbing the sheen from Tata's acquisition of Jaguar and Land Rover. The company has been forced to take out an expensive bridging loan to fund the purchase and its bankers have been working hard to limit the cost of capital as the Indian group moves into the bleakest market conditions seen in years.

Tata, which has never before sold luxury cars, is under pressure from the higher cost of raw materials.

Its full-year figures showed that net income fell to 5.36 billion rupees in the three months to the end of March, compared with 5.77 billion rupees for the same period a year earlier. The company this week gave warning of "challenging times ahead".

Full-year profits rose at the slowest pace in at least five years, weighed down by factors including lacklustre demand in India amid high interest rates and worries over the economy's growth prospects.
 
Spielberg, India Firm Near Deal to Ally With DreamWorks
By LAUREN A.E. SCHUKER and MERISSA MARR
Wall Street Journal, US
June 18, 2008

The principals of DreamWorks SKG are close to a deal with one of India's biggest entertainment conglomerates to form a new movie venture, according to people familiar with the situation, a move that would give director Steven Spielberg the cash to finance his DreamWorks team's departure from Viacom Inc.'s Paramount Pictures later this year.

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Associated Press
Movie moguls Jeffrey Katzenberg, left, and
Steven Spielberg watch the NBA finals last week.
Mr. Spielberg's DreamWorks SKG is in talks with
Reliance, a move that would give the director the
cash to regain his independence.

Mumbai-based Reliance ADA Group would provide Mr. Spielberg and company with $500 million to $600 million in equity, moving them one step closer to ending one of Hollywood's most contentious and closely watched battles. In Reliance, the DreamWorks team also would have an unusual and ambitious partner in the film business: an Indian firm with interests in telecommunications, financial services and entertainment that wants to build a media empire by financing Hollywood pictures.

The deal amounts to a marriage of some of the biggest names in the Hollywood and Indian business worlds, with Reliance getting a large stake in the new company. DreamWorks, which makes live-action films that have included last year's "Blades of Glory" and "Dreamgirls" in 2006, would likely seek another $500 million or so in debt financing elsewhere to give its new venture enough money to make a slate of about six films a year. The company would then choose a studio to distribute the films, which is still an open question. General Electric Co.'s Universal Pictures, where Mr. Spielberg began his career, is thought to be the director's preference to release his future works, but News Corp.'s Twentieth Century Fox also is thought to be a serious contender. (News Corp. is the owner of Dow Jones & Co., publisher of The Wall Street Journal.)

A spokesman for DreamWorks declined to comment.

The film industry has been closely monitoring the fate of the 61-year-old Mr. Spielberg and partner David Geffen, co-founders of DreamWorks SKG. DreamWorks was sold to Viacom in 2006 after a decade-plus run as a private company. But a tense relationship soon developed between DreamWorks and Paramount, and last year DreamWorks began to signal publicly that they might leave the studio in 2008, when the contracts of Messrs. Spielberg and Geffen allow it. Another provision of their complex arrangement will likely allow them to keep using the DreamWorks SKG name, though Viacom would retain rights to the films they created during their short time at Paramount.

The fractured relations reached a boiling point last fall when, threatened by rumors that Mr. Spielberg might bolt, Viacom Chief Executive Philippe Dauman said that any such departure would be "completely immaterial" to the company's financial future. Mr. Dauman and executives at Paramount have since then scrambled to repair relations with Messrs. Spielberg and Geffen, to no avail.

When the dust settles, Mr. Spielberg is expected to be joined in the venture by current DreamWorks Chief Executive Stacey Snider, who has become a key ally and collaborator since joining Mr. Spielberg in 2006. The former head of Universal Pictures, Ms. Snider would give Reliance a tested Hollywood manager for its biggest foray into the global movie business.

Although the DreamWorks team's possible partnership with Reliance ADA Group seems like an unlikely meeting of the minds, it's actually in line with Hollywood's current landscape, where a dearth of Wall Street financing has opened up the door to foreign investors.

Reliance's entertainment division, Reliance Big Entertainment, already announced a slate of investments in Hollywood projects last month at the Cannes Film Festival. Those include providing financing to a handful of Hollywood top talent with production houses, like Jim Carrey, George Clooney, Tom Hanks and Brad Pitt. The company also said then it would spend more than $1 billion over the next 18 months building its entertainment empire in India and abroad.

Reliance would provide funding to allow talent like Messrs. Clooney and Pitt who have their own production houses to acquire film projects before taking them to major studios with which they have previous agreements. Reliance could then go into business with the Hollywood studios, as a partner financing up to 50% of the film's production. These agreements are commonly referred to as "development silos."

Leading the Charge

Rajesh Sawhney, president of Reliance Big Entertainment, is leading the charge into Hollywood. Before joining Reliance, Mr. Sawhney was chief operating officer at Times Internet Ltd., part of the Times Group, one of India's largest media and entertainment companies.

Reliance's plunge into Hollywood is part of a broader push among India's corporate titans to take their place on the global corporate stage. The country has now produced global players in software, steel, autos and is building a growing powerhouse in telecommunications.

India's rise was at first confined to software and outsourcing. But more recently, Indian firms, spurred by rapid growth in their home market, have expanded abroad aggressively. In some cases, they have scooped up storied Western brands. Earlier this year, for instance, Tata Motors Ltd., part of the Tata group of companies, agreed to buy Britain's Jaguar and Land Rover brands from Ford Motor Co. for $2.3 billion.

In recent years, the country's Mumbai-based film industry, known as Bollywood, has found a growing global appeal for its products. As it has expanded, it has drawn investment from Hollywood as well. For example, Walt Disney Co. has a large stake in UTV Software Communications, one of India's leading production houses. Other large American media firms have also invested in the Indian market.

In the Reliance parent company, the DreamWorks team will find another internal feud -- among the Ambani family owners, one of India's most prominent industrial dynasties. Anil Ambani, 49, controls Reliance Communications Ltd., one of the major mobile players in India. He has pushed to become a major player in the country's media world, is married to a former Bollywood actress and is eager to make the leap to Hollywood. He and his older brother Mukesh are currently engaged in a feud over a multibillion-dollar telecommunications deal with MTN Group Ltd. of South Africa. Mukesh Ambani's company, Reliance Industries Ltd., has sought to assert that it has the right of first refusal over Reliance Communications in the event of a sale.

In leaving Paramount, Messrs. Geffen and Spielberg will put behind them a painful period in their storied careers. The duo have made clear for the past year that they are eager to part ways with Paramount after a series of personal clashes with executives at the studio and its Viacom parent. In an interview last September, Mr. Geffen said: "We want to function independently and get credit for our successes and failures."

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DreamWorks was founded with great fanfare in 1994 by Mr. Spielberg, Jeffrey Katzenberg and Mr. Geffen, who set out to build a vast multimedia enterprise. The trio, who form the SKG of the logo, found that success was not easy to come by, however. While they scored hits such as "Saving Private Ryan," they also made flops such as "The Island" and fared poorly in side businesses such as music.

In 2004, DreamWorks spun off the animation arm that Mr. Katzenberg was running into a stand-alone public company. DreamWorks Animation SKG, which also distributes its films through Paramount in a deal that runs for several more years, is the creator of hits like "Shrek" and "Kung Fu Panda."

Bidding War

The live-action arm of DreamWorks became the object of a fierce bidding war in 2005, with Viacom scooping up the studio and its venerable founders from under the nose of GE's NBC Universal. Viacom paid $1.6 billion -- at the time a healthy price for an 11-year-old studio with mixed returns.

The honeymoon period was brief, however. Not long after the deal was consummated, Messrs. Spielberg and Geffen were struggling with their loss of independence. They railed against their new master: Paramount chief Brad Grey. Mr. Spielberg privately complained about Paramount taking credit for DreamWorks movies. They also felt they were not being afforded the appropriate level of respect from Mr. Grey and his Viacom bosses.

Tensions between the two sides came to a head at the end of 2006 over "Dreamgirls." Mr. Geffen, who became a billionaire through the music industry, was heavily invested in the musical, having shepherded it from the stage to the big screen. He took enormous offense because he felt Mr. Grey seemed to take credit for the movie at several public events, according to people familiar with the situation.

Perhaps sensing that the DreamWorks camp was heading for the door, Viacom Chief Mr. Dauman dropped a bombshell last September. He told an investor conference that their departure would be "completely immaterial" to Viacom. While Paramount and DreamWorks are both small elements of Viacom's bottom line, the comment infuriated the DreamWorks team. Publicly defending Mr. Spielberg, fellow DreamWorks founder Mr. Katzenberg said: "To suggest that not having Steven Spielberg is completely immaterial just seems ill-advised." He added: "I think calmer heads need to prevail here."

Mr. Katzenberg finds himself in an awkward situation with the departure of his longtime colleagues. As part of the sale to Paramount, the studio landed a distribution deal with DreamWorks Animation. He and the animation company will be left behind at Paramount when Messrs. Geffen and Spielberg depart.

For Viacom and its Paramount studio, the departure of the DreamWorks camp will create a hole in its slate. But it will also remove a distraction that has taken up a lot of executives' time. Paramount is emerging from its revamp and finally has some hits to its name, including this summer's "Iron Man." A key advocate for the DreamWorks deal originally, Mr. Grey has taken the brunt of attacks from the DreamWorks crew, according to people familiar with the situation.

Still, Paramount may remain in business with DreamWorks for some time to come. The two share the rights to scores of projects, such as a sequel to last year's hit "Transformers," though people close to the situation say Mr. Spielberg's crew may bargain with Paramount to take certain projects with them. Aware of this, Mr. Dauman has made a special effort in recent months to smooth things with Mr. Spielberg, visiting him regularly in Los Angeles.
 
I propose that the format of this thread be changed. The reason being is that I just see links for articles being posted without any followup discussions. I would like to hear an analysis on the referenced material (particularly from Bushroda).

In reference to the Hummer Acquisition:
I don't know how good an idea this is given that the consumer base for the product itself is precipitously shrinking.
 
I propose that the format of this thread be changed. The reason being is that I just see links for articles being posted without any followup discussions. I would like to hear an analysis on the referenced material (particularly from Bushroda).

In reference to the Hummer Acquisition:
I don't know how good an idea this is given that the consumer base for the product itself is precipitously shrinking.

I second that...

Won't Hummer be at odds with LR?

Further, Tata Motors is better-off expanding their passenger line in India...
 
I second that...

Won't Hummer be at odds with LR?

Further, Tata Motors is better-off expanding their passenger line in India...
No, the Hummer and LR within the SUV market actually fall into two different sub classes. Even the smallest of the Hummers, the H3 sports a 3.5L engine, while the most popular still remains the 5.7L V8 version. The Land Rovers on the other hand top out at a 4.4L supercharged engine for the premium brand Range Rover Vogue SE. Majority of the Land Rover models are sold with engines at around 2.5- 3.2L range. LR has also entered the light/compact SUV market with their Freelander models. These trucks will actually have a growing consumer base as previous owners of larger SUVs trade them in for smaller ones.

In India, the LR brands will be initially considered Ultra Luxury and placed even higher than Tata's premier Safari brand. Again, the two will not compete directly. Tata will expect the upper middle class to trade their Tata SUVs in for the LRs as their wallets get fatter while the middle class will opt for Tata SUVs in lieu of their smaller sedans when they are in a position to do so.

The Hummer however will be left out in the cold since the only real market for these cars has been the USA where the disposable income used to be high, the culture promotes super-sizing and where gas used to be cheap. If the market share is dropping at a high rate here, then its going to be exponentially worse abroad. Land Rovers on the other hand given their better fuel efficiency have a much better demand worldwide (including Pakistan which assembles a version of these SUVs under license production).
 
Energon,

This thread is basically a databank for collecting news articles on Indian economy. However unimportant it might be, it simply gives the reader a gist of happenings in the Indian economic scene. I do not hope for any followup discussion in this thread since it tends to get messy and then the corresponding news often gets buried and unnoticed.

But I do believe that a discussion is important if it is deemed necessary by any poster. If any news article interests you simply open a new thread with the the particular news content.
 
Bollywood romance in the air for Steven Spielberg
Amanda Andrews, Media Business Correspondent
The Times, UK
June 19, 2008

It is a union that the film industry has been waiting for, a marriage between two of the giants of Hollywood and Bollywood - and if it is successful, Steven Spielberg and Anil Ambani will embark on what promises to be a formidably powerful new venture.

Mr Spielberg and senior executives at DreamWorks SKG, the film studio that he founded with David Geffen and Jeffrey Katzenberg, are understood to be in talks with Mr Ambani, the founder of Reliance ADA and India's second-richest man.

A deal with Reliance would reportedly earn the DreamWorks founders up to $600 million (£306 million) in equity to launch the venture, in which Reliance, India's biggest entertainment conglomerate, would have a large stake.

It is understood that the move could provide Mr Spielberg, whose film credits include the Indiana Jones series, Saving Private Ryan and Schindler's List, with sufficient financing to leave Viacom's Paramount Pictures by the end of the year.

Viacom bought DreamWorks in 2006 for $1.6 billion, starting a relationship that is believed to have soured quickly. It has been widely speculated that Mr Spielberg and his team are looking to leave after a series of personal clashes with executives at Paramount Pictures and its Viacom parent.

Many thought that a separation was likely after Philippe Dauman, Viacom's chief executive, said at an investor conference last September that the financial effect of Mr Spielberg's potential departure on the company and Paramount would be “completely immaterial”. Speaking at the Bear Stearns investor conference in March, Mr Dauman said of his relationship with Mr Spielberg: “We both believe we'll be in business together in one form or another for a very, very long time. Whether it is in the current form or not remains to be seen. It's really up to Steven.”

It is understood that DreamWorks has been looking to raise about $1 billion to secure its independence from Viacom and its Paramount film studio.

Reliance has vowed to invest more heavily in film in the next couple of years. At the Cannes Film Festival last month, Reliance's entertainment division - Reliance Big Entertainment - announced a number of investments in Hollywood projects.

These included providing financing to the production houses of leading Hollywood figures such as the actors Jim Carrey, Tom Hanks and Brad Pitt.

Reliance, which refused to comment yesterday, is understood to have spoken to other Hollywood studios. It is thought to be particularly keen to invest in Hollywood, which often struggles to raise cash.

While the Bollywood film industry is buoyant, producing hundreds of films a year, budgets rarely run into the tens of millions.

Mr Ambani, 49, has been an active dealmaker since he and his brother Mukesh divided Reliance Industries, the family business, in 2005. Anil, who is married to a former Bollywood actress, called his part of the business Reliance Anil Dhirubhai Ambani (ADA) Group and has created an empire that encompasses a range of sectors, including media, telecoms and industry.

He is separately in talks with MTN, the South African telecoms group, in an effort to create one of the world's ten largest telecoms companies, worth an estimated $70 billion (£35.7 billion) and with 116 million subscribers worldwide. Reliance Communications is valued at about $30 billion and has 48 million subscribers

No spokesmen for DreamWorks, were available for comment last night.

The personal contracts that Mr Geffen and Mr Spielberg signed as part of Viacom's acquisition of DreamWorks expire at the end of this year. Mr Katzenberg now runs DreamWorks Animation SKG, a separate public company with a market capitalisation of $2.81 billion.

The DreamWorks story

DreamWorks began in 1994 as an ambitious attempt by the media moguls Steven Spielberg, Jeffrey Katzenberg and David Geffen to create a new Hollywood studio

In December 2005 the founders agreed to sell the studio to Viacom, the parent company of Paramount Pictures

DreamWorks' animation unit was spun off as an independent studio in 2004, into DreamWorks Animation SKG. Its films are distributed by Paramount, but the animation studio is independent of Paramount/Viacom

In 1998, DreamWorks released Antz, its first animated feature
 
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