http://knowledge.wharton.upenn.edu/india/ Knowledge@Wharton is an online resource that offers the latest business insights, information, and research from a variety of sources. Content includes analysis of current business trends, interviews with industry leaders and faculty, articles based on the most recent business research, book reviews, conference and seminar reports, and links to other websites. en-us Copyright (c) 2007 The Wharton School of the University of Pennsylvania Fri, 20 Nov 2009 00:00:00 EST Fri, 20 Nov 2009 00:00:00 EST http://www.wharton.upenn.edu/globals/images/katw_white.gif http://Knowledge.wharton.upenn.edu/india/category.cfm?cid=1 125 45 Knowledge@Wharton Finance and Investment Research Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4430 Like many countries that have relied on monetary and fiscal relief policies to ride out the financial crisis, India knows it will one day have to wind down its stimulus measures or face a steep inflationary spiral that could derail economic growth. Because the country suffered less than most economies during the global downturn, it looks to be recovering quickly, and decisions regarding a stimulus exit strategy have become all the more critical. The governor of the Reserve Bank of India, D. Subbarao, has predicted that inflation will be 6.5% at the end of March 2010 -- more than the policy comfort zone of 4% to 5%. Experts weigh in on what rising inflation could mean for the Indian economy Thu, 19 Nov 2009 16:25:50 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4398 Despite the worldwide credit squeeze, which has impacted corporate India as well as other markets, Indian companies are once again finding it easy to raise funds. While some firms are turning to asset sales and instruments such as American and Global Depository Receipts to shore themselves up financially, others are joining the line for what looks like a new wave of Independent Public Offerings (IPOs). The market is responding to their efforts: In late June, an IPO by Mahindra Holidays and Resorts was oversubscribed 9.8 times. Meanwhile, a possible tsunami of debt threatens to drown any momentum in the private sector -- the government's projected fiscal deficit of 6.8% of GDP in 2009-10. Thu, 30 Jul 2009 20:13:41 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4396 India's rural economy has received more resource commitments in the government's latest budget proposals than in recent years. While Wharton faculty and other experts welcome the government's approach of being inclusive, critics claim the government isn't walking its talk. India Knowledge@Wharton interviews economists and other experts to help explain what the new budget will mean for thousands of India's villages. Thu, 16 Jul 2009 16:43:29 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4394 After the Congress-led government was voted back to power in the recent general elections, hopes ran high for the Union budget presented on July 6 by Finance Minister Pranab Mukherjee. As it turned out, the budget came as a shock to almost everybody, not for what it did contain but for what it didn't. While rural India did get greater attention, the budget lacked other major reform or policy initiatives. Wharton faculty and other experts note, however, that reforms might follow later. Thu, 16 Jul 2009 16:43:21 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4388 In the world of private equity, Providence Equity Partners is a specialist. The firm, whose headquarters are in Providence, R.I., specializes in deals involving media, entertainment, information and communications companies. In 2007, Providence Equity opened its New Delhi office, headed by Biswajit (Bis) Subramanian, who had earlier been a managing director in the firm's London office. By mid 2008, Providence Equity had invested more than US$1 billion in Idea Cellular, which, according to media reports, was among the largest private equity investments in India's telecom sector. What is Providence Equity Partners' strategy for India? How has it changed as a result of the global financial crisis? In an interview with India Knowledge@Wharton, Gaurav Sharma, who works with Subramanian on defining and executing Providence Equity Partners' India strategy, discusses those questions and more. Thu, 18 Jun 2009 17:25:08 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4376 Has a new golden age dawned for India's public sector banks? In the past, these institutions have been regarded as laggards compared with private sector or foreign banks. But as foreign banks reel from the global financial crisis, public sector banks -- which have largely avoided high-risk investments involving subprime mortgages -- have emerged as models of stability and fiscal responsibility. India Knowledge@Wharton spoke with experts about whether public sector banks now hold a decisive advantage over their global rivals, or whether, as one observer notes, it is a case of "satisfactory underperformance." Thu, 07 May 2009 16:26:54 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4366 Soya processing and leasing companies caught the Indian stock markets' imagination in the early 1990s. Then came the Y2K rush and the dot-com boom in the late 1990s, followed by yet another binge on IT software stocks. According to Raamdeo Agrawal, co-founder of Motilal Oswal Securities, the stock markets "always come up with a story every four or five years." Agrawal and other investment experts discussed India's capital markets during the recent Wharton India Economic Forum in Philadelphia. While declining foreign investments may temporarily threaten economic growth, many of the speakers said they remained bullish on India, especially for the long term. Thu, 09 Apr 2009 15:46:33 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4350 According to Ignatius Chithelen, managing partner of Banyan Tree Capital Management, an investment firm in New York City, emerging markets are not de-coupled but rather "turbo-coupled" to developed markets. In this opinion piece, Chithelen describes what he sees on the horizon for emerging markets and for commodities prices in the wake of the global economic crisis. Among his predictions: China will likely emerge as the big winner from the current worldwide recession, and Mexico's recent hedging of its oil exports will lead to a cap on commodities prices over the short to medium term. Thu, 12 Feb 2009 16:34:49 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4344 When terrorists attacked Mumbai last November, the media called it "India's 9/11." That tragedy has been succeeded by another that has been dubbed "India's Enron." In one of the biggest frauds in India's corporate history, B. Ramalinga Raju, founder and CEO of Satyam Computers, India's fourth-largest IT services firm, announced on January 7 that his company had been falsifying its accounts for years, overstating revenues and inflating profits by $1 billion. According to experts from Wharton and elsewhere, the Satyam debacle will have an enormous impact on India's business scene over the coming months. The most significant questions, however, will be asked about corporate governance in India, and whether other companies could follow Satyam's Raju in revealing skeletons in their own closets. Fri, 09 Jan 2009 12:02:37 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4343 After a year of financial shock and sharp economic loss, 2009 is likely to be extremely difficult for the global economy, with investors, business leaders and policymakers struggling to find signs of recovery. Wharton faculty and other experts interviewed by the Knowledge@Wharton Network discuss the outlook for India, the U.S., Europe, Latin America, China and Japan. Fri, 09 Jan 2009 12:02:37 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4330 Not long ago the biggest names in corporate India appeared to be on an acquisition tear overseas. Tata Motors was scooping up iconic brands such as Jaguar and Land Rover, and Hindalco had bought Atlanta-based Novelis, a leading aluminum fabricator, to cite two prime examples. But after new stock issues by both companies to help finance the acquisitions fell flat, some questioned India Inc.'s ability to sustain its global buying spree. Are outbound mergers and acquisitions (M&A) a dying breed, or was retrenchment inevitable given global financial conditions? Thu, 30 Oct 2008 14:35:19 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4312 The Reserve Bank of India (RBI) on July 29 announced substantial increases in both the repo rate -- the rate at which it lends funds to banks -- and the cash reserve ratio, or the proportion of deposits that banks have to set aside with the RBI. While RBI governor Y.V. Reddy has stated that these measures are necessary to combat inflation, market watchers are saying they will inevitably harm India's already moderating GDP growth. India Knowledge@Wharton spoke with members of the banking industry and faculty at the Indian School of Business about the RBI's strategy and what these hikes could mean for the Indian economy. Thu, 07 Aug 2008 16:51:03 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4291 In the wake of the U.S. financial crisis, valuations of Indian firms have tumbled -- something which the private equity industry has been careful to note, according to Sri Rajan, partner and head of Bain & Company's private equity practice in India. Over the next few months, he predicts, "we'll see a lot more deal flow in India." Rajan, whose work with private equity funds includes mergers and acquisitions, post-merger integration, offshore outsourcing and assessing entry and exit risks, discussed the industry outlook with India Knowledge@Wharton at the Wharton India Economic Forum in Philadelphia. Thu, 29 May 2008 21:37:01 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4284 Vikram Akula, founder and CEO of SKS Microfinance, launched the company in 1998 to offer small loans to very poor borrowers. Some 10 years later, SKS has become India's fastest growing microfinance institution (MFI), with more than two million borrowers. In the next two years, Akula would like SKS Microfinance, whose backers include venture capitalists such as Sequoia Capital, to grow to eight million borrowers -- which would make it the world's largest microfinance lender, surpassing Bangladesh's Grameen Bank. In an interview with India Knowledge@Wharton at the recent Wharton India Economic Forum, Akula spoke about emerging trends in microfinance. Thu, 01 May 2008 17:14:35 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4281 Recent corporate results announced by Indian firms have called forth both optimism and pessimism on Dalal Street -- Mumbai's equivalent of Wall Street -- which houses the Bombay Stock Exchange (BSE). As uncertainty looms over India's economic growth for the rest of the year, the biggest fear is growing inflation, according to experts interviewed by India Knowledge@Wharton. Thu, 01 May 2008 17:14:35 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4278 Investors are flocking to India, and last year net foreign institutional investment inflows exceeded $17 billion. While initially, international investors focused on technology, today they are investing in everything from real estate to infrastructure. How are companies getting into these opportunities, and how are the deals changing over time? A panel discussion at the recent Wharton India Economic Forum in Philadelphia explored the landscape and gave the audience a taste of what is to come. Thu, 17 Apr 2008 16:41:31 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4273 Most emerging market economies are unlikely to de-couple from the U.S., a premise behind the sharp, brief rally in emerging stock markets last fall. Since the American economy and stock market started weakening in late 2007, so have most emerging markets. Some developing countries may provide short-term investment gains due to specific economic factors. Are these increases sustainable? In this opinion piece, Ignatius Chithelen, managing partner of Banyan Tree Capital Management, an investment firm in New York City, argues that with most gains from emerging stock markets already behind us, it may be time to sell. Wed, 02 Apr 2008 21:12:28 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4272 Sovereign wealth funds from countries such as the United Arab Emirates, Norway and Singapore often are in the news as they invest in companies such as UBS, Merrill Lynch and Citigroup. In Asia, Singapore's Temasek fund and China's China Investment Corp. have been seeking out high-potential deals. These moves have led some experts to argue that India should set up a sovereign wealth fund to buy energy-generating assets. In this opinion piece, Vinay B. Nair, a senior fellow with the Wharton Financial Institutions Center, explains why he opposes the idea. Nair is also a senior fellow at New York University and a visiting professor at the Indian School of Business. Thu, 27 Mar 2008 16:05:04 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4266 The boom in the economies of many Asian countries is creating opportunities for Western financial firms that hardly existed a decade ago, according to two keynote speakers at the recent Wharton Asia Business Conference. Thanks to their double-digit growth, the developing Asian economies, led by China and India, are minting new millionaires seeking managers for their money, said Renato de Guzman, CEO, ING Private Bank-Asia. They are also giving birth to new firms that are seeking merger and acquisition advice as they expand at home and abroad, according to Helge Weiner-Trapness, a managing director in Asia with JP Morgan. Thu, 06 Mar 2008 17:33:59 EST Finance and Investment http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4265 India's budget for 2008 does little to encourage foreign investment -- possibly because global capital has been pouring into India. Between April and December 2007, the country saw an increase of nearly $13 billion in foreign direct investment (FDI) and $18 billion in foreign institutional investment (FII). The primary winner of this year's budget -- presented in New Delhi by finance minister P. Chidambaram last week -- was the farm sector, which has been offered a loan write-off worth $14.8 billion. Some observers are concerned about whether this is a good idea, but others argue that the Indian economy is going strong and needs to share the benefits of growth. Thu, 06 Mar 2008 17:33:59 EST