1. K E Y N O T E
Keynote Capitals Institutional Research - Industry Monitor September 21, 2011
Industries covered
• Banks
• Cement
• Infrastructure
• IT
• Media & Entertainment
Executive Summary
Government approves amendment to Export-Import Bank Act
The GoI has approved amendments to the Export-Import Bank Act to improve its ability to increase
credit to exporters and importers.The Export-Import Bank of India (Amendment) Bill, 2011 seeks to
increase the authorised capital of the bank from `2,000Cr to `10,000Cr, said an official statement
after the cabinet committee on economic affairs (CCEA) headed by Prime Minister Manmohan Singh
approved the amendments to the act.
Key highlights in Cement Industry
Ambuja Cements and Ultratech Cement coal from South Africa for the months of December and
January. 9 cement companies bid for Himachal mega cement plant in Chopal area of Shimla District.
The companies include Reliance Cementation, which proposes cement plant of 5mn tones while
others include, JK Cements, Ambuja, ACC, Dalmia with proposal of 2mn tones cement plant. Coal
stockpiles at India's ports fell slightly since mid-September to 11mn tonnes from 12mn, importers said,
but weak cement sector demand and rail bottlenecks are likely to keep stock levels high, according to
some of India's biggest importers. JK Cement has announced an investment of `750Cr to set up a
white cement plant in the UAE, through a subsidiary, with capacity to produce 0.6mn tpa. And finally,
Jaypee Group acquired majority stake in Andhra Cements. The company’s 2 cement units were non-
operational since June 2010 with accumulated losses of `200Cr for last 2 years.
Infra sector the most underperformers, although market factored the slumpiness
In the last fortnight, many companies declared their half yearly and Q2FY12 results. As expected
almost all companies has revenues grew significantly but there were decline in profits and their
margins mainly due to the higher cost of funds and higher raw material price which are now started
cooling off. Given sluggishness in the sector, IRB Infra and IL&FS Transportation Networks remains
our top picks and we maintain buy on the same however revising the target price to `197 in IRB infra
and maintaining same target price for IL&FS Transport Networks of `248 per share.
IT stocks fell on euro zone debt worries
BSE IT index closed at 5614.13, down 2.26% during the last week vis-à-vis its previous week. The
losers on the BSE IT index were Infosys, HCL Tech, TCS and Mphasis down 1.30%, 5.51%, 3.78%
and 9.08%, respectively. Tech Mahindra and Patni computers were gainers on the BSE IT index. IT
stocks fell on euro zone debt worries. Europe is the second largest outsourcing market for Indian IT
companies. The rupee fell past 51 per dollar for the first time in nearly 32 months, but did not have a
positive impact on software services exporters such as TCS and Infosys, which get more than half
their revenue from the US.
Cable operators challenge ordinance for digitalizing cable TV
A cable operators' body moved the Delhi High Court challenging an ordinance promulgated last
month for achieving complete digitalization of cable television networks in the country by 2015. Cable
Operators United Front (COUF), in its petition sought the court's direction, restraining the government
from enforcing the Cable TV Networks (Reg) Amendment Ordinance 2011.

2. K E Y N O T E
Weightages in major indices
Sectors Sensex Nifty BSE 500 CNX 500
Banks 22.55% 23.48% 22.08% 22.20%
Cement 0.51% 2.80% 2.70% 2.70%
Infrastructure 8.19% 8.44% 7.33% 7.28%
Information & Technology 15.00% 13.00% 10.16% 10.19%
Media & Entertainment - - 0.78% 0.78%
Banking Industry Monitor
Banking Industry and its contribution to Indian equities
Banking and other Finance firms together have the highest weightage in the Sensex and BSE 500
with 22.55% and 22.08% respectively. The major players in BANKEX Index are the private banks
namely ICICI Bank (26.30%), which is the second largest bank in India with HDFC Bank LT (25.36%).
Other banks include SBI (14.61%), Axis Bank (7.66%) and Kotak Bank (5.72%). The sector’s
weightage in CNX Nifty is 23.48% and in CNX 500 is 22.02%.
Government approves amendment to Export-Import Bank Act
The GoI has approved amendments to the Export-Import Bank Act to improve its ability to increase
credit to exporters and importers.The Export-Import Bank of India (Amendment) Bill, 2011 seeks to
increase the authorised capital of the bank from `2,000Cr to `10,000Cr, said an official statement
after the cabinet committee on economic affairs (CCEA) headed by Prime Minister Manmohan Singh
approved the amendments to the act. "Increase in the authorised capital would enable the bank to
take higher export credit exposures, enable it to borrow funds to disburse under export line of credits,"
the statement added.
The Exim Bank, which plays a vital role in financing of export and import deals, is governed under the
Export-Import Bank Act, 1981. The Export-Import Bank provides financial assistance to exporters and
importers and is the principal financial institution for coordinating the working of institutions engaged
in financing overseas trade. The amendments also provide for appointment of two-whole time
directors, other than the chairman and managing director in the bank by the central government.
SBI ties up with MoneyGram International for inbound money service
SBI has joined hands with money transfer services company MoneyGram International and its
principal agent Thomas Cook (India) Ltd. to provide in-bound money services across SBI's key
branches. Initially, the services will be made available to SBI's 100 branches. "Adding SBI to our
agent network immensely increases consumers access to the company's services across India. The
Bank's locations throughout India will make it be more convenient than ever to receive money
wherever you are in the country.", MoneyGram International's executive vice president for the
Americas and Emerging Markets, Dan O'Malley, said.
IDBI Bank becomes first lender to tap China funds
IDBI Bank became the first lender to raise funds in offshore yuan in Hong Kong, signalling a new set
of borrowers to enter the growing bond market, with an order book of 900 million yuan ($141 million),
nearly double what it set out to raise, and borrowing costs of 4.5% for three-year "dim sum" debt.
While the steady increase in rupee interest rates has driven local companies to raise funds overseas,
the yuan's attractiveness has received a boost after New Delhi added the Chinese currency as a
external financing vehicle to the US dollar, Japanese yen, euro and the pound sterling in September.
India has set a $1 billion limit for borrowing in yuan within the $30 billion overseas borrowing limit for
companies.
"IDBI Bank decided to access this market as an attractive funding cum diversification play as also to
cultivate a new and fast developing investor class," Melwyn Rego, executive director at the bank told

3. K E Y N O T E
a media briefing. IDBI has a "Baa3" rating from Moody's and "BBB-" from S&P, both with stable
outlooks, and similar ratings are expected for the new bonds. The bank has already lined up assets,
which will be funded from the proceeds of the bond, he added. While the bank did not have any
immediate plans to tap the market again, despite the good demand from investors, Rego said the
bank has applied to Chinese banking authorities to open a representative office in Shanghai.
Cement Industry Monitor
9 cement companies in run for Himachal mega cement plant
Reliance Cement has proposed a 5mn tonne capacity mega cement plant the biggest so far in
Himachal Pradesh. Besides Reliance eight other firms have bid for this project proposed to be set up
in Chopal area of Shimla district. While the others have proposed a 2mn tonne capacity plant,
Reliance Cementation Pvt Ltd (RCPL) has proposed a 5mn tonne plant. The other firms who have bid
for the grant of prospective license are Lafarge, JK Cements, Ambuja, ACC, Dalmia, Abhijit Group,
Laxmi Cements and Atha Mines. The plant is proposed to be set up at the Sanrothi limestone
deposits which is close to the Gummah limestone deposits where India cements is already setting up
a 2mn tonnes capacity plant. The state already has four cement plants in operation run by ACC,
Ambuja, CCI and Jaypee which have a total capacity of 12.6mn tonnes. Four others with a capacity of
7.27mn are in the process of being set up.
Coal sourcing for cement companies
Ambuja Cements may secure four Panamax cargoes of South African thermal coal. Ultratech Cement
Ltd (UTCEM), has requested offers for 100,000 tons of South African coal for delivery next month.
India coal stocks fall slightly to 11mn tonnes
Coal stockpiles at India's ports fell slightly since mid-September to 11mn tonnes from 12mn, importers
said, but weak cement sector demand and rail bottlenecks are likely to keep stock levels high,
according to some of India's biggest importers. Until the unsold tonnage shrinks, which could take
months, Indian buyers are unlikely to return to the spot market for large fresh purchases despite the
growing coal supply crisis which is causing power shortages across the country. India's need for
imported coal for power generation is structural and rapidly increasing but a lack of rail capacity to
move it from ports to end-users is holding up both domestic supply and imports.
JK Cement plans UAE plant
JK Cement has announced an investment of `750Cr to set up a white cement plant in the UAE,
through a subsidiary, with capacity to produce 0.6mn tpa. This is in sharp contrast to the earlier
announced plans for a 2.2mn tpa, $400mn project. The UAE cement plant by Kanpur-based cement
maker JK Cement was scheduled to go on stream by the middle of 2010, but was hit by deteriorating
economic conditions amid global slump and meltdown. The new plant will be set up at the Fujairah
Free Trade Zone and the plant will have provision to change over to produce grey cement.
Jaypee Group acquired Andhra Cements
The G P Goenka Group sold its controlling stake in ailing Andhra Cements to Jaypee Group in an all
cash deal of `235Cr. Goenka group will sell its 32.95% promoter's stake, out of 45% it held. Jaypee
Development Corp will also subscribe to additional fresh issue of 14.75Cr shares through preferential
allotment. These will take Jaypee's stake in Andhra Cements to 66.64%, Andhra Cements. The
preferential allotment will be at `12 a share of `10 each. At this price, Jaypee Development Corp will
have to fork out `234.74Cr to acquire 66.64%. Jaypee will launch an open offer for 7.63Cr shares of
Andhra Cements at `12 per share. Andhra Cements incurred a loss of `35.50Cr on net sale of `
65.48Cr last year while two of its units have been non-operational since June 2010. Andhra Cements
had accumulated losses of over `200Cr in the past two years.

4. K E Y N O T E
Infrastructure Industry Monitor
The Sector has underperformed 7.22%, 6.18%, 6.81% and 6.07% over Sensex, BSE500, Nifty and
CNX500 respectively. However, Noida toll bridge was the top performer by 5.51%, 6.56%, 5.89% and
6.63% whereas KSK Energy was the worst performer by 36.10%, 35.01%, 35.71% and 34.99% over
Sensex, BSE500, Nifty and CNX500 respectively.
Government clears three stalled infra projects worth `25000Cr
The government has given in-principal approval for three infrastructure projects involving an
investment of `25000Cr, these infra projects are cleared by inter ministerial committee led by the
finance ministry. The three projects, which have been cleared, are L&T Metro Hyderabad, Hinduja
Power, Vishakhaptanam and Seembari Expressway, Andhra Pradesh. The L&T Metro Hyderabad is
the biggest projects which involves investment of `16000Cr. The idea is to put these projects on the
fast track and bank loans, which have been sanctioned, should be disbursed for implementation. Till
now, the government has discussed around 24 projects worth around `209000Cr. However, as of
now, panel has only discussed projects where bank loans are above `1500Cr, and in next stage,
panel will discuss loan above `1000Cr. The government’s move to fast track these infra projects will
also clear way for banks to start lending and boost slowing credit growth and pushing banks to
accelerate lending at a time when credit growth is slowing because of the ongoing economic crisis
and high interest rates. However, banks are concerned over increasing NPAs, as any of these infra
projects turns into NPA, it may have chain reaction. The ministry of finance is also concerned over the
downgrading of the Indian banking sector by the credit rating agency Moody’s.
Government will stick to its disinvestment target of `40000Cr for FY12
In the first seven months of the current financial year, the government has been only able to raise
around `1145Cr through a stake sale in Power Finance Corporation (PFC) and there are
apprehensions that the government may miss the disinvestment target of `40000Cr. The government
has delayed its proposed stake sales in the Public Sector Units because of the volatile stock market
conditions. During 2010-11, the government had raised around `22763Cr via the sale of equity in
public sector enterprises. The government has delayed its proposed stake sales in the Public Sector
Units because of the volatile stock market conditions. he international equity markets have been on a
downslide on worries over the ongoing debt crisis in the euro zone and credit crunch in the United
States. 'All these aspects have to be taken into account and the government will take a decision at the
appropriate time

5. K E Y N O T E
IT Industry Monitor
IT Industry and its contribution to Indian equities
IT sector has weightage of 10.16% and 10.19% in BSE 500 and CNX 500 with major stocks are
Infosys, TCS and Wipro. The sector is also represented through BSE IT and CNX IT indices. IT sector
companies also constitute major portion of Sensex and Nifty with weightages of 15.00% and 13.00%.
Tech Mahindra reported a mixed second quarter results
For 2QFY12, Tech Mahindra reported revenue growth of 2.4% Q-o-Q to `1333Cr due to flat Q-o-Q
volume growth. Operating profit margin (OPM) slipped to 15.3%, down 337bp Q-o-Q, due to negative
impacts of wage hikes given during the quarter and volume decline from BT. PAT, excluding share
from Satyam, came in at `139Cr, negatively impacted by higher interest cost of `72.1Cr because
it includes MTM loss of `52Cr derived from foreign currency loans.
i-GATE to delist Patni Computer
Nasdaq-listed iGATE Corporation announced its intention to commence the process of delisting its
Indian subsidiary, Patni Computer Systems. The de-listing process, to be done through a reverse
book building process, is expected to be completed by mid-2012. iGATE has indicated a floor price of
`356.74 per share. The delisting is subject to the approval of Patni shareholders and regulatory
approvals.
Infosys launched XBRL filing solution to help companies file financial statements
Infosys launched XBRL filing solution to help companies file their financial statements in the format
mandated by the Ministry of Corporate Affairs. XBRL filing solution is a ready to use tool, in which
users can convert their excel-based financial information into XBRL.
Wipro implemented material management system for All Nippon Airways (ANA)
Wipro Technologies has implemented aircraft parts and material management system for All Nippon
Airways (ANA) to strengthen regulatory compliance and optimize its inventory stock.
Wipro expands footprint in South Africa, to hire 1,000
Wipro Technologies is planning to set up a delivery centre in South Africa. The proposed move by the
IT services business wing of Wipro would create job opportunities for 1,000 professionals in the next
three years. The company mentioned that over 500 employees who are either located in South Africa
or in various offshore centers are servicing clients in that country, belonging to industries such as
telecommunications, financial services and oil & gas.
Satyam Expects North America Sales to Grow: Mr. Lakshmanan Chidambaram
According to Mr. Lakshmanan Chidambaram, head of the Americas business at Satyam, Satyam
Computer expects sales from North America this fiscal year to increase faster than last year's 16%
growth, but fears that the outlook could be hurt if economic conditions in the industry's biggest market
worsen. The economic worries of the U.S. haven't hurt the Indian software services exporter's
business so far and that reflects in the size of the deals the company is chasing, The company is
pursuing nearly 10 deals worth more than $100mn in the banking and financial services,
manufacturing and hi-tech sectors, with the largest deal worth more than $200mn. Its largest deal so
far in North America was worth about $55mn.

6. K E Y N O T E
Media Industry Monitor
Major listed Media & Entertainment companies included in BSE 500 and CNX 500 indices are Zee
Entertainment Enterprises, Dish TV India, Sun TV Network, Jagran Prakashan and UTV Software
Communications, while the sector's weight age is 0.78% in both the indices.
Cable operators challenge ordinance for digitalizing cable TV
A cable operators' body moved the Delhi High Court challenging an ordinance promulgated last
month for achieving complete digitalization of cable television networks in the country by 2015. Cable
Operators United Front (COUF), in its petition sought the court's direction, restraining the government
from enforcing the Cable TV Networks (Reg) Amendment Ordinance 2011.
COUF challenged the ordinance, promulgated on October 25 on the basis of a recommendation by
Telecom Regulatory Authority of India (TRAI), terming it as "unconstitutional" and contending it
violated the cable operators' fundamental right to carry on their business and profession.
COUF pointed out to the court that a huge investment to the tune of `10,000Cr is required for
complete digitalization of the cable TV network, which the cable operators are not capable of doing.
Reliance MediaWorks to restructure business
Reliance Mediaworks, part of ADAG group, said that its board will explore options for restructuring its
business, including creating subsidiaries for exhibition and film and media services divisions. The
company also said that the restructuring will help position the film and entertainment services
company to pursue strategic growth and enable it to boost revenues and profitability as well as
expand products and service offerings.
Dish TV plans to raise $200mn from overseas investors
Dish TV plans to raise $200mn from overseas investors and is in the second step to get statutory
approvals and made an application to Foreign Investment Promotion Board (FIPB).
The CEO of Dish TV, RC Venkatesh said that the company has to deploy additional capital for
digitization and the high definition technology and the company should be in a position to do it in short
notice since this entire procedural thing is a long winded exercise.
Den Networks eyes 2.5mn new digital subscribers in FY13
In FY13, Den Network is looking to add about 2.5mn new digital subscriber as it's a completely new
paradigm where the entire under declaration or non-addressability goes out of the market and 100%
of the subscribers are going to be addressable.
Zee Group announces $250mn fund for Veria Living
ZEE Group has announced the creation of a $250mn content development, production, co-production
and acquisition fund that will benefit Veria Living, a network devoted to showcasing wellness
programming and related content across multiple media platforms. Veria Living, headquartered at
New York, offers the world’s largest line-up of first-run, original programming – connecting viewers in
a contemporary and accessible manner to the benefits and joys of living a healthy lifestyle.

7. K E Y N O T E
KEYNOTE CAPITALS LTD.
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