Thursday, October 26, 2006

It’s the approach that matters

CVRD wins first major takeover battle in the Canadian mining sector

The Canadian mining industry is turning into a hotbed for some really intense strategy games. The battle for leading nickel producer Inco, which had Brazilian firm Compania Vale do Rio Doce (CVRD), Phelps Dodge (PD) and Teck Cominco Ltd. competing tooth and nail has finally ended. On September 25, 2006, CVRD, the Brazilian mining giant, made an all cash bid of CAD $86.00 per share or a total of $17.3 billion to acquire Inco Corporation, an offer the Inco board has accepted and recommended to its shareholders. The tussle was on since May 2006. In fact, it was PD that was first successful in forming a combination agreement with Inco and Falcon Bridge. However, the party didn’t last long and the agreement was terminated on September 5. As a result, Inco will pay $125 million fine for contract termination to PD and upto $350 million more if it goes ahead with the CVRD deal. But the management of Inco doesn’t seem to mind that one bit. Scott Hand, Chairman & CEO of Inco points out, “We are satisfied with the CVRD offer of CAD $86.00 per share (all cash) as it represents compelling value for our shareholders.” While Inco would help CVRD diversify from iron ore, the two would still face issues, considering it’s a merger of Brazilian and Canadian cultures. Lawrence Smith, Mining Analyst, BlackMont Capital says, “The CVRD offer is the best for Inco, but synergies are quite small. This is just a strategic decision by CVRD to be a major nickel player.” But considering the growth potential, CVRD could well afford to take that in its stride. For complete information on IIPM Articles, please click here... , Also visit: Arindam Chaudhuri Initiative

Source: B&E and IIPM Publications

Wednesday, September 20, 2006

Don’t walk out of your home

As there’s no place left in hotels...

Hospitality industry is on a rock-and-roll to the beat of the booming economy and to the spiralling number of business and leisure travelers from the international and national space. And whether it is the Taj Mahal in Agra, or the backwaters of Kerala, the one sure area where foreign travellers would spend on, is booking hotel rooms. In FY06, approximately 4 million foreign tourists arrived into India (a growth of 11%) and shelled out $6 billion. Low-cost airlines have further provided an impetus to the sector. The boom is being witnessed across hotels of every segment. Recent developments have even led to capacity crunch situations in hotels, and this, despite many of the top hotels investing in capacity additions over the past five years. The occupancy levels of hotel rooms across major cities have either scaled up or remained firm. Average Rental Revenues (ARRs) have also gone up in the range of 15-35%.

For complete IIPM Research & Publication Article, please click here...

Editor: Arindam Chaudhuri; Source: B&E and IIPM Publication

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Thursday, July 13, 2006

Home Builders :: IIPM Editorial

All the components of the HMI index – sales, expected sales for the next six months and buyer traffic – most precariously declined to their lowest since April 1995. Commenting on this hazardous depreciation, National Association of Home Builders (NAHB), Chief Economist, David Seiders frighteningly sounded off, “We now expect new-home sales to be off by 13% from the record posted in 2005. Single family starts, supported by large builder backlogs of unfilled orders and some continuing reconstruction in the wake of last year’s hurricanes, should be down by about 9% from the 2005 record.” Well, it shouldn’t be hard for anyone to accept the fact that housing has been the anchor for the US and consequently the global economy at a time when yawning deficits and global imbalances have constantly exerted downward pressures. Housing had kept investments & consumption alive in US & OECD markets. And the most upsetting news is that dampness is clearly settling in now.

For complete IIPM Editorial Article, please click here...

Source: IIPM Publication, Editor: Arindam Chaudhuri

Monday, June 26, 2006

IIPM Publication: McKinsey blames the obligation on Indian banks...

For this, McKinsey blames the obligation on Indian banks to hold 25% of their net demand and time liabilities in government securities; and recommends that the same be reduced. This sounds puerile, mainly because RBI has been praised by even international bodies for undertaking timely reforms on these fronts. A much better way perhaps would have been to encourage Indian banks to actively consider securitisation of loans, which has helped countries like UK, China et al to lend more than what they have (their credit-deposit ratio is more than 100). Clearly, McKinsey’s report is just another example of how India is being forced to undermine its priorities. Such reports hardly pay any consideration to socio-economic responsibilities. By the way, the corrigendum we mentioned referred to something else, which would surely give horrors to our dear consultants. The priority sector lending by Indian banks is actually 40% of total credit, instead of the 36% that McKinsey wrongly mentions. That’s is being Rs.460,455 million off the mark. Now how’s that for being other“wise”!

For complete IIPM Editorial Article, please click here...

Source: IIPM Publication, Editor: Arindam Chaudhuri

Wednesday, May 10, 2006

Hyundai towards greater glory! (IIPM Editorial)

His father, and founder of Hyundai, Chung Ju-yung, was also indicted for embezzlement and bribery way back in 1993! Even more interesting, a then young Chung was arrested in 1978 for bribery to be released in double quick time to take Hyundai towards greater glory! There are chances that these reverberations spread even farther. Auto exports of Hyundai and affiliate Kia account for more than 10% of the total exports of South Korea. Any escalation of the crisis at Hyundai and the entire South Korean economy could face a problem. Of course, policy makers in the country are putting up a brave front. Said the South Korean Finance Minister Hang Duck Soo, “Chung’s arrest would inevitably have some impact on the economy, but it won’t be that huge.”

For complete IIPM Publication, please click here...

Source: IIPM Editorial

Saturday, May 06, 2006

India’s infrastructure is lagging far behind...

For the aspirational individual, these are good tidings, but in terms of macro sustainability factors, it assumes the form of a serious issue. India’s infrastructure is lagging far behind the projected growth rates and it’d be foolish not to come to terms with the fact. India spends a lowly 3.5% of its $700 billion GDP on infrastructure development and it’s obviously not enough to overhaul the deeply congested roads, leave alone lay out a decent public transport system. Meanwhile car companies are continuing with their capacity expansions, Hyundai has already planned to increase its capacity to 400,000 units by 2007 and others are following suit. Arun Arora of Maruti Suzuki believes that though western markets are saturated now, the Indian market still has potential for growth, as more people aspire to own cars.

For more information on IIPM Publishing article, please click here...

Source: IIPM Publication

Tuesday, April 25, 2006

Global faculty

IIPM Global Outreach Programme creates a platform for faculties from around the world to share their experiences and knowledge at a common forum and to deliver world class education to our students.This programme brings over 30 professors of International repute to IIPM branches in India. It enables, all IIPM students (of all branches) to be taught by professors from all of the top 15 global institutions.

For more information on Global Faculty, please visit