PE firms Carlyle, KKR and Warburg Pincus are likely to acquire a 15-18% stake in Hero Honda Motors by purchasing a 60-70% stake in an SPV funded by the acquisition of Honda's 26% stake in the company. Munjal's group will remain the largest shareholder with a 34-36% stake and the PE firms will own an indirect 18% stake, while Honda exits the joint venture completely. Spice Mobility will launch 9 new mobile phones priced between Rs. 2,000-6,000 and a Android-based tablet and handset during the festive season and invest Rs. 25 crore in marketing. ONGC's

1. Weekly news
18th October – 23rd October 2010

2. PE stars may team up to buy
18% in Hero Honda THREE leading US-based private equity (PE) firms
Carlyle, Kohlberg Kravis & Roberts (KKR) and
Warburg Pincusare likely to acquire an effective
stake of 15-18 % in Hero Honda Motors, as part of
a two-legged transaction that could see Japans
Honda completely exit the country's largest
motorcycle company, said two persons familiar
with the development,
 BM Munjal-owned Hero group is in advanced
discussions with these three PE firms to sell 60-70 %
stake in a special purpose vehicle (SPV) to fund
the acquisition of Hondas 26% shareholding
which at current market price is valued at around
9,300 crore in the joint venture company.
 Munjals will emerge as the largest shareholder in
Hero Honda with a combined direct and indirect
holding of 34-36 % and the PE funds will own an
indirect stake of up to 18%.Honda,on its part, will
completely exit the joint venture and focus solely
on its wholly owned company, Honda
Motorcycles and Scooters India (HMSI).
18th October 2010

3. Spice Mobility to spend 25
crore in marketing
 Spice Mobility on Sunday said it will launch nine
models and invest about 25 crore in marketing
and promotional activities during the festive
season.
 The new handsets, to be launched in the price
range of 2,000-6,000,will include basic and qwerty
keypad phones.
 The company will also launch an Android-based
tablet and handset, but has not disclosed the
pricing yet. They are expecting good sales in the
festive season (October-November ) and have
offering at various price points.
18th October 2010

4. ONGC fuel subsidy bill up 15%
in second quarter
 State-owned Oil and Natural Gas Corporation's fuel subsidy bill will
increase by nearly 15% to.3,019 crore in the second quarter this
fiscal.
 PSU fuel retailers Indian Oil Corporation Ltd, Bharat Petroleum
Corporation Limited (BPCL) and Hindustan Petroleum Corporation
Limited (HPCL) together lost about.11,295 crore in revenues on
selling diesel, domestic LPG and kerosene below cost of production
in July-September quarter.
 The under recovery, upstream companies like ONGC, Oil India and
Gail India will bear one-third. As per this subsidy sharing formula,
ONGC will chip in with. 3,019 crore by way of discount on crude oil
it sells to IOC,BPCL and HPCL. The subsidy outgo of ONGC will
be.2,630 crore higher than in the second quarter of last fiscal.
 OIL will pay.399 crore in subsidy during Q2 of this fiscal and GAIL.346
crore. Of the.3,765 crore upstream subsidy contribution, IOC will
get.2,135 crore,HPCL.808 crore and BPCL.821 crore.
19th October 2010

5. Britannia enters baked snacks
market with Time Pass
 Britannia Industries entered the baked snacks
category with its brand, Time Pass, in Bangalore on
Tuesday.
 While Britannia sells salted biscuits under its youth
centric Time Pass brand, the new offering will
directly compete with Parles Monaco smart chips,
Frito Lays Aliva and Parle Agros Hippo.
 The company will add about two variants every
quarter and intends to roll out the brand nationally
in a year.
 The salted snacks category is estimated to be at Rs
6,000 crore. Our Bureau
20th October 2010

6. IMIMobile acquires UK co WIN
for $26 m
 HYDERABAD-BASED IMIMobile,a company that provides
mobile technology,has just acquired WIN for $26 million,its
first major overseas acquisition.UK-based WIN,a mobile
content and services company,has revenues of around $60
million.
 The combined entity will have a workforce of about
650,and provide managed mobile services to over 100
operators and business in 70 countries.
 IMIMobile provides managed mobile services to customers
like Star,Idea,Orange and MTN.WIN specialises in providing
companies with customer management and
communication solutions,and its client list includes names
like T-Mobile,Orange,Cenrical AOL,Vodafone,and E-
On.Based in Buckinghamshire,it also has offices in Greece
and Kuala Lumpur.
21th October 2010

7. China Q2 growth slowest in a
year
 CHINA said its economy expanded at the slowest pace in 12
months during the September quarter as a World Bank report
tipped it to slow down further in 2011,raising the possibility of India
becoming the fastest-growing economic powerhouse next year.
 The worlds second-largest economy grew 9.6% in the three months
to September, just two days after the World Bank pared its growth
forecast for the year ending December 2011 to 8.5%.
 This is a tad below the banks growth projection of 8.6% for India
during the same period. For the fiscal year 2011-12,the multilateral
lender has forecast an 8.7% growth for India.
 Faced with a 23-month-high inflation and growing pressure from
the rest of the world to let its currency appreciate, China faces
severe headwinds to growth.
 With weak global growth and fading impact of the stimulus
package, the projected growth to slow to 8.5% in 2011.
22nd October 2010

8. World Bank approves $13 m
for Mizoram road project
 The World Bank has approved $13 million to modernize the
road network of North Indian state Mizoram.
 The project will help widen and improve 180 km of state
highways, and rehabilitate and maintain another 300 km.
 It will also finance improvements in equipment and training
for the state Public Works Department. Improvements in
basic infrastructure including highways are critical to
stimulate economic development.
 With growth there has been an increase in demand for
better infrastructure. Continued investments in improving
Mizoram's road infrastructure will support the region's
growth and service delivery goals.
23rd October 2010