Chaanakya Tracking the economy….

A Wealth Incorporation

Publication

August 1, 2012

Vol. 6

Issue 09

Christ University

Institute of Management

2

Index

News

National 3

International 5

Rates and Graphs 7

Contemporary Articles

MSME 9

Emerging Economies Future 10

Debate

Monetary Policy and Inflation 12

Stock Watch

YES Bank 13

Investor Check

Jupitar Infomedia Limited 16

Commodity Market

Potato 18

Scams

CRB Scam 20

Did You Know

Interesting Facts About Currencies 21

Crossword 22

Buzz Word 11

3

National News

Sanjeet Kumar [II MBA J]

FII inflows in 2012 near$10 bn

After being fence sitters for nearly three months, overseas investors now seem to be back in

action. The total investment by foreign institutional investors (FIIs) in the Indian market in calendar year 2012 is set to touch the $10-billion mark.

The net FII inflow till date in 2012 stands at $9.87 billion (`49,630 crore), compared with a

net investment of $2.01 billion (`8,807 crore) in the corresponding period the previous year.

The net outflow in the entire calendar year (CY) 2011 had stood at $358 million.

Topsgrup acquires UK security firm

Security group Topsgrup has acquired 100 per cent stake in British security firm The Shield

Guarding Company Limited for `167 crore (£19.5 million).

Topsgrup had originally picked up a 51 per cent majority stake in 2008, before opting to buy the rest.

Govt looks for ways to cover trade gap with China

The commerce and industry ministry is in damage -control mode, looking for ways to narrow

its soaring trade deficit with China. According to some analysts, the deficit is expected to

soar to $60 billion this financial year. With costs of products rising in China, the government is leaving no stone unturned to grab the opportunity of entering the Chinese market in full

force.

RIL buys back shares worth `2,512 crore in biggest buyback

In one of the biggest buybacks so far, the Mukesh Ambani-led Reliance Industries Ltd (RIL)

has bought back 35.1 million shares, for `2,512 crore, from its public shareholders.

With this buyback, RIL has taken over Piramal Healthcare which had repurchased 41.8

million shares, or 20 per cent of its total number of shares, for `2,508 crore in March 2011.

Inflation eases to 5-month low of 7.25%

The Wholesale price inflation eased to a five-month low of 7.25 per cent in June, against 7.55

per cent in May, owing to easing price pressure on manufactured items and a two-and-a-half

year low rate of price rise in fuels.

However, food inflation rose to 10.81 per cent from 10.74 per cent over the period. Food

inflation has been in double digits for four months.

IMF lowers India’s growth projection to 6.1%

The International Monetary Fund (IMF) on 16th July 2012 cut India‘s economic growth estimate from 6.8 per cent to 6.1 per cent in 2012, as external demand slowed down and

4

domestic demand decelerated. It attributed the slow domestic demand to capacity constraints and monetary tightening by the Reserve Bank of India (RBI).

The conditions are not expected to become favourable substantially in 2013, this prompted

the Fund to scale down the 2013 gross domestic product (GDP) growth as well to 6.5 per cent from 7.2 per cent estimated earlier.

Stan Chart sells distressed assets worth `1,000 crore

Standard Chartered Bank, the largest foreign bank in the country in terms of branch presence,

has sold `9001,000 crore of distressed assets to Mumbai-based International Asset Reconstruction Company (IARC), in an all-cash deal.

Sebi asks FIIs for details of ‘end beneficiaries’

Concerned that the 10 per cent individual investment cap in Indian companies is being

breached, capital markets regulator Securities and Exchange Board of India has written to all foreign institutional investors (FIIs) to furnish details of their ‗end beneficiaries‘. According

to sources in the know, the regulator has sent letters to all the FIIs seeking details, including a

list of the ultimate beneficiaries and the original sources of capital for their investments in

Indian companies.

According to Sebi norms, an FII or its subaccounts investing through the portfolio or

secondary market investment route can own only up to 10 per cent equity in an Indian company.

Essar Oil secures `5k-cr credit from 12 banks

Ruias-promoted Essar Oil has secured `5,000 crore from a consortium of 12 banks to meet

most of its `6,169-crore sales tax dues to the Gujarat government.

According to a Press Trust of India report, the consortium of banks includes State Bank of

India, ICICI Bank, Bank of Baroda, Punjab National Bank, IDBI Bank and Bank of India.

Loan pricing by banks comes under RBI lens

Just two years after its launch, the base rate — the benchmark reference rate for all bank loans has come under the Reserve Bank of India‘s scanner as the regulator feels the

methodology of rate fixation has hindered the transmission of monetary policy measures.

The base rate, introduced in July 2010, replaced the benchmark prime lending rate and was

aimed at increasing the transparency on pricing of loans and to improve transmission of

monetary policy. According to central banking sources, apart from banks‘ base rate methodology, the RBI will also look at the spreads that banks charge over the base rate for

different loan products.

HSBC to finally get 23 Royal Bank of Scotland branches

After two years of negotiations, the Reserve Bank of India is set to allow HSBC to acquire 23

of the 31 branches in India of Royal Bank of Scotland.

The HSBC-RBS deal, announced in July 2010, was part of RBS‘ strategy to retreat from

some businesses outside its home market.

5

International News

Sanjeet Kumar [II MBA J]

China turns to American exports

A weakening Chinese economy, underlined by a further slowdown disclosed on 15th July

2012 in Beijing, is starting to pose a headache for United States officials and the two presidential campaigns, as Chinese companies shift toward a greater reliance on selling to the

American market.

A real estate bust in China and sweeping layoffs in the country‘s construction sector, together

with slower growth in retail sales and declining exports to Europe, have left one area that is

thriving: exports to the United States.

‘Euro zone crisis will not end within two years’

The head of the European Investment Bank (EIB) said on 16th July 2012 he did not expect the Euro zone to emerge from its debt crisis within the next two years.

Man United to seek $300 mn in IPO

Manchester United, the English soccer team with a record 19 national titles, seeks to raise

$300 million in its US initial public offering and plans to complete the sale in early August,

said a person with knowledge of the matter. The club may begin meeting with prospective investors to pitch the IPO as early as next week, said the person, who asked not to be named

because the plans are private.

Spanish bond yields soar to record on bailout fears

Spain‘s borrowing costs raised to record levels for a third consecutive trading day on 23rd July 2012 on concerns that a deepening recession and the financing problems of its regions

would force the government to seek a fully fledged bailout.

Market regulators in Spain and Italy announced bans on stock short-selling, as Spanish turmoil and fresh concerns about Greece‘s status in the Euro zone sent European stocks down

broadly and sharply.

China downside risk significant: IMF

China might refrain from stepping up its monetary stimulus or increasing spending because

measures now in place are sufficient to support growth, the International Monetary Fund‘s top official in the nation said.

UK Q2 GDP slumps

British economic output shrank much more than expected in the second quarter of 2012, as

unusually wet weather and an extra public holiday weighed on an economy already hit by the euro zone debt crisis and government austerity, official data showed on 25th July 2012. The

Office for National Statistics said Britain‘s GDP fell 0.7 per cent in the second quarter after

contracting by 0.3 per cent at the start of the year, much worse than forecasts for a 0.2 per

cent contraction.

6

Sharp to cut jobs; report net losses

Japan‘s Sharp Corp is expected to report a group net loss of about 100 billion yen ($1.28

billion) for the April-June quarter as its LCD panel and solar panel businesses continue to

decline, the Nikkei business daily said. Sharp is also considering its first large-scale job cuts and will offer early retirement packages to several employees across the world.

‘Greece will need more debt restructuring’

Greece is unlikely to be able to pay what it owes and further debt restructuring is likely to be

necessary, three EU officials said on 24th July 2012, a cost that would have to fall on the European Central Bank and Euro zone governments.

The officials said that twice bailed-out Greece would be found to be way off track by EU and

International Monetary Fund officials who have been assessing the country.

US growth rate slows to 1.5% in second quarter

The US economy expanded at a slower pace in the second quarter, as a softening job market

prompted Americans to curb spending.

Gross domestic product, the value of all goods and services produced, rose at a 1.5 per cent

annual rate after a revised two per cent gain in the prior quarter, commerce department

figures showed today.

The Commerce Department‘s Bureau of Economic Analysis also issued revisions dating back

to the first quarter of 2009.

China eases restrictions on foreign investors

China has eased restrictions on foreign investors seeking to put their money into the country's

markets, Beijing's latest financial sector reforms as it seeks to boost a slowing economy.

The securities regulator on 27th July 2012 published new rules allowing qualified

institutional investors to hold up to 30 per cent of shares in any domestically listed company, up from 20 per cent.

S&P affirms UK's AAA rating, outlook stable

S&P affirmed the UK's AAA rating with a stable outlook, stamping the debt with the

agency's highest grade on expectations that the economy will gather steam toward year-end.

US projects $1.2 trillion 2012 budget deficit

New figures released on 28th July 2012 by the White House predict this year's federal budget deficit will end up at $1.2 trillion.

That would make the fourth consecutive year of trillion dollar-plus deficits during President Barack Obama's administration.

7

Rates

Pankaj Sharma [II MBA J]

Repo Rate 8.00%

Reverse Repo 7.00 %

Call rate 7.00%-8.05 % Inflation 7.25% for June 2012

Forex Reserve $287.338 Billion as on 20th July, 2012

91day T-Bill 8.1439% IIP 2.4% for May 2012

8.56 GS 2021 8.721%

Graphs

Pankaj Sharma [II MBA J]

54

54.5

55

55.5

56

56.5

57

16-Jul 19-Jul 22-Jul 25-Jul 28-Jul

Rs/$

Rs/$

28500

28900

29300

29700

30100

16-Jul 19-Jul 22-Jul 25-Jul 28-Jul

Gold(per 10 gram)

Gold(per 10 gram)

8

97

100

103

106

109

16-Jul 19-Jul 22-Jul 25-Jul 28-Jul

Oil(per bbl)

Oil(per bbl)

1200000

5200000

9200000

13200000

17200000

21200000

4600

4800

5000

5200

5400

5600

16-Jul 19-Jul 22-Jul 25-Jul 28-Jul

future rates open interest

4600

4800

5000

5200

5400

5600

16,500.00

16,900.00

17,300.00

17,700.00

18,100.00

18,500.00

16-Jul 19-Jul 22-Jul 25-Jul 28-Jul

sensex nifty

9

MSME

Dhruv Chopra [II MBA I]

India did recover from the crises of 2008 in a very impressive manner but this stint of speedy recovery

didn‘t last for long. The invariably long stint of India‘s growth story (GDP growth of 8-9%)as

perceived by many was not the reality. But the fact was that the period of 2003-08 was considered now

as an aberration and the real GDP growth forecast is around 5-6% from now on.

Now macroeconomic and financial stability is being pursued following the global crisis in India. But

recovery from recession following financial crises takes much longer due to the overhang of debt

because high leverage is almost invariably the cause of all the financial crises. Hence, the pace of

recovery from the current crisis is very slow and uncertain. In this scenario, a strengthened and more

resilient Micro, Small and Medium Enterprises (MSME) sector would aid in economic recovery and

add greater stability to the system.

Inclusive growth is being accorded very high priority and is being assiduously pursued by the policy

makers through financial inclusion, financial literacy and consumer protection initiatives. MSMEs are

not only envisaged to be major beneficiaries of these efforts but are also expected to facilitate financial

inclusion. MSMEs have a critical role to play in enhancing our export competitiveness given their very

significant share in exports.

Several institutions have been structured like Industrial Development Bank of India (IDBI), Small

Industrial Development Bank of India (SIDBI), national Bank for Agriculture and Rural Development

(NABARD), Export Import Bank of India (EXIM Bank), State Finance Corporation (SFC)s, State

Industrial Development Corporation (SIDC)s, National Small Industries Corporation (NSIC), etc. has

enabled necessary institutional support to MSMEs for meeting their credit needs. Inclusion of credit to

MSMEs as a part of priority sector lending has increased the scope of this industry to contribute a

bigger chunk in the country‘s GDP pie.

The Government of India has taken a number of measures to revitalize the MSME sector such as:

Approval of the public procurement policy (PPP) that envisages procurement of a

minimum of 20% of annual purchases of goods and services from Micro and Small

enterprises by the Central Ministries/Departments/PSUs

Permission to set up stock exchange/ trading platform for SMEs by recognized stock

exchanges

Conducting skill development programmes for development of self employment

opportunities as well as wage employment opportunities in the country and

Adoption of cluster approach as a key strategy for enhancing the productivity and

competitiveness as well as capacity building of MSEs in the country.

Inspite of the Government‘s efforts the extent of financial exclusion in the MSME sector is very high.

As only 5 to 10% of MSMEs are covered by institutional funding, there is a need to bridge the huge

gap through enabling policies. Banks and financial institutions need to support the MSMEs in their

need for finance. Some of them could grow into large corporate and potential MNCs in future.

If this sector is provided the right financial support and is entrusted with more responsibility of

providing economic stability then it would play a very critical role in the economic development given its contribution in employment generation, export competitiveness and, more importantly,

entrepreneurial development. As MSMEs are spread across the length and breadth of the country and

have a strong presence in rural areas, their growth also leads to more balanced and sustainable

development and eases pressure on urban infrastructure.

So I feel that right support at the right time to the right sector would definitely reap benefits for the

nation and this time is absolutely perfect to provide impetus to this sector which would contribute

magnanimously to the country‘s GDP in the near future.

10

Emerging Economies Future

Sanjeet Kumar [II MBA J]

After lots of turning and tossing during 1997- 2002, the future decade was a turnaround for

the Chinese as well as Indian economy. China continued with double digit growth and India

was also following China with a growth rate of 8%. Brazil cut down the public debts and also achieved current account surplus. In 2003 Goldman Sachs released 2050 projections saying

that BRICS will be the emerging economies and they will inherit the earth.

But after a dream decade, something is not right. China is now struggling to grow at

8% (its GDP expanded by 7.6% in the year

to the second quarter). India, which thought of double-digit growth, can now only

dreams of ridding itself of double-digit

inflation. None of the biggest emerging economies stands on the edge of a dramatic

financial precipice, like their counterparts in

the euro area or a fiscal cliff, like

America‘s. But their economic prospects have started showing downfall.

The MSCI emerging-market index is flat for the year and still 30% below its 2007 peak. Only 15 months ago, the IMF‘s forecasters expected Brazil‘s economy to grow by over 4% this

year. The latest 2012 forecast was just 2.5%. Over the same period, South Africa‘s 2012

growth forecast was cut from 3.8% to 2.6%.

Some reasons for downfall is due to Europe crisis. The European union is one of the biggest

markets for many emerging economies, buying about 19% of china‘s export and 22% of

South Africa‘s export.

The slowdown is not simply a demand-side phenomenon, the result of weak exports and past

tightening dragging growth below its long-run potential. As the IMF pointed out this week, the last decade or so may have ―generated overly optimistic expectations about potential

growth‖.

This decade also saw rapid credit growth. The ratio of bank credit to GDP has risen steeply in many emerging economies over the past ten years. From trough to peak, it rose by over 20

percentage points in Brazil, China, the Czech Republic, Hungary, Malaysia, Poland, South

Korea, Taiwan and Turkey. It rose almost as far in India and Russia. A rising credit ratio may represent healthy ―financial deepening‖ as the banking system does a better job of capturing

household saving and reallocating it to its best use. But it may also reflect a potentially

destabilising ―financial cycle‖, an upswing in credit and other financial variables, which doesn‘t take into consideration the swings of GDP and inflation.

When credit booms show up in inflation, central banks are typically quick to react. But if the

credit cycle has got out of hand, who is to be blamed? Policymakers in emerging economies

sometimes present themselves as powerless victims of vague global forces, such as the ―tide

of liquidity‖ supposedly sweeping across the globe.

11

Emerging world faces two distinct risks: a cyclical slowdown and a longer-term erosion of potential growth. The first should be reasonably easy to deal with. The second will not.

Governments of the countries should come with huge reforms to maintain the GDP with the

domestic people than depending on external economies. European banks had been conduits

for foreign money flowing into emerging markets. Now they are pulling back their money with the problems at home.

Optimists once thought India could sustain Chinese-style growth of over 9% a year; but that led to stubborn inflation and current-account deficits, suggesting that India‘s potential growth

may be more like 6-7%. India has an eye-watering deficit of 9% of GDP, yet government,

failed to tackle fuel subsidies that cost 0.8% of GDP. It makes sense to invest in the areas of growth in a better safety net, as India and to some extent Brazil have done the investment in

power and transport infrastructure that is a prerequisite for future growth.

For getting back up to the speed of the past decade growth emerging economies will have to maintain the macroeconomic discipline and returning to the microeconomic reforms.

Source: theeconomistonline. (2012). emerging markets. dream on?. Available: http://www.economist.com/blogs/

graphicdetail/2012/07/daily-chart-13?fsrc=scn%2Ffb%2Fwl%2Fbl%2Fdc%2FEmergingeconomies. Last accessed

22th July 2012.

Buzz Word

Prachi Sharda [ II MBA J]

Acquisition Indigestion

A slang term describing an acquisition or merger in which the companies involved have

trouble integrating with one another. Acquisition indigestion may also describe a situation in

which the purchasing company has difficulty making the most of a takeover.

Indigestion occurs when you eat too much or when you consume food that doesn't agree

with your stomach. The same outcome relates to mergers and acquisitions that have gone

sour, as companies may get indigestion when acquiring too many targets or purchasing

firms that don't integrate well.

Active Box

A physical location in a brokerage where securities are kept. These securities are usually

held as collateral for customers' margin positions. The collateral is used to secure broker

loans, which is money lent to brokers and investors by banks. This money is used to

finance the brokers' inventory of stock and to finance the underwriting of corporate and mu-

nicipal securities.

Customer margin accounts are financed with broker loans. Margin accounts enable

investors to buy large quantities of securities with broker loans. The stock and bond

certificates are kept in the active box until the margin account loan is paid. A bond

certificate is a legal document giving the bond owner the right to collect the debt listed on the document. Active box is also referred to as open box.

Sources: http://www.investopedia.com/terms/a/

12

Monetary Policy and Inflation

Bhavesh Dhanesha and Rohit Munka [II MBA J]

The RBI Monetary policy has not changed the rates since two sessions. A reduction in the SLR (Statutory Liquidity Ratio) by 1% to 23% certainly makes no difference as the banks

prefer to keep a higher rate of SLR ratio with the RBI. Bank Rate is unchanged at 9%, Repo

rate and Reverse Repo rate are at 8% and 7% respectively, and CRR (Cash Reserve Ratio) at

4.75%.

Basically changes in the rates are made during RBI monetary policy to control the money

supply in the economy. When the rates are increased they suck the liquidity out from the system and a decrease in rates pumps in the required money supply. In this way they try to

control the inflation in the economy. But this mechanism is not the only way to control the

inflation. However, there are experts who are supporting the changes that are made in the policy to be effective. But on the other hand a few economists have different views towards

controlling inflation.

Changes in the monetary policy should control inflation Changes in the monetary policy would be quite favourable for the country. As known, the

industry growth of India is as low as 5.1%. Also, the government has been borrowing heavily

over the last few months resulting in a lot of liquidity being sucked out of the system thereby leaving hardly anything for the private sector. Introduction to new monetary policy would

result into proper transmission of liquidity in the market. CRR cut would increase banks‘

ability to reduce interest rates. Moreover, the Small and Medium Enterprises (SMEs) can get

loans at very less rate which would help them in proper functioning and ultimately lead to growth in economy. The inflation which was at 7.55% is currently at 7.25% which tells that

the inflation trend is coming down. So there is lot of scope for monetary policy cut.

Monetary policy is not the only option.

The changes in rates do have not made any difference in the inflation significantly. When

RBI increased the rates consecutively for 13 times, inflation was moderately eased but was ineffective as at a retail level the inflation is still above 10%, due to which the masses are

suffering in the form of increased expenses.

However, another mechanism that can help us to stabilise the inflation is related with productivity and consumption that leads to growth in an economy. Because when

consumption increases simultaneously with the inflation, the purchasing power of an

individual increases that reduces the impact of a surge in inflation on the masses. Productivity on the other hand helps in reducing the cost and this leads to greater consumption ultimately

leading to growth.

At present the government is not making any fiscal policy which shows their inability to

perform. The unchanged rates in the monetary policy shows that, inflation has to be

controlled with another mechanism. However, the monetary policy can be supported if

government takes the decision to improve the fiscal situation and reduce subsidies appropriately.

Sources:

Business Standard, ―Worries over growth”, (Mumbai: 26/07/2012), Volume 16, Number 295.

www.rbi.org

Indiresan, P. ―Wrong approach to inflation‖, Business Line, Retrieved from: http://

www.thehindubusinessline.com/opinion/columns/p-v-indiresan/article2479811.ece

13

YES Bank

Deebadwita De [II MBA J] and Shashank Mishra [II MBA N]

YES Bank is a the first Indian and the third bank globally to receive certification for its

Complaints Management system by BSI (British Standard Institution). YES Bank is an

Indian private sector bank. The bank is regarded as India‘s youngest and fastest growing

bank. It has been awarded as India‘s Number 1 new private sector bank by the Financial Express-Ernst &Young Best Banks Survey 2010. YES Bank's performance since inception

has been compelling.

Company Profile:

YES Bank is the youngest Greenfield bank in India and the only Greenfield license

awarded by the RBI in the last 16 years.

YES Bank was incorporated in November 2003 and got its banking license in May

2004.

The bank was started with an initial capital of $45 million and its shareholders were

the co-founders Rana Kapoor and Asok Kapur (55%), the Dutch financial services firm Rabobank (20%) and the private equity players (25%).

In the first six years of operations YES Bank realized a compounded annual growth

rate (CAGR) of 74% and in 2010-2011 and thus became the fourth-largest private

sector bank of the country.

YES Bank is a full service commercial bank. It has operations with corporate, small

and medium enterprises and retail banking segments. The bank also has a

comprehensive product suite comprising financial markets, investment banking, transaction banking and wealth management.

YES Bank has won many accolades in various banking surveys over the years.

It was ranked as India's fastest growing bank of the year at the Bloomberg-UTV Financial Leadership Awards 2011.

Rana Kapoor was also awarded the Banker of the Year 2010-2011 by business

daily Business Standard.

Rana Kapoor and his team are now working towards the next phase of growth called

Version 2.0.

YES Bank has demonstrated unprecedented growth rates, notwithstanding it‘s still

small size, it has been able to create a very strong reputation of professionalism

among Indian banks.

Corporate banking and wealth management services have been the key strength areas

for YES Bank right from its inception.

Key Highlights:

YES Bank is the fourth largest private sector bank in the country.

YES Bank has successfully completed its first year of Version 2.0(2010-2015).

Version 2.0 is about scale and diversity.

YES Bank has also received its maiden International Investment Grade Baa3

long-term rating from Moodys Investor Services.

The bank‘s net revenues is of `2,473 crore for FY11-FY12.

The bank‘s Net Profit is of `977 crore for FY11-FY12..

Capital Adequacy Ratio (as per Basel II) is of 17.9 % as on March 31, 2012 of

which Tier I Capital Ratio was 9.9% and Tier II Capital Ratio was 8.0%.

Total income increased to `7,164.48 crores at March,2012 from `4,665.02.

14

15

Financials

Recommendation for the stock:

The comparative chart analysis of YES Bank and NIFTY shows that YES Bank has

outperformed the NIFTY for last 6 months. With its huge market share, YES Bank is

expected to outperform the market. Their healthy NIM (Net interest margin) supports a long

term view for the stock. The recommendation for the stock is ―BUY‖ for a period of 12

months with a target of `360.

Call: Buy

CMP: `347

Target Price : `360

Time Period: 12 months

16

Jupitar Infomedia Limited

Arnab Basak [II MBA J]

The small and medium companies have found a good platform for entering the primary

market in the name of BSE SME index. BSE SME is a kind of index wherein small and

medium enterprises list their shares and it has become a good source for venture capital and

private equity companies to invest in small companies by purchasing their shares through this exchange. It kick started its operation with the IPO of BCB holdings Ltd. in the month of

February of this year.

The IPO market is going through a rough and dry patch because there has not been any mega

IPO this year that has appeared except the MCX IPO in February which can provide an

impetus to the ‗not so good‘ secondary market. The small companies have a lot to cheer in

this market now because they get subscription of their shares even with a low IPO grade but the investors have no reason to rejoice as far as returns are concerned because most of the

recently listed SME‘s did not do well.

Jupitar Infomedia Ltd. is a Mumbai based SME that has come out with an IPO on July 30,

2012 and is going to be listed in the BSE SME index. The company was incorporated in the

year 2005 and has been performing well. It is India‘s leading web infomedia company with online publications on Business, Encyclopedia, Yellowpages, News and Events related to

India. Their aim is to develop India‘s largest online library, which will provide fast and

accurate information to its visitors about India.

Jupitar Infomedia Ltd. has 3 portals including:

1. JimTrade.com–It is an online business directory (B2B Portal). It is one of the

leading online business directory in India with nearly 3,00,000 products

profiles. It provides information on product profiles, supplier‘s directory &

trade shows in India.

2. IndiaNetzone.com–It is an Encyclopedia on India. The Company produces and

publishes well researched articles for everything related to India. It has around

30,000 articles.

3. JimYellowPages.com–It is an online yellowpages directory for India, which

contains 100 plus cities and lakhs of business listings.

17

Objective of the Issue:

Purchases and set-up of offices in Mumbai and Kolkata.

Renting offices in Ahmedabad, Chennai and Delhi.

Initial Operating Expenses for the Marketing/Branch Office( first three months)

Issue Related Expenses.

IPO Details:

IPO Grading:

Since the issue is being made in terms of Chapter XB of the SEBI (ICDR) Regulations, there is no requirement of appointing a IPO Grading agency.

Project Cost:

Means of Finance:

IPO Registrar and Lead Manager:

The registrar to this IPO issue is Karvy Computershare Private Ltd. and Aryaman Financial

Services Ltd. is the IPO Lead Manager.

Recommendation:

Since the IPO has not been graded by any of the rating agency, it is very difficult to make a call on the IPO. It is still advisable not to invest in this IPO now because the fundamentals of

the company and the objective of the issue do not look promising. A risk appetite investor

can invest in its share after it is listed considering the market condition.

Sources:http://www.kotaksecurities.com/stock-market-news/ipo/4007/Jupiter-Infomedia-Ltd.-IPO-

Details/17040578.00/2012-07-30/DIARY

Issue Open Jul 30, 2012 – Aug1, 2012

Issue Type Fixed Price issue IPO

Issue Size 2,040,000 Equity shares of `10

Issue Size `4.08 Crore

Face Value `10 per equity share

Issue Price `20 per Equity share

Market Lot 6000 shares

Minimum Order Quantity 6000 shares

Listing At BSE SME

Amount (`)

ISSUE EXPENSES 5500000

PRELIMINARY EXPENSES 6450000

BUYING/LEASING OF OFFICE PREMISES 29500000

TOTAL COST 41450000

INTERNAL ACCRUALS 650000

PUBLIC ISSUES 40800000

TOTAL COST 41450000

18

Potato

Srinivas Prasad K [II MBA J]

Potato, popularly known as the king of vegetables and a native of South America, is an

indispensable part of Indian cuisine. It ranks 4th among important staple food after wheat, rice and maize for the world. .

Potato is rich in carbohydrates and also contains proteins, phosphorus, minerals like calcium

and potassium and vitamins like vitamin C & A., constituting 22-24% of its weight. It contains 2.1% to 2.7% protein, less than 0.5% of fat and the rest is water. Boiling potatoes

increases their protein content and almost doubles their calcium content. It is vastly

consumed as a vegetable and is also used in various forms such as starch, flour, alcohol, dextrin and livestock fodder. Being a high yielding short duration crop it produces more

quantity of dry matter, edible energy, and edible protein in lesser duration, compared to

cereals like rice and wheat. Hence, potatoes are useful tool to achieve the nutritional security

of the nation. .

Potatoes are grown in 150 countries throughout the world and more than a billion people

worldwide eat it. The top ten producers in the world are China, Russia, USA, Ukraine, Poland, Germany, Belarus, Netherlands and France. These together contribute about 70% of

the total production.

India produces around 8% of the world‘s total produce. India ranks fourth in terms of area

and third in terms of production of potato across the globe. China and Russia are ahead of

India in terms of potato production. Europe is the largest per capita consumer, followed by

North America and Latin America. .

In India Uttar Pradesh produces the highest quantity of potatoes followed by West Bengal.

There has been an increase of 12.5% in the production of Potato than last year (2010). Uttar Pradesh, the state which houses our basis i.e. Agra, saw an increase of 22% in their

production levels.

19

Market Influencing Factors •Variations in potato domestic acreage based on yield and price realization

•Crop development based on weather progress in key growing regions particularly cold wave

and heavy rains during tuber formation

•Comparative price with other vegetables in the domestic market. •Upcountry demand of potato from the major cities and food processing industries.

•The potato price tends to firm up during the planting period and eases down during the

harvesting period. •Transportation charges have also profound impact on prices.

•Potato growers and traders hoard the commodity before selling in expectation of better prices.

Potato can be kept in cold storages without spoilage for 5-6 months.

Major Trading Centres

There are four-potato export zone in India viz. in UP, Punjab, MP and West Bengal. The major

potato markets in UP are Agra, Hathras, Kanpur, Meerut, Farrukkhabad; Jalandhar, Ludhiana, Phul and Patiala in Punjab; Ujjain, Indore and Dewas in MP and Hoogly, Burdwan and

Howrah in West Bengal.

Potato futures in India to continue bullish momentum, both NCDEX and MCX continued to

move up as speculators enlarged their positions. This is due to delayed monsoon, crop damage

in major producing regions and festival season. Rising vegetable prices also supported the potato price rise in medium term. Below average rainfall coupled with crop damage reports in

Andhra Pradesh would lead farmers to depend on Agra and West Bengal for meeting their de-

mand.

Sowing in both Karnataka and Maharashtra is delayed due to delayed rain this year.2011-12

output is around 20% than the NHRDF‘s estimates of 43 million tonnes.About 220 lakh tonnes

of potato is stored in different cold storage out of which 89 lakhs MT is stored in Uttar Pradesh, 16 Lakhs MT in Punjab, 10 Lakhs MT in Bihar and 50 Lakhs MT in West Bengal.

Although 12-13% of the cold storage stocks are released so far from overall producing belts,

they are much lower compared to normal due to lower demand.

In India‘s National Commodity & Derivatives Exchange (NCDEX), Potato August contract

traded in at `1343.5 per quintal, on July 30, 2012 Sources:

http://www.commodityonline.com/news/delayed-monsoon-crop-damage-in-ap-pushes-up-potato-prices-49068-3-49069.html

http://www.thehindubusinessline.com/markets/commodities/article3703391.ece http://www.commodityonline.com/commodity-market/commodity-prices/potato

20

CRB Scam

Ankita Pagaria [II MBA J]

It's so easy to shake off a lakh investors and depositors. Here is how C R Bhansali (CRB

Capital Markets Limited Chairman ) did it: Move houses, change your phone numbers, and flit in and out of town.

He first launched the finance company CRB Capital Markets, followed by CRB Mutual Fund and CRB Share Custodial Services. He ruled like a financial wizard 1992 to 1996 collecting

money from the public through fixed deposits, bonds and debentures. The money was

transferred to companies that never existed.

The company offered various schemes like merchant banking , leasing and hire purchase , bill

discounting and corporate funds management , fixed deposit and resources mobilization ,

mutual funds and asset management , international finance and forex operations. CRB caps was also very active in stock-broking having a card both on the BSE and the NSE.

CRB Capital Markets raised a whopping `176 crore from the public in three years. A+

rating given by CARE and upfront cash incentives of 7-10% attracted investors in hordes to

Bhansali‘s schemes. CRB Corporation Ltd raised another Rs.84crores through three public issues between May 1993 and December 1995.CRB share custodial services raised another

`100 crores in January 1995.In 1994 CRB Mutual Funds raised `230 crore from the

market through Arihant Mangal Growth Scheme and `180 crore came via fixed deposits.

Bhansali also succeeded to to raise about `400 crore from the markets.

However, his good days did not last long, after 1995 he received several jolts. Bhansali tried

borrowing more money from the market. This led to a financial crisis.

Suspicions arose when CRB cap‘s networth grew from `2 crores in 1992 to `430crores in

1996. It was in mid 1996 that reports regarding frauds being committed by the RBI group began appearing in the media. An FIR was filed against CRB as per section120B read with

section 420 of the Indian Penal Code and section 13(2) read with section 13(1)D of the

corruption Act.

It became difficult for Bhansali to sustain himself. The Reserve Bank of India (RBI) refused

banking status to CRB and he was in the dock. SBI was one of the banks to be hit by his huge

defaults.

Those worst affected by the scam were mutual fund instrument holders who plan to take the

matter to court under the aegis of the Investors Grievances Forum. The IGF has staged several demonstrations and even met the prime minister to seek his intervention to protect the

interest of small investors.

On June 9,1997 Bhansali had been arrested. June 11,1997 SBI suspends 3 officials in Mumbai Branch, R.L.Walker-Chief Manager(Mumbai Branch), V.N.Patil-Scale II officers,

M.M.Narang-Scale II officers.

Sources: http://janamejayan.wordpress.com/2011/01/02/indias-biggest-scams-since-1992-worth-over-rs-80-lakh-crore/ http://www.rediff.com/business/jun/09crb.htm http://www.expressindia.com/fe/daily/19980219/05055754.html

21

Interesting Facts About Currencies

Vinay Goel [II MBA L]

Sources: http://www.knowledgehub.co.in/2010/07/8-interesting-facts-about-currencies.html http://my.opera.com/skafridi/albums/showpic.dml?album=824530&picture=11236319

http://lh5.ggpht.com/_2YjNLslggyc/TDGMHL7vdHI/AAAAAAAAAeQ/zJzQ3uip-q0/s1600-h/US-dollar%

5B7%5D.jpg

*When Pakistan was in its infancy stage after India Pak separation in 1947, they used

Indian currency with ―Pakistan‖ stamped on

it for the first few months till there was

enough circulation of Pakistani notes.

*Initially Australians used Australian Pound

as its official currency. The currency was

given the name ―Royal‖ but as the name could not gain the popularity among the

locals. It was changed to Dollar.

*The widely used $ symbol, which is used to represent US Dollar, doesn‘t appear on

US currency.

*Before 1974, Bhutan didn‘t have any

currency. Instead they followed Barter

system, i.e., they traded goods and services in exchange of other goods and services. In

1974 Bhutanese Ngultrum was introduced as

a currency.

*Bermuda‘s $2 bill has been named the

bank note of the year 2010 by International

Bank Note Society for its attractiveness and high security features.

*Australia introduced polymer notes in 1988

and in1966; it became the first country in the world to have a complete series of polymer

notes.

*In India, Rupee one notes have signature of

the Secretary, Ministry of Finance, Govern-

ment of India, while the notes of Rs.2 and

above denominations contain signature of the Governor, Reserve Bank of India.

22

Crossword

Reddy Sreedhar T [II MBA L]

Across

2. India signed an agreement on Bilateral Secuity Cooperation on 14th July 2012 with this

country.

5. The Govt of this Indian state increased the DA (Dearness Allowance) by 12% for the employees and pensioners on 17th July 2012.

6. Nestle Health Science on 19 July 2012 acquired a stake in U.S based company '..........',

that makes milkshake prescribed to Alzheimer‘s patients.

9. Marissa Mayer is appointed as the new President and CEO of this Company. Prior to

this she served as the top executive at Google. 10. The Planning Comission of India allocated 57800 Crore Rupees to this state of India

for the fiscal year 2012-13 , which is striving at attaining the 10% growth target by

2016-17.

Down 1. India‘s leading four-wheeler manufacturer Maruti Suzuki India Limited announced to

close down its factory at Manesar on 21 July 2012. Manesar is situated in this district of Haryana state.

3. Mr S. Raman is the chairman and MD of this Bank in India.

4. The seventh G20 Summit took place in this country on 18th and 19th of june 2012, to

discuss the prominent economic issues such as Eurozone crisis, Poor Scenario of global economic growth and faltering international financial systems.

7. Hesham Kandil , recently became the prime minister of this country .

8. The US House of Representative on 19 July 2012 voted unanimously to cut the US aid to this Islamic country by 650 million dollar. It is the one of the largest recipients among

the Islamic countries of US assistance

23

Kritika Banerjee

Editor

Sanjeet Kumar

News

Reddy Sreedhar T

Crosswords & Quiz

Pankaj Sharma

Graph & Rates

Arnab Basak

Investors check

Bhavesh Dhanesha &

Rohit Munka

Debate

Vinay Goel

Did You Know

Dhruv Chopra

Contemporary Articles

Ankita Pagaria

Scams

Srinivas Prasad K

Commodity Market

Debadwita De &

Shashank Mishra

Stock Watch

Prachi Sharda

Buzz Words

Vedang Dave &

Sandeep Kumar

Boyapati

Review Committee

Kritika Banerjee

Creative Head &

Design

Team Members

24

About Us

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Its objective is to keep each & everyone abreast with the activities

and events of the world of finance.

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