However, the policy planning and the economic and political commentary on the networks is indicative of the same symptom when Citibank was alive and India was suffering from non recognition of symptoms or reforms staring it in the face in light of a sluggish prognosis. Maybe we are just out of cash. Maybe there is something still for the imagination to save without spending extra dollars on saving the house.

The Indirect taxes and even some Direct tax measures had in fact reached near ideal state without souring the last July’s moves that were attributed to stimulus. The direct cash infusion of INR 2 T was also attributed to stimulus but was a long needed fiscal correction for the farmers and the salaried class. Now its retail inflation led by unprecedented food price usury and culminating in shelving of tax reforms in the form of direct tax code, petroleum market pricing reforms by shelving of the Kirit Parikh report and many more. The excise slabs will be back at 10-12% leaving behind the desired stop at 8% and the greater acceptance of these as withdrawal of stimulus is actually letting the reform cat slip out of the bag.

In fact the anti dumping measures in Pharma($3.1 – $3.8 per BOU) , Steel($2254 per tonne) , Tyres ($90 ea) and some more in fact could be consolidated under a similar chapter and announced as a policy statement part of the budget, as that seems to be among the most important items that can be tackled right away.

Maybe there will be more affirmative statements for reforms like the policy prescription of increase in FDI in insurance but the Divestment targets have already been pruned to $7.5 billion. The education and healthcare sectors are hardly getting any increases from the look of it unless there is a rabbit in the hat anyone has missed. Let alone the $2.7 Trillion estimated by Goldman Sachs, the government is unlikely to action even the $500 billion of its own estimates to shore up the infrastructure deficit. Our highway plans are at 27% of Targeted 11000 Kms of highway and sheer magnitude of the expenditure is unlikely to be affirmative to economics when the budget is released later this week.

All in all, we seem to be headed towards an insipid 2nd year budget from a government that never produced a first one, and things are unlikely to show up in more clarity despite our continuing growth.

India’s reform prescription needs a new prognosis and some imaginative heads at the helm that can convert this great momentum into something tangible and not eternal hubris.

The Obama Budget

In the other part of the world too, Obama is already cornered by second stage movements of his own prescriptions and a tumultous 2008. Firstly, It would be positive for them as Healthcare survives in a mutant form and education reforms are pushed. Secondly, there would be growth in statistics leading bouncebacks in Housing and lower joblessness even as more reforms hang fire as bad as the ones on healthcare. And finally, the growth would lose its significance in this mass of inaction and tougher compromises as the seven red listed states try to get into a place where they can start recovery and as elsewhere mentioned again by Citi, Europe injects a further $1T into the banking system in the coming 2-3 years. Is this the winter we promised our children?

..and india's aviation story

When Kingfisher introduced TV entertainment in its never before Kingfisher Class in 2005, it created a buzz and some great innovation in the industry. The first pioneer to go for a full service airline after Jet had nearly monopolised the Private Sector Airlines esp after the Sahara deal, Kingfisher even found an ally in its now next door neighbour's Deccan, which has now become the staple LCC fare at the airline.

The more than 30 awards, incl 6 Freddies as recently as 2008 mean that the Airline has been a pathbreaker and an iconic brand for India's global travellers. however, it never could break the barrier set by Jet Airways who continues to showcase profitability and professional management despite the industry's hiccups in most of 2008 when Oil prices were skyrocketing to 2009 when recession took its toll.

Low Cost Carriers like Spicejet (Modis of Spice, Bangalore) and Indigo have taken to the skies and made never before profits as on the ground new ticketing wars brought Cleartrip, Yatra and Makemytrip to fight over pennies in commissions. Such a cost conscious environment has now showed up Kingfisher for the troubled Dodo it is in the skies. Unable to take off, Fly kingfisher reported a $100m loss in the latest December Quarter concurrent with revenue losses of 5% Q-o-Q. A debt ticket of more than $1.5 billion makes its efforts at garnering Private equity partnerships even morelong-winded. The debate rages on and the airline's financial obligations keep mounting. Low cost Carrier Spicejet has published a $25 million profit for the most recent quarter

With the Force India F1 and the Bangalore Royal Challengers investments also causing heartburn with their performance on and off the field and the Kingfisher Calendar suffering in competition with the supermodels of the Continent, India's desi luxury lifestyle challenge needs to take a hard look at its options and the PE it finds will take the horse to water. Tough days ahead Mr Mallya!

However, not many have finally confused Indian Luxury Lifestyle with its latest icon and while Kingfisher tries to shake off the water from its back, the Indian Luxury goods revolution rages on and has a substantial chunk of India's Modern retail business. More on that later!

Each of his sporting businesses is worth over a $1 billion though on sentiment and in liabilities too. And that's the lucre. And because of his aviation, sports and lifestyle interests India's Beer Baron is known for a little more than his spirit today.

The PE Investors looking at Kingfisher also reflect those who see the fast life connection with India incl Abu Dhabi based Aabar investments and the more Bangalore centric Texas Pacific Group. One would do well to keep per share valuations at the low-end at this stage because this is going to be one very vertical roller coaster ride.

(Pls. note that all Advantage research notes carry a new approximate rate of Rs 40 henceforth for trend equalization and longer lasting predictions. Earlier 2010 notes and tweets mention the conversions at Rs 45 and Rs 42 for every dollar. Of course this assumes that Indian Exporters,e sp IT firms show enough skill in hedging to stay away from highly speculative Double or Quit options and also do not forego hedging which seems to be India's binary lot courtesy lineage as Satyam, ICICI and Wipro)

[Tag Bangalore, Bangalore Royal Challengers, Brand Valuation, Cricket, Delhi Daredevils, F1, Force India, India, India Cement, India Infrastructure, India Lifestyle, IPL, Jet Airways,Kingfisher, KKR, Kolkata Knightriders, Lifestyle,Lifestyle Brands, Lifestyle Infrastructure, Private Equity, Retail, Retail Lifestyle, Sport, Sports Marketing, Texas Pacific,UB, Vijay Mallya]

[Topic Retail, Retail Lifestyle, india, India infrastructure]

PostRank Topblogs 2009 - #20 in Deals

PostRank Topblogs 2009 – #1 in Business News

PostRank Topblogs 2009 - #20 in Deals

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Wishing all our readers from around the world a very happy new year for 2010. Esp our readers fom India, USA, UK, Russia, Eastern Europe, China, the Philipines and Australia

This article in today's N Y Times

As with Facebook, D.S.T. will invest directly in Zynga while also buying stock from shareholders, including the company’s employees. The move is aimed at giving employees and shareholders of the prominent start-up a way to cash out before an initial public offering.

Tiger Global, a New York hedge fund, and the venture capital firms Institutional Venture Partners and Andreessen Horowitz also invested. Zynga had previously raised $39 million. The companies did not disclose Zynga’s valuation as a result of the new capital, but the game company’s annual revenue has been reported to be around $250 million and growing quickly.

Two experts in Internet company finance said it would be reasonable for Zynga to command a valuation of two and a half to six times its annual revenue. That could put the value of the two-year-old Zynga at $1.5 billion; one industry insider believes the value could be as much as $3 billion. With the investment, D.S.T. is doubling down on its billion-dollar bet on social networks and online games, which draw people who do not normally play video games into virtual simulations that they can play with friends.

Players might spend only a few minutes each day in the game, and are persuaded to pay real money to buy virtual goods, like bales of hay and gasoline for their tractors in FarmVille, a game in which players run a farm. D.S.T. began investing in 2005, mostly in Internet firms based in Russia and Eastern Europe, where, as in Asia, people have adopted social games and virtual goods marketplaces faster than in the United States.

“People did not believe that this Chinese model of micropayments and social games was real,” said Yuri Milner, D.S.T.’s chief executive. “I am pretty convinced this market will have tremendous pick-up on the Western side of the world.”

With DST having picked up a stake in both Facebook and zynga, Farmville and Mafia Wars would be part of more daily lives.

Here are some recent Facebook and Twitter stories defining their early impact. Twitter has started testing its contributor feature to allow brands and businesses to set aside a permanent budget for Twitter and Facebook in their business. It will take a lot of business to keep steering this network esp as not just Asia and Eastern Europe is taking more to these networks but also because it is intuitively appealing to all age groups and takes a considerable bit of your time in the 'daily diet'. You can also expect some daily 'interference' from Fans on the more discernible social media than they could on Radio and TV. Scott Tozer of DST Technologies is himself listed on Facebook. Also see some recent 'hits'

This just might be Russia's next ticket after Gas/Oil without Ukraine and seemingly China also as most social sites are banned in countries like China and Vietnam Our estimate of the valuation of zynga conventionally as not exceeding $1 billion but wih hypergrowth, even $3 billion is cheap. Amazon started the same way and survived the bubble and the credit crisis.

Interestingly, the zynga CEO's statement above reflects shows the difference between a chinese, a russian and a 'western' model' that resides in mental subsets. Indian startups typically may not work towards recognising such national and cultural differences, but still we are another distinct culture even on the internet. That leaves the british, australian, the latam and the neo-asian ( the n11 incl korea, thailand and bangladesh, singapore and hongkong) to pursue a global internet unification with the big 4 investment banks and the larger american investors and fund houses).

This story is draft.