India's exports by commodity in August 2011 and growth

The Macro Picture I External Sector I Foreign Trade I Exports Commoditywise
Indias exports of principal commodities (Rs Lakhs) AUG APR-AUG 2011 2011-12
All Commodities AGRICULTURAL & ALLIED PRODUCTS TEA COFFEE Pulses RICE -BASMOTI RICE(OTHER THAN BASMOTI) WHEAT Other Cereal DAIRY PRODUCTS FLORICLTR PRODUCTS TOBACCO UNMANUFACTURED TOBACCO MANUFACTURED SPICES SUGAR MOLLASES CASHEW NUT SHELL LIQUID CASHEW SESAME SEEDS GROUNDNUT SPIRIT & BEVERAGES GUERGAM MEAL OIL MEALS CASTOR OIL SHELLAC NIGER SEEDS FRUITS / VEGETABLE SEEDS FRESH FRUITS FRESH VEGETABLES PROCESSED VEGETABLES PROCESSED FRUITS & JUICES MISC PROCESSED ITEMS MEAT & PREPARATIONS MARINE PRODUCTS COTTON RAW INCLD. WASTE POULTRY PRODUCTS ORES & MINERALS IRON ORE MICA 10,451,374.52 52,185,413.61 1,095,872.20 36,414.09 27,050.35 6,268.91 123,854.73 5,471.34 0 11,844.13 2,334.85 2,625.40 12,459.41 6,913.05 117,001.68 71,125.98 858.3 619.71 40,763.97 18,955.27 17,568.84 6,976.45 71,218.82 55,276.14 35,149.27 1,083.14 1,388.42 1,530.30 13,646.12 14,776.02 8,540.63 12,626.59 25,968.14 107,115.12 147,533.19 87,559.25 3,354.59 216,538.49 111,672.95 1,363.27 5,397,011.59 131,287.14 202,622.96 61,134.26 639,762.15 41,699.70 528.68 166,020.53 26,255.07 14,183.94 92,844.97 39,184.93 497,269.79 331,465.77 8,010.68 2,267.00 173,755.38 123,964.16 228,514.95 44,721.25 301,948.85 393,204.00 258,169.87 6,795.36 6,509.84 9,855.80 77,961.18 96,686.83 42,836.44 54,116.86 135,912.19 437,521.44 531,921.12 206,319.43 11,759.07 1,179,044.88 502,659.17 8,779.12
AUG-11
33.53 62.6 4.1 11.06 29.42 45.32 93.5 6.76 -57.7 -21.04 -63.45 4.48 115.36 248.58 -64.93 262.49 87.92 33.09 175.81 43.36 304.7 4.41 53.83 -11.92 1,417.90 -15.93 -7.1 -36.03 26.98 42.65 24.83 73.48 68.46 531.62 27.92 -4.95 -8.66 -8.26
GROWTH % APR-AUG FY 12
30.19 63.42 17.66 82.54 42.85 58.72 253.66 942.35 83.66 -16.78 7.68 -30.77 32.02 69.99 1,141.34 32.12 137.05 56.16 64.6 249.04 65.07 263.01 53.93 77.8 50.9 1,195.46 28.41 -12.67 -13 30.44 32.78 43.67 51.46 39.59 20.93 -4.25 -34 -59.55 8.42
AUG-11
100 10.49 0.35 0.26 0.06 1.19 0.05 0.11 0.02 0.03 0.12 0.07 1.12 0.68 0.01 0.01 0.39 0.18 0.17 0.07 0.68 0.53 0.34 0.01 0.01 0.01 0.13 0.14 0.08 0.12 0.25 1.02 1.41 0.84 0.03 2.07 1.07 0.01
SHARE % APR-AUG FY 12
100 10.34 0.25 0.39 0.12 1.23 0.08 0 0.32 0.05 0.03 0.18 0.08 0.95 0.64 0.02 0 0.33 0.24 0.44 0.09 0.58 0.75 0.49 0.01 0.01 0.02 0.15 0.19 0.08 0.1 0.26 0.84 1.02 0.4 0.02 2.26 0.96 0.02
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The Macro Picture I External Sector I Foreign Trade I Exports Commoditywise AUG 2011
COAL PROCESSED MINERALS OTHER ORES AND MINERALS MANUFACTURED GOOD LEATHER & LEATHER MANUFACTURERS FINISHED LEATHER LEATHER GOODS LEATHER GARMENTS FOOTWEAR OF LEATHER LEATHER FOOTWEAR COMPONENT SADDLERY & HARNESS CHEMICALS & RELATED PRODUCTS DRUGS,PHRMCUTES & FINE CHEMLS DYES/INTMDTES & COAR TAR CHEML INORGANIC/ORGANIC/AGRO CHEMLS COSMETICS/TOILETRIES ETC. PAINTS/ENAMELS/VARNISHES ETC. RESIDL CHEMICL & ALLIED PRDCTS ENGINEERING GOODS FERRO ALLOYS ALUMINIUM OTHR THAN PRDCTS NON-FERROUS METALS MANUFACTURES OF METALS MACHINE TOOLS MACHINERRY AND INSTRUMENTS TRANSPORT EQUIPMENTS RESIDUAL ENGINEERING ITEMS IRON&STL BAR/ROD ETC&FRRO ALOY PRMRY & SEMI-FNSHD IRON & STL ELECTRONIC GOODS PROJECT GOODS 530.1 59,711.25 43,260.92
APR-AUG 2011-12
12,759.83 327,959.51 326,887.25
GROWTH % AUG-11 APR-AUG FY 12

131.06 19.25 -19.54 27 19.77 16.68 26.79 37.9 12.13 18.49 7.67 30.46 15.76 80.62 33.28 54.6 20.56 51.59 17.02 -47.61 0.27 45.68 -19.55 49.2 39.02 73.24 47.77 54.95 -39.34 16.1 -62.27 19.2 185.34 1.56 -36.04 39.45 56.69 -7.07 -68.65 27.29 19.13 30.61 29.65 25.71 13.55 31.86 54.72 20.46 34.2 24.34 26.81 14.19 77.47 26.01 34.12 19.07 32.25 31.2 -3.16 28.73 60.84 15.27 18.28 36.77 33.83 54.69 59.61 27.67 32.66 -13.01 25.56 70.01 18.47 -31.6 35.63 64.55 1.32 -68.21
SHARE % AUG-11 APR-AUG FY 12

0.01 0.57 0.41 64.39 1.9 0.34 0.41 0.3 0.7 0.12 0.04 8.43 4.06 1.23 1.77 0.52 0.28 0.56 23.67 0.57 0.18 1.3 3.13 0.12 4.88 7.91 0.1 0.49 1.66 3.3 0.02 4.4 0.27 2.16 0.07 1.84 0.06 0.15 0.01 0.02 0.63 0.63 63.48 1.72 0.36 0.38 0.22 0.62 0.11 0.04 8.84 4.15 1.53 1.82 0.54 0.28 0.52 24.5 0.63 0.24 1.13 3.1 0.11 4.95 8.85 0.1 0.53 1.72 3.11 0.02 4.48 0.19 2.32 0.07 1.84 0.05 0.15 0.02
6,729,120.50 33,129,425.79 198,409.38 36,028.22 42,675.73 31,171.51 72,658.92 12,173.21 3,701.79 880,756.59 424,662.23 129,069.09 184,705.78 54,255.07 29,686.59 58,377.83 899,357.77 186,873.79 198,184.88 113,911.34 322,780.09 58,197.18 19,410.49 4,612,795.46 2,166,112.51 800,069.42 947,811.08 282,107.09 147,632.71 269,062.65
2,473,597.05 12,785,994.31 59,926.83 19,278.91 136,340.14 326,666.20 13,026.02 509,657.95 826,902.63 10,131.54 51,542.92 173,115.82 345,025.60 1,982.49 329,048.60 127,578.45 590,301.40 1,617,387.96 59,868.00 2,582,080.51 4,620,502.34 50,469.25 277,159.19 899,293.70 1,621,902.24 10,402.67 2,337,015.90 100,215.63 1,211,289.30 37,932.88 959,068.83 28,509.26 76,699.08 8,526.05
TEXTILES YARN,FABRICS,MADEUP ARTICLES 459,874.56 HANDLOOM PRODUCTS COTTON YARN,FABRICS,MADEUPSETC NATRL SILK YARN,FABRICS,MADEUP MANMADE YARN,FABRICS,MADEUPS WOLLEN YARN,FABRICS,MADEUPSETC JUTE JUTE YARN 28,514.50 225,588.75 7,808.16 192,059.36 5,903.79 15,405.34 1,420.16
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The Macro Picture I External Sector I Foreign Trade I Exports Commoditywise AUG 2011
JUTE HESSIAN OTHER JUTE MANUFACTURES CARPETS CARPET(EXCL. SILK) HANDMADE SILK CARPET OTHER TEXTILES EXC RMG FLOOR CVRNG OF JUTE MANMADE STAPLE FIBRE COIR & COIR MANUFACTURES SILK WASTE READY MADE GARMENTS RMG COTTON INCL ACCESSORIES RMG SILK RMG MANMADE FIBRES RMG WOOL RMG OF OTHR TEXTLE MATRL OTHER MANUFACTURED GOODS SPORTS GOODS RUBR MFD. PRDCTS EXCPT FOOTWR FOOTWEAR OF RUBBER/CANVAS ETC. GEMS & JEWELLARY GLS/GLSWR/CERMCS/REFTRS/CMNT/ PAPER/WOOD PRODUCTS PLASTIC & LINOLEUM PRODUCTS COMP.SOFTWARE IN PHYSICAL FORM HANDCRFS(EXCL.HANDMADE CRPTS) PETROLEUM, CRUDE & PRODUCTS OTHER COMMODITIES 6,529.52 7,455.66 28,226.54 28,151.68 74.86 32,262.47 2,139.87 22,461.79 7,476.68 184.13 462,560.45 314,873.35 11,260.94 74,105.72 16,774.53 45,545.91 2,178,028.12 6,806.81 89,744.88 2,938.70 1,696,101.26 46,193.04 65,691.74 253,940.96 735.63 15,875.10
APR-AUG 2011-12
34,372.11 33,800.92 141,876.18 141,535.78 340.4 141,812.29 10,200.15 93,329.15 37,284.89 998.1 2,598,845.06 1,846,826.77 56,926.67 386,384.49 81,056.07 227,651.06 9,535,029.74 35,611.47 419,137.50 14,581.29 7,098,749.18 226,216.49 453,369.85 1,249,343.78 6,103.20 31,916.98
AUG-11
-10.23 56.16 -1.76 -1.95 281.16 57.26 -29.28 97.86 32.02 -61.17 15.79 15.68 -1.07 24.51 -13.51 23.07 45.91 -3.57 64.07 54.57 45.05 25.43 9.57 65.57 -8.61 80.58 52.4 20.28
13.42 82.02 -11.88 -11.85 -20 19.06 -30.35 26.85 26.46 -29.42 29.8 26.84 20.49 45.9 31.02 32.2 31.78 6.51 46.61 33.06 26.7 24.8 58.13 60.76 -66.72 -18.07 68.77 -59.38
AUG-11
0.06 0.07 0.27 0.27 0 0.31 0.02 0.21 0.07 0 4.43 3.01 0.11 0.71 0.16 0.44 20.84 0.07 0.86 0.03 16.23 0.44 0.63 2.43 0.01 0.15 20.58 2.47
0.07 0.06 0.27 0.27 0 0.27 0.02 0.18 0.07 0 4.98 3.54 0.11 0.74 0.16 0.44 18.27 0.07 0.8 0.03 13.6 0.43 0.87 2.39 0.01 0.06 21.82 2.1
2,151,284.08 11,384,630.75 258,559.25 1,095,300.60
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The Macro Picture I External Sector I Foreign Trade I Imports Commoditywise
Indias imports of principal commodities (Rs Lakhs) AUG APR-AUG 2011 2011-12
All Commodities PETROLEUM, CRUDE & PRODUCTS NON-POLITEMS FOOD AND RELATED PRODUCTS WHEAT RICE OTHER CEREAL CEREAL PREPARATION PULSES TEA MILK AND CREAM FRUITS & NUTS EXCL CASHEW NUTS SPICES SUGAR VEGETABLE OILS FIXED (EDIBLE) 17,746,814.02 5,655,235.43 12,091,578.59 541,452.44 104.23 104.43 1,922.38 45,010.24 1,944.19 7,784.24 35,047.90 18,990.51 14,438.56 416,105.76 88,870,164.25 29,030,963.94 59,839,200.31 2,466,186.67 0 322.86 1,766.89 11,027.47 308,783.87 8,964.05 40,427.09 158,774.15 93,666.22 14,764.46 1,827,689.61 722,284.46 6,338.96 52,556.80 192,945.27 52,064.32 349,245.65 47,955.39 21,178.07 6,256,717.43 75,817.06 2,507,832.60 994,420.95 267,600.22 512,204.35 1,189,516.19 709,326.06 11,149,638.29 565,613.67 5,655,348.43 871,356.39 1,593,528.20 1,508,765.24 955,026.36 37,414,168.73 0
AUG-11
40.59 68.85 30.38 32.39 752.95 -27.87 11.19 -40.85 10.07 222.11 90.43 82.45 -32.49 53.09 40.32 102.22 17.48 54.45 41.34 42.98 69.28 -37.95 49.48 38.15 40.02 94.44 41.55 27.07 50.81 51.48 35.52 63.84 34.51 20.61 -17.11 135.87 35.31 28.95
31.5 52.45 23.28 28.12 497.78 93.52 32.43 -0.04 -3.04 47.5 42.97 47.62 -92.85 56.04 18.67 12.35 0.76 20.57 21.84 25.32 47.48 -42.55 5.96 12.96 14.37 32.43 17.31 7.08 -25.6 20.48 21.08 55.41 30.09 24.29 -10.69 29.82 12.39 28.81
AUG-11
100 31.87 68.13 3.05 0 0 0.01 0.25 0.01 0.04 0.2 0.11 0.08 2.34 0.9 0.01 0.06 0.23 0.06 0.42 0.08 0.03 7.99 0.08 2.85 1.33 0.35 0.66 1.89 0.82 12.7 0.65 6.31 0.97 1.4 2.22 1.14 41.31
100 32.67 67.33 2.78 0 0 0.01 0.35 0.01 0.05 0.18 0.11 0.02 2.06 0.81 0.01 0.06 0.22 0.06 0.39 0.05 0.02 7.04 0.09 2.82 1.12 0.3 0.58 1.34 0.8 12.55 0.64 6.36 0.98 1.79 1.7 1.07 42.1
TEXTILES YARN,FABRICS,MADEUP ARTICLES 159,877.90 WOOLEN YARN & FABRICS COTTON YARN & FABRICS M-MADE FMNT/SPUN YRN(INC.WAS) MADEUP TEXTILE ARTICL OTHR TXTL YRN,FABS,MADEUP ARTL READYMADE GMENTS(WOVN & KNIT) SILK YARN & FABRICS CHEMICALS & RELATED PRODUCTS ESSENTIAL OIL & COSMETIC PREPN ORGANIC CHEMICALS INORGANIC CHEMICALS DYENG,TANNG,COLRNG MATRLS MEDICINAL & PHRMACUTICL PRODTS FERTILEZERS MANUFACTURED CHEMICAL MATRL & PRODCTS CAPITAL GOODS MACHINE TOOLS MACHRY EXCPT ELEC & ELECTRONIC ELEC MACHRY EXCPT ELECTRONIC TRANSPORT EQUIPMENTS PROJECT GOODS PROFSNL INST,ETC EXCPT ELCTRNC OTHER NON-POL ITEMS CASHEW NUTS 1,887.57 10,082.50 41,269.72 11,441.04 75,062.49 15,025.64 5,108.94 1,417,174.69 14,743.15 505,490.20 236,164.60 62,045.53 116,987.05 335,948.21 145,795.95 2,252,971.39 116,144.27 1,120,629.42 171,678.55 248,409.68 393,775.57 202,333.90 7,330,602.07
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The Macro Picture I External Sector I Foreign Trade I Imports Commoditywise AUG 2011
OIL SEEDS NATURAL RUBBER SYNTHC & RECLMD RUBBER PULP AND WASTE PAPER WOOD AND WOOD PRODUCTS JUTE, RAW SILK,RAW WOOL, RAW SYNTHETIC & REGENERATED FIBRES RAW HIDES & SKINS WOOLEN AND COTTON RAGS ETC. LEATHER VEGETABLES AND ANIMAL FATS FERTILIZERS,CRUDE COTTON RAW:COMB./UNCOMB./WASTE SULPHR & UNROSTD IRON PYRTS OTHER CRUDE MINERALS METALIFERS ORES & METAL SCRAP COAL,COKE & BRIQUITTES ETC. ARTFCL RESNS,PLSTC MATRLS,ETC. NEWSPRINT PAPER BOARD & MANUFACTURES PRNTD BOOKS,NWSPAPRS,JRNLS ETC CEMENT PERLS PRCUS SEMIPRCS STONES NON-METAC MNRL MNFS EXCL PERLS PRIMRY STEL,PIG IRON BASD ITMS IRON & STEEL NON-FERROUS METALS GOLD SILVER MANUFACTURES OF METALS ELECTRONIC GOODS COMP.SOFTWARE IN PHYSICAL FORM OTHER COMMODITIES 218.37 37,012.17 66,869.63 44,456.90 103,249.87 2,619.78 8,574.35 15,831.67 10,925.34 3,736.50 1,443.12 16,824.03 212.52 47,320.72 2,969.78 14,954.13 20,525.70 331,253.76 650,448.18 267,872.66 41,557.58 56,692.09 18,574.18 3,080.37 956,185.97 79,076.83 25,503.85 448,688.93 215,398.80 2,070,010.58 79,085.66 139,133.14 1,485,304.50 64,990.41 389,500.10
APR-AUG 2011-12
2,729.49 166,498.07 334,149.70 257,659.20 453,251.29 21,624.44 44,093.75 84,950.88 65,087.18 20,211.53 6,460.25 92,864.56 735.37 248,448.39 50,051.73 91,038.39 107,115.65 2,385,543.52 3,373,207.12 1,301,876.28 185,607.64 297,069.91 136,292.99 13,450.01 4,942,223.85 367,959.03 145,938.64 1,916,382.72 1,051,957.83 10,819,077.95 1,101,569.52 720,780.02 6,245,586.24 362,675.59 1,830,204.73
GROWTH % AUG-11 APR-AUG FY 12

-30.13 2.21 128.56 34.88 46.28 190.65 23.91 37.42 103.39 28.34 15.28 42.03 124.75 80.87 117.52 176.73 43.33 24.13 53.68 13.91 60.9 14.73 5.35 39.58 -14.8 37.2 36.71 63.99 47.28 22.14 -0.01 38.74 67.89 321.12 -14.56 -37.53 32.57 61.73 17.03 31.62 716.11 13.99 30.33 67.11 0.8 17.23 11.72 -8.98 81.34 67.92 130.11 21.02 39.4 42.53 -3.2 27.3 23.24 37.27 -27.87 -12.84 32.97 27.66 -8.18 35.16 67.58 303.56 33.56 20.72 152.08 -0.91
SHARE % AUG-11 APR-AUG FY 12

0 0.21 0.38 0.25 0.58 0.01 0.05 0.09 0.06 0.02 0.01 0.09 0 0.27 0.02 0.08 0.12 1.87 3.67 1.51 0.23 0.32 0.1 0.02 5.39 0.45 0.14 2.53 1.21 11.66 0.45 0.78 8.37 0.37 2.19 0 0.19 0.38 0.29 0.51 0.02 0.05 0.1 0.07 0.02 0.01 0.1 0 0.28 0.06 0.1 0.12 2.68 3.8 1.46 0.21 0.33 0.15 0.02 5.56 0.41 0.16 2.16 1.18 12.17 1.24 0.81 7.03 0.41 2.06
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The Macro Picture I External Sector I Foreign Trade I Exports Countrywise
Indias exports (Rs Lakhs)* COUNTRIES AUG 2011

U ARAB EMTS USA SINGAPORE CHINA P RP NETHERLAND UK HONG KONG GERMANY UNSPECIFIED INDONESIA SAUDI ARAB BELGIUM BRAZIL JAPAN ITALY KOREA RP SRI LANKA DSR SOUTH AFRICA TURKEY MALAYSIA ISRAEL FRANCE TAIWAN BAHAMAS SPAIN BANGLADESH PR IRAN VIETNAM SOC REP THAILAND NIGERIA BRUNEI KENYA NEPAL EGYPT A RP AUSTRALIA TANZANIA REP CANADA RUSSIA MAURITIUS MEXICO KUWAIT 1,143,209.94 958,073.92 372,096.33 923,450.93 314,599.91 282,426.75 131,531.14 326,522.42 1,005,145.86 203,959.88 150,526.04 128,030.07 202,128.77 222,005.02 180,378.27 126,221.25 144,556.26 165,742.50 193,154.83 103,299.67 122,448.29 113,914.03 148,936.57 96,787.79 107,913.56 100,917.86 102,882.96 99,873.72 69,550.44 89,107.69 392,053.61 88,691.80 56,282.47 68,056.76 69,546.62 34,591.98 85,851.10 62,170.38 35,850.19 48,779.03 30,537.67
APR-AUG 2011-12
6,310,212.27 5,987,266.00 3,648,087.40 2,507,065.55 1,851,589.31 1,572,919.45 1,566,856.59 1,538,787.78 1,526,244.65 1,274,847.77 1,181,465.32 1,140,975.09 1,138,684.51 1,012,370.40 992,669.10 874,057.81 824,914.61 810,219.26 744,215.20 731,991.51 701,821.62 696,982.85 638,554.76 589,376.87 560,711.66 523,924.45 487,055.44 484,537.52 435,466.84 408,524.73 397,798.94 370,213.53 362,528.06 348,143.65 344,418.93 325,618.20 320,211.62 309,438.69 256,935.97 233,421.85 222,114.69
AUG 11
13.36 7.89 34.01 160.75 24.7 -12.32 -68.66 46.78 1949.72 -29.23 13.65 -49.15 12.7 38.25 19.28 13.52 29.7 86.67 109.89 5.03 62.05 -37.3 168.45 -2.28 14.2 -8.43 42.15 125.94 8.57 71.78 42798.02 5.73 -27.71 17.23 -22.76 -26.3 64.14 19.36 211.05 71.78 -73.59
15.25 30.68 94.32 17.21 55.64 29.37 -14.78 46.74 61.9 57.77 41.74 24.37 57.32 -0.09 43.11 52.99 62.32 -7.08 68.08 -5.29 34.51 -11.43 90.3 10.73 32.42 0.7 62.16 13.55 24.83 20.49 9074.12 -16.25 -4.03 -7.56 14.48 83.15 41.58 -5.74 327.5 68.07 -4.58
AUG-11
10.94 9.17 3.56 8.84 3.01 2.7 1.26 3.12 9.62 1.95 1.44 1.23 1.93 2.12 1.73 1.21 1.38 1.59 1.85 0.99 1.17 1.09 1.43 0.93 1.03 0.97 0.98 0.96 0.67 0.85 3.75 0.85 0.54 0.65 0.67 0.33 0.82 0.59 0.34 0.47 0.29
12.09 11.47 6.99 4.8 3.55 3.01 3 2.95 2.92 2.44 2.26 2.19 2.18 1.94 1.9 1.67 1.58 1.55 1.43 1.4 1.34 1.34 1.22 1.13 1.07 1 0.93 0.93 0.83 0.78 0.76 0.71 0.69 0.67 0.66 0.62 0.61 0.59 0.49 0.45 0.43
Capital Market
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31
The Macro Picture I External Sector I Foreign Trade I Exports Countrywise COUNTRIES
SWITZERLAND PAKISTAN IR GREECE PHILIPPINES ALGERIA BENIN MALTA OMAN SWEDEN DENMARK COLOMBIA SUDAN POLAND GHANA YEMEN REPUBLC IRAQ MOZAMBIQUE PORTUGAL QATAR AFGHANISTAN TIS SYRIA PERU CONGO P REP NORWAY JORDAN CHILE BAHARAIN IS UKRAINE ARGENTINA MYANMAR UGANDA GIBRALTAR DJIBOUTI ETHIOPIA AUSTRIA MOROCCO ANGOLA HUNGARY IRELAND Grand Total
AUG 2011
20,770.20 33,792.99 10,405.14 33,472.84 27,082.41 13,934.44 57,144.48 26,559.24 34,336.04 29,750.20 29,938.14 28,161.18 26,074.68 23,503.35 16,562.34 21,688.16 12,331.41 18,244.29 32,638.22 22,977.49 23,255.01 15,308.28 6,579.30 8,343.15 17,048.82 17,355.50 9,528.61 18,487.15 17,388.04 14,652.25 14,267.86 42,227.56 19,437.43 15,727.63 12,823.75 11,887.33 12,308.78 11,854.46 12,039.92 10,451,374.47
APR-AUG 2011-12
211,568.19 200,037.56 187,614.41 173,851.79 170,488.62 166,443.75 160,645.37 157,866.51 152,349.58 148,069.85 147,926.02 144,800.95 143,210.78 134,832.81 126,586.87 108,761.27 106,968.58 104,695.04 104,452.39 103,859.24 100,008.32 91,085.35 88,209.18 86,597.81 85,760.38 84,294.23 84,101.16 83,160.16 82,729.14 81,036.88 72,549.48 72,533.63 70,745.33 67,895.29 67,670.14 62,832.27 60,793.59 57,632.32 55,933.51 52,185,413.63
AUG 11
-4.64 -28.74 30.33 20.87 -31.94 55.03 5.31 8.16 53.84 33.61 64.4 102 16.21 27.72 -57.28 28.8 -39.77 10.19 193.1 40.51 92.4 14.23 3.73 56.75 17.3 41.15 7.84 63.82 5.42 7.22 81.91 1022359.08 87.25 37.26 -40.51 25.49 56.97 95.88 31.19 33.53
98.33 -31.54 245.8 21.31 41.36 244.76 0.6 9.17 37.93 32.22 51.9 57.84 37.59 49.13 6.22 21.02 23.36 23.02 64.51 68.02 30.81 30.17 133.91 175.03 50.26 13.2 -8.94 31.15 16.17 89.64 57.88 135.11 61.44 44.44 25.83 23.16 -11.21 87.44 20.79 30.19
AUG-11
0.2 0.32 0.1 0.32 0.26 0.13 0.55 0.25 0.33 0.28 0.29 0.27 0.25 0.22 0.16 0.21 0.12 0.17 0.31 0.22 0.22 0.15 0.06 0.08 0.16 0.17 0.09 0.18 0.17 0.14 0.14 0.4 0.19 0.15 0.12 0.11 0.12 0.11 0.12 100
0.41 0.38 0.36 0.33 0.33 0.32 0.31 0.3 0.29 0.28 0.28 0.28 0.27 0.26 0.24 0.21 0.2 0.2 0.2 0.2 0.19 0.17 0.17 0.17 0.16 0.16 0.16 0.16 0.16 0.16 0.14 0.14 0.14 0.13 0.13 0.12 0.12 0.11 0.11 100
32
Capital Market
I January 2012
The Macro Picture I External Sector I Foreign Trade I Exports Countrywise
Country Wise Monthly Merchandise Exports (US $ Million) FEB-11 MAR-11 APR-11 MAY-11 JUN-11
North America Canada Mexico USA, a 32859 25772 109640 40060 31356 131315 36430 27968 123901 38396 31097 124000 38169 30409 122913
JUL-11
37158 27852 120376
AUG-11
39186 31487 126766
SEP-11
39492 28814 127219
OCT-11
38296 30088 131033
NOV-11
... 31017 ...
South and Central America Argentina Brazil Chile Colombia Peru Bolivia Costa Rica El Salvador Guatemala Paraguay Ecuador Uruguay Europe EU (27) Intra-EU (27) Extra-EU (27) Austria Belgium Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Slovak Republic 472276 307593 164682 13981 38440 144 12303 8595 1142 5982 46822 114450 1928 9210 10432 40394 891 2040 1769 265 50945 14695 4523 6031 557623 366026 191597 16559 45408 166 14828 10602 1513 7244 56797 137134 2439 10317 11916 48182 1092 2297 2092 366 60660 16735 5290 7102 505082 329089 175992 15014 40349 167 13586 9394 1589 6615 50431 121423 2493 9308 11230 44835 1062 2176 1878 377 55967 16008 4969 6579 538441 350953 187488 16230 44003 160 14429 10005 1614 7176 53876 131969 2959 9875 10415 48057 1154 2545 1842 268 57579 16755 5310 7104 522498 343089 179408 14997 42385 158 14646 9796 1377 6975 51749 126670 2815 9496 11955 46912 1120 2534 1723 381 55930 16213 5163 6963 502033 317800 184234 15186 38556 159 12936 9194 1335 6263 49257 122150 2825 8910 9977 50301 1075 2359 1746 247 54814 15013 5388 6098 475907 300025 175882 14144 38368 137 13004 9780 1482 6711 43831 122077 2447 9269 9882 34676 1218 2508 1787 260 54953 15808 4184 6413 523700 342286 181414 15704 40011 144 14273 9719 1510 6759 50931 130719 2691 9888 11083 45438 1204 2556 1926 308 55957 16362 5201 7079 505477 325380 180097 15876 38529 141 14178 9269 1423 6001 50024 122026 2433 9431 10264 44039 1218 ... 1604 376 54220 15695 5182 7329 ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 5407 16733 5751 3948 3368 579 820 454 902 360 1638 566 6305 19286 7223 4899 3771 542 963 532 1052 538 1971 565 6953 20173 7108 4697 3444 628 907 430 936 503 1837 673 8043 23209 7713 4765 4083 691 913 484 890 568 2016 785 7922 23689 6291 4709 4192 678 858 466 876 487 1751 723 7317 22252 6982 4890 4254 795 822 472 824 578 1926 697 8255 26159 6633 4965 4608 783 831 421 852 590 1631 754 7959 23285 6469 4482 3757 ... 851 439 819 506 1680 748 7528 22140 6446 4713 3752 ... 838 389 767 406 1657 618 6920 21774 6769 ... ... ... 882 389 ... 413 ... ...
Capital Market
I January 2012
33
The Macro Picture I External Sector I Foreign Trade I Exports Countrywise FEB-11
Slovenia Spain Sweden United Kingdom Bulgaria Romania EFTA Switzerland Iceland Norway Turkey 18454 367 11962 10060 20433 510 14325 11812 18736 360 14070 11870 21956 485 12487 10945 19865 450 11971 11353 20838 446 13570 11866 18823 472 13578 11250 20502 535 13663 10759 20141 454 12527 11920 20624 457 13799 11114 2661 23450 15361 38975 2034 4812
MAR-11
3216 27568 17939 42002 2376 5783
APR-11
2967 25101 15787 38545 2319 4912
MAY-11
3125 26358 17354 40387 2382 5510
JUN-11
3112 25891 15901 39937 2297 5402
JUL-11
2984 23653 14425 39140 2632 5411
AUG-11
2638 19952 15328 37564 2520 4964
SEP-11
3123 27027 16535 39446 2358 5748
OCT-11
2891 25910 15529 41478 2368 5594
NOV-11
... ... ... ... ... ...
Commonwealth of Independent States Belarus Kazakhstan Russian Federation Ukraine Africa Algeria Egypt Morocco Tunisia South Africa Middle East Israel Asia Australia New Zealand China Hong Kong, China domestic exports re-exports India Indonesia Japan Korea, Republic of Malaysia Philippines Singapore Taipei, Chinese Thailand Viet Nam 17472 2943 96681 29252 588 28664 27683 14125 67747 38474 16310 3865 28314 21226 18868 4930 21840 3422 152144 36125 818 35307 30757 16749 71659 48044 20373 4353 36289 27225 21258 7582 21889 3682 155594 32425 768 31657 23891 16388 61869 48541 19184 4302 34078 27311 17565 7526 24210 3676 157050 36010 788 35223 27742 17801 58580 47425 18284 4108 34148 27870 19436 7233 23550 3223 161903 37536 713 36823 29213 17608 71735 46747 19096 4128 35180 25165 20648 8460 23948 3135 175163 36738 656 36082 29344 17573 72811 48918 19781 4429 34606 28124 21522 9323 25990 2873 173270 39745 761 38983 24313 18181 69367 45769 19616 4123 36763 25781 21569 9247 24097 2803 169615 34877 625 34253 24822 16997 77784 46546 19019 3897 35570 24610 21509 7944 23969 3068 157444 39306 676 38630 19870 16898 71738 46822 20243 4088 33919 27030 17190 8394 22657 ... 174464 35800 661 35139 22322 ... 67016 46494 ... ... 33339 24676 15496 8854 5177 6851 5113 6271 6528 5789 5147 5394 4340 4810 5940 2316 1681 1390 7282 7559 2774 1897 1576 8707 6123 2740 1820 1622 7669 5084 2880 1810 1808 8200 7550 2972 1899 1676 8909 4615 2669 1926 1525 8311 ... 2230 1714 1345 8630 ... 2345 1667 1352 8952 ... ... 1752 1527 7679 ... ... 1524 1253 8417 2717 6662 39280 4724 3414 6317 43651 6006 3665 8534 45884 5605 3644 7317 43656 5700 3476 9863 44209 6167 3722 5272 42117 5356 3635 9166 44566 5780 3530 8919 44017 5968 3399 5886 45947 5758 ... ... ... ...
a FAS.: Free Alongside Ship.
34
Capital Market
I January 2012
The Macro Picture I External Sector I Foreign Trade I Imports Countrywise
Indias imports (Rs Lakhs)

COUNTRIES
CHINA P RP U ARAB EMTS SWITZERLAND SAUDI ARAB USA IRAQ NIGERIA GERMANY INDONESIA AUSTRALIA KUWAIT QATAR KOREA RP IRAN JAPAN SINGAPORE SOUTH AFRICA MALAYSIA HONG KONG BELGIUM UK ANGOLA TAIWAN VENEZUELA ITALY THAILAND BRAZIL OMAN RUSSIA FRANCE EGYPT A RP SWEDEN MEXICO ISRAEL NETHERLAND CANADA CHILE FINLAND UKRAINE SPAIN ALGERIA VIETNAM SOC REP MOROCCO ARGENTINA
AUG 2011
2,402,376.73 1,425,026.00 958,207.37 1,145,310.88 870,252.65 723,245.41 674,299.30 650,453.70 549,701.29 393,894.02 654,427.35 732,372.83 543,350.75 145,973.73 461,166.54 345,292.36 488,135.54 410,559.01 340,778.06 240,086.49 238,286.72 310,218.53 188,288.11 93,120.53 210,303.73 207,249.71 203,392.73 104,111.32 137,000.01 115,529.74 82,975.28 78,510.02 37,351.91 69,636.70 104,175.86 61,053.14 11,308.64 72,814.62 80,731.84 77,725.89 74,357.57 66,030.80 66,472.62 48,558.87
APR-AUG 2011-12
10,518,905.94 6,676,709.14 5,982,430.65 5,500,805.14 4,259,789.21 3,789,932.74 3,265,111.10 2,908,168.11 2,830,058.32 2,700,594.93 2,583,540.04 2,499,182.39 2,278,198.32 2,237,696.56 2,152,081.59 1,919,489.53 1,858,988.17 1,850,046.79 1,838,456.90 1,624,988.00 1,441,217.13 1,173,938.08 1,069,880.28 1,066,704.13 1,061,369.53 994,446.95 803,027.22 780,631.43 728,957.28 691,626.65 598,063.03 454,854.64 435,982.41 404,942.20 399,389.41 398,586.94 375,493.61 368,518.86 363,350.43 338,176.60 303,682.29 280,797.56 274,724.12 243,390.35
AUG-11
62.44 23.17 -5.78 48.90 30.19 244.10 98.85 79.00 72.83 -24.19 227.81 165.89 51.20 -55.85 49.81 30.41 29.73 66.46 5.61 13.17 23.39 120.57 39.20 -2.83 28.01 40.53 325.32 15.42 27.12 -13.29 224.81 58.99 234.30 6.31 75.60 -11.16 -65.65 145.64 91.77 72.81 -14.20 48.90 193.52 -12.93
26.82 6.56 77.11 46.00 6.67 180.23 66.99 35.97 64.56 7.30 54.11 86.79 15.37 17.68 33.81 23.35 25.90 52.92 27.43 3.83 57.77 79.16 48.83 21.68 30.92 26.62 11.79 47.59 -17.51 -4.01 139.03 69.79 188.03 -6.53 30.64 -6.92 52.32 35.22 25.01 17.16 -19.33 46.16 27.10 -3.29
AUG-11
13.47 7.99 5.37 6.42 4.88 4.06 3.78 3.65 3.08 2.21 3.67 4.11 3.05 0.82 2.59 1.94 2.74 2.30 1.91 1.35 1.34 1.74 1.06 0.52 1.18 1.16 1.14 0.58 0.77 0.65 0.47 0.44 0.21 0.39 0.58 0.34 0.06 0.41 0.45 0.44 0.42 0.37 0.37 0.27
11.80 7.49 6.71 6.17 4.78 4.25 3.66 3.26 3.17 3.03 2.90 2.80 2.55 2.51 2.41 2.15 2.08 2.07 2.06 1.82 1.62 1.32 1.20 1.20 1.19 1.12 0.90 0.88 0.82 0.78 0.67 0.51 0.49 0.45 0.45 0.45 0.42 0.41 0.41 0.38 0.34 0.31 0.31 0.27
Capital Market
I January 2012
35
The Macro Picture I External Sector I Foreign Trade I Imports Countrywise COUNTRIES
MYANMAR UNSPECIFIED JORDAN BRUNEI AUSTRIA TURKEY BAHARAIN IS SRI LANKA DSR NEW ZEALAND CZECH REPUBLIC DENMARK POLAND SUDAN GHANA PERU CAMEROON BANGLADESH PR AZERBAIJAN BENIN HUNGARY YEMEN REPUBLC NORWAY PHILIPPINES SENEGAL COTE D IVOIRE ROMANIA PAKISTAN IR IRELAND PANAMA REPUBLIC NEPAL TRINIDAD COLOMBIA PORTUGAL GUINEA GUINEA BISSAU ALBANIA LATVIA BHUTAN COSTA RICA BULGARIA ESTONIA LITHUANIA TUNISIA PANAMA C Z Grand Total
AUG 2011
62,663.46 34,639.41 33,660.99 28,203.50 44,840.40 25,965.92 25,494.71 20,722.33 29,111.86 31,209.55 17,310.77 16,848.82 4,313.29 19,977.74 9,849.01 670.57 21,335.92 74.97 11,935.35 24,469.47 26,606.64 17,006.90 19,000.21 26,551.48 42,468.97 8,360.45 17,535.91 17,671.07 55,863.29 10,674.18 178.31 730.31 7,969.53 5,446.74 22,723.27 10.82 2,084.23 6,742.47 8,095.62 3,022.63 22,021.22 5,602.79 4,186.31 26,531.17 17834183.85
APR-AUG 2011-12
243,112.65 234,053.97 223,205.67 218,501.35 204,517.84 183,672.12 176,264.42 160,245.49 150,539.17 140,805.38 132,535.34 126,850.81 125,056.11 120,649.59 115,566.29 106,017.89 105,815.89 105,098.86 102,862.31 94,315.01 84,946.74 81,709.92 78,678.82 78,637.75 78,491.37 74,795.98 71,926.73 68,153.04 66,042.01 61,430.63 56,032.80 49,335.55 47,128.64 43,986.93 41,548.09 40,963.53 37,597.21 35,767.76 35,070.16 33,321.35 30,372.43 29,482.76 28,573.48 26,531.17 89177726.46
AUG-11
1.62 -85.34 34.07 62.48 61.36 269.42 80.70 41.48 145.49 -1.78 23.10 -79.48 390.63 1495.65 124.51 92.52 -29.25 551.98 31.01 -73.40 42.84 135.83 264.33 430.09 79.06 45.18 113.49 12915.37 -51.59 -97.80 -70.53 155.29 -85.65 730.39 -77.32 -12.54 166.92 20.56 3090.56 853.72 -43.71 41.28
1.85 -30.07 16.61 449.31 43.08 35.54 20.64 122.13 4.65 22.22 48.93 75.77 45.14 184.42 387.70 4054.88 89.93 152.14 135.38 44.99 -80.66 -28.66 -21.73 82.50 2.45 100.47 9.36 41.05 -12.06 -37.72 86.74 -79.56 178.10 8.42 98.74 -21.68 10.66 88.72 207.70 946.02 -45.87 -68.18 31.95
AUG-11
0.35 0.19 0.19 0.16 0.25 0.15 0.14 0.12 0.16 0.17 0.10 0.09 0.02 0.11 0.06 0.00 0.12 0.00 0.07 0.14 0.15 0.10 0.11 0.15 0.24 0.05 0.10 0.10 0.31 0.06 0.00 0.00 0.04 0.03 0.13 0.00 0.01 0.04 0.05 0.02 0.12 0.03 0.02 0.15 100.00
0.27 0.26 0.25 0.25 0.23 0.21 0.20 0.18 0.17 0.16 0.15 0.14 0.14 0.14 0.13 0.12 0.12 0.12 0.12 0.11 0.10 0.09 0.09 0.09 0.09 0.08 0.08 0.08 0.07 0.07 0.06 0.06 0.05 0.05 0.05 0.05 0.04 0.04 0.04 0.04 0.03 0.03 0.03 0.03 100.00
36
Capital Market
I January 2012
The Macro Picture I External Sector I Foreign Trade I Imports Countrywise
Country Wise Monthly Merchandise Imports (US $ Million)

FEB-11
North America Canada FOB Mexico USA 33127 26188 160730 39833 30752 190446 37594 28018 182963 38698 31449 193843 39614 31192 196888 37196 29886 192258 40046 33245 201357 38491 31540 194650 39056 31446 196531 ... 32160 ...
MAR-11
APR-11
MAY-11
JUN -11
JUL -11
AUG -11
SEP-11
OCT-11
NOV-11
South and Central America Argentina Brazil Chile Colombia Peru Bolivia Costa Rica El Salvador Guatemala Paraguay FOB Ecuador Uruguay Europe EU (27) a Intra-EU (27) a Extra-EU (27) Austria Belgium Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Slovak Republic FOB 485577 307593 177984 14886 37108 697 11506 7360 1212 6233 57141 98318 4179 8069 5809 44524 1076 2284 2159 398 45333 16263 6328 5889 573027 366026 207001 17398 43733 804 13569 8838 1636 8189 67173 110983 4690 9158 6004 53480 1358 2647 2550 459 54737 18243 7665 6969 527691 329089 198602 15967 38680 734 12818 7967 1678 7112 60774 105940 4353 8640 6685 48914 1248 2642 2311 528 49528 17986 7236 6661 557119 350953 206166 17064 42899 753 13607 8972 1643 7686 65108 110935 4656 8862 5282 51257 1391 2859 2428 477 52819 18652 7802 7073 540747 343089 197658 15820 40705 778 13617 8464 1441 6890 61104 108630 4764 8620 5514 49365 1346 2785 2400 452 51622 18470 6629 6782 515293 317800 197493 16206 36685 715 12235 7837 1433 6535 58429 107240 4791 8396 4982 48130 1432 2624 2314 435 49185 17126 6998 6159 501396 300025 201371 15845 37971 842 12868 8339 1561 7150 53975 105281 3886 8548 5314 38844 1434 2774 2674 402 51358 17597 6057 6234 538298 342286 196012 16650 38232 627 13064 8528 1513 6757 61240 107003 4435 8853 5233 48028 1406 2732 2328 405 50438 17258 7017 6645 520554 325380 195173 16785 35886 659 12770 8072 1471 6823 59779 106313 3616 8736 4893 45515 1464 ... 2800 582 49254 16595 6460 6647 ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 4799 16330 5138 3776 2607 464 1179 769 1181 799 1606 768 5638 18596 6507 4645 2956 593 1477 959 1481 893 2003 990 5653 19165 5926 4206 3108 562 1247 804 1397 884 1960 811 6363 20624 6290 4931 3383 537 1339 942 1536 982 2049 1017 6904 20146 6197 4553 3313 668 1298 879 1461 1026 2095 920 6645 20005 6572 4564 3101 676 1424 925 1328 960 1938 863 7616 23303 6962 4757 3572 724 1458 874 1504 1095 2246 900 6895 21152 6771 5067 3286 709 1347 851 1418 1061 2193 889 6306 20670 5953 4842 3308 ... 1401 754 1397 1042 2200 871 6236 21191 6494 ... ... ... 1463 797 ... 1026 ... ...
Capital Market
I January 2012
37
The Macro Picture I External Sector I Foreign Trade I Imports Countrywise FEB-11
Slovenia Spain Sweden United Kingdom Bulgaria Romania EFTA Switzerland Iceland Norway Turkey 15689 317 6856 17520 19601 421 10229 21643 17029 354 6773 20952 4193 2994 27095 6298 18398 469 8057 21105 3709 3619 28109 6767 18155 401 7474 21603 3971 2890 27675 6788 17505 392 6701 21061 3548 3373 27347 6527 17831 429 7443 19679 3750 3369 30046 7214 18089 431 7742 21203 3610 3295 27306 7385 17329 414 7910 19915 3790 3379 29066 7544 17365 420 7659 18647 ... ... ... ... 2731 27805 13675 48791 2187 5377
MAR-11
3305 33930 16460 55736 2562 7047
APR-11
2986 30743 15327 50336 2752 6345
MAY-11
3276 31188 16447 54438 2834 7217
JUN -11
3018 31469 14769 53613 2736 6687
JUL -11
2905 27759 13121 54279 2708 6377
AUG -11
2799 26935 14436 51435 2785 6193
SEP-11
3209 34170 14979 55928 2750 6859
OCT-11
2917 29781 14430 55077 2964 6617
NOV-11
... ... ... ... ... ...
Commonwealth of Independent States Belarus 3824 4457 Kazakhstan 2126 2421 26861 7048
Russian Federation FOB 21773 Ukraine Africa Algeria Egypt Morocco Tunisia South Africa FOB Middle East Israel - excl military imports 5396 Asia Australia - customs basis 16741 New Zealand China Hong Kong, China India Indonesia Japan Korea, Republic of Malaysia Philippines Singapore Taipei, Chinese Thailand Viet Nam 2802 104484 32476 32619 12130 59864 36364 12881 4993 24557 20324 17097 6119 3241 3327 3179 1611 7331 6387
4175 4654 4034 2060 8567
4093 4507 4048 2236 8032
4298 5723 3881 2226 8350
3934 4854 3937 2138 8192
3740 4937 3566 1916 8885
... 5277 3842 1919 9158
... 5428 3544 2046 8620
... ... 3521 2261 8881
... ... 3335 1869 9406
6753
5791
6793
6148
6630
6316
5586
5816
6208
18727 2990 152315 41269 35293 14609 69381 45499 16641 5820 33354 25477 19469 8938
18352 2773 144328 37885 36157 14775 67481 44192 15530 5766 30561 24363 18345 8993
19220 3238 144068 40602 45065 14609 69130 45303 15468 5186 31733 26659 19184 8654
19510 3059 139693 42708 36872 15431 70899 44877 16492 4772 31456 23789 19804 8620
21154 3048 144806 41350 40426 16110 71956 44293 16625 5300 30041 24752 18724 8221
21572 3456 155517 44205 38354 14673 79462 45381 15938 5220 34544 23151 22773 9643
20503 3445 155164 40005 34589 15070 73959 45265 15896 5380 30217 22836 21276 9445
21005 3292 140448 42282 39514 15538 75387 42755 16032 5320 30157 23709 18203 9144
21720 ... 159936 41469 35922 ... 75844 42958 ... ... 32360 21473 16872 9421
a includes an adjustment for under-recorded intra-EU imports
38
Capital Market
I January 2012
The Macro Picture I External Sector I Balance of payment
Balance of payment
Indias balance of payments (BoP) surplus dipped to a ninequarter low of a mere US$0.276 billion in the quarter ended September 2011 compared to US$5.442 billion in previous quarter and US$3.289 billion in corresponding quarter of previous year, due to 14.7% fall in capital account surplus with portfolio outflows. Indias foreign exchange reserves dipped by US $4.233 billion to US$311.482 billion in the quarter ended September 2011, including valuation losses worth US$4.512 billion in Q2 of FY 2012, reflecting sharp appreciation of US dollar against major international currencies during the quarter. However, the forex reserves declined snapping consistent increase for previous four sequential quarters with the cumulative increase of US$40.0 billion. The continuous increase in Indias trade deficit to record level of US$43.9 billion in the quarter ended September 2011, weighed on BoP surplus. On a BoP basis, Indias merchandise exports surged at robust pace of 47.2% to US$76.6 billion, while imports moved up 35.4% to U$120.5 billion in Q2 of FY 2012. The trade deficit widened despite higher growth in exports, as imports have recorded strong growth on high base. However, exporters have most likely front loaded their exports during Q2 of FY 2012, pushing up growth, to get the duty entitlement pass book scheme benefit scheduled for expiry in September 2011. Import growth was boosted by 57.8% surged in gold import to US$12.538 billion in Q2 of FY 2012. The net invisible inflows zoomed 34.6% to touch record level of US$27.03 billion during Q2 of FY 2012, on y-o-y basis, mainly due to strong growth in receipts led by travel, transportation and software services inflows. The inflow of transfer incomes also recorded strong growth during, while income outflows were steady Q2 of FY 2012. The current account deficit increased to US$16.9 billion (3.7% of GDP) in Q2 of FY 2012 from US$15.9 billion (3.5% of GDP) in Q1 of FY 2012, but it was steady compared to
BOP surplus eases on portfolio outflows
US$16.9 billion (4.4% of GDP) in corresponding quarter of previous year. The record inflows of invisible flows helped to contain some of the increase in trade deficit during Q2 of FY 2012. However, the capital account surplus (including errors and omissions) narrowed from US$21.6 billion in Q2 of FY 2011 to US$22.6 billion in Q1 of FY 2012 and further down to US$18.4 billion in Q2 of FY 2012, mainly due to outflows of portfolio investment. However, the capital account inflows were supported by sharp increase in foreign direct investment, loan inflows, banking capital inflows and dip in outflow of other capital flows.
Trade deficit widens

On a BoP basis, Indias merchandise exports surged 47.2%, year-on-year, to US$76.6 billion during Q2 of FY 2012, as compared with a growth of 19.9% during corresponding quarter of FY 2011. Similarly, on a BoP basis, merchandise imports increased 35.4%, year-on-year, to US$120.5 billion during the quarter as compared with a growth of 21.9% during same quarter last year. The trade deficit in absolute terms widened to US$43.9 billion as compared with US$37.0 billion during the Q2 of FY 2011.
Net invisibles surge

Net invisibles inflows surged 34.6% to touch record level of US$27.0 billion in Q2 of FY 2012, compared to 1.6% fall recorded in Q2 of FY 2011. Invisibles receipts recorded a strong growth of 15.4% to US$54.29 billion, while invisible outflows moved up only 1.1% to US$27.26 billion in Q2 of FY 2012. Among the major components, net services inflows surged 30.6% to US$15.52 billion with strong growth for travel (69.6% to US$1.07 billion), transportation (from outflows of US$0.254 billion to inflows of US$0.77 billion) and software services (25.5% to US$14.895 billion). Net private transfer inflows surged 24.8% to US$16.196 billion, with workers remittances rising 35.6% to US$7.53 billion during the quarter ended September 2011. Further, inflows for compensation of employees increased to US$0.22 billion, but investment income outflows increased 6.5% to US$4.89 billion in Q2 of FY 2012 with interest income outflow surging 26.3% to US$1.968 billion in Q2 of FY 2012.
Major items of Indias Balance of Payments ITEM / QUARTER ENDING JUN-10 SEP-10 DEC-10 MAR-11 JUN-11 SEP-11
Exports Imports Trade Balance (1-2) Invisibles, net 55.3 87.16 52.03 89 65.9 97.4 -31.5 21.5 -10 14 -4 77.2 74.32 76.59 107.1 116.14 120.53 -29.9 -41.83 -43.94 24.5 25.89 27.03
-31.86 -36.98 19.76 20.07 -16.9 21.6 -3.29
Current A/c Balance (3+4) -12.1 Capital A/c Balance* Change in Reserves# 15.84 -3.74
-5.4 -15.93 -16.91 7.4 -2 22.63 -5.44 18.43 -0.28
Invisible surplus finances 61.5% of trade deficit

The invisibles surplus surged 34.6%, while trade deficit galloped 18.8% during quarter ended September 2011, helping to contain rise in current account deficit. The invisible surplus at US$27.0 billion financed 61.5% of the trade deficit
39
(-Indicates increase;+ indicates decrease), *: Including errors and omissions. #: On BoP basis (i.e., excluding valuation).
Capital Market
I January 2012
The Macro Picture I External Sector I Balance of payment in Q2 of FY 2012 as against 61.9% during Q1 of FY 2012 and 54.3% in Q2 of FY 2011. US$3.163 billion in Q2 of FY 2011, mainly due to sharp surge in NRI deposits and liquidation of foreign assets by commercial banks. Inflows of NRI deposits jumped 167.0% to US$2.786 billion in Q2 of FY 2012.
Investment inflows
Net FDI inflows to India (inward FDI minus outward FDI) surged 22.9% to US$4.38 billion during Q2 of FY 2012 as compared to US$3.565 billion in the corresponding quarter of last year. Higher net FDI was mainly on account of sharp decline in the gross FDI outflows of 26.1% to US$2.898 billion in Q2 of FY 2012. However, inflow of FDI also declined 2.8% to US$7.278 billion in Q2 of FY 2012.
Valuation losses for forex reserves

With capital account surplus being higher than the current account deficit, there was a net accretion to foreign exchange reserves of US$ 0.3 billion during the quarter (US$ 3.3 billion a year ago). In nominal terms (i.e., including valuation changes), foreign exchange reserves have declined by US$ 4.2 billion during the quarter, due to valuation losses worth US$4.5 billion, reflecting appreciation of US dollar against major international currencies during the quarter. The US Dollar index measuring the strength of US currency against six peers improved 6.1% since end July 2011, as the dollar is seen as best place for investors with uncertain global economic environment and unfolding of euro zone sovereign debt crisis.
FIIs withdraws money

The portfolio inflows, representing inflows/outflows of foreign institutional investors (FIIs) into/from domestic equity assets, have shown outflows for the quarter ended September 2011 at US$1.2 billion compared to robust inflows of US$19.19 billion in the quarter ended September 2010. Net loans inflows surged 53.5% to US$10.202 billion in Q2 of FY 2012 compared to of US$6.647 billion in Q2 of FY 2011, net external commercial borrowing inflows more than doubled to US$7.007 billion and short term credit flows to India also improved 9.6% to US$2.87 billion in Q2 of FY 2012. But, the net external assistance inflows dipped 44.6% to mere US$324 million.
RBI steps to improve foreign capital inflows

1 January: Allowed foreign individuals and pension funds, as well as other entities, mainly known as qualified foreign investors (QFIs) to invest directly in equity markets. 19 December: Allowed microfinance institutions to raise up to US$10 million during a financial year through external commercial borrowings for permitted end-uses. 16 December: Allowed banks to fix interest rates on nonresident external rupee deposits and ordinary non-resident accounts. Banks have responded strongly by raising foreign deposit rate by 500-600 bps since the announcement. 23 November: Raised the ceiling on interest rates that companies can pay on foreign loans, provided the funds are brought into India immediately. 17 November: The government increased the ceiling of foreign institutional investment in government and corporate debt by US$5 billion each.
NRI deposits surge

Banking capital of commercial banks recorded net inflow of US$6.679 billion in Q2 of FY 2012 compared to outflows of
Sources of Variation in Forex Reserves ITEMS DEC-10 MAR-11 JUN-11 SEP-11

I. II. Current Account Balance Capital Account (net) (a to f) a. Foreign Investment (i+ii) (i) Foreign Direct Investment (ii) Portfolio Investment Of which: FIIs ADRs/GDRs -9.3 13.4 6.9 0.6 6.3 0 7.2 0.2 -5.4 7.3 -0.3 -0.5 0.2 0 -0.1 0.2 2.6 -0.7 0.9 2.5 0.7 2.6 5.4 7.5 -14.2 19.7 9.7 7.2 2.5 0 2.5 0.3 2.9 12.7 1.2 3.1 0.4 -9.1 5.4 10.9 -18.6 18.9 4 5.1 -1.2 0 -1.6 0.2 7.7 6.6 2.7 2.8 0.3 -2.5 -4.5 -4.2
Outlook
Indias forex reserves have declined by US$10.619 billion to US$ 300.863 billion as of 23rd December 2011 from end of September 2011 levels. This fall is in addition to US$ 4.2 billion decline recorded during quarter ended September 2011. The valuation losses along with the RBI intervening in foreign exchange market may have caused decline in forex reserves during Q3 of FY 2012. The valuation losses during Q3 of FY 2012 would have been caused by appreciation of US dollar against major currencies. The trade deficit has widened sharply during Q3 of FY 2012, while invisible inflows are likely to have impacted due to global economic uncertainty. However, the RBI measures to attract foreign capital inflows would help to raise inflows of foreign capital.
Capital Market India Economy Review I January 2012
b. External Commercial Borrowings 3.6 c. Banking Capital of which: NRI Deposits d. Short-Term Trade Credit e. External Assistance f . Other items in capital account III. Valuation Change Total (I+II+III) Figures in US$ billion 4.9 0.1 1.6 1.2 -4.7 0.5 4.5
40
External Sector I External Debt
External Debt
Debt service burden to rise on weak Rupee
Indias external debt, end-September 2011 was placed at US $ 326.6 billion recording an increase of $37.91 billion over the end-September 2010 level and $20.16 billion from end March 2011. About 57% of the increase in total external debt during the quarter was on account of commercial borrowings, while short-term trade credits accounted for 32.4% of the increase, reflecting surge in imports. Excluding the valuation effects due to the appreciation of the US dollar against other major international currencies and the Indian rupee, the increase in external debt as at end-September worked out to be higher at US $ 13.02 billion over end-March 2011. Long-term debt at US$ 255.07 billion and short-term debt at US$ 71.53 billion accounted for 78.1% and 21.9%, respectively, of the total external debt end-September 2011. The share of commercial borrowings in total external debt continued to increase, cornering the largest share at 30.3% end-September 2011, followed by short-term debt (21.9%), NRI deposits (16.0%) and multilateral debt (15.0%). The ratio of short-term debt to foreign exchange reserves rose sharply to 22.9% end-September 2011 from 21.7% as at end-June 2011. Debt denominated in US dollars accounted for the highest share with 55.8% in total external debt as at end-September 2011 followed by the Indian rupee (18.2%) and Japanese yen (12.1%). The ratio of foreign exchange reserves to external debt as at end September 2011 declined sharply to 954% at end September 2011 from 99.6% end June 2011.
Evolution of Indias external debt
September 2011. The ratio of concessional debt to total external debt declined to 14.7%, reflecting the increasing share of non-government debt.
Currency Composition of External Debt

The currency composition of Indias external debt consists of major international currencies such as US dollars, Japanese yen, euro, pound sterling, special drawing rights (SDR) and the domestic currency i.e., the Indian rupee. The US dollars denominated debt continued to be the largest component with a share of 55.8% in the total external debt as at end-September 2011. The share of Indian rupee in the total external debt stock accounted for 18.2%, followed by Japanese yen (12.1%), SDR (9.1%) and euro (3.7%) at end September 2011.
Components of External Debt

The loans under external assistance (multilateral and bilateral debt) increased by US$ 0.719 billion during quarter ended September 2011. Commercial borrowings surged by $5.25 billion, while export credit galloped $0.985 billion at endSeptember 2011 over its level end-June 2011. Overall longterm debt increased $6.06 billon, while short-tem debt increased by $ 3.06 billion, primarily on account of sharp increase in short-term trade credits.
Outlook
The rising foreign debt amid sharp weakening of the Indian rupee has raised concerns for higher debt service burden. The huge and rising increasing external commercial borrowing and high debt service burden can impact the profitability and the balance sheets of corporate borrowers. The recent measures from the RBI such as higher ceiling on interest rates that corporate can pay on foreign loans would help corporate manage their forex debt. The deregulation of foreign deposit rates with sharply raising deposit rates can help Indian banking sector to attract more funds. But both these moves have potential to fuel Indias external debt. Meanwhile, the import growth remains strong, despite moderation in export growth, leading to higher rise in short term trade credits. However, the appreciation of US dollars against major currencies would trim foreign debt stock inclusive of valuation effects.
Government and Non-Government External Debt

The government debt stood at US$ 79.3 billion, while nongovernment debt amounted to US$247.3 billion at end September 2011. The share of government debt in total external debt declined from around 33% at end March 2006 to 25.5% at end March 2011 and further to 24.3% end
(US $ billion)
41
The Macro Picture I Public Finance
Public Finance
Deficit up on weak revenues and rising subsidy bill
The economic slowdown, sluggish revenues and rising subsidies have hurt the government's plan to keep the fiscal deficit under the set target for FY12. The fiscal deficit for the current financial may be more than the budget estimate of 4.6% of gross domestic product. In current financial year, till November 2011 fiscal deficit to BE (budgetary estimates) ratio stood at 85.6% compared with 48.9% in the same period a year ago. Indias fiscal deficit recorded 76.95% growth to Rs 46360 crore in November 2011 compared with Rs 26199 crore in October 2011. It has recorded 91.68% growth in November 2011 compared with November 2010. The revenue deficit to BE stood at 91.3% in April-November 2011 compared with 50.7% in AprilNovember 2010. On other hand, primary deficit to BE stood
at 129.4% till November 2011 in the current FY compared with 39.2% in same period a year ago. The growing fiscal deficit on one hand and limited source of finance on other side makes scenario more complex. The external finance has been very weak in recent past due to the global fragile macro economic scenario. External finance to BE stood at 45% till November in current FY compared with 65% in April-November 2010. It has recorded 82.32% fall in November 2011 compared with October 2011. On yearly basis, external finance recoded 27.82% fall in November 2011 compared with November 2010. There has been growing pressure on domestic financing as it is stood at 87% till November 2011 in current FY compared with 48% in April-November 2010. In domestic
GOI-Central government non-debt receipts MONTH TAX REVENUE NON-TAX REVENUE REVENUE RECEIPT
Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug 2011 Sep 2011 Oct 2011 Nov 2011 10062 21834 52098 28827 25679 94915 38278 24941 94514 35329 34147 112166 3774 19329 55596 35379 30817 109836 36770 28969 2917 9844 103055 9887 26596 12520 11113 4150 13038 9264 7358 11745 3106 2507 6608 10856 20578 7142 17414 4132 12979 31678 155153 38714 52275 107435 49391 29091 107552 44593 41505 123911 6880 21836 62204 46235 51395 116978 54184 33101
RECOVERIES OF LOANS
254 13 857 979 1258 895 958 1053 2324 1111 804 2246 5589 86 824 1613 887 1025 898 859
OTHER RECEIPTS
0 1078 0 80 960 117 25 18922 1562 0 1 102 0 1145 0 0 0 1586 0 0
TOTAL RECEIPTS
13233 32769 156010 39773 54493 108447 50374 49066 111438 45704 42310 126259 12469 23067 63028 47848 52282 119589 55082 33960
APR-NOV
2010-11 2011-12 Figures in Rs crore 296634 320470 180082 72343 476716 392813 6267 11781 21182 2731 504165 407325
42
Capital Market
I January 2012
The Macro Picture I Public Finance financing particularly market borrowing to BE stood 96% in April-November 2011 compared with April-November 2010. It has recoded 46.59% growth in April- November 2011 compared with April-November 2010. growth rate stood at 9.3% in November 2011 compared with November 2010. In plan expenditure, capital expenditure to BE stood at 42.9% compared with 55.3% in same period a year ago. It has recorded 3.3% fall in November 2011 compared with October 2011. On other side, it has recorded 11.8% growth in November 2011 compared with same month a year ago. Total expenditure to BE stood at 60.5% till November 2011 in current FY compared with 62.3% in same period a year ago. It has recorded 12% fall in November 2011 compared with October 2011. However growth registered at 9.6% in November 2011 compared with November 2010.
Expenditure
Non plan expenditure to BE stood at 66.1% till November 2011 compared with 65.2% in the same period last year. It has recorded 4% growth in November 2011 compared with November 2010. On yearly basis, it has recorded 9.8% growth in November 2011 compared with November 2010. In nonplan expenditure, capital expenditure to BE stood at 653% till November 2011 in current FY compared with 45.4% in same period a year ago. It has recorded 162.3% growth in November 2011 compared with November 2010. Plan expenditure to BE stood at 50.1% in April-November 2011 compared with 56.5% a year ago. It has recorded 14.1% fall in November 2011 compared with October 2011. However
Revenue
Revenue receipts to BE stood at 49.7% in April-November 2011 compared with 69.9% in same period a year ago. It has recorded 38.91% fall in November 2011 compared with October 2011. However, recorded 13.78% growth in November 2011 compared with same month a year ago. Tax
Gross fiscal deficit and its components MONTH GFD EXTERNAL MARKET FINANCE BORROWINGS
Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct 2011 Nov 2011 53993 46914 -60711 50719 60510 -18173 29084 24186 -15273 50973 52866 93955 74661 56065 31927 66100 44770 7287 26199 46360 834.29 9518.43 -49.09 353.86 270.99 1032.15 1783.97 856.61 2068.52 -118.11 60.34 6975.44 555.04 1179.66 -953.32 547.03 247.28 792.5 3496.78 618.27 39102 60085.52 8888.96 -20025.32 69944 29504.6 51448.8 22406.11 31028.73 24814.78 2575.03 7179.3 43921.89 61243.43 69446.3 30178.11 45327.43 26957.23 32728.74 32845.91
SMALL SAVINGS
4432.36 4305.98 4353.4 5394.14 5371.05 3656.67 2657.32 3544.12 2961.82 -228.51 -787.75 529.65 -1909.36 -826.64 820.1 -2691.21 -1583.12 -1682.33 -1725.07 -1426.64
PPF
-827.11 516.07 469.06 682.96 593.52 1048.88 490.87 715.40 1589.2 1018.27 2115.84 14025.25 -1488.64 540.23 279.15 722.47 651.48 619.63 298.4 890.56
STATE PROVIDENT FUNDS

1018.92 82.54 903.11 242.29 -52.68 1551.26 324.07 153.71 1445.36 79.49 19.4 6518.4 1346.81 -729.98 446.57 126.92 12.48 958.93 672.58 289.11
SPECIAL DEPOSITS
-6.86 -173.06 -35.97 51.28 -173.08 -138.63 -124.87 -374.40 -497.81 -80.24 -323.63 174.06 -60.05 -465.91 -53.03 -632.91 -532.31 -643.36 -92.06 123.2
OTHER FINANCING
-41871.96 9166.89 7652.39 -6320.74 -7200.84 -13208.66 -5589.62 20168.87 10393.85 -18547.26 16391.77 15023.11 -23673.14 8831.31 -19240.82 -883.32 3182.41 -17234.73 -14066.71 20043.39
REVENUE DEFICIT
50638 30582 -70643 39498 50277 -25431 19909 45328 -23849 39447 44951 44146 60615 49454 24552 60299 35080 -8220 21232 37445
APR-NOV
2010-11 2011-12 186522 353369 14601.21 6483.24 261354.67 342649.04 33715.04 -11024.27 3689.65 2513.28 4223.22 3123.42 -975.59 -2356.43 -37203.67 -43041.61 140158 280457
Figures in Rs crore
Capital Market
I January 2012
43
The Macro Picture I Public Finance revenue to BE stood at 48.2% till November 2011 in current FY compared with 55.5% in same period a year ago. Non-tax revenue to BE stood at 57.7% till November 2011 compared with 121.6% in same period a year ago. Non tax revenue recorded 76.27% fall in November 2011 compared with October 2011. Overall, total receipt to BE stood at 48.2% compared with 69.3% in same period a year ago. It has recorded 38.35% fall in November 2011 compared with October 2011. Till November 2011 in the current FY it has registered 30.79% fall compared with April-November 2010. as public finances have been under stress. A slowing economy has hurt revenue receipts while volatile stock markets have hit the government's plans to raise Rs 40000 crore from disinvestment in state-run companies. With this modification, the gross market borrowing through dated securities during 2011-12 will further increase by Rs 40000 crore over the already announced increase of Rs 52872 crore. In September 2011, the government had increased its market borrowings by Rs 52872 crore to meet funding needs.
Subsidy & crude oil raises deficit

Fertilizer subsidy could be Rs 90000 crore as compared to the budget estimates of Rs 50000 crore. The government is also expected to shell out an additional Rs 45000 crore to compensate oil firms for selling auto and cooking gas fuels below market prices. The food subsidy bill is also expected to be significantly more than budgeted Rs 60572 crore.
Government borrowing for remaining FY12 rises

Government set to borrow Rs 40000 crore extra from the market, a move prompted by sluggish tax revenues and mounting spending commitments. This is the second additional borrowing announced by the government for the current fiscal
Central government expenditure NON-PLAN EXPENDITURE MONTH INTEREST OTHER REV. REVENUE CAPITAL PAYMENTS EXPENDITURE EXPENDITURE EXPENDITURE
Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct 2011 Nov 2011 14134 16588 9501 18153 27245 17158 12585 19180 11760 25463 29402 33570 15078 21342 13767 17354 32702 22256 22022 21389 33362 22729 37456 42218 52234 37530 38147 39795 37917 40616 24641 85383 38009 26410 37546 65089 38535 48187 33412 32348 47496 39317 46957 60371 79479 54688 50732 58975 49677 66079 54043 118953 53087 47752 51313 82443 71237 70443 55434 53737 710 12578 7090 8381 8870 2333 5891 -4097 7450 7895 3225 34476 17036 3515 4390 3961 5481 10612 2477 6498
TOTAL
48206 51895 54047 68752 88349 57021 56623 54878 57127 73974 57268 153429 70123 51267 55703 86404 76718 81055 57911 60235
REVENUE EXPEND.
16121 22943 37553 17841 23073 27316 18568 15444 34026 17961 32413 49104 14408 23538 35443 24091 15238 38315 19982 16809
PLAN EXPENDITURE CAPITAL TOTAL EXPEND.

2899 4845 3699 3899 3581 5937 4267 2930 5012 4742 5495 17681 2599 4327 3809 3453 5096 7506 3388 3276 19020 27788 41252 21740 26654 33253 22835 18374 39038 22703 37908 66785 17007 27865 39252 27544 20334 45821 23370 20085
TOTAL EXPEND.
67226 79683 95299 90492 115003 90274 79458 73252 96165 96677 95176 220214 87130 79132 94955 113948 97052 126876 81281 80320
APR-NOV
2010-11 2011-12 134544 165910 303471 319536 438015 485446 41756 53970 479771 539416 178859 187824 32057 33454 210916 221278 690687 760694
Figures in Rs crore
44
Capital Market
I January 2012
The Macro Picture I Financial Sector I Capital Market
Capital Market
Market loses ground ahead of Q3 earnings
Concerns about Q3 December 2011 earnings pulled the market lower in the last month of calendar 2011. The BSE Sensex lost 668.54 points or 4.14% in December 2011. The barometer index slumped 5,054.17 points or 24.64% in calendar 2011. From a 52-week high of 20,664.80 on 3 January 2011, the Sensex has lost 5,209.88 points or 25.21%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 319.06 points or 2.1%. Trading for the month began on a firm note as key benchmark indices scaled two-week highs on 1 December 2011 after the worlds six major central banks announced measures to tame a liquidity crunch for European banks by providing cheaper dollar funding. A move by Chinas central bank to cut the reserve ratio requirement for Chinese banks to 21% from 21.5% effective 5 December 2011 also boosted sentiment. Key benchmark indices hit their highest level more than 2-week highs on 2 December 2011 as European stocks rose on hopes of a bold solution to the 2-year old euro-zone debt crisis at a key European Union summit on 8-9 December 2011. Key benchmark indices scaled 3-week closing highs on 7 December 2011 on firm global cues. The market tumbled on 8 December 2011, after a newspaper report suggested that industrial output declined by 7% in October 2011, falling for the first time since June 2009, ahead of the official release of the data on 12 December 2011. The market fell for the second
straight day on 9 December 2011 on uncertainty on whether European leaders will be able to cobble up a far-reaching plan at a crucial European Union (EU) summit to tackle the regions festering debt crisis. Key benchmark indices declined for the third straight day on 12 December 2011 to settle at their lowest level in more than 2 weeks as data showing decline in industrial production in October 2011 for the first time in more than two years and after a plan outlined at the EU summit on 8-9 December 2011 for stricter budget rules for European nations failed to ease worries about euro-zone debt crisis. The market on 13 December 2011 snapped a three-day losing streak on speculation the Reserve Bank of India (RBI) will start cutting interest rates next year to support flagging economic growth. Key benchmark indices dropped in choppy trade on 14 December 2011 as higher-than-expected inflation reading for November 2011 dashed hopes that the RBI will advance a rate cut to early next year to stimulate the economy. Key benchmark indices tumbled on 16 December 2011 to hit their lowest level in more than two years after Reserve Bank of India (RBI) kept cash reserve ratio (CRR) and key short-term lending rate viz. the repo rate steady after a midquarter monetary policy review. A section of investors had expected a cut in interest rates or CRR from RBI after recent data showed a moderation in inflation and slower economic growth. They were left disappointed with the RBIs decision
Sensex PERIOD
Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov 2011 Dec 2011
HIGH
20552 20665 18691 19575 19811 19254 18873 19132 18440 17212 17908 17702 17004
LOW
19075 18038 17296 17792 18976 17786 17314 18132 15766 15801 15745 15479 15136
CLOSE
20509 18328 17823 19445 19136 18503 18846 18197 16677 16454 17705 16123 15455
VAR. (%)$
5.1 -10.6 -2.8 9.1 -1.6 -3.3 1.9 -3.4 -8.4 -1.3 7.6 -8.9 -4.1
VAR. (%)#
17.4 12.0 8.5 10.9 9.0 9.2 6.5 1.8 -7.2 -18.0 -11.6 -17.4 -24.6
Nifty PERIOD
Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov 2011 Dec2011
HIGH
6147.3 6181.05 5599.25 5872 5944.45 5775.25 5657.9 5740.4 5551.9 5169.25 5399.7 5326.45 5099.25
LOW
5721.15 5416.65 5177.7 5348.2 5693.25 5328.7 5195.9 5453.95 4720 4758.85 4728.3 4639.1 4531.15
CLOSE
6134.5 5505.9 5333.25 5833.75 5749.5 5560.15 5647.4 5482 5001 4943.25 5326.6 4832.05 4624.3
VAR. (%)$
4.6 -10.2 -3.1 9.4 -1.4 -3.3 1.6 -2.9 -8.8 -1.2 7.8 -9.3 -4.3
VAR. (%)#
17.9 12.8 8.3 11.1 8.9 9.3 6.3 2.1 -7.4 -18.0 -11.5 -17.6 -24.6
# change over corresponding month of previous year $ change over previous month of the current year
# change over corresponding month of previous year $ change over previous month of the current year
Capital Market
I January 2012
45
The Macro Picture I Financial Sector I Capital Market
BSE Sensex
Foreign investments inflow (Rs cr) PERIOD GROSS GROSS NET NET INVEST. PURCHASES SALES INVST.* IN US$ MLN**
Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 57,851.40 53019.3 54,174.40 52,010.30 55,405.20 54,077.70 48914.3 47,722.00 46,906.20 39,612.40 44,075.80 62,437.20 46121.8 46,961.10 58,624.60 50,833.30 46,047.60 59747.9 47,880.50 45,229.20 43,810.30 43,977.80 -4,585.50 6897.8 7,213.30 -6,614.40 4,572.20 8,030.10 -10833.6 -158.3 1,677.40 4,197.90 97.9 -1,006.59 1540.36 1,617.76 -1,480.39 1,014.10 1,807.01 -2394.42 6.97 346.51 -787.08 31.49
Nifty
Nov 2011 Dec2011
* change base on month on month. ** change base on year on year
on status quo on CRR and repo rate. The market on 19 December 2011 extended losses for the fourth day in a row as data showing sustained selling by foreign funds over the past few days, ongoing worries about euro-zone sovereign debt crisis and geopolitical worries arising from death of North Korean leader Kim Jong-il hurt sentiment adversely. The barometer index, BSE Sensex, reached its lowest closing level in nearly 28 months. A sell-off in late trade on 20 December 2011 pushed the key benchmark indices to their lowest level in 28 months. The market surged on 21 December 2011 after Moodys Investors Service raised Indias local-currency debt rating by one level to investment grade from the highest junk grade. Comments by a senior government official that the government is looking at all options to attract foreign capital inflows also helped lift investor sentiments as the Sensex snapped a fiveday losing streak. The market on 22 December 2011 edged higher for the second straight day, helped by firm European stocks and after the latest showed that food inflation eased sharply to 1.81% in the year to 10 December 2011. Key benchmark indices on 26 December 2011 reached their highest closing level in nearly two weeks as strong economic data in the US, the worlds
46
biggest economy, boosted sentiment. Key benchmark weakened again towards the end of the months on concerns about upcoming Q3 December 2011 corporate earnings. Credit rating agency Moodys Investors Service on 14 December 2011 said that the recent sharp decline in the value of the Indian rupee against the dollar is generally exerting only a moderate impact on rated Indian companies. Risks for companies holding large amounts of dollar denominated debt are also manageable in the near term, given that debt maturities are limited for this time frame, Moodys said. This means Indian companies rated by Moodys do not have a significant dollar outflow at a time when the Indian rupee is losing ground. The Reserve Bank of India (RBI) has allowed foreign equity investors in Indian companies, overseas organisations or individuals to hedge their rupee debt (external commercial borrowings denominated in Indian rupees) that they may have extended to their Indian partners or to any other entity like a non-government organisation (NGO) or an MFI (microfinance institution). This is to encourage foreign debt to flow into India, so that Indian companies are not choked for funds. On 2 September 2011, the RBI permitted foreign equity investors in Indian companies to extend external commercial borrowing (ECB) to their Indian partners in Indian rupees. However, this debt was not allowed to be hedged until now. To prevent the adverse exchange rate movement to impact debt investments of these foreign entities, the RBI has permitted them to hedge the currency risk that they run with Indian banks.
Market outlook
Euro-zone debt worries continue to haunt bourses. There is speculation that European banks might unwind their
The Macro Picture I Financial Sector I Capital Market investments in Asia to cover losses from their holdings of risky European government debt. The next major trigger for the market is Q3 December 2011 corporate earnings, which will start tricking from second week of January 2012. The focus will be on guidance from the company managements on outlook for the remaining part of the year and for the next year. Analysts expect weak Q3 December 2011 results due to lower volume growth in a slowing economy, higher raw material costs and higher interest charges. On the macro front, data on 14 January 2012 on inflation for December 2011 and on 12 January 2011 on industrial production for November 2011, will provide cues on the central banks likely policy stance at the third quarter review of Monetary Policy 2011-12 scheduled on 24 January 2012. Inflation based on wholesale price index (WPI) eased to 9.1% in November 2011, from 9.7% in October, driven mainly by sharp fall in primary articles inflation. Provisional inflation figure for September 2011 was revised upward to 10% from 9.7% reported earlier. Industrial production declined 5.1% in October 2011, snapping consistent growth for the preceding 29 months in a row. The cumulative growth for the period April-October 2011-12 decelerated to 3.5% over 8.7% growth in the corresponding period of the previous year.
BSE
VOLUME RS. CRORE %CHANGE
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov 2011 Dec2011 312667904 434222368 375019072 231010800 286391296 270021152 249463056 295637952 333794240 308550912 351768320 370576288 -20.1 22.7 1.8 -11.2 -28.3 -46.0 -24.5 -5.0 -0.3 6.8 21.5 26.8
NO OF TRADES NUMBER %CHANGE

5879192 7042606 5715431 4071818 5196004 4218866 3765014 5390063 5806265 5276706 5700996 6268881 2.8 28.1 14.2 -15.5 -22.5 -41.2 -26.5 4.8 13.5 20.8 19.6 20.2
NET TURNOVER RS. THOUSAND %CHANGE

204371165.2 213704507.4 173780287.5 132711915.5 159767986.2 133886320.6 116339458.1 140648120.3 148252868.6 137899589.6 147488423.9 147730169.9 -14.8 20.4 -19.7 -23.9 -26.4 -40.7 -33.1 -23.4 -25.1 -20.7 -18.4 -22.4
MARKET CAP RS. CRORE %CHANGE

2804574.3 2719404.5 2959166.8 2920807.5 2808224 2848301 2756826.5 2796939 2744192.5 2929156.8 2718731.5 2603663.8 12.4 9.6 12.8 11.8 9.0 5.7 1.6 2.1 -9.6 -3.0 -7.2 -16.3
NSE
VOLUME RS. CRORE %CHANGE
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov 2011 Dec 2011 3071885312 3733423616 3210946816 2162720000 2394065664 2362540288 2315725056 3104805376 3490694656 2957660160 3295122432 3430146560 -20.8 4.9 -6.2 -31.4 -38.9 -41.5 -30.6 -3.4 -2.6 1.8 -0.2 14.7
NO OF TRADES NUMBER %CHANGE

40116900 45310856 41126984 31245960 37743888 34954288 34250628 42984868 45336960 38972976 43232248 45029704 8.0 29.0 16.5 -6.8 -8.0 -15.9 -2.7 22.3 23.8 14.7 17.6 21.9
NET TURNOVER RS. THOUSAND %CHANGE

1460245234 1496562139 1352254095 1133285343 1196028199 1069377520 1026402288 1255275364 1316167221 1132027838 1206536503 1172418331 -5.5 25.4 1.7 -12.5 -17.3 -25.7 -19.7 -2.8 -11.3 -21.2 -18.7 -18.0
MARKET CAP RS. CRORE %CHANGE

3480761 3356892 3678345 3637100 3494285 3534010 3438754 3149416 3114350 3545482 3271526 3131053 11.4 7.6 11.1 10.0 9.0 5.7 1.8 -7.6 -18.0 -5.9 -10.7 -18.5
Capital Market
I January 2012
47
The Macro Picture I Financial Sector I Mutual Fund
Mutual Fund
Debt Funds Outperform Equity Funds in CY 2011
Assets Under Management (AUM) trend of the domestic mutual fund (MF) industry during the Calendar Year (CY) 2011, indicates that it had been volatile due to various reasons such as weakness in the equity markets, volatile fund flow into income and liquid funds as most of them were institutional investors, who had redeemed their investments when they had any financial commitments. Moreover, the rising interest rates during CY 2011, lead to outflow of funds from Gilt Fund category. However, the positive had been the rising gold prices, which lead to the increase in AUM of Gold Exchange Traded Funds (ETF); moreover there had been good inflow of funds into this category. Returns of equity funds during CY 2011 were negative, due to policy uncertainty, sticky inflation and global risk aversion. Indias GDP growth slowed to 6.9% in Q2 FY12 from 8.4% in Q2 FY11. Not only did growth slowdown, but also suffered from high inflation as WPI remained sticky in the 9-10% range for most of 2011. As a result, the RBI was forced to raise repo rate by 225bps during the year. Also, concerns regarding the sovereign debt crisis in Europe created further headwinds for investors. Mid and small cap stocks witnessed a steeper selloff compared to large caps. The sell-off was fairly broad-based with all sectoral indices, except FMCG, closing in the negative territory. Real estate, metals and capital goods indices were the top losers amidst concerns of slowdown in investment activity. Among the sectoral funds, FMCG Funds was the only gainer by 11.83% during the year ended 30 December 2011. On the flipside, Banking Funds decline the most by 31.11%, followed by Infotech Funds that declined by 18.24% and Pharma Funds by 8.23%. Among the major equity fund category, Index Funds fell by 24.52%, followed by Mid Cap Funds that fell by 24.22%, Large Cap Funds by 23.29%, Tax Saving Funds by 23.26% and Multi Cap Funds by 22.65%. Debt funds outperformed equity funds in CY 2011. Among the debt fund categories, Short Term Income Funds was the top performer by 8.98%, followed by Floating Rate Income Funds Short Term by 8.86%, Ultra Short Term Funds by 8.79%, Floating Rate Income Funds Long Term by 8.61%, Income Funds Medium & Long Term by 8.36%, Liquid Funds by 8.32%, Gilt Funds Short Term by 6.58% and Gilt Funds Medium & Long Term by 5.57%. Arbitrage Funds and Monthly Income Plans were the gainers among the Hybrid Funds that gained by 6.82% and 2.11% respectively. On the flipside, Equity Oriented
48
Transactions by mutual funds in 2011 EQUITY (RS CR) DEBT (RS CR) TRANSACTION GROSS GROSS NET PURC/ GROSS GROSS NET PURC/ DATE PURCHASES SALES SALES PURCH SALES SALES
January February March April May June July August September October November December Total 12332.5 11741.6 13205.8 11778.6 10595.2 10848.5 9629.9 10093.5 12205.8 11770.9 10516.5 9693.3 590.8 1427.1 -253.3 67257.3 57881.4 87949.9 29830.8 37426.6 35329.6 22551.6 60094.6 27855.5 38373.2 62959.9 51133.3 -4171.5
-463.7 101333.4 434.7 823.4 652.2 2523.9 -777.1 -361.7 809.8 46961.4 92155.8 66195.7 59739.3 86020.8 58011.7 73294.8
56973 35182.6 50981.1 15214.6 63696.8 -3957.7
11642.9 10990.6 13640.2 11116.7
9649.2 10426.5 9307.8 10789.4 8808.3 9669.5 9979.7 8228.1
62815.3 23205.8 43148 14863.6 63476 9818.9
580.1 151983.4 101005.2 50978.5 5986.2 948784.9 656856.9 291928.4
132323.5 126337.5
Balanced Funds declined the highest by 16.22%, followed by Debt Oriented Balanced Funds by 4.53%. Among the ETFs, Other ETFs fell by 24.48%, while Gold ETFs rose up 30.34%. Among Fund of Funds (FoF), Global FoF, declined by 5.07% and FoF Domestic fell by 5.15%. On the other side, funds investing in overseas equities fell up 11.45%.
Equity & Debt Investments by Mutual Funds
Domestic mutual funds turned out to be net buyers in equity worth Rs 5986.2 crore during CY 2011, as against net selling of Rs 27830.8 crore during CY 2010. Mutual Funds were net buyers in equity in eight months during 2011, while they were net sellers in the remaining four months. Net buying was highest at Rs 2523.9 crore in August and net selling was highest at Rs 777.1 crore in September. The dip in equity market during the year had resulted investors to purchase more units of equity funds. On the other hand, mutual funds were net buyers in debt instruments worth Rs 291928.4 crore in CY 2011, as against a net buying worth Rs 194978.1 crore in CY 2010. Mutual Funds were net buyers in debt in ten months during 2011, while they were net sellers in the remaining two months. Net buying was highest at Rs 62959.9 crore in April and net selling was highest at Rs 4171.5 crore in May.
The Macro Picture I Financial Sector I Mutual Fund
Average AUM of MF Industry
Average assets under management (AAUM) of the MF industry declined for the second consecutive quarter in December 2011. It fell by 4.35% (by Rs 31033.89 crore) to Rs 6.8 lakh crore during the quarter ended December 2011 as against Rs 7.12 lakh crore registered during the quarter ended September 2011. The decline was basically due to the redemptions by the corporate and banks from their debt fund investments to meet their quarter end commitments. Moreover, the weakness in the equity markets had resulted in decline in asset base of equity funds during the quarter. Top five fund house based on AAUM, witnessed fall in asset base during the quarter. Among the top five fund houses based on AAUM, assets of Reliance MF declined by 9.22% (by Rs 8354.80 crore) to Rs 82305.81 crore, it was followed by ICICI Prudential MF that fell by 7.78% (by Rs 5849.31 crore) to Rs 69367.79 crore, assets of UTI MF fell by 7.61% (by Rs 4762.52 crore) to Rs 57817.34 crore, assets of Birla Sun Life MF lost by 5.98% (by Rs 3839.76 crore) and assets of HDFC MF dropped by 3.48% (by Rs 3199.09 crore) to Rs 88628.03 crore. Of the 42 mutual funds, 18 fund houses registered increase
in Average AUM while the rest resulted in decline. There were five mutual funds whose AAUM surged by over 23%, which includes JPMorgan MF that grew by 42.36%, Pramerica MF by 38.51%, Baroda Pioneer MF by 34.81%, Edelweiss MF by 28.71% and IDBI MF by 23.88%. Thirteen fund houses registered increase in the range of over 1% to 14%. On the flipside there were seven fund house whose AAUM decline in the range of over 12% to 38%.
Risk-Return Analysis for Equity Oriented Balanced Funds
Equity Oriented Balanced Funds had delivered an average three year return of 15.85% as on 30 December 2011. We have tried to explain with the help of a diagram, which is divided into four quadrants, with each quadrant containing schemes of a particular risk-return profile. The size of the bubble indicates the size of the fund. (Returns are compounded annualized and only open ended growth schemes are considered). Funds Positioned in Low Risk High Return quadrant: During the three year period ended 30 December 2011, equity oriented balanced funds covered in the Low Risk High Return
49
The Macro Picture I Financial Sector I Mutual Fund quadrant delivered returns in the range of 16.16% to 27.07%. There were nine schemes which appeared in this quadrant. The schemes in the low-risk high returns quadrant outperform the peer group on the risk-adjusted returns basis as they deliver higher returns compared to the peers without exposing the portfolio to very high risk. HDFC Childrens Gift Fund-Investment Plan had taken a low risk of 0.93% and had delivered a three year return of 27.07%. The other schemes which had been in the same quadrant include, HDFC Prudence Fund with a low risk of 0.97% had delivered a high return of 25.35%. HDFC Balanced Fund had taken a low risk of 0.90% and delivered a high return of 24.86%. Birla Sun Life 95 Fund with a low risk of 0.97% delivered high return of 20.71%. Canara Robeco Balance with a low risk of 1% delivered high return of 19.61%. ICICI Pru Balanced Fund with a low risk of 0.86% delivered high return of 17.39%. Funds Positioned in High Risk High Return quadrant: The schemes in the high-risk high returns quadrant follow a very aggressive approach and deliver high compounded annualized growth rate (CAGR). The equity oriented balanced funds covered in the High Risk High Return quadrant had posted returns in the range of 19.21% to 20.99%. Tata Balanced Fund had taken a high risk of 1.07% and had delivered a three year return of 20.99%. The other schemes which had been in the same quadrant include Reliance Regular Savings Fund - Balanced with a high risk of 1.08% had delivered a high return of 20.01%. ICICI Pru Child Care Plan-Gift Plan had taken a high risk of 1.09% and delivered a high return of 19.21%.
AUM of MF for Quarter ended December 2011* MUTUAL FUND NAME AUM AUM CHANGE VAR (RS CR) (RS CR) (RS CR) (%) DEC SEPT 2011^ 2011^
AIG Global Invest Group MF 718.07 Axis Mutual Fund 8598.14 Baroda Pioneer Mutual Fund 4581.68 Bharti AXA Mutual Fund 161.2 Birla Sun Life Mutual Fund 60377.27 BNP Paribas Mutual Fund 4805.24 Canara Robeco Mutual Fund 7356.03 Daiwa Mutual Fund 858.17 Deutsche Mutual Fund 13314.35 DSP BlackRock MF 30564.9 Edelweiss Mutual Fund 575.56 Escorts Mutual Fund 204.8 Fidelity Mutual Fund 8796.87 Franklin Templeton MF 35641.63 Goldman Sachs Mutual Fund 4349.19 HDFC Mutual Fund 88628.03 HSBC Mutual Fund 4897.22 ICICI Prudential MF 69367.79 IDBI Mutual Fund 6101.89 IDFC Mutual Fund 26475.93 IIFL Mutual Fund 25.77 Indiabulls Mutual Fund 1307.99 ING Mutual Fund 1069.3 JM Financial Mutual Fund 6915.35 JPMorgan Mutual Fund 6758.72 Kotak Mahindra Mutual Fund 29738.06 L&T Mutual Fund 4616.09 LIC NOMURA Mutual Fund 6222.57 Mirae Asset Mutual Fund 422.47 Morgan Stanley Mutual Fund 2086.07 Motilal Oswal Mutual Fund 232.13 Peerless Mutual Fund 4390.44 Pramerica Mutual Fund 2084.41 PRINCIPAL Mutual Fund 3941.59 Quantum Mutual Fund 173.3 Reliance Mutual Fund 82305.81 Religare Mutual Fund 11814 Sahara Mutual Fund 472.95 SBI Mutual Fund 41551.51 Sundaram Mutual Fund 14774.78 Tata Mutual Fund 21473.31 Taurus Mutual Fund 4599.76 Union KBC Mutual Fund 540.15 UTI Mutual Fund 57817.34 Grand Total 681707.84 722.62 7544.78 3398.59 176.13 64217 5243.24 6920.15 789.08 12760.8 30083.7 447.17 205.73 9119.51 34410.4 4357.59 91827.1 4952.13 75217.1 4925.81 28908.2 1036.05 6468.27 4747.7 32100.8 4135.49 7075.33 446.62 1971.42 277.68 5608.38 1504.89 4535.62 156.69 90660.6 11042.1 455.83 47731.4 15109.6 22633.8 5367.34 869.37 62579.9 712742 -4.55 1053.35 1183.09 -14.94 -3839.8 -437.99 435.89 69.09 553.53 481.19 128.39 -0.93 -322.64 1231.26 -8.4 -3199.1 -54.91 -5849.3 1176.08 -2432.3 33.25 447.08 2011.02 -2362.7 480.6 -852.76 -24.15 114.65 -45.54 -1217.9 579.52 -594.03 16.6 -8354.8 771.86 17.12 -6179.9 -334.79 -1160.5 -767.57 -329.22 -4762.5 -31034 -0.63 13.96 34.81 -8.48 -5.98 -8.35 6.3 8.76 4.34 1.6 28.71 -0.45 -3.54 3.58 -0.19 -3.48 -1.11 -7.78 23.88 -8.41 3.21 6.91 42.36 -7.36 11.62 -12.05 -5.41 5.82 -16.4 -21.72 38.51 -13.1 10.6 -9.22 6.99 3.76 -12.95 -2.22 -5.13 -14.3 -37.87 -7.61 -4.35
Outlook
* AUM pertains to 44 Mutual funds ^ Data for Mutual Funds is as at the end of the respective quarter. AUM: Asset Under Management
Equity markets will mirror the economic recovery in CY 2012. Inflation which was a concern in CY 2011 will be less an issue in CY 2012, due to slowdown in domestic demand engineered by tight monetary policy and base effect. Once the markets recover, we can expect more flow of funds into equity funds. On the fixed income markets side, domestically, slower GDP growth combined with fall in inflation may cause RBI to cuts interest rate in Q1 or Q2 of FY2013. At the same time slower growth in the Emerging Markets along with any shocks coming from the Euro zone countries due to the sovereign debt crisis may lead to continued lower interest rates of safe haven economies. This presents a very attractive opportunity for investors in fixed income markets with a time horizon of 6 months or more as there could be a sharp fall in interest rates in the next 2 to 3 quarters. However, in case fiscal deficit continues to be high or if there is a sharp upwards movement in commodities prices globally, the fall in interest rates could be moderate.
50
The Macro Picture I Financial Sector I Insurance
Insurance
Non-Life insurance sector improves global share
The growth in the first year premium income of life Insurers has been falling continuously, since March 2011 and the trend has continued in November 2011 also. The fresh premium collection of life insurers dipped 8% to Rs 6695.73 crore in November 2011. The fresh premium income of the 23 private life insurers fell 8% to Rs 2195.75 crore during November 2011. Among private insurers, 13 players including major players such as
First Year Premium Collection of Life Insurers NO. INSURER PREMIUM VARIATION (%) NOVEMBER APR-NOV NOVEMBER APR-NOV 2011 2011-12 2011 2011-12
Bajaj Allianz ING Vysya Reliance Life SBI Life Tata AIG HDFC Standard ICICI Prudential Birla Sunlife Aviva 204.72 41.69 132.67 306.03 70.37 237.87 418.50 125.60 35.23 1333.17 342.11 920.64 3171.63 604.26 2036.07 2628.77 1025.80 377.50 551.29 1082.14 422.06 32.11 242.87 120.22 180.22 172.70 426.44 114.05 54.53 472.50 356.64 2.15 16669.88 45758.99 62428.87 -7.6 -8.3 -8.1 -22.4 -17.6 -18.9 -28.3 0.8 -22.8 -20.4 -11.7 -18.4 1.5 3.0 -8.3 9.8 -4.6 -6.8 3.7 -34.1 -23.3 -30.9 -35.8 -37.5 1.5 85.9 193.9 71.0 -34.4 -6.4 -48.6 -19.2 -22.9 -5.3 -35.1 -20.7 -7.4 -15.5 -13.9 6.2 -36.3 -29.2 -48.9 -25.0 -33.9 -4.5 -8.7 21.9 49.5 17.4
SBI Life, HDFC Standard, Bajaj Allianz have recorded a drop in the premium income. Meanwhile, the private players such as ICICI Prudential, Birla Sunlife, Star Union Dia-ichi, IndiaFirst, ING Vysya, Kotak Mahindra Old Mutual Fund etc recorded growth in new premium collection during November 2011. The premium income of life insurers declined 19% to Rs 62428.87 crore in April-November 2011. Gross premium underwritten by non-life insurers increased 29% to Rs 4312.90 crore in November 2011 compared with Rs 3345.10 crore in November 2010. Public sector players witnessed a 20% growth in the gross premium collection to Rs 2448.10 crore, while the private non-life insurers also posted 42% health growth in premium collection to Rs 1864.80 crore in November 2011. The premium collection of non-life insurers has increased 24% to Rs 37360.23 crore in April-November 2011.
Life insurers performance in 2010-11
Kotak Mahindra Old Mut 70.93 Max New York Met Life Sahara Life Shriram Life Bharti Axa Life Future Generali Life IDBI Federal Life 132.13 52.08 4.49 28.61 13.93 21.40 21.52
Canara HSBC OBC Life 31.85 Aegon Religare DLF Pramerica Star Union Dai-ichi IndiaFirst Edelweiss Tokio Private Total LIC Grand Total 15.60 7.92 165.56 56.22 0.83 2195.75 4499.98 6695.73
Source: IRDA and Figures in Rs crore
In the global life insurance business, India ranked 9 among the 156 countries, for which data are published by Swiss Re. The share of Indian life insurance sector in global market was 2.69% during 2010, as against 2.45% in 2009. The increase in expenses was lower than the increase in the gross premium collected by the insurers in 2010-11. As such, the commission expenses ratio (commission expenses as a percentage of premiums) declined marginally to 6.29% in 2010-11 from 6.81% of 2009-10. The operating expenses of the life insurers increased by 14.04% in 2010-11i (11.84% in 2009-10). The number of offices of life insurers declined from 12018 as on 31 March 2010 to 11546 as on 31 March 2011. The life insurance industry have recorded grand premium collection of Rs 291605 crore in 2010-11 as against Rs 265447 crore in 2009-10, registering a growth of 10%. Private sector insurers posted 11% growth in their premium income, while LIC recorded a 9% growth in the premium income in 201011. The renewal premium accounted for 57% of the total premium received by the life insurers in 2010-11, while the first year premium contributed the remaining 43%. The renewal premium reported 6% growth in the financial year 2010-11. In financial year 2010-11, the life insurance industry reported net profit of Rs 2657 crore as against net loss of Rs 989 crore in 2009-10. Out of the 23 life insurers in operations during 2010-11, 12 companies reported profits. They are LIC, ICICI Prudential, Birla Sunlife, Max New York, Bajaj Allianz, SBI, Kotak Mahindra, Tata AIG, MetLife, Aviva, Sahara India and Shriram. LIC has reported net profit of Rs 1172 crore, showing an increase of 11% over Rs 1061 crore in 2009-10.
51
Capital Market
I January 2012
Life premium dips 18% in April-November
In the period April-November 2011, the first year premium income of the life insurers declined by 19% to Rs 62428.87 crore. The 23 private players reported 22% fall in the first year premium income to Rs 16669.88 crore, while the fresh premium income of LIC plunged 18% to Rs 45758.99 crore during AprilNovember 2011. The premium collection top of three private players such as of SBI Life, ICICI Prudential and HDFC Standard Life decreased 19%, 35% and 5%, respectively in April-November 2011. The premium collection of Max New York decreased 14%, while that of Bajaj Allianz Life, Reliance Life and Birla Sunlife declined 34%, 49% and 21%. Tata AIG, Kotak Mahindra, Shriram
Life and Canara HSBC OBC recorded 23%, 16%, 29% and 5% decrease in premium collection during April-November 11. The premium income of Aviva Life, Sahara Life and ING Vysya declined 7%, 36% and 6%, while that of Bharti Axa Life, Future Generali Life, IDBI Federal Life and Aegon Religare fell by 49%, 25%, 34% and 9%, respectively during April-November 2011.
Life insurers sold 230.70 lakh policies
Gross Premium underwritten by Non-life insurers INSURER PREMIUM VARIATION (%) NOVEMBER APR-NOV NOVEMBER APR-NOV 2011 2011-12 2011 2011-12
Royal Sundaram Tata-AIG Reliance General IFFCO-Tokio ICICI-lombard Bajaj Allianz HDFC ERGO General Cholamandalam Future Generali Universal Sompo Shriram General Bharti AXA General Raheja QBE SBI General L&T General Star Health & Allied Insur Apollo MUNICH Max BUPA New India National United India Oriental ECGC AIC Private Total Public Total Grand Total 114.10 131.79 129.50 145.49 440.29 246.13 144.53 120.06 73.11 43.59 108.40 70.77 2.10 16.55 11.32 38.21 21.90 6.94 572.32 582.06 642.91 407.08 87.42 156.31 954.97 1118.41 1146.45 1292.22 3394.95 2121.64 1187.65 902.51 601.14 252.00 742.15 530.22 13.90 133.57 84.53 806.96 212.13 60.05 5546.40 4835.77 5160.04 3926.46 615.18 1720.91 16.1 51.2 3.6 10.0 62.6 15.2 51.2 44.9 86.3 110.1 60.0 61.3 207.7 29.3 41.0 6.6 9.1 20.6 13.6 42.1 39.6 54.8 33.9 63.7 55.7 160.3
Life insurers have sold 230.70 lakh policies in April-November 2011, down by 12% compared to 263.52 lakh in the same period last year. Meanwhile, the number of lives covered declined 41% to 351.12 lakh compared to 593.92 lakh in April-November 2010. LIC sold 183.11 lakh policies, while covered 182.28 lakh lives in April-November 2011. All private players together sold 47.59 lakh policies and covered 168.85 lakh lives during April-November 2011. Among private players, ICICI Prudential sold the highest number of policies at 7.11 lakh polices, followed by Reliance Life and Bajaj Allianz with 6.15 lakh and 5.91 lakh policies. Birla Sunlife and SBI Life sold 5.11 lakh and 4.71 lakh policies, respectively, in April-November 2011. In November 2011, Life insurers sold 34.74 lakh policies, while covered 42.98 lakh lives, representing a growth of (+) 8% and (-) 68%, respectively.
Non-Life insurers performance in 2010-11
1097.9 1031.2 1021.7 4839.2 357.1 3.6 257.1 17.7 22.3 26.5 7.6 20.5 39.7 42.1 20.4 28.9 2.2 70.6 381.3 18.6 27.2 27.5 13.9 10.0 37.9 26.8 22.7 24.3
1864.80 15555.47 2448.10 21804.76 4312.90 37360.23
Source: IRDA and Figures in Rs crore
The share of the Indian non-life insurance premium in global non-life insurance premium increased to 0.58% in 2010, thereby improvising its global ranking to 19 in comparison to 26 in last year. The non-life insurers underwrote 793.41 lakh policies in 2010-11 as against 674.88 lakh in 2009-10, while premium collection increased to Rs 42576 crore in 2010-11 from Rs 34620 crore in 2009-10. The underwriting losses of the non-life insurance companies jumped 67.7% to Rs 9969 crore in 2010-11, while the operating expenses increased 26.5% to Rs 10,620 crore in 2010-11. During 2010-11, the net loss of non-life insurance sector was Rs 1019 crore. The public sector companies reported a net loss of Rs 162 crore, as against private sector companies which collectively reported a net loss of Rs 857 crore. Among the public sector companies, except New India, all other companies reported net profits during 2010-11. United India made a net profit of Rs 131 crore during 2010-11 (Rs 708 crore in 2009-10), the largest among the public sector companies. The other public sector companies which reported net profits were National and Oriental at Rs 75 crore and Rs 55 crore, respectively. New India incurred a net loss of Rs 422 crore. Among the 15 private insurance companies, while two companies reported profits, the remaining thirteen incurred net losses during 2010-11. The net profit of Bajaj Allianz was Rs 43 crore in 2010-11 (as against Rs 121 crore in 2009-10). Shriram reported net profit of Rs 13 crore (Rs 16 crore in 2009-10). The thirteen insurers which reported net losses were Reliance, HDFC Ergo, Future Generali, Universal
52
First Year Premium Collection of Life Insurers MONTH MONTHLY CUMULATIVE VARIATION (%) CURRENT PREVIOUS CURRENT PREVIOUS MONTHLY CUMUL
Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 5063.37 7190.08 5746.33 8220.26 5063.37 12253.45 18276.43 26787.68 40645.56 49046.01 55737.83 62428.87 5746.33 13966.59 25522.73 34249.71 52750.21 62361.34 69707.92 76989.89 -11.9 -12.5 -47.9 -2.5 -25.1 -12.7 -8.9 -8.1 -11.9 -12.3 -28.4 -21.8 -22.9 -21.4 -20.0 -18.9
Gross Premium Underwritten by Non-Life Insurers MONTH MONTHLY CUMULATIVE VARIATION (%) CURRENT PREVIOUS CURRENT PREVIOUS MONTHLY CUMUL
Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 5252.24 3828.78 4091.35 4239.80 4081.71 4892.09 4443.06 4312.90 4381.49 3001.18 3356.47 3467.32 3210.20 3630.25 3956.33 3345.10 5252.24 9082.98 13174.31 17414.33 21496.01 28604.82 33047.32 37360.23 4381.49 7382.67 10758.82 14226.14 17436.35 22744.29 26700.56 30047.07 19.9 27.6 21.9 22.3 27.1 34.8 12.3 28.9 19.9 23.0 22.5 22.4 23.3 25.8 23.8 24.3
6022.98 11556.14 8511.25 8726.98
13857.89 18500.49 8392.84 6690.71 6695.73 9612.74 7346.10 7281.97
Figures in Rs crore. Source: IRDA.
Figures in Rs crore. Source: IRDA.
Sompo, Bharti AXA, Raheja QBE, ICICI Lombard, Royal Sundaram, TATA AIG, IFFCO Tokio, Cholamandalam, SBI General and L&T General. As on 31 March 2011, the non-life insurance companies were operating from 6660 offices all over the country, of which the public sector and private sector companies had 4911 and 1749 branches, respectively.
Non-Life premium rises 24% in April-November
In the period April-November 2011, the gross premium growth of United India and National Insurance was strong at 28% and 27%, respectively. New India and Oriental also recorded a better growth of 19% and 14%. Among private players, the premium collection of ICICI Lombard and Bajaj Allianz increased 21% and 14%, respectively, while that of IFFCOTokio and Tata-AIG climbed up 9% and 41%, respectively. The premium collection of HDFC ERGO, Royal Sundaram, Future Generali, and Cholamandalam increased 42%, 29%, 55% and 40%, respectively, in April-November 2011. The premium collection of Shriram General and Bharti Axa General surged at the pace of 64% and 56%, while that of Universal Sompo rose 34% in April-November 2011. The premium income of Reliance General grew 7%, while the premium collection of SBI General, L&T and Raheja QBE stood at Rs 133.57 crore, 84.53 crore and Rs 13.90 crore during AprilNovember 2011.
engaged with the non life insurance companies for soliciting the insurance business. The authority has issued standard instructions and guidelines that are applicable for approval or renewal of agents of all training institutes. IRDA has decided to relax the code of conduct of insurance brokers and to permit limited claim consultancy. Broking companies may now offer claim consultancy for claims not exceeding Rs 1 crore. The authority has decided to open up the window for application for offline Agents Training Institutes (ATIs), which was closed on 15 November 2007 and has issued the guidelines for the same. IRDA reforming the Indian Motor Third Party Motor Pool System has ordered the dismantling of the existing Indian Motor Third Party Pool with effect from 31 March 2012. The authority has also indicated that the general insurers who have issued the policy will also be responsible for servicing them and settling the claims as and when they arise. IRDA has also decided to create a declined risk pool for act only Commercial Vehicle Third Party Insurance with effect from 1 April 2012.
Outlook
IRDA regulations and guidelines
The Insurance Regulatory Authority of India (IRDA) has issued the guidelines on the IPO norms for the life insurance companies, which will come into force on the date of their publication in the official gazette. According to the IPO norms, any life insurance company, which has completed 10 years of operations, can raise capital through public offering. IRDA has also issued guidelines pertaining to corporate agents. The non life insurers have been directed to lay down minimum business requirement for all corporate agents
The growth rate of life insurance sector has been weak due to the regulatory tightening of product distribution and design. However, the effect of the strict regulations on the growth of the life insurance sector is anticipated to trim down and the industry is expected to rebound in 2012. Strong growth is expected in commercial, motor, health and personal accident insurance due to the growing risk awareness among the people and the steps taken by insurance authority. The recent decision by IRDA to dismantle the existing motor third party pool and to create a declined risk pool has come as a relief for the non-life insurers, who suffered due to the massive third party motor pool losses. However, the motor premium rates are expected to rise after the said new norms come into effect. Despite sluggishness in economic growth, on an overall basis, the insurance sector is set to improve its performance in 2012.
53
The Macro Picture I Financial Sector I Interest rates
Interest rates
RBI indicate at reversing rate hike cycle
The yields on 10-year government stock, dipped 18 basis points to 8.56% during December 2011, in addition to 14 bps fall recorded in November. However, the yield has increased 12 bps in the quarter ended December 2011, while recording rise for sixth sequential fortnight. The yield has increased 65 bps in calendar year 2011, recording rise for third straight year in addition to the 23 bps in 2010 and a sharp 243-bps increase posted in 2009. The average trading volumes on the central banks gilts trading platform improved to record level of Rs 17501.19 crore during December 2011. The bond yields have eased for all maturities in December 2011 recording fall for the second month. The bond yields eased sharply in second half of November and in the first half of December 2011 on bonds buyback, slow down in GDP growth, hike in foreign investment limit in G-sec and corporate bonds. Meanwhile, the RBI also assured that it would take necessary steps to support liquidity. However, the concerns for fresh supplies of dated securities for the current fiscal weighed on sentiments in the gilts market causing sharp spike in yields during the second half of December 2011. Meanwhile, the extremely tight liquidity conditions on cash outflow toward advance tax payment also weighed up on yields. The inflow of foreign institutional investors (FIIs) flows posted a record inflow of Rs 21774.6 crore into domestic debt assets during December 2011 compared to an inflow of Rs 934.7 crore in October 2011. The domestic debt assets have attracted an inflow of FIIs worth Rs 30589.5 crore in financial year 201112 so far and Rs 42064 crore during calendar year 2011. The government has revised its market borrowing calendar for 2011-12, announcing additional borrowing of Rs 40000 crore over Rs 52872 crore hike announced in September 2011. As per the new calendar, the Government would raise Rs 116000 crore through market borrowing during Jan-March 2012.
rates. In its guidance on policy, the RBI has guided that based on the projected inflation trajectory, further rate hikes might not be warranted. It also said that from this point on, monetary policy actions are likely to reverse the cycle, responding to the risks to growth. RBI cautioned that the growth is clearly decelerating, but both inflation and inflation expectations are currently above the comfort level. It expected inflationary pressures to abate in the coming months despite high crude oil prices and the rupee depreciation on growth deceleration. As per the RBI, there are currently no significant signs of stress in the money market, while it assured that further open market operations (OMOs) will be conducted as and when seen to be appropriate. RBI
Yield on treasury bills
The cut-off yields offered on 91-day T-bills have continuously increased for three months between 17 August and 16 November 2011 by cumulative 59 bps, but it eased by 50 bps in the month ended 21 December. However, it rebounded to 8.48% on 28 December 2011. The cut-off yields offered on 182 days T-bills increased to 8.47% on 28 September and 8.62% on 12 October and 8.9454% on 09 November. However, it declined to 8.84% on 23 November and further dipped 8.51% on 07 December 2011 and 8.27% on 21 December. The cut-off yield offered on 364-days T-bills increased incessantly by cumulative 68 bps between 24 August and 16 November to touch 8.85%. However, it plunged to 8.45% on 30 November 2011 and to 8.2595% on 14 December, but increased to 8.35% on 28 December 2011.
Auction results
Mid-quarter Monetary Policy Review
The RBI released the mid-quarter monetary policy review on 16 December 2011, while maintaining status quo on policy
Government raised Rs 53000 crore through issue of dated securities during December 2011 and taking total borrowing to Rs 3.98 lakh crore during April-December 2011 compared to Rs 3.84 lakh crore in April-December 2010. The bid-to-
Interest rates
MONTH 1ST
Sep-11 Oct-11 Nov-11 Dec-11 8.39 8.45 8.65 8.60
91-DAY T-BILLS AUCTIONS DURING THE MONTH 2ND 3RD 4TH

8.39 8.48 8.86 8.48 8.43 8.65 8.90 8.39 8.43 8.65 8.86 8.48
5TH
364-DAY T BILLS AUCTIONS DURING THE MONTH 1ST 2ND 3RD

8.34 8.52 8.45 8.68 8.85 8.35 8.45
REVERSE REPO RATE

7.25 7.50 7.50 7.50
BANK RATE
BASE RATE
6.00 6.00 6.00 6.00
10.00/10.75 10.00/10.75 10.00/10.75 *10.00/10.75
8.81
8.74 8.26
* As on 16 December 2011. # from July 2010 , PLR replaced by base rate system , base rate associated with five major banks
54
Capital Market
I January 2012
The Macro Picture I Financial Sector I Interest rates cover ratio for December 2011 improved to 2.41% compared to 2.24% during November 2011. However, the dated securities worth Rs 400 crore devolved on primary dealers. About 12 states together have raised Rs 13459 crore during December 2011 through sales of 10-year State Development Loans (SDLs). The RBI has bought back bonds worth Rs 31775.345 crore during December 2011 under Open Market Operations.
Call money rate DATE VOLUME

01-Dec-11 02-Dec-11 03-Dec-11 05-Dec-11 07-Dec-11 08-Dec-11 09-Dec-11 10-Dec-11 12-Dec-11 13-Dec-11 14-Dec-11 15-Dec-11 16-Dec-11 17-Dec-11 19-Dec-11 20-Dec-11 21-Dec-11 22-Dec-11 23-Dec-11 24-Dec-11 26-Dec-11 27-Dec-11 28-Dec-11 29-Dec-11 30-Dec-11 31-Dec-11 9908.33 424.78 620.33 11716.5 10739 13339.4 596.73 775.3 13999.9 11679.5 14178 16504.5 546.65 2523.58 24876.9 24889.6 20743.8 23825 429.5 1353.7 23292.3 19437.2 21922.4 19031.6 2198.09 1945.83
WEIGHTED AVG. RATE

8.54 8.34 8.4 8.6 8.59 8.58 8.41 8.42 8.56 8.55 8.57 8.65 8.5 8.99 9.2 9.5 9.6 9.68 9.06 9.49 9.49 9.17 8.97 8.91 8.86 8.83
RANGE
7 - 8.75 6.9 - 8.5 6.9 - 8.65 7 - 8.75 4.5 - 8.7 7.1 - 8.7 7 - 8.6 6.75 - 8.6 7 - 8.65 6.85 - 8.65 7 - 8.7 7 - 8.9 09-Jul 7 - 9.1 7.1 - 9.7 7.25 - 9.65 7 - 9.75 7.25 - 9.9 7.4 - 9.85 7.6 - 9.9 7.25 - 9.9 5.25 - 9.5 7 - 9.1 7.25 - 9.15 7 - 9.6 7.3 - 8.9
Medium-term interest rate

The yield on 10-year benchmark federal paper tumbled to 2months low of 8.65% on 02 December, as the weak economic data raised the hopes that the RBI may ease its tight stance. Bond buyback hopes pushed down yield to 8.58% on 05 December. The bond yield eased to 8.52% on 08 December, as the RBI governor assured all possible steps to support liquidity. Industrial production data showing sharp fall for October 2011 pushed down yield to two and half months low of 8.45% on 12 December and further down to 8.40% on 13 December. However, the high and steady inflation data for November 2011 caused spike in yield to 8.49% on 14 November. The RBI at mid-quarter policy review indicated at reversing the rate hike cycle, helping yield to dip to 8.33% on 19 December. The yield declined sharply to end at four months low of 8.28% on 20 December, on hopes that the RBI would conduct more bonds buyback to support liquidity. The yield rebounded to 8.34% on 21 December on tight liquidity conditions, while the concerns for additional market borrowing pushed up yield to 8.37% on 23 December. The yields jumped to 8.49% on 26 December, on concerns that government may revise its market borrowing. Yield surged to 8.59% after government announced unscheduled sale of bonds, but eased to 8.49% in the latter part of the trading on 27 December on bonds buyback hopes. However, yield advanced to three weeks high of 8.54% on 29 December and rose to 8.56% on 30 December, on concerns for fresh supplies of dated securities amid tight liquidity conditions.
the net infusion of liquidity in to banking system was higher at Rs 65807.8 crore compared to Rs 10.989.5 crore during 2010.
Outlook
Call-money rates
The mean of the weighted average rate in the overnight CBLO eased to 8.37%, while that for call money inched up to 8.87% in December 2011 from 8.45% and 8.50% in November 2011. The average trading volume on call money jumped to Rs 11582.1 crore, while that for CBLO dipped sharply to Rs 22154.4 crore in December 2011.
Liquidity adjustment facility
The liquidity conditions continued to remain in deficit mode. The scheduled banks parked excess cash worth Rs 1481.2 crore with RBI under LAF reverse repo window, while borrowed Rs 117742.1 crore on daily average basis at repo window during December 2011. Thus, there was a net infusion of liquidity worth Rs 116261 crore during December 2011, which was higher than Rs 92973 crore during November 2011. For 2011,
The bond yields rebounded sharply at the fag end of December 2011, owning to concerns for higher supplies of dated securities for rest of the fiscal. Government has sharply revised upward its market borrowing for 2011-12 by Rs 40000 crore, in addition to Rs 53000 crore increase announced earlier. The heavy supplies of dated securities amid tight liquidity conditions would weigh up on sentiments in gilts market. On a positive note, RBI has indicated at reversing monetary rate hike cycle, while also assured to conduct bonds buyback as and when seen necessary. RBI has also allowed banks to avail funds at the marginal standing facility (MSF) up to 1% of SLR bonds. Meanwhile, banks are raising interest rates on their foreign currency deposits by 500-600 bps to improve liquidity, in the wake of RBI deregulating NRE deposit rates on 16 December 2011. Easing inflation is adding strength to the gilt market and can help yields to ease in the medium term.
55
The Macro Picture I Financial Sector I Money Supply
Money Supply
Government borrowing rises further for FY12
The market continues to witness liquidity crunch, with banks borrowing large amounts from the RBIs repo window. A host of factors such as lack of government spending and advance tax payments, contributed towards deficit in liquidity in the system. The liquidity conditions continued to remain in deficit mode. The scheduled banks parked excess cash worth Rs 1481.2 crore with RBI under LAF reverse repo window, while borrowed Rs 117742.1 crore on daily average basis at repo window during December 2011. Thus, there was a net infusion of liquidity worth Rs 116261 crore during December 2011, which was higher than Rs 92973 crore during November 2011. The rise in time deposits and liquidity injection by RBI through purchase of G-sec led to rise in money supply. However, the decelerated growth in currency with public and fall in demand deposits led to a slower growth in money supply over 17.7% growth recorded in April 2011.
Components
In current FY, till 16 December 2011 money supply recorded 8.5% growth rate compared with 8% growth recorded during same period a year ago. Annual growth rate as on 16 December 2011 stood at 16.5% against 15.4% a year ago.
Among components of money supply, currency with public recorded 12.5% annual growth rate as on 16 December 2011 compared with 19% growth last year. Till 16 December 2011, growth rate stood at 8.1% compared with 14.5% growth recorded in the same period in last financial year. On other hand, demand deposit with bank recorded 11% fall till 16 December in current FY compared with 9.3% negative growth rate recorded in the same period last year . The annual growth rate turned in to negative zone too at 1.9% as on 16 December 2011 compared with 10.8% growth recorded last year. In current FY, till 16 December 2011 time deposit with public recorded 11.5% growth compared with 9.8% growth recorded in the same period a year ago. The annual growth rate as on 16 December 2011 stood at 20% compared with 15.4% growth recorded a year ago. Net bank credit to government recorded 22% annual growth rate as on 16 December 2011 compared with 19.7% growth recorded a year ago. In current FY, till 16 December 2011 growth rate stood at 10.9% against 8% in same period a year ago. Bank credit to commercial sector has adversely impacted due to higher interest rate. In current FY, till 16 December
Components of money stock OUTSTANDING (RS CRORE) CURRENCY DEPOSIT MONEY TIME WITH MONEY OF SUPPLY DEPOSITE PUBLIC THE PUBLIC (M1) WITH BANKS
Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 21-Oct-11 18-Nov-11 16-Dec-11 826070 840741 871767 868666 888153 905351 914197 946865 961465 962310 935518 943185 941610 952190 977384 988660 693787 733694 714303 723133 678384 682454 721373 665039 644589 631517 647763 640690 640264 647167 639597 640130 1519857 1574435 1586070 1591799 1566537 1587805 1635570 1611904 1606054 1593827 1583281 1583875 1581874 1599357 1616981 1628790 4379435 4506068 4504529 4633407 4689478 4778941 4863979 5036194 5062157 5098560 5222183 5254511 5277306 5359307 5396693 5422250
M3
CURRENCY WITH PUBLIC

19.2 17.9 20.5 17.7 19.7 19.8 19.1 18.6 16.6 15.7 14.9 14.6 14.0 13.3 12.1 12.5
% CHANGE OVER PREVIOUS YEAR DEPOSIT MONEY TIME MONEY OF SUPPLY DEPOSITE THE PUBLIC (M1) WITH BANKS
12.2 22.4 21.9 22.0 7.4 6.5 -0.1 1.2 -0.7 -3.5 -7.2 -6.0 -7.7 -11.8 -10.5 -2.2 15.9 20.0 21.1 19.6 14.0 13.7 9.8 10.7 9.0 7.2 4.7 5.2 4.1 1.6 1.9 6.2 15.0 16.4 14.9 18.4 17.4 17.7 18.2 20.1 19.7 20.7 20.6 20.8 20.5 18.9 19.8 20.0
M3
5899292 6080502 6090600 6225207 6256015 6366746 6499548 6648098 6668211 6692387 6805464 6838386 6859181 6958664 7013674 7051040
15.2 17.3 16.4 18.7 16.5 16.7 16.0 17.7 16.9 17.2 16.5 16.8 16.3 14.4 15.2 16.5
56
Capital Market
I January 2012
The Macro Picture I Financial Sector I Money Supply 2011 growth rate stood at 7.8% compared with 12.4% growth rate registered in the same period a year ago. The annual growth rate stood at 16.4% compared with 23.2% growth recorded a year back. There has been significant growth in net foreign exchange assets of banking sector. Till 16 December 2011 growth rate stood at 14.8% compared with 7% in same period a year ago. The annual growth rate stood at 16.6% an on 16 December 2011 compared with 2.2% growth last year.
Outlook
Reserve money
Till 23 December 2011, growth rate for reserve money recorded 5.8% compared with 8.3% growth a year ago. The annual growth rate as on 23 December 2011 stood at 16.5% compared with 21.3% last year. Currency in circulation recorded a growth of 12.7% as on 23 December compared with an annual rise of 18.9% recorded last year. Net foreign exchange assets of RBI recorded 16.6% growth till 23 December 2011 compared with 6% last year. The annual growth rate stood at 18.6% compared with 0.8% growth a year ago. Till 23 December 2011 in 2011-12 net non-monetary liabilities of the RBI recorded 67.6%, growth rate compared with a 16.1% rise in the same period last year. As on 23 December 2011, the annual growth rate stood at 76.3% compared with a fall of 8.2% growth last year.
The government is scheduled to borrow Rs 1,16,000 crore and Rs 1, 50,000 crore through issuance of dated bonds and treasury bills, respectively, in January-March 2012. Over and above the borrowing, states will also step into the market to borrow around Rs 6, 000 crore every fortnight. The government increased the size of its borrowing for the second half of 2011-12 by Rs 40, 000 crore on the back of worsening finances. The Rs 40,000 crore additional supply is on top of the Rs 53,000 crore jump in the borrowing for fiscal 2011-12, taking the total government borrowing for the fiscal to Rs 5,18,000 crore. All these are clear indication that market participants will need more money and RBI is the last resort. There are two options for RBI to boost the liquidity, either by way of lower the CRR or by broadening the corridor for the open market operations. Market participants have to wait till 24 January 2012 when RBI will announce mid-term policy review. Liquidity conditions have remained consistent with the RBIs anti-inflationary stance of monetary policy as liquidity has been in deficit mode so far in 2011-12. In the weeks ahead, RBI could ease CRR to help ease liquidity and improve business confidence, provided inflation stays on the downward trajectory.
Reserve money
Net RBI Credit to Central Govt.
Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 21-Oct-11 18-Nov-11 16-Dec-11 206761 205651 259513 263952 269302 300211 396555 365280 380487 376109 372134 368132 406753 391984 423184 438037
OUTSTANDING (RS CRORE) Net RBI Net Foreign Credit to Exchange State Govt Assets of RBI
1325 1477 1572 1626 1325 1570 2164 1325 1595 2098 1799 1839 1783 1878 1998 1998 1299984 1283419 1315909 1301865 1333507 1333268 1328553 1340160 1352155 1362732 1376710 1431000 1491104 1530763 1543962 1558137
Reserve Money
1174479 1173663 1231900 1241831 1247373 1279553 1376881 1346308 1362093 1358107 1357472 1368940 1355529 1385212 1409139 1402652
Net RBI Credit to Central Govt.

482.7 370.4 258.8 479.4 198.5 97.7 87.4 59.2 79.1 65.4 67.1 77.3 96.7 40.5 60.0 61.8
% CHANGE OVER PREVIOUS YEAR Net RBI Net Foreign Credit to Exchange State Govt Assets of RBI
-87.7 -77.2 -70.9 -74.3 -75.8 -66.7 63.0 -0.2 20.1 41.9 35.8 38.8 34.6 19.7 22.9 23 -1.0 -1.1 1.0 0.7 4.7 6.0 7.8 10.2 8.1 9.3 6.6 10.6 14.7 18.1 17.8 19.1
Reserve Money
21.7 20.9 22.8 26.6 21.6 17.8 19.1 15.5 17.5 15.9 15.9 16.4 15.4 11.1 14.0 12.8
Capital Market
I January 2012
57
The Macro Picture I Financial Sector I Money Supply
Money supply (Rs crore) AS AT THE RBIS NET END OF CREDIT TO GOVT
Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 21-Oct-11 18-Nov-11 16-Dec-11 203643 258095 263994 268593 299053 396555 365280 380487 376109 372134 368132 356660 394737 416903 438040
COMML. RBIS BANKS CREDIT TO CREDIT COMMRCIAL TO GOVT SECTOR

1588609 1561349 1533141 1568543 1572746 1586216 1634630 1670508 1685978 1763289 1780757 1781172 1787171 1796012 1761150 1477 1572 1626 1325 1570 2164 1325 1595 2098 1799 1839 1783 1878 1908 2000
COMMRCIAL BANKS CREDIT TO COMMRCIAL SECTOR

3751733 3836405 4047303 4019698 4102260 4233242 4213070 4258536 4295071 4305130 4338340 4387878 4445249 4484233 4562910
NET FOREX ASSERT OF BANKING SECTOR

1346830 1379320 1349074 1380716 1380477 1393327 1404934 1416929 1404149 1418127 1472417 1549140 1598117 1584738 1599550
GOVT.S CURRENCY LIAB. TO PUBLIC

12152 12254 12373 12479 12586 12724 12834 12960 13080 13196 13312 13312 13312 13312 13310
NNML*
NET NNML**
M3
333192 361861 343064 373707 371509 368274 374471 387786 398006 408763 447085 526650 578538 577475 612660
492757 597952 639199 622340 631595 756406 609505 685018 686092 659448 689325 704114 703262 705958 713260
6080502 6090600 6225207 6256015 6366746 6499548 6648098 6668211 6692387 6805464 6838386 6859181 6958664 7013674 7051040
*Net Non Monetary liabilities of RBI **Banking Sectors Net Non-monetary Liabilities
Money supply - % Change AS AT THE RBIS NET COMML. RBIS END OF CREDIT BANKS CREDIT TO TO GOVT CREDIT COMMRCIAL TO GOVT SECTOR
Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-2011 21-Oct-11 18-Nov-11 16-Dec-11 370.8 262.0 203.8 200.2 95.7 87.4 93.0 79.0 65.4 67.1 77.6 72.5 91.9 60.6 61.8 11.8 9.3 8.1 6.6 8.3 8.8 8.0 9.8 12.9 14.9 14.1 14.3 12.5 15.0 15.0 -77.2 -70.9 -65.5 -75.8 -66.7 63.0 -0.2 20.1 41.9 35.8 38.8 34.6 27.1 21.4 22.9
COMMRCIAL BANKS CREDIT TO COMMRCIAL SECTOR

21.0 22.5 27.3 22.9 22.9 21.3 21.7 22.1 67.0 18.3 19.9 18.8 18.5 16.9 16.4
NET FOREX ASSERT OF BANKING SECTOR

0.1 2.0 0.6 4.9 6.1 8.7 10.8 9.0 9.0 6.3 10.3 13.6 18.7 14.9 16.6
GOVT.S CURRENCY LIAB. TO PUBLIC

13.2 14.2 13.3 12.9 12.7 12.9 12.6 12.6 12.5 12.2 12.0 10.9 9.5 8.6 8.6
NNML*
NET NNML**
M3
-14.0 -6.9 -10.7 5.4 9.4 22.1 27.6 22.4 25.1 13.9 31.8 51.4 73.6 59.6 73.2
37.9 56.4 55.4 40.4 36.4 37.8 21.3 33.3 21.5 21.4 27.0 19.5 42.7 18.1 1.4
17.3 16.4 18.7 16.5 16.7 16.0 17.7 16.9 17.2 16.5 16.8 16.3 14.4 15.2 16.5
*Net non monetary liabilities of RBI **Net non monetary liabilities of Banking Sector other than time deposits # Percentage change
58
Capital Market
I January 2012
The Sectoral Picture I Agri & Allied I Agriculture
Agriculture
Food inflation turns negative
The WPI based food inflation has dipped sharply from above 20% in December 2010 to 11.06% in October 2011 and further turned negative to 3.4% in the week ended 24 December 2011. The food inflation has recorded negative reading for the first time after seven years and nine months. The food inflation had recorded negative growth way back in March 2004. The food inflation plunged sharply by 1411 bps during 29 October to 24 December 2011. The fall in vegetables prices and high base effect has largely contributed to dip in food inflation. The prices of spices items have also eased. However, the food inflation is expected to rebound to 5-6% level by March 2012, as the high base effect wanes out.
North east Monsoon 2011

The north east monsoon (Oct-Dec) rainfall has been only 51.7% of long period average during 01 October to 30 December. This was the weakest performance of northeast monsoon rainfall since we have data from 2011. Among the 36 meteorological sub-divisions rainfall was excess in only one sub-division, normal in 06 sub-divisions, deficient in 05 sub-divisions and scanty in 23 sub-divisions, while there was no rain in 01 sub-division. Although, the performance of northeast monsoon season is not closely related to Rabi crops production, the weakest performance of northeast monsoon 2011 is a cause of concern, which has weighed on reservoir water level.
Rabi crop sowing

As per the Ministry of Agriculture, the area sown to Rabi crops stood at 553.48 lakh hectares (lh) as on 30 December 2011 compared to 564.94 lh same time a year ago, touching about 92% of the overall normal kharif crop area. The area sown to wheat, oilseeds, coarse cereals and pulses remains lower compared to previous season sowing, while that under rice was higher in the current season so far. Wheat: Wheat has been sown in 276.43 lakh hectare against 277.95 lakh hectare last year on this date. Area coverage of wheat compared to last year is lower by 1.52 lakh hectare. Higher coverage has been reported from Madhya Pradesh (4.69 lakh hectare), Rajasthan (3.20 lakh hectare), Bihar (0.72 lakh hectare), Jharkhand (0.37 lakh hectare) and Chhattisgarh (0.18 lakh hectare). Rice: Rice transplanting is in progress in Andhra Pradesh, Assam, Odisha and Karnataka. The total area under rice is 4.13 lh against 3.49 lh during the corresponding period of last year. The area coverage is 0.64 lh higher than last year. Coarse Cereals: The area under coarse cereals dipped 6.0% to 55.16 lh, as the area under jowar dipped 4.0% to 36.74 lh in the current season. Meanwhile, the area under maize rose 0.2% to 9.4 lh as on 30 December. Pulses: The area sown to pulses has declined 1.2% to 138.54 lh as on 30 December. Among the pulses, the area under gram and lentil has declined 3.9% and 0.2%, while that under peas, kulthi, urad and moong has increased 1.1%, 0.1%, 1.7% and 0.1% in the current season. Oilseeds: The area sown to oilseeds dipped 6.3% to 79.22 lh as on 30 December 2011. Among the oilseeds, the area sown to rapeseed/mustard declined 3.9% to 63.83 lh, while that under linseed and sunflower also fell 0.1% to 3.91 lh and 0.8% to 3.38 lakh hectares, respectively. Area under groundnut moved up 0.3% to 3.87 lh as on 30 December 2011.
Reservoir status
The Central Water Commission monitors the live storage of 81 important/major reservoirs, having capacity at Full Reservoir Level (FRL) of 151.77 billion cubic meters (BCM), which is about 67% of total reservoir capacity in the country. Water stock in 81 major reservoirs dipped sharply to 92.573 bcm as on 05 January 2012 compared to storage of 102.646 bcm a year ago.
Basin-wise water storage level NAME OF BASIN LIVE STORAGE AS ON 05 JANUARY (BCM) 2012 2011 10 YEAR AVRG
Ganga Indus Narmada Tapi Mahi Sabarmati Rivers Of Kutch Godavari Krishna Mahanadi & Neighbouring EFRS Cauvery & Neighbouring EFRS West Flowing Rivers Of South Total 28.096 17.559 14.730 14.869 7.394 4.012 0.735 0.887 14.526 9.012 8.074 4.988 2.952 0.553 0.635 7.167 9.217 10.260 9.143 5.478 1.684 0.361 0.469 12.325 27.608 8.997 7.187 9.917 9.832 6.839 5.696 4.788 2.149 0.269 0.319 7.559 18.274 9.263 4.243 8.264 77.495
31.548 15.828 13.181 10.865 8.190 13.600 5.286 9.654
151.770 92.573 102.646
Source: Ministry of Water Resources, figures in billion cubic meters
59
The Sectoral Picture I Agri & Allied I Agriculture
Rabi Crop Sowing Progress CROP AREA SOWN AS ON 06 JAN 2012 2011
Wheat Rice Coarse Cereals Rapeseed & Mustard Groundnut Sunflower Total Oilseeds Gram Total Pulses 284.25 6.61 56.35 64.83 5.1 1.9 80.96 87.22 140.66 283.45 6.35 59.69 68.21 4.91 2.32 85.5 92.77 142.38
VARIATION +/
0.80 0.26 -3.34 -3.38 0.19 -0.42 -4.54 -5.55 -1.72
%
0.3 4.1 -5.6 -5.0 3.9 -18.1 -5.3 -6.0 -1.2 -1.5
Rice Procurement (Lakh Tonnes) (Oct-Sept) STATE TOTAL PROCUREMENT PROCUREMENT AS ON 23 DEC 2009-10 2010-11 2011-12 2010-11
Andhra Pradesh Chhattisgarh Haryana Kerala Maharashtra Orissa Punjab Tamil Nadu Uttar Pradesh Uttaranchal West Bengal 75.55 33.57 18.19 2.61 2.29 24.96 92.75 12.41 29.01 3.75 12.4 320.34 96.1 37.39 16.87 2.63 3.08 24.76 86.35 15.83 24.66 4.22 13.1 340.94 76.6 2.83 11.3 1.04 1.06 150.38 86.34 0.94 5.1 1.2 0.97 133.34 12.54 18.63 19.6 0.99 0.46 8.43 9.51 16.52 0.64 0.36
Total 568.83 577.37 -8.54 Source: Ministry of Agriculture, Figures in Lakh Hectares
Northeast Monsoon 2011 (Oct-Dec) FOR THE PERIOD FROM 1 OCTOBER TO 31-DEC 31-DEC 31-DEC 31-DEC 2008 2009 2010 2011
Excess Normal Total Deficient Scanty No rain Total Data Inadequate TOTAL 2 4 6 15 15 0 30 0 36 13 10 23 9 4 0 13 0 36 18 7 25 10 1 0 11 0 36 1 6 7 5 23 1 29 0 36
All India
Figures in Lakh Tonnes
Import of 5 lakh tonnes of pulses allowed

Government has permitted the import of 5 lakh tonnes of pulses in 2011-12. During April-November 2011, the designated agencies importing pulses have entered into import contracts of approximately 1.65 lakh tonnes of pulses as compared to approximately 3.4 tonnes during the same period last year. Government has permitted import of pulses at zero duty under Open General Licence (OGL). A scheme is in place since November 2008 for supplying imported pulses to the state governments for distribution under PDS at 1 kg per family per month.
The live water storage is 90.2% of the last years storage and 119.5% of the average of last ten years. There were 69 reservoirs having storage more than 80% of normal storage, 8 reservoirs having storage between 50% and 80% of normal storage, while 4 reservoirs reported storage of 3-47% of normal storage. Out of 36 reservoirs with significant hydropower generation, the storage build up was less than normal in 11 reservoirs.
Outlook
There are very few bright spots in the Indian economy, prominent amongst which is Agriculture. The country has seen 2 successive years of rise in rural income. The initial spurt was largely used for consumption, and the sizeable portion of the recent accretions can go towards housing, irrigation, agricultural implements and a host of capital and consumer durables. Also, it has the potential to push up demand for industrial and service sector, which can become prominent, if agriculture continues to grow. India is witnessing shrinkage of agricultural lands, and lower availability and higher cost of labour. This is gradually leading to mechanization of agriculture. Fall in fertility of the soil, and limited availability of water is also a cause for concern. This calls for slew of measures to improve production and productivity of agriculture through mechanization, Judicious use of fertilizers and pesticides, making available disease resistant and high yielding quality seeds, better water management including increasing popularity of drip irrigation, expanding area under irrigation etc.
Rice Procurement
Rice procurement in the Kharif Marketing season 2011-12 (October-September) has touched 164.842 lakh tonne as on 02 January 2012. Punjab has led the States by procuring 76.61 lakh tonnes followed by Chhattisgarh with 21.255 lakh tonne, Haryana with 19.662 lakh tonnes and Uttar Pradesh with 14.302 lakh tonnes of rice. Meanwhile, Andhra Pradesh also procured significant amount of rice at 16.878 lakh tonnes of rice. The rice procurement in the Marketing season 2010-11 (October-September) stood at 340.94 lakh tonne, showing growth of 6.4% compared to 320.34 lakh tonnes during last marketing season.
60
The Sectoral Picture I Agri & Allied I Edible oils
Edible oils
Ferocious jump in local prices
Production
Prices
The slight moderation witnessed in the local edible oils prices during October-November 2011 gave way to a ferocious jump in the month of December 2011 and there is a great possibility that this upside spurt might continue in the near term given acute worries over the rabi oilseeds crop. The oilseeds output went up in the kharif (April-September) season following generous rise in the production of soybeans. According to the First Advance Estimates from Department of Agriculture & Cooperation, the oilseeds production in the 2011-12 Kharif season was 208.86 lakh tonnes, up from 208.47 lakh tonnes in the 2010-11 season. However, this figure is likely to be ratcheted higher in subsequent estimates, as was the case last year, when the first advance estimates pegged the output at just 172.74 lakh tonnes, around 20% lower than the final estimates. Apart from the statistical evidence of the previous years, the moderation in the oilseeds and edible oils prices during October-November period also corroborates the view that the kharif output is likely to be a strong one. However, sharp gains recorded in prices during December are a glum reminder of the fact that given the heavy dependence on imported edible oils and its impact on the local crushing and refining activity, the consumers in local markets could not be insulated from elevated prices heading into the early months of 2012. This is a peculiar period for the domestic markets as the arrivals from kharif season are on the wane and there is still some time for the rabi crops to get ready.
Unfortunately, the global prices are also peaking at the same time. The Malaysian Crude Palm Oil (CPO) futures neared MYR 3200 per tonne mark during end December 2011- its highest in two months. The local refined soy oil, Groundnut oil and Rape Mustard oil hit their lifetime highs during the last week of December 2011, setting up the stage for a stirring scenario heading into the rabi harvest. The sowing of the rabi oilseeds crops continued to proceed at a laggard pace. Total area under oilseeds cultivation is reported to be 80.96-lakh hectare against 85.5-lakh hectare last year, recording a fall of 5.31% as on 6th January 2012. The area under Rapeseed has dropped by 5% to 64.83 lakh hectares. Local edible oils consumption has been increasing steadily because of growth in population and the higher incomes of sections of people. There was good progress in the area in the 1980s when the Oilseed Technology Mission, through various strategies and activities, had given a boost to oil seeds production in the country. However, the scenario changed in mid 1990s and the productivity in oilseeds depleted over the years. Easy edible oils imports further lowered the entry barrier to the industry as crude or refined oil can be imported, packed and distributed doing away with the need of having manufacturing facility in the domestic market. At about 1000 kgs/ha, Indian oilseed yields are about half of the worlds average and less than one-third of leading producers.
Edible oils imports

61
The Sectoral Picture I Agri & Allied I Edible oils
Production of edible oil ITEM DESCRIPTION NOV-OCT 2010

Edible Hydrogenated Oil Soyabean oil Coconut oil Groundnut Oil Mustard/ Rapeseed Oil Soyabean Extraction Sunflower oil Cotton Seed Oil Rice bran Oil Castor oil De-Oiled rice bran Units in metric tonnes 918054
Animal feed segment powers KSE growth
NOV-OCT 2011
1154809.45
%
25.79 90.73 84.19 144.80 131.78 103.58 -13.79 -40.85 16.28 -41.80 21.85
715226 1364120.67 8570 15785.0358 12747 31204.0625 68146 157948.429 2890037 5883662.36 48784 42057.9754 40177 23764.8604 613890 713806.658 63681 37062.2474 3166401 3858133.19
Vegetable oil imports in November rose 28% from a year earlier to 8,55,363 tonnes, according to the Solvent Extractors Association of India (SEA). Indias edible oil imports in the year ending October 2012 are likely to rise by 6.3% to 8.9m tonnes and all the additional imports will be refined palm oil after Indonesia changed export taxes. Indonesia, the largest global exporter of CPO, altered duties to make its refined palm oils more attractive than CPO from October 2011. This could prompt more imports of the same from Indian buyers, hurting the local refinery margins.
had averaged just Rs 535 per 10 kgs in April 2011. The groundnut oil prices in Rajkot jumped to four-digit mark topping highs of Rs 1030 per 10 kgs. The commodity averaged Rs 926 per 10 kgs during December 2011, up 24.50% compared to December 2010.
Summing up
Rapeseed production in India is likely to decline this year as lack of sufficient winter rains in the nations biggest growing northwest region hurt the sowing. Rapeseed output may drop as much as 21 percent to 5.5 million metric tons in the crop year that started October 2011 from 7 million tons a year earlier, according to the latest updates from SEA. All in all, the price scenario could see a meaningful moderation only if the global prices ease considerably in next few months. Given the shabby development in rabi oilseeds sowing, prices are unlikely to feel much of an impact once the harvesting is over and arrivals start to flood in the local mandies from end February-early March onwards.
Prices
Refined soy oil prices in Indore hit an lifetime high of Rs 727 per 10 kgs in last week of December. The commodity averaged Rs 670 per 10kgs, up 15% compared to December 2010. The RM Oil prices averaged Rs 712 per 10 kgs during December 2011, up 25.60% compared to December 2010. The prices
Market capitalisation of the edible oil industry COMPANY LATEST MCAP LATEST AS ON 30 DECEMBER 11 (RS CR ) PRICE (RS)
Total Agro Tech Foods. AVT Natural Prod Guj. Ambuja Exp IVP K S Oils KSE Murli Industries Ruchi Soya Inds. Sanwaria Agro Wadala Com. Others 6119.81 953.23 213.19 251.80 43.28 250.14 74.56 112.84 3113.49 348.35 3.33 755.60 391.15 280.15 18.20 41.90 5.88 233.00 15.65 93.40 10.01 1.54
1 MONTH
-8.54 -4.89 -14.84 -9.68 -10.10 -11.18 7.87 -27.04 -5.80 -22.22 -14.83 -11.04
CHANGE IN MARKET CAPITALISATION (%) OVER 3 MONTHS 6 MONTHS

-19.97 -2.30 -25.96 -17.65 -12.44 -41.67 13.66 -33.55 -16.03 -44.54 -24.83 -26.17 -29.54 1.52 5.10 -35.57 -10.67 -73.15 15.58 -21.46 -4.69 -67.66 -41.78 -53.23
12 MONTHS
-53.40 4.50 140.57 -50.48 -21.54 -87.59 27.56 -66.43 -16.80 -86.52 -52.97 -73.24
62
Capital Market
I January 2012
The Sectoral Picture I Agri & Allied I Rubber
Rubber
Price stabilises
Production
Prices
Tyre-grade RSS 4 rubber prices at Kottayam improved 2.6% to Rs 200.34 per kg in December 2011, snapping fall of the previous two months. Rubber price had declined 1.2% in October and 7.9% in November 2011, on month-on-month (m-o-m) basis. Still, the prices were 1.5% lower in November 2011, 0.8% lower in December 2011 and steep 11.6% lower in early January 2012. Meanwhile, RSS-3 (Bangkok) prices also improved to Rs 179.52 per kg in December from Rs 175.13 per kg in November 2011. Nevertheless, the Kottayam prices were sharply down from Rs 239 per kg in April 2011 and while Bangkok prices tumbled from peak of Rs 282.3 per kg in February 2011. The NR prices declined sharply owing to concerns for European debt crisis, slowing Chinese growth and worries over prospectus for rubber demand. However, price stabilised in responses various measures taken by key rubber growing countries such as setting floor price for
sale of rubber. However, the average rubber price has increased 27.6% at Kottayam and 34.3% in Bangkok during 2011.
Production
Indias total rubber production increased 2.1% to 88621 tonnes in September 2011, while it increased 4.1% to 446150 tonnes in April-September 2011. NR output increased 3.5% to 80200 tonnes, but production of synthetic rubber dipped 9.6% to 8421 tonnes. The production of NR increased 4.3% to 391400 tonnes, while that of synthetic rubber moved up 2.9% to 54750 tonnes in April-September 2011. Provisional estimate of NR production for October 2011 is 89300 tonnes (up 8.4%).
Consumption
Consumption of NR dipped 7.0% to 74,870 tonnes, while that of synthetic rubber fell 2.8% to 33,510 tonnes in APRIL-SEPTEMBER 2011-12 2010-11
446150 688560 465205 262547 17619 428481 670675 438260 269970 4558
Rubber Production, Consumption and Trade SEPTEMBER 2011 2010

Total NR & SR Production Total NR & SR Consumption Total NR & SR Imports Exports of Natural Rubber 88621 108380 36156 4405 86820 114980 75227 58502 194
% CHANGE SEPTEMBER-11 APR-SEPT FY 12

2.1 -5.7 -5.6 -38.2 2170.6 4.1 2.7 6.1 -2.7 286.6
NR & SR Consumption for Auto Tyre 70980
Capital Market
January 2012
63
The Sectoral Picture I Agri & Allied I Rubber September 2011. Consumption of rubber from auto tyre manufacturers, which accounted for 65.5% of the total consumption, declined 5.6% to 70,980 tonnes in September 2011. Consumption of NR increased 1.4% to 475,485 tonnes, while that of synthetic rubber moved up 5.7% to 213,075 tonnes in April-September 2011. Consumption of rubber from auto tyre manufacturers, accounting for 67.6% of the total consumption, increased 6.1% to 465,205 tonnes in AprilSeptember 2011. Consumption of NR provisionally estimated for October 2011 is 76,000 tonnes (down 6.4%).
Apar Inds. impacted by competition
Trade
Indias NR import plunged 71.9% to 9,396 tonnes in September 2011 compared with 33,477 tonnes in September 2010, while synthetic rubber import rose 6.9% to 26760 tonnes in September 2011. In April-September 2011, imports of NR fell 24.9% to 89,057 tonnes, while that of synthetic rubber increased 14.6% to 173,490 tonnes. Exports of NR zoomed to 4,405 tonnes in September 2011 from 194 tonnes in September 2010, while it increased 286.6% to 17,619 tonnes during April-September 2011. The stock of NR at the end of September 2011 increased to 279,550 tonnes from 268,690 tonnes at end August 2011.
Global NR supply to grow 3.1% in 2012

The Association of Natural Rubber Producing Companies (ANRPC) expects the global NR supply to increase 6.4% during 2011 to 10.10 million tonnes (mt), against 5.6% growth predicted last months, while it estimates the supplies to rise only 3.1% to 10.415 mt during 2012 against earlier estimate of 3.6%. The ANRPC estimates demand growth to have moderated to 1.0% for 2011. Further, the ANRPC has anticipated import to rise 0.2% in 2011 and global NR export to improve 2.4% in 2011.
New global benchmark rubber price

Thailand, Indonesia and Malaysia, which account for about 70% of global natural rubber output, are planning to set up a regional physical market to create a new benchmark for the rubber price. The market is expected help producers trade with more transparent and reliable prices. These three nations have also agreed to set the floor price for sale of Rubber at US$ 3 per kilogram. All initiatives have been taken in the wake of sharp fall in rubber prices and help rubber prices to stabilize.
Outlook
Rubber prices are expected to remain steady in the near term on weak demand with ongoing global economic worries, the deepening Eurozone debt crisis. India remains a net importer of natural rubber, with imports constituting 19.0% in FY 200910 and 19.9% in FY 2010-11 of total natural rubber consumption. But the depreciation of the Indian rupee has deprived India of weak global prices.
Market capitalisation of the rubber industry COMPANY LATEST MCAP LATEST AS ON 30 DECEMBER 11 (RS CR ) PRICE (RS)
Total Apar Inds. Apcotex Industri Guj. Reclaim Indag Rubber MahalaxmiRubtech Pix Transmission Puneet Resins Rishiroop Rubber Rubfila Intl. Vamshi Rubber Others 1002.55 394.23 70.86 152.29 72.14 45.42 45.13 18.44 13.16 21.95 7.75 161.18 109.60 135.75 1145.00 137.40 5.15 34.90 35.40 11.08 6.93 18.40
1 MONTH
-12.22 -17.69 -9.47 -11.05 -11.04 -4.64 2.66 -6.49 0.69 -2.96 -11.93 -8.86

-17.75 -32.24 -18.30 2.04 17.40 -20.90 -16.10 -17.97 -22.31 -8.12 -24.83 4.14 -30.44 -50.52 -24.69 11.45 44.63 -44.63 -39.92 -11.09 -12.03 -10.84 -21.64 17.96
12 MONTHS
-34.87 -47.36 -18.74 -2.95 39.51 -75.06 -54.37 9.24 21.51 45.85 -43.51 2.71
64
Capital Market
I January 2012
The Sectoral Picture I Agri & Allied I Sugar
Sugar
Prices can ease from current levels
Production
Prices
The world sugar production estimated to be 172 million tonnes (mt) for the sugar season 2011-12 compared to 166 mt in 2010-11. The consumption estimated to be 168 mt compared to 165 mt in previous season with end stock at 6.1 mt. The top 5 sugar producing countries are Brazil, India, China,
Domestic sugar production MONTH 2011 - 12 2010 - 11 PRODN % CHG PRODN % CHG
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr - Oct 22.0859 8.85 46.85 92.81 15.04 295.79 4.59 144.15 1.61 0.61 0.84 1.33 1.91 15.69 44.4 48.81 49.076 41.44 21.05 90.63 -6.67 66.25 3.24 7.25 6.5 21.09 31.43 47.05
2009 - 10 PRODN % CHG

3.8 -86.96 1.88 -79.98 1.33 -49.04 0.32 -82.89 0.9 -26.83 0.8 -56.04 1.85 -16.29 14.63 41.69 40.31 37.34 -1.42 -1.23 -0.2 41.71
5.6 247.83 3.6 490.16 1.3 54.76
0.8 -39.85 2 -----44.2359 4.71 0 0 0 0 0 70.6
28.18 134.64 10.88 -77.46
25.93 138.33
Units in lakh tonnes. Source : CSO
Thailand and the USA. However, The reduction in estimates in Brazil for the sugar season 2011-12 are expected to be offset by higher production estimates from Asian countries mainly from India and Thailand. Interestingly, Thailand estimated to produce 9.5 mt of sugar for coming season. The two foremost challenges for Indian sugar industry facing are rigid regulations and the cyclicality in production and interestingly both these problems are inter-linked. The lack of freedom to make decisions on sound commercial basis is amplifying the financial distress for the Industry players. This lead too ever sharper swings in sugar production from year to year. To understand it better way, sugar production slipped sharply from 26.4 million tons in 2007-08 to14.5 million tons in 2008-09. However, the sugar production recovered to 18.9 mt in 2009-10 season. Interestingly, the sugar production for 2010-11 was at 24.39 mt and with opening stock 4.98 mt, total availability sugar during the season was at 29.37 mt. Further, With 3% decline internal consumption to 20.76 mt there was surplus sugar in the system. This resulted government to allow more Exports (2.6 mt) during the season and taking the total off take of sugar to 23.37 mt for the 2010-11. Recently, the satellite mapping survey was carried out statewise and district-wise for the sugarcane area for the first time in India. On a detailed analysis of the satellite mapping report, the sugarcane acreage for 2011-12 has been estimated at 51.82 lakh hectares. This is slightly higher to the estimates of
65
Capital Market
January 2012
The Sectoral Picture I Agri & Allied I Sugar sugarcane area made manually by the sugar industry at 50.79 lakh hectares, by the ministry of agriculture at 50.93 lakh hectares and the ministry of food and public distribution at 50.25 lakh hectares. In other words, the survey carried out through satellite mapping shows higher sugarcane area as compared to estimates of the government by around 3%. The area estimated for 2011-12 sugar season through the satellite mapping higher by 4.8% to 51.82 lakh hectares compared to 2010-11 sugar season. The current sugar season is certainly a difficult year not only from the point of view of surplus sugarcane and sugar production and pressure on sugar prices, but also because some of the state governments have fixed very high cane price in their respective states. The industry indicated that if SAP for SY 2011-12 has to be paid at 240-250, the cost of production of sugar in U.P would be about Rs.33 per kg.
Balrampur Chini turns bitter
Outlook
The domestic prices may move southward after February 2012, once the industry gets clear perspective about sugar production, and possibly due to surplus sugar for the coming season. With elections to five states announced, the Central government may not be able to announce further export of sugar, till the elections in these states are over. Another dampening factor is the extension of zero import duty upto
March 2012, ironically when India is having surplus sugar production, which needs to be exported! The UP government's decision to increase the SAP prices may impact the margins of UP based sugar mills if court affirms SAP fixed by UP government. Meanwhile, there is speculation surmounted at the industry helm that the government may partially decontrol sugar. Interestingly, the global sugar prices expected to be remain firm in the coming sugar season on the back of lower production from the Brazil (largely contributes to global exports) despite the possible surplus in International market. CHANGE IN MARKET CAPITALISATION (%) OVER 3 MONTHS 6 MONTHS
-32.23 -38.26 -26.71 -16.32 -24.08 -23.53 -28.87 -22.07 -17.17 -16.15 -16.94 12.16 -2.47 -26.79 -25.09 -54.62 4.77 -19.37 -11.73 -27.60 -38.76 -6.68 -46.63 -10.76 -23.18 -38.29 -47.90 -34.94 -54.86 -26.46 -35.28 -24.55 -28.86 -49.54 -43.23 -63.43 -24.73 -33.25 -31.85 -42.04
Market capitalisation of the sugar industry

COMPANY
Total Bajaj Hindusthan Balrampur Chini Bannari Amm.Sug. Dalmia Bharat DCM Shriram Inds Dhampur Sugar Dharani Sugars Dwarikesh Sugar EID Parry KM Sugar Mills Oudh Sugar Rajshree Sugars Rana Sugars Sakthi Sugars Sh.Renuka Sugar Simbhaoli Sugars Ugar Sugar Works Upper Gang. Sug. Others
LATEST MCAP AS ON 30 DECEMBER 11 (RS CR )

9085.24 1521.77 824.51 574.40 105.40 67.86 157.39 59.66 51.13 3283.64 19.41 59.75 80.05 42.39 72.50 1681.61 78.18 115.20 44.39 246.00
LATEST PRICE (RS)

23.80 33.75 502.10 13.02 39.00 29.20 20.30 31.35 189.15 2.11 23.05 33.65 2.76 19.70 25.05 28.85 10.24 38.40
1 MONTH
-10.66 -14.23 -23.12 -1.27 -5.31 -7.70 -9.88 -22.07 -12.43 -3.50 -6.23 3.84 -6.41 -13.74 -10.04 -17.19 3.22 -10.96 -7.46 -7.81
12 MONTHS
-54.11 -33.19 -63.91 -41.58 -65.74 -53.35 -61.81 -56.86 -67.65 -31.80 -60.86 -43.08 -56.78 -66.98 -65.53 -74.18 -29.88 -50.17 -32.33 -63.54
66
Capital Market
I January 2012
The Sectoral Picture I Agri & Allied I Tea
Tea
Welcomes 2012 on cheerful note
Production
Prices
All-India tea production recorded a 2.68% fall in October 2011 compared with a 9.65% fall recorded in the same month a year ago. North India recorded a 4.24% fall in October 2011 compare with an 11.53% negative growth rate recorded in October 2010. South India recorded 4.48% growth in October 2011 compared with a 0.17% growth recorded in the same month a year ago. In January October 2011, all-India tea production recorded 4.11% growth compared with 2% fall recorded in the same period last year. North India recorded 6.07% growth till October 2011 compared with 3.52% fall recorded in January October 2010. South India recorded 1.83% fall till October 2011 compared with 2.89% growth registered in January October 2010.
months ended November 2011. This is about 1.96 million kg or 0.6% lower over the the corresponding previous year period. Kenya reported tea production of 336 million kg in the eleven months ended November 2011. This is 24.4 million kg or 6.8% lower than 360.4 million kg produced in the same period of the previous year. Tea production in Bangladesh is estimated at 48.98 million kg in the ten months ended October 2011. This is 2.68 million kg or 5.8% higher over the same period of the previous year.
Export
All-India tea export recorded 0.24% growth in October 2011 compared with a 6.54% fall registered in same month a year ago. North India region recorded 5.61% growth in October 2011 compared with 18.14% fall registered in the same month a year ago. South India recorded a 6.43% fall in October
Global tea production falls

Srilankas tea production was 302.14 million kg in the 11
Tea Production*
OCTOBER-2011
North India South India All India 95.04 22.46 117.50
Tea Export*
OCTOBER-2010
99.24 21.50 120.74
% GROWTH OCTOBER-2011
-4.24 4.48 -2.68 North India South India All India
OCTOBER-2011
181.64 108.09 151.01
OCTOBER-2010
167.03 92.83 133.93
8.75 16.44 12.75
*Figures are in million Kg
*Figures are in million Kg
Capital Market
January 2012
67
The Sectoral Picture I Agri & Allied I Tea
Export unit price in Rs per kg

OCTOBER-2011
North India South India All India 11.49 8.20 19.69
OCTOBER-2010
10.879 8.76 19.64
5.61 -6.43 0.24
South Indian tea prices prop up Harrisons Malayalam
2011 compared with 13.40% growth registered in October 2010. In January October 2011, all-India tea export recorded a 8% fall compared with 3.48% growth recorded in same period a year ago. North India region recorded a 2.57% fall and south India registered 13.82% fall in January October 2011 compared with January-October 2010 data.
Tea imports down 14.6% as prices rise

The tea import bill fell by 9.12 %year-on-year in the first 10 months of the current calendar as suppliers raised prices. In January and October 2011, the asking price for imported tea rose to Rs 94.87 a kg from Rs 89.10, up Rs 5.77 or 6.48 %. Consequently, importers reduced offtake to 14.15 million kg (mkg) from 16.57 mkg, down 2.42 mkg or 14.6%. Due to this, the tea import bill reduced by Rs 13.47 crore or 9.12 %to Rs 134.2 crore from Rs 147.67 crore. In dollar terms, Indias import bill reduced to $29.39 million from $32.23 million
despite the price rising to $2.08 a kg from $1.94. In 2010, India imported 20.04 mkg (25.67 mkg in 2009) of tea worth Rs 184.94 crore (Rs 216.03 crore) at an average price of Rs 92.26 a kg (Rs 84.16).
Outlook
With Kenya and Srilanka reporting fall in tea production, the global tea supplies are lower. This is facilitating improvement in the global and Indian tea auction prices, which can add further strength to the Indian tea sector. The sharp depreciation of the Indian rupee has added further aroma to the Indian tea exports.
Market capitalisation of the tea industry COMPANY LATEST MCAP LATEST AS ON 30 DECEMBER 11 (RS CR ) PRICE (RS)
Total Assam Company Bombay Burmah Goodricke Group Harr. Malayalam Jay Shree Tea Tata Global Warren Tea Others 7261.84 221.51 474.22 226.58 120.27 241.44 5577.97 334.90 64.95 7.15 339.70 104.90 65.15 83.60 90.20 312.70
1 MONTH
2.59 -11.07 -10.82 -12.22 6.11 -23.23 7.57 -5.98 -7.41

-2.56 -32.36 -18.63 -17.17 -0.83 -18.77 5.44 -30.51 -16.24 -12.22 -52.27 -15.79 -25.05 -9.89 -32.66 -7.82 2.81 -13.19
12 MONTHS
-21.94 -66.11 -38.44 -29.48 -21.74 -38.14 -16.75 53.70 -32.06
68
Capital Market
I January 2012
The Sectoral Picture I Energy I Coal
Coal
Production improves after three months of fall
Production
Prices
Indias coal production tumbled down by 15.3% in August 2011 and by 17.8% in September 2011. The extended southwest monsoons and Telengana stir in Andhra Pradesh together lead to a 9.0% fall in coal production in October 2011. After such fall for three months in succession, the Indian coal production finally looked up, and increased by 4.9% in November 2011. In April-November 2011, our coal production recorded a 4.0% fall, as against marginal 0.4% improvement in the same period of the previous year. The cost of domestic coal is set to increase, as Coal India has shifted to Gross Calorific Value (GCV) based pricing mechanism from 1 January 2012. Hitherto, the company was pricing based on useful heat value (UHV) based pricing. The shift will mean that there will be 17 slabs, as against 7 hitherto. The government indicted that the shift to GCV system of grading will create a win-win situation for both the coal consumer and producer by incentivizing improvement in quality resulting in better quality of coal to the consumer and commensurate realization for the coal companies. The shift to GCV is likely to add Rs 1500 crore of revenues to Coal India in the quarter ending March 2012, and similar incremental cost to domestic coal user industry. In the eight months ended November 2011, Coal India (CIL) and Singareni Colleries Company (SCCL) together supplied 214.27 million tonnes (mt) of coal to the power plants as against the pro-rata Annual Contracted Quantity of 282.87 mt indicating overall materialization of about 92%. This was
achieved inspite of unprecedented rain this year and long strike in Telangana region affecting coal production The combined coal production of CIL and SCCL during this period was 277.81 mt as against the pro-rata target of 303.54 mt, indicating achievement of 91% of the pro-rata production target. Thermal coal prices at Chennai, based on daily spot prices declared by Multi Commodity Exchange, has increased from Rs 5821 per tonne in November 2011 to Rs 5841 in December 2011, which further increased to Rs 5905 per tonne by early January 2012. This is despite easing Australian thermal coal prices from US$ 131.30 per tonne in September 2011 to US$ 127.49 per tonne in October 2011, which further eased to US$ 121.93 per tonne by November 2011. The sharp depreciation of Indian rupee has lead to improvement in domestic prices despite easing global prices.
Outlook
India is heavily dependent on coal for sizeable portion of our energy requirements. There is a need to significantly and sustainably step up our coal production, amidst Falling gas production, and higher global crude oil, natural gas and coal prices and rising domestic energy requirements. Also, newer technologies of coal mining, besides exploration of coal bed methane, coal to liquid and gas needs to be deployed to beneficially extract energy resources, with least damage to the fragile ecology.
69
The Sectoral Picture I Energy I Crude Oil & Refineries
Crude Oil & Refineries
Price remains high
Production
Prices
The Brent crude oil price eased 2.6% to $107.72 per barrel during December 2011 from $110.62 per barrel during November. Meanwhile, the price of Indian basket of crude oil also declined to $107.08 a barrel during December 2011 from $109.62 a barrel in November 2011. However, the data from Petroleum Planning and Analysis Cell (PPAC) shows that the daily under-recoveries for Oil Marketing Companies (OMCs) on the sale of Diesel, PDS Kerosene and Domestic LPG zoomed to Rs 388 crore during December 2011 compared to Rs 364.5 crore in November 2011. The increase in under-recoveries was caused by sharp weakening of Indian Rupee to record low of Rs 52.67 against US dollar, while fall in crude oil price restricted further increase in under-recoveries. However, the Brent crude oil prices have rebounded to $112.92 a barrel in the early January 2011, while rupee remains sharply weak, which could widen the under recoveries.
2011. The crude oil output has increased 2.9% to 25.527mt during April-November 2011, compared to 11.5% growth recorded in same period last year.
Refinery output
Crude oil output
India's crude oil production plunged 5.6% to 3.084 million tonnes (mt) in November 2011, in addition to 0.9% fall posted in September after consistent growth in previous 22 months, over the same period of the previous year. The crude oil output of ONGC declined 4.2% to 1.94 mt, recording fall for twentieth sequential month, as its Mumbai high offshore output fell 5.3% to 1.334 mt. The crude oil production of Oil India increased 5.3% to 0.311 mt in November 2011, but that of private/JV companies slumped 11.7% to 0.833 mt in November
70
India's crude oil refinery output for nine refineries together rebounded 11.2% to 14.423 mt in November 2011, snapping 2.8% fall posted in October 2011. The output of PSU refiners increased 6.1% to 10.214 mt, as BPCL recorded 20.3% surge in output to 2.00 mt during November 2011. The production of HPCL increased 2.8% to 1.358 mt, while that of Indian Oil improved 6.1% to 4.681 mt. But, the output of Mangalore Refineries dipped 7.0% to 1.057 mt, wile that of Numaligarh Refineries also plunged 2.3% to 0.232 mt in November 2011. The production of Chennai Petroleum recorded 3.5% growth at 0.879 mt, snapping fall for previous five months. Among private refiners, the output of Reliance Petroleum zoomed 40.3% to 2.94 mt, while the output of Essar Oil rose 1.3% to 1.269 mt in November 2011. The overall refinery utilization rate in November 2011 stood at 109.4% of total installed capacity, compared to 101.6% in November 2010.
Natural Gas
India's natural gas production dipped 10.1% to 3.847 billion cubic meters (bcm) in November 2011, recording fall for the twelfth sequential month. The output of ONGC increased 1.7% to 1.911 bcm, while that of Oil India increased 6.7% to 0.218 bcm in November 2011. But, the output of private/JV
The Sectoral Picture I Energy I Crude Oil & Refineries companies plunged 21.8% to 1.718 bcm in November 2011. The cumulative gas production has dipped 8.5% to 32.279 bcm in April-November 2011, compared to strong 19.8% growth recorded in April-November 2010.
Refinery shutdown pulls down Essar Oil
Fuel Product consumption
India's fuel product consumption/sales zoomed 11.2% to 12.82 mt in November 2011, compared to 1.2% growth recorded in November 2010. The consumption of diesel surged 16.6% to 5.72 mt, while the consumption of naphtha and LPG advanced 8.1% to 0.99 mt and 11.1% to 1.33 mt in November 2011. Consumption of Aviation Turbine Fuel (ATF) improved 10.9% to 0.48 mt, but that of petrol dipped 2.4% to 1.16 mt. The consumption of fuel oil plunged 10.2% to 0.78 mt, while that of lubes and kerosene also fell 1.1% to 0.20 mt and 8.9% to 0.68 mt during November 2011. The consumption of LDO dipped 11.3% to 0.03 mt, while that of bitumen surged 43.4% to 0.44 mt during November 2011. The consumption of petcoke zoomed 62.7% to 0.59 mt, while that of other fuel products galloped 13.6% to 0.42 mt during November 2011.
is projected to increase to 240.6 mt by 2013-14 from 193.386 mt in 2010-11. India, which probably has the largest number of petrol pumps in the world, would witness number of fuel retail outlets rising to 45,530 in 2013-14 from 39,430 in 2010-11. Meanwhile, the number of LPG consumers is also likely to surge to 15.58 crore in 2013-14 from 12.69 crore in 2010-11.
Trade
India's import of crude oil increased rebounded 18.2% to 14.824 mt during November 2011, while it increased 4.5% to 112.226 mt during April-November 2011. The imports of petroleum products dipped 23.7% to 1.045 mt, while exports of petroleum products increased 8.2% to 4.86 mt during November 2011. The petroleum product import has declined 12.8% to 9.911 mt, while export of petroleum products climbed up 8.7% to 40.463 mt during April-November 2011.
Outlook
Crude oil and refinery capacity
India's crude oil production is likely to increase to 38.18 mt in 2011-12, 42.30 mt in 2012-13 and 45.57 mt in 2013-14 on the back of output from newer fields like the Rajasthan block of Cairn India. The natural gas production is expected to dip to 51.671 bcm in 2011-12 to recover to 52.276 bcm in 2012-13 and jump to 61.652 bcm by 2013-14. Indias oil refining capacity
Indias crude oil production can increase at a faster pace than our demand growth, in the next couple of years. Still the share of imports in our total crude oil requirement is set to be in excess of 70%. Our natural gas production too is faltering, and there is a need to reverse the fall, and step up production through newer fields as well as increase in output in the existing fields. Our refinery capacities are increasing, and are already in excess of our domestic demand. As a result, the refinery product exports have been racing ahead in the recent times. Increase in our petrochemical capacity in general, and ethylene capacity in particular, should help capture significant value of the downstream petrochemicals, including polymers and plastic products. The players are also actively scouting for oil and gas reserves abroad. Still, the country remains very vulnerable to shocks to Crude oil supply disruptions and prices. CHANGE IN MARKET CAPITALISATION (%) OVER 3 MONTHS 6 MONTHS
-5.59 -20.53 -11.93 -21.55 -25.77 -14.53 -3.66 1.01 -11.79 -13.90 -23.35 -46.12 -26.64 -19.21 -20.86 -5.05
Market capitalisation of the crude oil & refinery industry COMPANY LATEST MCAP LATEST AS ON 30 DECEMBER 11 PRICE 1 MONTH (RS CR) RS
Total BPCL CPCL Essar Oil HPCL IOCL MRPL ONGC 342904.67 19365.89 2666.77 9871.78 9380.05 63612.29 10603.23 227404.66 535.65 179.05 69.15 277 262 60.5 265.8 -7.11 -14.06 -9.71 -20.38 -16.89 -9.98 -6.20 -4.46
12 MONTHS
-22.77 -23.06 -26.38 -47.59 -35.69 -31.79 -18.13 -17.49
Capital Market
I January 2012
71
The Sectoral Picture I Energy I Power
Power
Spectacular growth in November 2011
Production
Indias power generation capacity touched 185496 MW by November 2011, including 20162.24 MW of renewable energy sources. Thermal power capacity at 121805.98 MW including 102863.38 MW of coal-based power plant, 17742.85 MW gas based and 1199.75 MW of diesel based power plants. Indias nuclear power capacity is 4780 MW as of November 2011. Indias power generation a recorded spectacular 14.39% growth in November 2011 compared with a 3.54% growth recoded in the same month a year ago. Thermal, hydro and nuclear power generation recorded 15.30%, 11.12%, 8.78%
growth in November 2011 compared with November 2010. In April-November 2011, Indias power generation recorded a 9.38% growth compared with the same period a year ago. Thermal, hydro and nuclear power generation recorded 6.39%, 20.51%, 37.21% growth rate in April-November 2011 compared with April-November 2010. As the domestic coal availability is way short of demand, this leads to high and rising import of coal by various user industries, including power sector. Now, the cost of domestic coal is set to increase further, as Coal India has shifted to Gross Calorific Value (GCV) based pricing mechanism from 1 January 2012. Hitherto, the company was pricing based on useful heat value (UHV) based pricing. The shift will mean that there will be 17 slabs, as against 7 hitherto. The shift to GCV is likely to add Rs 1500 crore of revenues to Coal India in the quarter ending March 2012, and similar incremental cost to domestic coal user industry. Natural gas availability was expected to improve, but in the recent times the KG D6 basin is recording fall in production, leading to under utilization of gas based power plants. So, lower availability of fuel has become a major deterrent in power capacity additions, besides delays relating to land acquisitions, and environmental clearance. Indias conventional generation capacity additions were 12,160 MW during 2010-11, which was way below the target of 21,441.20 MW target. Still, this was the highest power capacity addition recorded for any year so far. Perhaps, the country is heading for newer heights in annual power capacity additions in FY 2011-12, surpassing the previous high recorded CHANGE (%)
7.05 4.35 7.89 3.50 3.95 3.60 15.30
Power Generation (GWH)

MONTHS
May-11 Jun-11 Jul-11 Aug-11 Sep 2011 Oct 2011 Nov 2011
*MONITORED CAPACITY (MW)

75,009.28 70,600.67 74,425.21 73,101.19 70,497.50 74,434.13 71,234.39
CHANGE (%)
10.31 7.93 12.98 9.35 8.80 5.41 14.39
THERMAL MILLION UNITS

60,503.73 55,588.29 56,518.82 53,353.32 49,172.99 59,142.19 60,306.65
HYDRO MILLION UNITS

11,482.35 11,884.59 14,146.65 16,004.07 17,744.41 11,957.03 8,188.00
CHANGE (%)
21.02 21.77 31.22 29.52 22.68 14.03 11.12
NUCLEAR MILLION UNITS

2,726.27 2,502.39 2,722.88 2,719.71 2,679.95 2,714.63 2,454.41
CHANGE (%)
60.49 39.93 62.92 41.54 31.72 17.89 8.78
APR-NOV
2011 2010 580728.13 530922 9.38 454404.27 427110.58 6.39 100242.27 83178.62 20.51 21183.37 15438.13 37.21
Numbers are actual. * Including Bhutan
72
Capital Market
I January 2012
The Sectoral Picture I Energy I Power in the previous year. Already, in the eight months ended November 2011, the power generation capacity additions were 10307.50 MW, which was also lower than target of 13918 MW. Of this, 64% or 6566.5 MW was added by private sector, followed by 21% or 2160 MW by Central and 15% or 1581 MW by the state sector during this period. Capacity additions were lower than target by 26% on All India basis. The performance would have been better but for steep 54% below target additions by State followed by 38% below target by the Central sector. The private sector has done relatively much better with capacity additions at 94% of the target in April-November 2011. The share of the private sector in the Indian power generation capacity has increased significantly in the last few years.
FCCB repayments due trips Suzlon Energy
NTPC anticipates better H2FY12
Availability of coal based power plants of the company for Q2 of FY 2012 was 83% and that for H1 of FY 2012 was about 86.67%. Similarly that of Gas based plant availability for Q2 of FY 2012 stood at 92% and that for H1 of FY 2012 was at 91.06%. The power plant availability below 90% for the quarter as well as half year was largely on account of relatively higher plant outages in quarter/half year ended September 2011 compared to corresponding previous period. Plant outage normally accounts for 5%-10% in a year. Unlike last fiscal where most of the plant outages have happened in second half, in current fiscal it happened in first half. Moreover, NTPC has lined up sufficient coal including imported coal for smooth operation of plants in H2 of FY 2012, the company is confident of plant availability of over 92% for current full year i.e. FY 2012.
Outlook
Reforms of the state distribution utilities are the weakest link in the Indian power sector. These utilities are unable to buy power at market rates, forcing lower capacity utilization of many private sector projects. Also, their dues to generation companies have increased significantly in the recent times, leading to rising overdues and higher interest costs for power generating companies. In view of the precarious financial position of state distribution utilities, many critical investments required at the power transmission and distribution segments have been neglected. Also, many states are yet to fully allow third party sale of power, which will be a major trigger, besides improving the financial viability of state distribution utilities for the Indian power sector.
Market capitalisation of the power sector COMPANY LATEST MCAP LATEST AS ON 30 DECEMBER 11 PRICE (RS CR) (RS)
Total CESC Energy Devl.Co. Guj Inds. Power Neyveli Lignite NTPC Reliance Infra. Suzlon Energy Tata Power Co. 181111.39 2541.28 83.74 986.15 12196.95 132422.09 8976.65 3199.23 20705.30 203.40 30.45 65.20 72.70 160.60 340.45 18.00 87.25
1 MONTH
-3.30 -21.71 -21.72 -9.57 -3.96 -0.89 -15.77 -22.41 -4.80

-7.53 -26.48 -19.55 -19.26 -7.33 -3.98 -8.86 -50.75 -12.49 -20.96 -30.97 -13.62 -13.36 -26.93 -13.66 -37.55 -63.45 -33.26
12 MONTHS
-29.48 -44.39 -37.67 -37.46 -45.56 -19.94 -56.46 -67.06 -36.11
Capital Market
I January 2012
73
The Sectoral Picture I Infrastructure I
Railways
Railways
Posts double digit growth
The earnings of Indian Railway (IR) surged 11.7% at Rs 8765.2 crore in November 2011. The passenger earnings increased 10.0% to Rs 2434.57 crore in November 2011. The total approximate number of passengers booked improved 4.8% to 701.8 million in November 2011 compared to 669.6 million in November 2010. The goods earnings improved 11.7% to Rs 5777.3 crore, while the earnings from other sources galloped 21.3% to Rs 563.79 crore in November 2011. Among the other sources of earnings, the revenue from other coaching climbed up 10.2% to Rs 238.9 crore and that from sundry earnings jumped 26.7% to Rs 314.5 crore.
Railways goods traffic
Freight loading
Freight loading of the railway rebounded 5.9% to 81.08 million tonnes (mt) in November 2011, snapping fall for last two sequential months. Freight revenue increased 11.7% to Rs 5713.88 crore in November 2011. The freight loading increased 4.1% to 618.0 mt, while freight earning increased 9.3% to Rs 43106.76 crore in April-November 2011. The net tonne kilometers (NTKM) moved up 5.1% to 52629 million in November 2011 and 4.4% to 410378 million in April-November 2011. Earnings per tonne and earnings per net tonne kilometers improved 5.5% to Rs 704.7 and 6.3% to 108.6 paise, respectively, in November 2011. The earnings per tonne increased 4.9% to Rs 697.5, while earnings per net tonne kilometers increased 4.7% to 105.0 paise in April-November 2011.
foodgrains dipped 20.7% to 2.92% in November 2011. The traffic movement of other goods improved 18.6% to 6.51 mt in November 2011.
Private Investment in Freight Terminals
Commodity wise freight
Coal transportation, accounting for 48.1% of the total loadings, surged 10.4% to 39.03 mt in November 2011, while the cement and fertilizers loading spurted 13.3% to 8.8 and 15.3% to 5.2 mt, respectively. However, iron ore loading plunged 14.6% to 8.36 mt in November 2011, while that of container service and raw material for steel plant also fell 0.3% to 3.09 mt and 4.6% to 1.03 mt in November 2011. Loading of mineral oil and finished steel increased 9.0% to 3.52 mt and 2.7% to 2.62 mt in November 2011, but that of
A total of 18 proposals have been received so far under the scheme for private freight terminal, out of which seven proposals for Bamanhari, Nabha (Northern Railway), Rudrapur (North Eastern Railway), Wardha, Tadali, Kalamboli and Somathane (Central Railway) have been given In Principle' approval by the zonal railways and one private freight terminal at Timmapur (South Central Railway) has been notified. The scheme will facilitate traffic handling at the terminals by private investors thereby increasing Indian Railways' market share.
Outlook
Revenue Earnings (in Rs crore)

MONTH
Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11
PASSANGER
2283.61 2476.41 2374.84 2322.75 2301.23 2434.57
GOODS
5473.93 5475.21 5225.62 4938.51 5647.86 5777.25
OTHERS
419.64 402.09 333.44 561.35 425.04 553.33
TOTAL
8177.18 8353.71 7933.90 7822.61 8374.13 8765.15
Indian Railways earnings started off on a strong note with 11.5% increase in April 2011, but there were sharp deceleration to about 4.1% on y-o-y basis by September 2011. Since then, the growth is looking up, which rose to 7.5% in October 2011 and to healthy 11.7% in November 2011. The cumulative growth has also improved from.9% growth in the seven months ended October 2011 to about 9.3% in the eight months ended November 2011. On the other hand, there has been sharp rise in costs, including diesel, and staff. But despite the fact that passenger fares needs to be hiked, the announcement of elections to 6 states, including Uttar Pradesh has will make this next to impossible, at least till the end of March 2012. It remains to be seen whether the government musters strength to take such unpopular decision.
74
(million tonnes)
Civil Aviation
Civil Aviation
Global uncertainty raise concerns
Oil marketing companies reduced the aviation turbine fuel (ATF) prices by 2.4% to Rs 63076.67 per kiloliters on 01 January 2012 from a month earlier, after raising them for the previous three sequential months leading to a cumulative increase of 14.9%. Indias crude oil basket price eased 2.3% to $107.08 a barrel during December, but the Indian rupee touched a record low level restricting further cut in ATF prices. ATF consumption has increased 10.9% to 0.48 million tonnes (mt) in November 2011, while it advanced 10.8% to 3.64 mt during April-October 2011 compared to 8.9% growth in the corresponding period of previous year. Total passenger traffic increased 16.7% to 138 lakh, but freight cargo dipped 9.9% to 185.61 th tonnes, recording fall for the fifth sequential month in October 2011. Aircraft movement increased 14.5% to 134.16 thousands in October 2011. Cumulative passenger traffic and aircraft movement has increased 16.0% to 922.4 lakh and 12.0% to 891.64 thousands in April-October 2011. Meanwhile, freight cargo declined 2.2% to 1347.65 th tonnes in April-October 2011.
Growth in total passenger traffic
while domestic cargo movement also dipped 13.8% to 66.74 th tonnes in October 2011. The domestic cargo traffic declined 6.1% to 468.57 th tonnes, while international cargo loading rose 0.1% to 879.1 th tonnes in April-October 2011.
Domestic passenger traffic of scheduled airlines
Passenger Traffic
Domestic passenger traffic advanced 19.9% to 104.1 lakh, while international passenger traffic moved up 7.6% to 33.9 lakh in October 2011. Airports such as Madurai, Srinagar, Amritsar, Raipur, Silchar, and Lucknow recorded strong growth in domestic traffic at 258.7%, 145%, 109.5%, 85.6%, 83.1% and 77.1%, respectively. Meanwhile, Nagpur, Trichy, Pune, and Varanasi airports have witnessed a healthy growth in international traffic at 60.6%, 37.1%, 31.9% and 18.6%, respectively, in October 2011.The cumulative domestic and international passenger movement increased 19.0% to 693.4 lakh and 7.8% to 229 lakh, respectively.
Aircraft Movement
Domestic passenger traffic of scheduled domestic airlines increased 11.1% to 54.14 lakh during November 2011. Passenger traffic of scheduled airlines has increased 16.4% to 407.01 lakh in April-November 2011 compared to 18.2 growth recorded during April-November 2010. Domestic passenger traffic of Air India increased 12.7% to 9.42 lakh, while that of Jet Airways and Jet Lite improved 14.5% to 10.69 lakh and 14.9% to 3.94 lakh, respectively, in November 2011. Passenger traffic of Kingfisher Airlines plunged 18.9% to 7.56 lakh during November 2011. Passenger traffic of Spicejet and Indigo surged 28.8% to 8.37 lakh and 26.9% to 10.69 lakh, but that of Go Air declined 0.6% to 3.35 lakh, respectively, in November 2011.
Domestic aircraft movement increased 16.5% to 106.61 thousands, while international aircraft movement rose 7.2% to 27.55 thousands in October 2011. Airports such as, Madurai, Raipur, Ranchi, and Trivandrum have recorded a strong growth of 96.7%, 71.7%, 55.8% and 50.6%, respectively, in the domestic aircraft movement. Meanwhile, the Trichy and Lucknow airports have posted better growth in international aircraft movement at 27.3% and 21.1%, respectively in October 2011. Cumulative domestic aircraft movement increased 14.0% to 712.48 thousands, while international aircraft movement rose 4.9% to 179.16 thousands in April-October 2011.
World Air Traffic
Cargo traffic movement
International cargo movement fell 7.5% to 118.87 th tonnes,

The passenger and freight traffic results reported by IATA (International Air Transport Association) for November 2011 showed passenger demand was up 4.3%, while freight demand declined 3.1% recording fall for the seven sequential months. As per the IATA, weak global economic performance is being reflected in air transport markets. Overall, passenger demand increased 5.9% in 2011 so far. The passenger load factors eased to 76.3% in November and 78.2% in January-November 2011. North American airlines saw international demand shrink by 1.2% with a 1.0% reduction in capacity. Latin American and the Middle Eastern carriers recorded the strongest yearon-year growth at 8.8% and 9.8%, respectively, while capacity
75
(% change)
Civil Aviation for increasing their yields. Enhancing air traffic management infrastructure, Creating an empowered air cargo promotion board to fix quality of service and responsibility of each stakeholder, and Developing a world-class national aviation academy through public private partnership to create a pool of skilled personnel. Observations and Projections of Assocham Passenger handling capacity doubled from 72 million in 200506 to 143 million in 2010-11. Indian carriers catered to 5.4 crore domestic and 1.3 crore international passengers in 2010-11. Airlines suffered a loss of over Rs 20,000 crore in the past three years. Freight traffic increased nearly 11% over the past five years to reach 23.3 lakh tonnes in 2010-11. Airlines are expected to add 370 aircraft worth Rs 1.5 lakh crore by 2016-17 The maintenance, repair and overhaul industry expected to triple in size from Rs 2250 crore to Rs 7000 crore by 2020. In the 12th Plan, airport infrastructure will require about Rs 67500 crore of which Rs 50000 crore is likely to be contributed by the private sector. General aviation market expected to grow at 10% per annum to cross Rs 1600 crore by 2016-17.
increases outstripped the growth in demand with capacity growing 10.4% and 11.4%, respectively. European airlines continued to face the weakest market outlook due to the uncertainty in the euro-zone. Demand grew 4.9% while capacity increased 5.3%. Asia-Pacific airlines reported a 2.4% growth in demand against 5.4% growth in capacity. African carriers reported a 2.6% growth in demand, which is twice the 1.3% capacity expansion. IATA is estimating the airline industry will make a collective profit of US$ 6.9 billion in 2011 for a net margin of 1.2%. IATA forecasts that this will fall to US$ 3.5 billion in 2012 (0.6% net margin). But the association has warned that the downside risk of the Euro-zone crisis failing to be resolved could lead to losses in excess of US$ 8 billion. The Associated Chambers of Commerce and Industry of India (Assocham), expect the Indian civil aviation industry can again fly on a growth curve in 2012, if the government lowers taxes on jet fuel, upgrade airport infrastructure and allow three major airlines Jet Airways, Kingfisher Airlines and SpiceJet to offload 49% of promoter stake to foreign airlines. Progressive policies and collaborative approach between the government and the industry can propel India among the top five aviation markets globally by 2015. It has formed eight-point strategy for aviation industry to be pursued in the 12th Five-Year Plan (2012-17) period as follows: Creating an infrastructure development fund to build airports in tier II and III cities Bringing immediate parity with global aviation turbine fuel prices to start with at metro airports Increasing supervision on pricing policy by certain carriers Opening foreign direct investments by international airlines to bring in capital and technological expertis Allowing easier access to global routes by Indian carriers
ASSOCHAM suggests 8-point strategy
Outlook
The spike in crude oil prices and the sharp depreciation of Indian rupee together has lead to accelerated rise in costs of the sector, most of which are US dollar-denominated. With deceleration in economic growth, the pace of growth in demand may also ease, which is also a cause for concern. The Indian civil aviation sector is limping with huge losses. To tide away the financial crisis, and to optimally capitalize on future growth opportunities, the players expect the government to relax FDI in the civil aviation sector, to attract global funds.
Airport Performance: All India

MONTH
Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11
AIRCRAFT MOVEMENT (IN 000) INTERNATIONAL DOMESTIC TOTAL

25.06 25.13 24.92 25.38 25.77 25.40 27.55 97.81 102.11 100.82 103.07 102.14 99.88 106.61 122.87 127.24 125.74 128.45 127.91 125.28 134.16
PASSENGERS (IN MILLION) INTERNATIONAL DOMESTIC TOTAL

3.22 3.37 3.23 3.37 3.19 3.13 3.39 9.35 10.85 10.42 9.88 9.44 8.99 10.41 12.57 14.22 13.65 13.25 12.63 12.12 13.80
FREIGHT (IN 000 TONNES) INTERNATIONAL DOMESTIC

127.46 132.78 125.70 129.26 124.30 120.69 118.87 64.67 65.92 63.05 66.07 69.97 72.10 66.74
TOTAL
192.13 198.70 188.75 195.33 194.27 192.79 185.61
APR-OCT
2010-11 2011-12 170.71 179.21
APR-OCT
625.24 712.44
APR-OCT
795.95 891.65
APR-OCT
21.25 22.90
APR-OCT
58.28 69.34
APR-OCT
79.53 92.24
APR-OCT
878.64 879.06
APR-OCT
498.99 468.52
APR-OCT
1377.33 1347.58
76
Capital Market
I January 2012
Telecommunication
Telecommunication
Rural subscribers cross 300 million
The number of telephone subscribers in India increased to 914.59 million at the end of October 2011 from 906.93 million at the end of September 2011, thereby registering a monthly growth rate of 0.85%. The share of urban subscribers has marginally declined to 66.23% from 66.31% whereas share of Rural Subscribers has marginally increased to 33.77% from 33.69% in the month of October, 2011. With this, the overall Tele-density in India reaches to 76.03 at the end of October, 2011 from 75.48 of the previous month. Subscription in Urban Areas grew from 601.42 million in September 2011 to 605.78 million at the end of October 2011. Rural subscription increased from 305.51 million to 308.81 million. The growth of Rural and Urban Subscription is 1.08% and 0.72% respectively. The overall Urban teledensity has increased from 166.01 to 166.93 and Rural teledensity increased from 36.4 to 36.76.
where as BSNL and MTNL, two PSU operators hold only 12.19% market share.
Mobile Number Portability
As per the data reported by the service providers, by the end of October 2011 about 231.66 lakh subscribers have submitted their requests to different service providers for porting their mobile number as compared to 206.29 lakh subscribers at the end of September 2011. Out of these requests around 11.71 lakh pertains to Haryana wherein MNP was implemented from 25th November 2010. In rest of the country, in MNP Zone-I (Northern & Western India) maximum number of requests have been received in Gujarat (22.39 lakh) followed by Maharashtra (19.1 lakh) whereas in MNP Zone-II (Southern & Eastern India) maximum number of requests have been received in Andhra Pradesh (19.46 lakh) followed by Karnataka Service area(19.18 lakh).
Wireless
Total Wireless subscriber base increased from 873.61 million in September 2011 to 881.4 million at the end of October 2011, registering a growth of 0.89%. The share of Urban Subscriber has marginally decreased from 65.95% to 65.86% where as share of Rural Subscribers has marginally increased from 34.05% to 34.14%. The overall wireless Tele-density in India increased to 73.27 from 72.7. Wireless subscription in Urban Areas increased from 576.12 million in September 2011 to 580.49 million at the end of October 2011. Rural subscription increased from 297.49 million to 300.91 million during the same period. This shows higher growth in Rural Subscription (1.15%) than Urban Subscription (0.76%). The Urban wireless teledensity has increased from 159.03 to 159.96 and rural teledensity has increased from 35.44 to 35.82. Private operators hold 87.81% of the wireless market share
Wireline segment
Wireline subscriber base declined from 33.31 million in September 2011 to 33.19 million at the end of October 2011. The share of Urban Subscriber has increased from 75.94% to 76.18% where as share of Rural Subscribers has declined from 24.48% to 23.82%. The overall wireline Tele-density in India declined to 2.76 from 2.77 with urban and rural teledensity being 6.97 (6.97) and 0.94 (0.94) respectively. BSNL and MTNL, two PSU operators hold 81.32% (81.42%) of the Wireline market share.
Circle wise Growth
All India GSM cellular Services

MONTH
Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov 2011
LAKHS NO.
111.06 95.33 85.81 76.40 53.39 65.26 71.23 66.77
% CHANGE
-0.66 -15.30 -30.18 -33.69 -60.48 -47.45 -51.52 -61.09
LAKHS NO.
5806.65 5901.98 5987.80 6064.20 6117.59 6182.84 6254.07 6320.84
% CHANGE
34.09 32.84 31.14 29.55 27.02 25.15 22.94 20.19
Circle B registered the highest net addition (44.54% of total net additions at 3.5 million) taking the total to 347.7 million subscribers thereby increasing the difference in subscribers between Circle B and Circle A (310.6 million) whereas Circle C continued to register the highest rate of monthly growth (1.38%) in the wireless sector from September 2011 to October 2011 due to comparatively lower base taking the total to 120.3 million subscribers.
VLR Data
Out of the total 881.4 million subscribers, 626.18 million subscribers were active subscribers on the date of Peak VLR for the month of October 2011. The total active VLR number excludes the CDMA VLR figure of BSNL, as the service provider has not provided the VLR figures corresponding to their total CDMA subscriber base of 4.65 million. The proportion of VLR subscribers is approximately 71.04% of the total wireless subscriber base against 70.71% in September
77
Capital Market
I January 2012
Telecommunication
2011 reported by the service providers. Circle-wise, Jammu & Kashmir has the highest proportion of VLR subscribers with 81.36% followed by Assam (77.43%) and M.P. (77.35%); Mumbai has the lowest proportion with 59.68%. Service Provider wise, Idea leads the tally with 92.03% followed by Bharti with 88.79%; Etisalat is at the bottom with 27.57%.
Tata Comm rings gains
6.68 million new GSM subscribers in Nov11
Mobile operators using GSM technology excluding Reliance Communications (RCom) and Tata Teleservices (TTSL), added 6.68 million subscribers in November 2011, up 1.07% over previous month lower than 1.15% monthly growth rate achieved in October 2011, same as 1.07% in September 2011 but higher than 0.88% monthly growth rate achieved in August 2011. With this, the total GSM subscriber base in the country went up to 632.08 million during the month compared to 625.41 million in the previous month according to the data released by the Cellular Operators Association of India (COAI).
Broadband (= 256 Kbps download)
Total Broadband subscriber base has increased from 12.84 million in September 2011 to 12.98 million in October 2011, there by showing a growth of 1.03% as compared to 1.18% in September 2011 decreasing again after increasing in August.
Outlook
Next phase of growth would come from higher usage rather than subscriber adds. 3G networks may add significantly to
voice capacity, enabling voice revenue growth in urban areas to some extent. The weak financial state of most telcos underlines the inevitability of consolidation in the sector. The consolidation is expected to happen once the New Telecom Policy is out later this year and M&A guidelines are clear. The revenue growth for the industry improved even as competitive intensity reduced with operators focusing on paying customers than chasing subscriber market share. With tariff hikes, revenue growth may improve further, going forward. The New Telecom Policy (NTP) remains the only overhang on the sector, especially the spectrum pricing norms. CHANGE IN MARKET CAPITALISATION (%) OVER 3 MONTHS 6 MONTHS
-9.90 -24.94 19.51 -9.31 -36.80 18.20 -16.97 -18.08 -27.94 -22.97 -4.96 -2.65 -33.01 14.04 -30.29 -24.38 -11.44 -24.92 20.98 -10.58 -62.19 -19.52 4.38 -42.81 -48.29 -41.16 -23.29 -28.29 -42.54 4.30 -37.10 -29.46
Market capitalisation of the telecom industry

COMPANY LATEST MCAP AS ON 30 DECEMBER 11 RS CR
184472.06 177.31 283.20 130216.96 357.47 1313.76 27120.93 515.52 1430.10 97.21 199.60 14417.18 26.65 6051.98 2261.46 2.73 124.60 34.60 342.90 36.75 10.60 82.00 17.90 22.70 42.60 3.26 69.85 23.65 212.35 11.92 0.72
LATEST PRICE (RS)
1 MONTH
-10.87 -12.10 -6.11 -11.00 -7.66 -4.42 -16.05 -10.05 -14.02 -13.68 -10.19 -5.74 -8.70 11.06 -16.93 -17.27
12 MONTHS
-14.26 -48.90 -24.21 -4.32 -91.17 -74.40 18.37 -56.76 -58.61 -63.51 -43.40 -51.86 -56.29 -16.92 -38.40 -13.33
Total AGC Networks Astra Microwave Bharti Airtel GTL HFCL Idea Cellular ITI MTNL NELCO Quadrant Tele. Rel. Comm. Shyam Telecom Tata Comm Tata Tele. Mah. Vital Comm.
78
Capital Market
I January 2012
Shipping & Ports
Shipping & Ports
Traffic falls for three months in succession
The all-India port traffic has been recording fall for three months in succession through November 2011 over the same month of the previous year. Traffic fell by 4.5%, 7.1% and 0.2% in September, October and November 2011 respectively. While the fall in September and October 2011 can be partly due to high base of 4.5% rise in September 2010 and 4.4% rise in October 2010, the fall in November 2011, is despite low base of 5.1% fall in November 2010. The easing foreign trade growth is affecting the port traffic in the recent times. Ports like the Mormugao, and Haldia dock systems, total Kolkata, Paradip, and Visakhapatnam recorded 10.53%, 17.92, 10.47% 24.40% and 3% fall respectively in November 2012 compared with November 2010. The total share of all these ports in all India port traffic stood at 38% On other hand, ports like the Kolkata dock system, Ennore, Chennai, Tuticorin recorded 10.96%, 86%, 5%, 7% growth in November 2011 compared with November 2010. In April-November 2011, the all-India port traffic recorded 1.33% growth compared with same period a year ago. Ennore port recorded 43% growth till November 2011 compared with April-November 2010. The ports of JNPT, Visakhapatnam, Tuticorin, and Cochin recorded 3.67%, 9%, 11%12% growth respectively in April-November 2011.
Traffic at major ports
Commodity wise traffic
The all-commodity traffic recorded 0.23% fall in November 2011 compared with November 2010. P.O.L. holds the highest share with 32% in all-commodity traffic with 1.43% growth registered in November 2011 compared with same month a
year ago. Iron ore recorded a 35.38% fall in November 2011 with a 10% share in all-commodity traffic. Traffic of coking coal recorded a 13.29% fall with 4% share in all commodity traffic in November 2011 compared with November 2010. Indias merchandise exports has witnessed sharp deceleration in the recent times. Exports grew by mere 3.9% to US$ 22321.64 million in November 2011 as against robust 52% spike recorded in the six months ended September 2011 to US$ 160 billion. Our iron ore exports are falling, and the recent hike in export duty on iron ore to 30%, can lead to further fall in iron ore exports. With EU and US recording sluggish growth, stepping up exports is going to become all the more difficult in the rest of the current fiscal.
Investments in shipping and ports
Commodity wise traffic APR - NOV (UNITS) PORT 2011-12 2010-11

P.O.L. Iron Ore Finished Fertilizer Raw Fertilizer Thermal Coal Coking Coal 118,393.00 42,356.00 7,916.00 5,296.00 32,075.00 19,041.00 117,544.00 50,364.00 9,908.00 4,865.00 27,938.00 19,543.00 73,464.00 4,995.00 62,186.00 365,812.00
% CHANGE* 2011 - 12
0.72 -15.9 -20.1 8.86 14.81 -2.57 8.24 3.72 6.28 1.33
% SHARE* 2011 - 12
31.94 11.43 2.14 1.43 8.65 5.14 21.45 1.4 17.83 100
Tonnage Container 79,516.00 TEUS Container Other Cargo All Commodities 5,181.00 66,089.00 370,682.00
Units in thousand tonnes * April-November
The working group on shipping and inland water transport constituted by the Planning Commission envisages investment of Rs 90519 crore in the twelfth five year plan spanning 201217 for the shipping sector. This includes gross budgetary support of Rs 10499 crore, Rs 2340 crore from state governments and Rs 77680 crore through internal and extra budgetary resources (IEBR). IEBR includes Rs 60000 crore for acquisition of ships, Rs 12360 crore for coastal shipping and Rs 5320 crore for Inland Water Transport. As regards ports, the government has identified 23 projects for award, which can increase the port capacity by 236.63 million tonnes per annum at an outlay of Rs 16743.92 crore, under Private Public Partnership mode. The ministry of shipping has decided to install radiation monitor portals (RMP) in all the major Indian ports by 2012. Once these equipments are installed, all the consignment imported through ports will be scanned for radioactive radiation.
79
Capital Market
I January 2012
(% change)
Shipping & Ports products and gas (in case of LNG charter period to be 20-25 years), thermal coal, coking coal, fertilizer, iron ore. SCI has indicated that major industrialized economies such as Japan, China, South Korea, and USA have followed a proactive policy of cargo reservation for national flag vessels for carriage of all national cargoes for strengthening their national tonnage.
In August 2011, the ministry of shipping indicated that it has written to all the State Governments of Coastal states seeking land for setting up a new major port or a new ship building yard or a composite port cum shipbuilding yard project. The maritime sttes of Odisha, Andhra Pradesh, Tamil Nadu, Karnataka and Kerala were asked for providing lands for the porposed ports. The ministry indicated that already it has received proposals from Andhra Pradesh and Karnataka, which are under examination.
Outlook
Shipping Corporation seeks policy measures
Shipping Corporation of India has sought policy measures for cargo support and reservation for Indian flag vessels in Indias export-import trade. These proposals include (i) Reservation of 33.33% of Indias seaborne Exim cargoes for Indian flag vessels only, (ii) long-term charters of 5 - 7 years to be given to Indian flag companies in respect of crude oil, petroleum
The all-India sea port capacity has to be considerably and sustainably increased, factoring in demand growth in future. The sluggishness in port traffic should not deter us from capacity additions at strategic locations. There could be considerable reduction in time and costs of transporting through sea ports. This can be achieved by enhancing, mechanizing and modernizing our sea ports, which can also significantly improve the global competitiveness of Indias merchandise trade.
Port
NOVEMBER 2011
Kolkata Dock System New Mangalore Mormugao Mumbai J.N.P.T. Kandla Haldia Dock System Total Kolkata Paradip Visakhapatnam Ennore Chennai Tuticorin Cochin All Ports 1,073.00 2,895.00 3,840.00 4,229.00 5,569.00 7,102.00 2,286.00 3,359.00 3,618.00 5,490.00 1,293.00 4,470.00 2,154.00 1,681.00 45,700.00
2010
967 2,810.00 4,292.00 4,087.00 5,582.00 6,490.00 2,785.00 3,752.00 4,786.00 5,656.00 694 4,245.00 2,009.00 1,401.00 45,804.00
% CHANGE NOV 2011 OVER NOV 2010

10.96 3.02 -10.53 3.47 -0.23 9.43 -17.92 -10.47 -24.4 -2.93 86.31 5.3 7.22 19.99 -0.23
APRIL-NOVEMBER 2011-12 2010-11

8,364.00 20,951.00 23,856.00 35,629.00 43,630.00 53,758.00 22,056.00 30,420.00 36,367.00 47,905.00 8,979.00 37,851.00 18,108.00 13,228.00 370,682.00 8,501.00 20,812.00 26,703.00 36,217.00 42,086.00 54,133.00 22,239.00 30,740.00 35,693.00 43,930.00 6,278.00 41,161.00 16,278.00 11,781.00 365,812.00
% CHANGE APR-NOV 2011-12

-1.61 0.67 -10.66 -1.62 3.67 -0.69 -0.82 -1.04 1.89 9.05 43.02 -8.04 11.24 12.28 1.33
80
Capital Market
I January 2012

India's exports by commodity in August 2011 and growth

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India's exports by commodity in August 2011 and growth

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The Macro Picture I External Sector I Foreign Trade I Exports Commoditywise

India Economy Review

GROWTH % AUG-11 APR-AUG FY 12

SHARE % AUG-11 APR-AUG FY 12

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2,151,284.08 11,384,630.75 258,559.25 1,095,300.60

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GROWTH % AUG-11 APR-AUG FY 12

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Indias exports (Rs Lakhs)* COUNTRIES AUG 2011

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a FAS.: Free Alongside Ship.

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Indias imports (Rs Lakhs)

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Country Wise Monthly Merchandise Imports (US $ Million)

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4175 4654 4034 2060 8567

4093 4507 4048 2236 8032

4298 5723 3881 2226 8350

3934 4854 3937 2138 8192

3740 4937 3566 1916 8885

... 5277 3842 1919 9158

... 5428 3544 2046 8620

... ... 3521 2261 8881

... ... 3335 1869 9406

a includes an adjustment for under-recorded intra-EU imports

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BOP surplus eases on portfolio outflows

Trade deficit widens

Net invisibles surge

-31.86 -36.98 19.76 20.07 -16.9 21.6 -3.29

-5.4 -15.93 -16.91 7.4 -2 22.63 -5.44 18.43 -0.28

Invisible surplus finances 61.5% of trade deficit

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Valuation losses for forex reserves

FIIs withdraws money

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NRI deposits surge

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Debt service burden to rise on weak Rupee

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Deficit up on weak revenues and rising subsidy bill

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STATE PROVIDENT FUNDS

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