As a result, new projects may have to be put on the backburner.
Weighed down by a sharp rise in input costs and limited ability to pass on the burden to customers, India Inc's operating margins took a hard knock in the first quarter of 2008-09 even though demand was buoyant as reflected in zooming sales.
Reliance Power (R-Power), the Reliance-ADAG group company, which plans to set up 28,000 mw of power plants in India, has secured $1 billion (or around Rs 4,200 crore) funding from three Chinese banks for the Sasan ultra mega power project (UMPP) in Madhya Pradesh.
In partnership with different US firms, two companies belonging to Reliance Anil Dhirubhai Ambani Group (ADAG) have submitted competing bids for a single project floated by the Ministry of Coal.
Indian companies led by Anil Ambani's Reliance Power (RPower), Nuclear Power Corporation of India (NPCIL) and Bharat Heavy Electricals (BHEL) plan to invest over Rs 100,000 crore in the next five years to expand their presence in the nuclear energy sector after the country signs the nuclear agreement with the US, paving the way for import of fuel and transfer of technology.
Pharmaceutical companies in the country offering any financial incentive to doctors to prescribe particular drugs may become a thing of the past if the drug manufacturers decide to follow the strict code of conduct being implemented by a US industry trade group.
Glenmark Pharmaceuticals (Glenmark), which reorganised its speciality and generics businesses recently, is looking to acquire a medium to large-scale speciality pharmaceutical company in the US.
Amid reports of a US Congress probe against India's largest drug maker Ranbaxy Laboratories, data show that many leading multinational companies such as Pfizer, GlaxoSmithKline, Novartis and Merck are also under the scanner of the US drug regulator, for more or less similar violations as Ranbaxy is alleged to have committed.
The pharmaceutical industry is expected to continue with its good performance in the first quarter of 2008-09 with over 25 per cent growth in revenues and about 45 per cent rise in net profit riding on better sales in the domestic and export markets. The industry will gain from the the depreciation of rupee as well.
Experts said it is the first time that an Indian pharmaceutical company has been charged with such serious offences, and that the firm may be prosecuted if the allegations are proved. Able Labs of the US, now a unit of Sun Pharma through an acquisition in 2005, had to face similar charges in 2004-2005.
Pharma major denies charges, to file response soon.
Tanti, who acquired Germany's REpower Systems last year, today announced plans to buy Chinese wind energy company Honiton Energy Holdings. The acquisition will be concluded through Colossus Holdings, a Singapore-based holding company of the Tanti group, and Bahrain-based private equity company Arcapita Bank for over $500 million (Rs 2,162 crore), sources said.
The voluntary move comes a little more than a year after the Central Drugs Standard Control Organisation, the central authority that approves new drugs for marketing, had asked the drug makers to withdraw the 'combination drugs' as they are 'unnecessary' and may pose health hazards. The Drugs Controller General of India had banned 294 combination drugs sold under nearly 1,053 brand names from the market in June 2007.
Analysis of data published by 1,074 manufacturing companies with turnover of at least Rs 1 crore (Rs 10 million)(shows they were sitting on unsold finished stock worth Rs 18,950 crore (Rs 189.5 billion) at the end of 2007-08, up almost 70 per cent from Rs 11,164 crore (Rs 111.64 billion) a year ago.
The market meltdown since its January 8 peak has made private investments in public equity (PIPE) unprofitable as 2007's deal size of $5.31 billion is currently valued at $5.29 billion.Of the seven deals in the real estate sector, five are profitable while two made losses. Similarly, of the 17 deals in manufacturing sector, 13 reported loss.
Aurobindo pharma, cipla, orchid chemicals are the prominent takeover targets.
Health experts point out that it will take decades for India to reach the level of health education and infrastructure in developed countries. Our per capita health expenditure is estimated at $23, which is only 6.1 per cent of the gross domestic production.
"We are looking at targets with a bottom line of Rs 50-60 crore (Rs 500-600 million) to expand our CRAMS business in various markets," said Ashok Shinkar, director, Wanbury. The company plans to increase its turnover to over Rs 900 crore (Rs 9 billion) within the next three years.
According to analysts, Indian drug makers are forging alliances with overseas companies such as CD Pharma, Gnosis SpA, Crawford Healthcare and Syrio Pharma to sell drugs for chronic and acute cases. According to analysts, Indian drug makers are forging alliances with overseas companies such as CD Pharma, Gnosis SpA, Crawford Healthcare and Syrio Pharma to sell drugs for chronic and acute cases.
Voveran, Novartis India's flagship pain killer medicine, has become the largest selling domestic drug with sales of more than Rs 11 crore (Rs 110 million) in March 2008, displacing Pfizer India's cough and cold syrup Corex, which had sales of Rs 10 crore (Rs 100 million). Cipla, on the other hand, maintained its leadership position as the largest domestic pharmaceutical company edging out Ranbaxy Laboratories with a market share of 5.24 per cent.
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