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Wealth Incorporation Presents

"Do not think that you will begin to act in a great way at some future time; beginnow. Do not think that you will act in a great way when you reach a different environment; act in a great way where you are now. Do not think that you will begin to act in a great way when you begin to deal with great things; begin todeal in a great way with small things." -- Wallace D. Wattles

National Headlines WIPRO has signed a definitive agreement to acquire the Nasdaq listed

INFOCROSSING for $600 million- this is Indias biggest tech takeover.

The government and SEBI have come around to the view that the current norms for

delisting of shares featuring a reverse book building process should not berevamped.

SEBI has approved changes to rules governing ESOPs, which will allow nomineedirectors to accept this as a compensation.

In order to plug imports, the government has reduced the duty on IntegratedCircuits (ICs) from 4% to zero. Due to high CENVAT overflow, most motherboardmanufacturers in India had started importing from China.

Despite continuing opposition from the Private Courier Industry, the Centre hasrevived work on amendments to the Postal Bill, which will prevent the former fromcarrying any letter or parcel below 150gm and also seeks to limit FDI in the sector to49%.

Power Grid Corporation of India, the countrys biggest transmission utility, has fixeda price band of Rs. 44-52 for its IPO and sale of government equity to raise between2500-3000 crore.

International Headlines Temasek Holdings, the Singapore government-owned investment agency, has

approached Nasdaq to buy its 30% stake, worth 1.6 billion dollars, in the LondonStock Exchange.

The Hong Kong based Mulitex holdings plans to acquire a 10% stake in the Mumbaibased Effort BPO.

The worlds largest 24 hour convenience retailer 7 Eleven is set to make its forayinto Indian markets.

UK-based financial services and Real Estate Company Dawnay Day is planning toraise a $200-million India specific private equity (PE) fund.

Japans central bank, Bank of Japan decided to keep the interest rates unchanged.The decision was probably prompted by current worries about a U.S. credit crunchthat has affected markets worldwide.

Blackstone acquires 50.1% stake in Gokaldas Exports far $165 million, also puts anopen offer for 20% of share in the company.

Lehman shuts sub prime unit. 1200 employees to be laid off.

1 st SEP 2007Volume 1, Issue 1

..Tracking the Economy

Its only when the tide goes out that you learn whos been swimming naked.Warren Buffett

Inflation- 4.10 % , IIP(Q2)-11.0 %

Issue Attractions

National Headlines

1

International Headline

1

Corporate Interview

2

Quiz 2

Guest Editorial 3

Student Editorial 3

Pearls of Wisdom 4

15 days Movements

CHAANAKY CHAANAKY CHAANAKY CHAANAKY

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Corporate Interview

Quiz

Wide diversification is only required when investors do not understand what they are doing. WarrenBuffett

1. An Indian bank has tied up with a foreign Exim bank for a line of credit of $ 200 m.. Which are the two banks we are

talking of?

2. Finance ministry has asked PSU insurance companies to implement CIS by September. What is CIS?

3. Which bank is going to acquire stakes in UTI securities and how much?

4. Recently S&P ratings has downgraded a $300m senior unsecured bond of a company from BB+ to BB-. Which companyare we talking about?

5. SBI has recently launched SSIs card with a credit limit of Rs. 5 lakh for small-scale industries. The purpose of the card isto?

6. Who authored "Security Analysis" the bible of fundamental analysis. He is also the mentor of Warren Buffett.

7. Name the first company to come out with a public offer through the book-building route.

(Answers will be published in the next issue)

Mr. Srikant Bhagavat , the founder of the Hexagon Capital Advisors Pvt. Ltd, shares his views on the recent hue and crysurrounding the US sub-prime, the current state of the economy and the market.

CCIM: Is the market over reacting to the US sub-prime default issue?

Mr. Srikant Bhagavat: Market must react to the news, and thats what is happening presently. This reaction is mainly due

to the indirect impact of the American and European markets. The investors in these markets are mainly short terminvestors who have high leverage and invest by borrowing money. Their major strategy is to invest in emerging economiesand mainly invest with an aim of Hedge Funds Risk. Once they fall short of liquidity they liquidate investments where theyare earning high returns. The present effect is an indirect effect not a direct impact.

CCIM: With the current trend , do you think the boom period is coming to an end?

Mr. Srikant Bhagavat: No. India is still left with minimum two more years before the recession period starts. This is notan indication of the slowing down of the economy. The RBI is playing a major role in keeping tab on the economy bymonitoring and controlling the interest rates. Once the interest rates start showing negative signs, those will be the earlyindication of the slowing down of the economy.

CCIM: Are the current prices of stocks getting adjusted to reflect their true value?

Mr. Srikant Bhagavat: All stocks were not overrated, only expectations were running high in the stock market. Due to thevolatility some of the good stocks trading at a lower price can be grabbed.

CCIM: Do you mean to say this is the right time to enter into the market?

Mr. Srikant Bhagavat: Yes, this is the opportunity to get into the market with a long term perspective and buying stocksto hold for a long duration.

Mr. Srikant Bhagavat advices not to go by the current media hype and collective paranoid phenomenon but instead investwith a long term view and buy boldly. He says that students must do a thorough research and study facts, until fullyconvinced about any market related story and than make an investment decision. Take a complete view of where you standand than make a decision.

Mr. Srikant Bhagavats prediction for the next fortnight

With the present instability in the government and other anti-social elements being active, anything is possible. A minimumof 3 years period is required to come out with a proper prediction as this will give the opportunity to see through alluncertainties.

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Did you Know?

A Native American tribe inSouth Dakota collects bottlecaps left by campers, usingthem as currency. Severalbanks in the area nowrecognize the caps as legaltender.

Buzz Word Counterfeit- A practice of imitating currency, documents, certificates with intent to

deceptively represent its content .

Asset Stripping- the process of buying an undervalued company with the intent tosell off its assets for a profit. The individual assets of the company .

Seigniorage- The difference between the value of money and the cost to produce it .

Fiat Money- Money that a government has declared to be legal tender, despite thefact that it has no intrinsic value and is not backed by reserves.

CICI BANK, BSE-532174,NSE-ICICIBANK

CMP- Rs.862 TARGET PRICE- Rs.1235

RELIANCE CAPITAL,BSE-500111, NSE-RELCAPITALCMP- Rs.1146

TARGET PRICE- Rs.140PENINSULA LAND, BSE-

503031, NSE-PENINLANDCMP- Rs.456

TARGET PRICE- Rs.719RELIANCE COMM, BSE-

532712, NSE-RCOMCMP- Rs.520

TARGET PRICE- Rs.66

(CMP Current Market Price)

Stock Ratnas

Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who takethe subway. Warren Buffet

With a nearly double digit growth rate, well developed financial markets and an overincreasing pool of budding entrepreneurs, India has emerged as one of the hotspots forPrivate Equity (PE) firms. In 2008 the number of PE deals emanating from India will bearound 300 and the value of the deals will be around $7.5 billion. This figure is expected totouch at least $10 billion by 2010. The biggest names in the PE business like Blackstone,Carlyle, General Atlantic and Britain Actis Partners along with local firms such as IDFCPE,ICICI Ventures and UTI Ventures are active in the PE space. The Blackstone group wasinvolved in two deals with significant stake buyout in Gokaldas Exports and NagarjunaC o n s t r u c t i o n C o m p a n y .

Another important aspect of the Indian PE market is that the average fund size andthe average deal size of the PE players has increased substantially. For the PE firms entryand exit has become relatively easy with the developments in the capital markets.

The Indian PE market is still small and nascent. Indias investment share is only 6%-7% of the global pie. Private investments in public enterprises (PIPE) constitutes nearly40% of the deal flow in India in contrast to less then 10% in the U.S. Indian PE players stillsee themselves as Venture Capitalist players where as in abroad they see themselves asstrategic investors. With many PE firms looking out for investments in the developing andemerging economies and India having the right mix, Indian PE market is all set to grow inthe next couple of years.

The future of Private Equity Investments in India By Soumya Ranjan

D id you Know?

The term "bank teller"originated in the wake of the1929 stock market crash,when banks began hiring low-paid workers to "tell" throngsof frantic depositors that theirmoney was gone

SMEs and Mergers looking beyond By Prof. Anirban Ghatak, CCIM

For the last 2 years there is an significant increase in M&A, MBO (Management buy outs) andMBI (Management buy ins) in the SMEs sector as they are looking for growth, spurred by arelatively stable economy, available funds and low cost borrowings.. It involves huge privatedeals and the typical transaction values in the SMEs market range from 250,000 to 5m ormore. Deals from 10m to 100m tend to be advised by M&A boutiques. The current trend of highly leveraged deals will continue as the lenders are keen to back acquisition, where most of the money is borrowed and a larger element is unsecured. This

implies there are plenty of buyers available with ready access to funds. Apart from this retirement sales, more acquisitions will happen because SMEs want to buy outcompetitors, diversify into new areas or new markets, or increase market share. The otherattributes can be 'increasing entrepreneurial spirit', partly encouraged by the current capitalgains tax taper relief legislation, Is M&A in the SME market sector good for the economy? Off course Yes, as the youngcompanies have to move on and grow - and that's good for owners, employees and for theeconomy. So as the conclusion we can say that M&A can help smaller businesses to grow faster thanthey would relying on organic growth. MBI and MBO can offer challenging new opportunitiesfor able managers that will be the future trend too.

D id you Know?

In every year since 2000,stocks rated "sell" by WallStreet have outperformedstocks rated "buy" or "hold."Over the past four years,stocks that the Street hasbeen telling you to sell haverisen 19% per year onaverage. Meanwhile, the"buys" and "holds" have risen

just 7%.

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Tag Lines: Live Richly- Citi Group

We See Your Financial Life in Total-

Merrill Lynch

One Client at a Time- Morgan

Stanley

Audit.Tax.Advisory KPMG

a. Jp Morgan Chase b. State Bank of Pakistanc. Sundaram BNP Paribas Mutual Fundd. Peoples Bank of Chinae. Barclays Bank f. Bank of Americag. Fortis Bank h. Corus

How to prepare for the interview :

Interview was focused on various derivativesstrategies (practical aspects) along with their payoff matrix.

Valuation of bond was the 2 nd most important area.It focused from basics to valuation.

Practical aspects of SAPM ( Portfolio selection and justification)

Guidelines to help

1. Follow any business paper regularly

2. For those planning for equity firms, tracking oneindustry and its companies is a must

Pearls Of Wisdom Aiyappan VR ( aiyappan.vr@rediffmail.com)

Analyst, Infosys BPO

Job Profile : 1. Processing: Accounts for 60-70% of the job

2. Other research

In processing, data regarding the US bond market is collected from

RBI and central bank of various countries. Research is being carriedout with Deutsche bank which provides the information andrequirement to be carried out. The information needs to beprocessed and a page document is thereafter presented to theDeutsche bank.

Please mail your valuable feedbacks, reviews at chaanakya.ccim@gmai

Opening remarks

On the occasion of the release of Chaanakya, the Finance news letter initiated by the students of CCIM, Iconvey my hearty wishes for this initiative. The seed is sown; and it would also be our responsibility to ensurethat it grows into a big tree to give fruits to all of those who touch it.

Prof. T. S.Ramachandran

On the occasion of the release of Chaanakya the finance newsletter, initiated by the students of CCIM, Iconvey my best wishes for this initiative. It is initiatives like this which helps a student to link his knowledge

with current developments and remain abreast of the ever changing external environment. May this humblenewsletter mark the birth of a professional magazine in the field of finance.

Prof. H. A. C. Poppen