COVER STORY

Alternative Energy : End of the Oil Age?

- - Dr. Bhamy V Shenoy

As the possibility of high oil prices looms large there is some urgency to look for alternate energy. World crude oil prices have been steadily increasing since 2002. They reached a historic high of $75 per barrel (not in terms of real dollars) in the first quarter of 2006. Within this backdrop of higher oil prices, another race of Alternate Energy Sources (AES) and New Energy Technologies (NET) to win the grand prize of larger share of the world energy market has started. The world energy market had seen such a race soon after the first oil shock of 1973 which was further reinforced by the second oil shock that followed in 1979-80. These oil shocks were caused first by the Yom Kippur war, and then the Iranian revolution and Iran-Iraq war.

© 2006 IUP . All Rights Reserved

PERSPECTIVE

Lakshmi Mittal : An Invisible Corporate

- - GRK Murty

His Arcelor deal has a lesson for Indian businesses. Much against many odds, Lakshmi Mittal, who bid for Arcelor, did it: Clinched a landmark deal. Its a landmark deal not because he has to pay more than what he originally contemplated, but because it is unique in itself in many ways.

© 2006 IUP . All Rights Reserved

ENERGY SECURITY

Carbon Credits : A Market of the 21st Century

- - DG Prasad,V Shunmugam

It is by employing necessary technology to reduce GHG emissions, Indian companies can earn CERs that can be sold at a price in the emerging multi-billion-dollar market in the global emissions trading.

© 2006 IUP . All Rights Reserved

ENERGY SECURITY

Future Energy Mix : Power of Price

- - Karin Kneissl

Climate change has become a shocking reality. It is high time that countries worked together to minimize the dangers of climate change. The devastating hurricane season which hit the Gulf of Mexico in late summer 2005 had a real impact both on the landscape of destruction and on public sensitivity when it comes to the phenomenon of climate change. While the Bush administration still refuses to tackle the topic of carbon dioxide (CO) emissions and global warming, the subject has made its way to the front pages of the US-media and into the cinema.

© 2006 IUP . All Rights Reserved

ENERGY SECURITY

Alternative Energy : Window of opportunity

- - N Janardhan Rao and Ravi Babu Adusumilli

Venture Capitalists have spotted alternative energy as the next hot investment destination. With oil prices shooting up-wards and increased concernsn being shown over global warming, Venture Capitalists (VCs) are looking beyond their traditional business to invest increasing sums of money in alternative energy companies. Against this backdrop, most of the energy companies are revealing their business plans to investors, to identify advances in technologycheap, powerful chips, more capable software and broadband communications which will have an impact on the energy business, resulting in more high-priced deals to be struck. In the recent past, four solar energy companies attracted a stunning $60 mn.

© 2006 IUP . All Rights Reserved

INDUSTRY

Indian Semiconductor Industry : In the Fab Groove

- - D Satish and Smitha Deshpande

Renowned for its designing capabilities, the Indian semiconductor industry has eyes now set on manufacturing. India has earned itself a distinct image in the designing of semiconductors. A continued focus on quality coupled with the cost arbitrage has made India a natural destination for Integrated Circuit (IC) design for quite sometime now, and owing to factors such as large pool of skilled professional, it is likely to remain so in future. Lot of high-end designing is happening in the country as even MNCs are setting up their design centers here. Yet, the industry has always struggled to replicate the same in manufacturing semiconductors.

© 2006 IUP . All Rights Reserved

INDUSTRY

Global Forging Industry : Thriving on Auto Boom

- - N Janardhan Rao and Ravi Babu Adusumilli

As outsourcings of engineered and finished products are around the corner, the future seems to be lucrative for the low-cost forging players. The global forging industryone of the oldest industriesis rapidly transitioning into a new phase by adopting several structural changes that are happening in the industry. The automobile industry is the key driver for forging industry and contributes to 65% of its revenues. Hence, the forging industrys fortunes are undoubtedly dependent on the automobile industry.

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CORPORATE STRATEGY

Airbus : Jumbos Jitters

- - Amit Singh Sisodiya and Kavitha Putta

With the A380 hitting a major production snag leading to production and delivery time overrun, it threatens to turn into a crisis for Europes largest aircraft maker, Airbus. However, it could be music to the ears of the arch rival, Boeing.

© 2006 IUP . All Rights Reserved

CORPORATE STRATEGY

Sonys Woes : No Music to Ears

- - Amit Singh Sisodiya and Sanjoy De

Amidst shifting consumer preferences and intensifying competition, including that from even non-traditional rivals like Apple Computer, the Japanese electronics major is finding it hard to regain its lost glory.

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CORPORATE STRATEGY

GM-Renault-Nissan : Will it Work?

- - D Satish and Smitha Deshpande

The proposed three-way, three-continental strategic alliance among GM, Renault, and Nissan offers too few synergies to make it work for them. In early July, a proposal from Kirk Kerkorian, one of the largest share-holders of General Motors (GM), took the entire global auto industry by surprise. Kerkorian, who holds 10% shares of the company, had proposed a three-way alliance among American giant GM, France-based Renault, and Japans Nissan. Two weeks later, in mid-July, the three companies have issued a joint statement that they are willing to review the proposal.

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CORPORATE STRATEGY

Allianz : Restructuring to Rescue

- - Amit Singh Sisodiya and Madhuparna Chakraborty

The German insurer Allianz reveals new restructuring initiatives to resurrect itself. However, challenges abound. When in May, this year, Allianz - Germanys top insurer - announced its latest first-quarter results, it seemed that the last few years woes might be behind now. There were strong reasons to feel so. The groups first-quarter net income had grown by more than 34% to approximately 1.8 bn while its overall total revenues increased by 4.9% to 29.6 bn. It also added to the optimism that this would just have the kind of rub-off effect on the performance for the rest of the current fiscal as well.

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FINANCIAL MARKETS

Real Estate Mutual Funds: A New Kid on the Block

- - D Satish and Y Bala Bharathi

With the entry of real estate mutual funds in India, retail investors will be poised to take advantage of the sizzling realty markets. Of late, the Real Estate Mutual Funds (REMFs) which have caught the fancy of retail investors became the buzzword of the financial markets. With the approval of guidelines for REMFs, the average Indian investor will be poised to take advantage of the booming real estate industry. Though these funds have been much awaited since long, Sebi has finally timed them right. Many of the mutual fund players have been gearing up to ride on the investors interest in these funds.

© 2006 IUP . All Rights Reserved

FINANCIAL MARKETS

Intellectual Property Securitization : A New Financing Vehicle

- - N Janardhan Rao and Ravi Babu Adusumilli

With the value of intangible assets increasing on the balance sheets the US companies are raising finance by using Intellectual Property (IP) assets. With the evolution of new business models across industries and companies, the intrinsic value of companies has undergone a remarkable transformation in the past two decades. In other words, the intangible assetspatents, trademarks and copyrightsare increasingly becoming the value drivers for a company.

© 2006 IUP . All Rights Reserved

BUSINESS ENVIRONMENT

Net Neutrality : Damning Discrimination

- - Amit Singh Sisodiya and Ankur Gupta

Sans net neutrality, a great medium could lose the very plank of "freedom for all", which made it so successful. Such assurances, coming from big operators like AT&T and Verizon, have done little to soothe Web freaks nerves who fear that soon if these carriers have their way, surfers would be forced to pay for such services as music and video downloads, data transfer and so on, but worst of all, they would take upon themselves the role of deciding which service should get a priority over others on the Net.

© 2006 IUP . All Rights Reserved

BUSINESS ENVIRONMENT

Contract Research Outsourcing : Indias Opportunity

- - D Satish and Y Bala Bharathi

With the growing compliance to global regulations, India is increasingly emerging as a global hub for contract research outsourcing. Of late, India has been emerging as an attractive destination for contract research outsourcing. Outsourcing is not a new concept to India. In fact, India has proved its mettle by being successful in outsourcing business processes of IT, software and financial services. Contract research outsourcing, which broadly covers clinical research outsourcing and drug discovery research outsourcing, has been offering a host of related services in India.

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BUSINESS ENVIRONMENT

Coal and Mineral Sector Disinvestment : Challenges of Valuation

- - Dipesh Kumar Dipu

Disinvestment of government stake in coal India and other commodity company is fraught with price-risk, particularly due to non-availability of comparable companies in the country. Recently, the Government of India proposed disinvestment of 5% stake in Coal India Limited (CIL) along with dilution in stakes to the tune of 15% each in National Aluminium Company Limited (NALCO) and National Mineral Development Corporation Limited (NMDC).

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BUSINESS ENVIRONMENT

Business Process Outsourcing: Will the Boom Sustain?

- - N Janardhan Rao and Indu Prasad

The Indian BPO industry has achieved tremendous growth in recent past. Will the industry be able to sustain its growth rate in future? By December 2006, the $6 bn-plus Business Process Outsourcing (BPO) industry, which is also Indias fastest growing industry, will complete 10 years of its existence. The BPO industry has been experiencing pathbreaking success and its share in the global market for ITES and BPO services stands at 44% with $28 bn revenue in 2004-05 against the total global market worth of $40 bn. The scenario, however, is not as rosy as it looks. Akin to any other industry in its growth phase, the BPO industry is also going through its share of turbulence.

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BUSINESS ENVIRONMENT

Reliances SEZ Foray : Hype and Reality

- - Amit Singh Sisodiya and Madhuparna Chakraborty

The SEZ scenario gets hotter as Reliance, along with some major business houses in the country, announces big bang investments. Whatever Reliance does, it does in style. And it makes India Inc. sit and take notice; whether it was its foray into telecommunications or petro-retailing or retailing, it simply overwhelmed the competition with its aggressive entry. So when it revealed its plan to set up Special Economic Zones (SEZs) in the country, competitors did feel the heat. Mukesh Ambani-led Reliance Industries Ltd. (RIL), Indias largest private sector firm, made its intentions clear when it signed an agreement with the Haryana State Industrial and Infrastructure Development Corpn. Ltd. (HSIIDC) to set up the countrys largest multi-product SEZ in the state, to be built over a period of 10 years; SEZs are defined as geographic regions designated for economic development oriented toward boosting inward FDI and exports, and supported by special policy incentives by the government.

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BUSINESS ENVIRONMENT

Managed Services : Doing More for Less

- - D Satish and Smitha Deshpande

The same factors that made India synonymous with software services are coming to the fore once again in the form of managed services. It is the same story, with the same players, but only with a slight change in the script. Indian companies, after proving their mettle in the area of software services, are now pursuing "managed services"which, according to s, could be the next big wave for the Indian services sector.

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APOLITICAL

Thanks, Mr. Rahul Mahajan!

: Is cocaine becoming a street drug in India too?

- - grk

Thanks to the hype created by the media around Rahul Mahajans drug episode, the nations attention has been drawn to the drug menace fast creeping into otherwise conservative Indian homes, albeit metros.

© 2006 IUP . All Rights Reserved

ARTS AND ARTISTS

Kanthapura in State Mourning

- - GRK Murty

"I am a man of silence. And words emerge from that silence with light, of light, and light is sacred" And that "light"Raja Rao has rejoined the "perennial" light. Raja Rao"a proud Indian" Sadhaka of Sabda as Mantra left for his heavenly abode on July 8, 2006 leaving behind his "magic casement(s)"Kanthapura, The Serpent and the Rope, The Chess Master and his Moves, The Cat and Shakespeare for us to meditate upon for times to come.

© 2006 IUP . All Rights Reserved