Is the era of supernormal growth for Google Inc over?

The phenomenal growth witnessed by Google Inc during the start of this decade is gradually slowing down. Google’s revenues had jumped 250 times in 7 years from 2001 to 2008 showing a compounded annual growth rate (CAGR) of 120%. The profits even fared better with the net profits in 2008 being more than 600 times the net profits in 2001 – a CAGR of 150%. However, Google’s revenue growth rate has been slowing down as its size is increasing. The annual growth rate which was more than 400% in 2002 has gradually fallen to about 30% in 2008 and in the first half of 2009 the growth rate was in single digit.

Has Google’s growth matured? Is Google’s supernormal growth phase behind us? It is quite possible as suggested by the trend in the growth rates. Google is now one-third the size of Microsoft and one-fifth of IBM. For a company that was incorporated only 11 years ago - growing to such a size is amazing. Continuing to show such phenomenal growth is not sustainable in long term. If Google can grow by more than 25% in next 4-5 years it would be a significant achievement. A growth rate more than that will require entering into other related businesses. Google has done it in past and is very capable of doing it in future. With plans of entering into the Operating System business which has Microsoft's dominance, Google has a huge potential opportunity which if it can unleash will help it grow even faster.

47 Indian companies in Forbes 2000 List

The following 47 companies have figured into the Forbes 2000 list:

Company	Sector
Reliance Industries	Oil & Gas Operations
SBI	Banking
ONGC	Oil & Gas Operations
IOCL	Oil & Gas Operations
NTPC	Utilities
ICICI Bank	Banking
Tata Steel	Materials
Bharti Airtel	Telecommunications
SAIL	Materials
Reliance Communications	Telecommunications Services
L&T	Capital Goods
BPCL	Oil & Gas Operations
BHEL	Capital Goods
HDFC	Banking
TCS	Software & Services
Hindalco Industries	Materials
HDFC Bank	Banking
DLF	Diversified Financials
Infosys Technologies	Software & Services
Punjab National Bank	Banking
ITC	Food, Drink & Tobacco
Wipro	Software & Services
Bank of India	Banking
HPCL	Oil & Gas Operations
GAIL (India)	Utilities
NMDC	Materials
Canara Bank	Banking
Power Grid of India	Utilities
Tata Motors	Capital Goods
Bank of Baroda	Banking
Power Finance	Finance
Axis Bank	Banking
Union Bank of India	Banking
Grasim Industries	Construction
Indian Overseas Bank	Banking
Sun Pharma Industries	Drugs & Biotechnology
Mahindra & Mahindra	Consumer Durables
Allahabad Bank	Banking
Indian Bank	Banking
Syndicate Bank	Banking
IDBI Bank	Banking
Central Bank of India	Banking
Jindal Steel & Power	Materials
National Aluminium	Materials
Oriental Bank of Commerce	Banking
UCO Bank	Banking
Hero Honda Motors	Consumer Durables

Rank	Companies	Sales (b $)
121	Reliance Industries	34.03
150	State Bank of India Group	22.63
152	Oil & Natural Gas Corp	24.04
207	Indian Oil Corp Ltd	51.66
317	NTPC	9.63
329	ICICI Bank	15.06
463	Tata Steel	32.77
508	Bharti Airtel	6.73
582	Steel Authority of India	9.82
689	Reliance Communications	4.26

Forbes global 2000 list is published every year and takes into consideration the assets, sales, profits, and market capitalization of the corporations.

Source: Forbes

World's top 6 safest banks are still the safest!!

The financial crisis has taken a toll on major banks leaving many top notch banks like America's Citibank, UK's Barclays etc. in never before situation. However, the top 6 safest bank as published by Global Finance Magazine has remained the same during this crisis. Have a look at the top 6 safest banks their ranks in the period 2004-2009.

2009	2008	2006	2004	Bank	Country
1		4	3	KfW Group	Germany
2	1	1	1	Caisse des Dépôts et Consignations	France
3	2	2	5	Bank Nederlandse Gemeenten	Netherlands
4	3	5	6	Landwirtschaftliche Rentenbank	Germany
5	4	3	7	Rabobank	Netherlands
6	5	6	2	Landeskreditbank Baden-Wuerttemberg - Foerderbank	Germany

Global Finance ranks the banks on the basis of their credit rating as provided by the rating agencies Fitch, Moody's, and S&P. These banks have the highest credit rating of AAA from Fitch & S&P, and Aaa from Moody's. The rating corresponds to the maximum credit worthiness and has lowest risk of default.

The size of the balance sheet of these safest banks is however not of the order of the biggest banks like RBS, Deutsche bank, etc.

Bank	Total Assets billion USD
KfW Group	521
Caisse des Dépôts et Consignations	289
Bank Nederlandse Gemeenten	136
Landwirtschaftliche Rentenbank	131
Rabobank	840
Landeskreditbank Baden-Wuerttemberg - Foerderbank	87

A comparison with the biggest banks:

Bank	Total Assets billion USD
Royal Bank of Scotland Group	3,807
Deutsche Bank Group	2,974
BNP Paribas	2,494
Barclays	2,459
HSBC	2,354

The asset data is as on Dec 31, 2007.
Source: Global Finance

A look at Tech Mahindra’s winning bid for Satyam Computers

Recently Tech Mahindra won the bidding auction for a majority stake in Satyam Computer Services Ltd. which has been seeking some rescue since it was hit by the country’s biggest accounting fraud. Tech Mahindra outbid the other two bidders: engineering giant Larsen & Toubro (L&T) and International distressed fund investor WL Ross and Co. While Tech Mahindra bid at Rs 58/share L&T and Ross were distantly behind at Rs 45.90 and Rs 20 /share respectively. The reason for such low bid by WL Ross & Co. is cited by many that it lost interest as its partner for the bidding Cognizant Technology Solutions withdrew from the bid. As the next bidder was at less than 90% of the highest bid value Tech Mahindra was easily declared the winner.

Tech Mahindra has to pay Rs 1756 crore ($351 million) for 31 % preferential allotment of new shares. Later it has to make open offer for further 20 % at Rs. 58 /shares. If the open offer does not get fully subscribed, Tech Mahindra will have the option of going for a second preferential issue and raise its stake to 51 % to become the majority shareholder. Overall it will be investing Rs 2880 crores to get the 51% stake. This deal values the fraud-hit Satyam Computers at about Rs 5,665 crore ($1.1 billion).

Tech Mahindra will require Rs 2880 crore to sail through this deal smoothly. Moreover it may have to immediately invest for operating expenses of Satyam which according to some analysts could go up to Rs 1000 crore. In its balance sheet Tech Mahindra has about Rs 700 crore in cash. It will be looking for debt financing for the rest of the acquisition value. This is likely to put stress on its balance sheet which as on Mar 2008 had total asset value of Rs 1323 crore.

About Tech Mahindra
“Tech Mahindra is a leading provider of solutions and services to the telecommunications industry, majority stake owned by Mahindra & Mahindra Limited, in partnership with British Telecommunications plc. With total revenues of Rs 37,66 crore in the year ended March 31, 2008, Tech Mahindra is India’s 6th largest software exporter, and serves telecom service providers, equipment manufacturers, software vendors and systems integrators. Tech Mahindra solutions enable clients to maximize returns on IT investment by achieving fast time to market reduced total cost of ownership and high customer satisfaction. Tech Mahindra achieves this through its domain and process expertise, distinctive IT skills, research and development, proven innovative delivery models and approach to off shoring.”

About Satyam
“Satyam (NYSE: SAY) is a leading global business and information technology services company, delivering consulting, systems integration, and outsourcing solutions to clients in 20* industries and more than 65* countries.”
* Figures as of September 30, 2008


Before Satyam's scandal was disclosed in January, Satyam was ranked India's fourth-largest outsourcing firm and Tech Mahindra was sixth-largest.

Tata group's struggle with liquidity continues

Tata group is trying hard to raise more than Rs 15,000 crore to support its cash requirements. This is in addition to Rs 13,070 crore it has obtained from the sale of 26% equity stake in Tata Teleservices to NTT DoCoMo. According to news reports, Tata group has plans to obtain these funds by the sale of vehicle loan portfolio of Tata Motors, selected private equity placement, and through the public offer of debt securities.

Notably, Tata Group had taken INR 9,200 crore bridge loan in June 2008 to finance the purchase UK’s Jaguar and Land Rover (JLR) brands of luxury cars from Ford. While that loan is required to be paid by June 2009, Tata Motors will further need to invest more than hundred crore rupees into JLR to save it from going illiquid. JLR has sought financial assistance from the UK government to the order of 1 billion pound as it is facing credit crisis due to sharp fall in sales. The UK government is in still pondering whether to use taxpayer money to bail out JLR.

As an outcome of the JLR deal, Tata Motors outlook may be degraded to negative by rating agencies which will further put pressure on the company to raise cash from the market.

Tata group is planning to fulfil this cash requirement by following ways:

1. Rights Issue: Rs. 4,200 crores

2. Sale of stake: Rs. 3,000 crores
It had raised Rs. 545 crore through through two major sales: Rs. 485 crore by selling TATA Steel stake, stake in TATA Teleservices of around INR 60 crore.

3. Foreign Equity Offer: $ 500 million (Rs. 2,400 crores)
This might be a hard option to pursue in the current market conditions.

4. Public Debt Offer: Rs. 2700 crores
In November 28 2008, Tata Motors has gone to the public with a fixed deposit scheme offering as much as 12.83% to general public. According to the Companies Rules, Tata Motors can raise a maximum of Rs. 772 crore from its shareholders and another Rs. 1931 crores from the general public through the fixed deposit scheme. The last time Tata Motors went for public borrowings was in the year 1995 when it received good support. However in the current situation it might be difficult if not impossible for Tata Motors to raise the maximum possible amount from public.

5. Sale of vehicle loan portfolio of Tata Motors: About Rs. 8,000 crores
The vehicle loan pool of Tata Motors is about Rs. 8,000 crores.

About Tata Motors
Tata Motors Limited is India’s largest automobile company. In FY08 it reported revenues of Rs. 35651 crores (USD 8.8 billion). It is the leader in each segment of commercial vehicles in India. Also, it is among the top three players in the car & utility vehicle market. On global scale, it is world’s fourth largest truck and second largest bus manufacturer. Though it is a part of India’s biggest business group, Tata group, it gained world’s attention last year with its announcement of buying Jaguar and Land Rover from Ford. Also it came into limelight with the proposal of manufacturing world cheapest car: Tata Nano, popularised as ‘The people’s car’.

Tata Motors takes retail debt route for raising funds

Tata Motors has been trying to raise funds by offering debt securities to retail investors. The public offering of debt securities if successful will reduce some liquidity problems which the company is facing because of the Jaguar Land Rover.

Tata Motors has appointed Tata Securities, Kotak Securities, and JM Financial as the authorised brokers for this offer know as "Tata Motors Fixed Deposit Scheme". A retail investor will require to deposit a minimum amount of Rs 20,000 (and thereby in multiples of Rs 10,000) to participate in the scheme. The deposits for 1 year carry an interest rate of 10% p.a. For 2 years the interest rate is 10.50% p.a. and for 3 years it is 11.00% p.a. The income tax will be deducted at source from the amount of interest payable to the depositor in accordance with the provisions of the Income Tax Act, 1961 if it exceeds Rs.5,000 in a financial year.

Tata Motors has long term credit rating of AA+ and AAA for its debt instruments. It has made profits after tax of over 2000 crores in FY08.

	(Rs. in crores)
Year	Profit before tax	Profit after tax
2007-08	2,576	2,029
2006-07	2,573	1,913
2005-06	2,053	1,529

Moreover, its leverage ratio is also not high. However, its debt/equity ratio has increased from 0.44 in FY04 to 0.7 in FY08. Still, Tata Motors has enough profits to easily service its debt. Its interest coverage ratio was 7.0 in FY08.

Balance Sheet (Rs. in crores)
	As at	As at
Liabilities	31.03.08	31.03.07
Share Capital	386	385
Reserves & Surplus	7,454	6,484
Secured Loans	2,462	2,022
Unsecured Loans	3,819	1,987
Deferred Tax Liabilities	976	787
Current Liabilities
& Provision	10,657	7,728
Total	25,752	19,394

	As at	As at
Assets	31.03.08	31.03.07
Fixed Assets and
intangible Assets (Net)	10452	6395
Investments	4910	2477
Current Assets, Loans
and Advances	10384	10512
Misc. Expenditure	6	10
Total	25752	19394

Though Tata Motors has strong fundamentals, the macroeconomic situation is adverse and its acquisition of JLR is adding extra burden on its performance. However, with a strong balance sheet and backup of the biggest group of India Tata Motors should be able to wither off these concerns and emerge out of this crisis.

This however doesn't eliminate the risk that in near future it may see its credit rating getting downgraded. Hence, the question: is the spread between interest rates offered in the scheme and risk free rate adequate enough to compensate for the risk. It is more favorable to Tata Motors as it has a very strong brand reputation and the risk free rates are on downward movement thereby increasing the spread and making the scheme a very attractive investment option.

Top Fund of Fund company 2007

The top five fund of funds in June 2007, along with the firm's capital (million USD) as per the Alpha Magazine's ranking are:

Rank	Financial Institution	Assets
1	UBS	54749
2	Man Investments	50310
3	Union Bancaire Privée	45775
4	Permal Asset Management	35040
5	HSBC	33572

Source: Alpha

Global top companies by market value

These ranking were issued by Financial Times for third quarter of 2007. The data of prices and market capitalization for these ranking have been taken on 28 September 2007. FT publishes a list of top 500 global companies every quarter. The entire list can be accessed at the source link given at the end of this post.

Global 500 rank Sep 2007	Global 500 rank Jun 2007	Company	Country
1	1	Exxon Mobil	US
2	2	General Electric	US
3	12	China Mobile	Hong Kong
4	13	Industrial & Commercial Bank of China	China
5	3	Microsoft	US
6	4	Royal Dutch Shell	Netherlands
7	7	Gazprom	Russia
8	5	AT&T	US
9	6	Citigroup	US
10	10	Bank of America	US
11	8	BP	UK
12	17	Procter & Gamble	US
13	11	HSBC	UK
14	30	China Construction Bank	China
15	37	China Life Insurance	China
16	26	BHP Billiton	Australia/UK
17	9	Toyota Motor	Japan
18	23	Cisco Systems	US
19	19	Chevron	US
20	36	Sinopec	China
21	16	Total	France
22	15	EDF	France
23	22	Vodafone Group	UK
24	21	Johnson & Johnson	US
25	24	Berkshire Hathaway	US
26	29	Bank of China	China
27	14	Wal-Mart Stores	US
28	31	Nestle	Switzerland
29	18	American International Group	US
30	20	Pfizer	US

With the IPO of PetroChina in October, and its market value crossing a trillion dollars, the highest ever by any company, the rankings have changed with PetroChina coming right at the top.

Source: FT

World's top paid executives

The top 10 CEOs in the world ranked on the basis of the compensation package are:

Rank	CEO's Name	Company	$ m	Age
1	Steven P Jobs	Apple	647	52
2	Ray R Irani	Occidental Petroleum	322	72
3	Barry Diller	IAC/InterActiveCorp	295	65
4	William P Foley II	Fidelity National Finl	180	62
5	Terry S Semel	Yahoo	174	64
6	Michael S Dell	Dell	153	42
7	Angelo R Mozilo	Countrywide Financial	142	68
8	Michael S Jeffries	Abercrombie & Fitch	115	62
9	Kenneth D Lewis	Bank of America	100	60
10	Henry C Duques	First Data	98	63

Source: Forbes Magazine

World's richest people

The top 10 richest people of the world according to Forbes magazine as on Mar 2007 were:

Rank	Name	Citizenship	Age	Net Worth ($bil)
1	William Gates III	United States	51	56
2	Warren Buffett	United States	76	52
3	Carlos Slim Helu	Mexico	67	49
4	Ingvar Kamprad & family	Sweden	80	33
5	Lakshmi Mittal	India	56	32
6	Sheldon Adelson	United States	73	26.5
7	Bernard Arnault	France	58	26
8	Amancio Ortega	Spain	71	24
9	Li Ka-shing	Hong Kong	78	23
10	David Thomson & family	Canada	49	22

Source: Forbes

Marsh & McLennan soared on Putnam's sale

Marsh & McLennan Companies (MMC) , one of the world's largest risk and insurance broker, has reported a net income of $1.95b against last quarter $176m. There was a one time income of $1.85b from sale of its stake in Putnam Investment. Operating income has dropped by 57%.

Toyota and GM struggle for No.1 spot

During the first half of this year, the Japanese auto major, Toyota, overtook GM to become the leading world's car-manufacturer by volumes. In the 3rd quarter however GM has narrowly crossed Toyota by 10000 vehicles.

On one hand Toyota has reported strong growth in earnings in Q3, GM, on the other hand, had posted its biggest ever quarterly loss. Toyota's growth can be attributed to the growing Asian markets like China and Russia. The struggle between GM and Toyota continues as the difference is very minor. Last month Toyota recalled 470000 cars from the market which has impacted its brand image.

GM posts record loss on deferred tax write-down

Yesterday General Motors (GM) posted its biggest ever quarterly loss- a whopping figure of $38.6 billion. Last year for the same period the profit was $497 million. Such a big loss was due to one time items and write-down of deferred tax liability. The tax charge written down at GM is the biggest so far for any firm. These can be attributed as cumulative losses of last three years. GM has written down these because of expected lower profits in near future.

Excluding these exceptional items the losses were to the tune of $1.6 billion. Its financing subsidiary, GMAC Financial Services, has suffered because of subprime mortgage. GM has 49% stake in GMAC and it had contribute to slightly half of it losses.

Reliance to launch IPTV in India in alliance with Microsoft

Reliance Communications Ltd has entered into an alliance with Microsoft Corp to launch Internet Protocol Television software (IPTV) in India. Reliance will have to pay Microsoft $500 million as license fee for using Microosoft's Mediaroom IPTV software.

RCom plans to target mass market in India and launch the service by March next year. Initially it is planning to launch it in Mumbai and Delhi only.

India has about 110 million household who own a television set and their number is growing at a rapid rate of about 20%.

Merrill Lynch pays $161.5 million to Stan O'Neal

This is the fifth largest exit pay given by any company.
Exxon Mobil Corp.'s paid the highest exit package of $351 million to Lee Raymond in 2006.
More details at Bloomberg.

China crosses US in top 10 market capitalization

Five Chinese companies are now in global top ten companies by market capitalization. Chinese stocks have almost tripled in past ten months of year 2007. It is currently trading at P/E ratio of more than 50. PetroChina, which recently has raised $9 billion in the world's biggest initial public offer (ipo) , is all set to become the world leader in market capitalization after it opens for trading in secondary market. Currently PetroChina is ranked second only to Exxon Mobil Corp.

The top 10 companies in world by market capitalization are:

Rank	Company	Country	Approx. Market Cap ($)
1	Exxon Mobil Corp.	US	485
2	PetroChina	China	450
3	General Electric Co.	US	411
4	China Mobile	China	393
5	ICBC*	China	330
6	Microsoft Corp.	US	327
7	Gazprom	Russia	290
8	Royal Dutch Shell	Netherlands	277
9	Sinopec**	China	276
10	China Life Insurance	China	260

*ICBC - Industrial and Commercial Bank of China.
**Sinopec is also known as China Petroleum and Chemical Corporation

Sensex crosses 20k and Ambani crosses Gates

Mukesh Ambani, of Reliance Industries Ltd, became the world's richest man on 29 October, overtaking Microsoft's Bill Gates and Mexican Carlos Slim Helu. The feat was achieved because of the strong rally which the stocks of Ambani's Reliance Industries has been witnessing since last month. The Reliance Industries Ltd stock has risen more than 60% in past few months and has helped Bombay Stock Exchange's 50-stock index Sensex to cross 20,000 points and take Mukesh Ambani's net worth to $63.2billion just piping Helu and Gates who are a little behind at around $62.29bn each. Ambani holds more than 50% shares of Reliance Industries.

Estimates of the wealth of the top five richest person of the world are:

Mukesh Ambani - $63.2 billion
Carlos Slim Helu - $62.3 billion
Bill Gates - $62.3 billion
Warren Buffett - $55.9 billion
Lakshmi Mittal - $50.9 billion