Though the markets made good part of their losses during the previous two hours of trade, they continued to languish deep in red. Amidst broad based selling activity, the stocks from metal, realty, energy, FMCG and power sectors are the biggest losers.
The BSE-Sensex and the NSE-Nifty are trading lower, down by around 180 points and 60 points respectively. The BSE-Midcap and BSE-Smallcap are also trading lower, down by around 1.2% and 1.6% respectively. The rupee is trading at 44.59 to the dollar.
According to a leading business daily, India's second largest motorcycle manufacturer, Bajaj Auto has increased its stake from 31.9% to 35.7% in the European power bike maker, KTM. The Indian automobile company has invested € 20 m (or Rs 1.2 bn) in order to raise its shareholding in Austria based KTM Power Sports AG which is the second largest motorcycle maker and world's largest Off-Road Bike maker. This increase in shareholding was a part of a loan conversion and rights issue programme.
It may be noted that in 2007, Bajaj Auto acquired 14.9% stake in KTM for around Rs 3 bn. It has been slowly increasing its ownership in the company. By the end of 2008, Bajaj Auto owned 25% stake in KTM. The two partners signed an agreement to jointly develop 125 cc bikes which are manufactured in Bajaj Auto's Pune facility for exports to European markets under KTM brand. It is believed that the joint venture is panning out well and anticipates launching its products in the European market within 1 year. Bajaj will also distribute KTM's products in India and other markets like Sri Lanka, Bangladesh, Indonesia and Africa.
As per a leading business daily, India's second largest IT exporter, Infosys which has been a relative laggard in terms of acquisitions in the recent past, is eyeing strategic acquisitions in Europe. The company while highlighting its 'two-pronged strategy' for the European markets has indicated that it is looking at companies with revenues in the range of US$ 100 m to US$ 300 m in UK, France and Germany. In UK, the company plans to acquire small firms catering to specific industry verticals or ones owning some significant Intellectual Property (IP) or platform. In Germany and France Infosys is targeting companies having capability for enterprise applications and consulting. The company is witnessing significant traction in Switzerland and Nordic countries where it primarily caters to medium and large enterprises.
It may be noted that at end of March, 2010 Infosys had a huge cash reserve of US$ 3.5 bn. We believe the cash rich company has a lot of opportunity and capability to scale up its operations in Europe. Lack of technology talent pool in Europe is compelling more and more organisations to embrace IT outsourcing and off-shoring to destinations like India.