MUMBAI: Three global giants are interested in purchasing Dutch firm ING Asset Management’s Indian mutual fund business, which may be carved out of the Asian operations and sold separately.
South Korea’s Mirae, Vanguard and US-based Pramerica have held talks with ING on the issue, people close to the transaction told ET.
ING is selling its Asia-Pacific insurance and asset management businesses to help repay the assistance provided by the Dutch government in 2008 at the time of the global financial markets meltdown. The company is hoping to raise $7 billion.
The Indian business is tiny compared with the Asian operations, having assets of only 797 crore as of April this year and is barely profitable. A separate sale is likely to fetch only 40 crore, an industry official estimated. ING and Mirae did not respond to the email query sent by ET. A Vanguard spokesperson said the news was not true.
“A lot of players are below the threshold of meaningful acquisitions, and lot of these companies might not add much value to those who acquire them,” said Dhirendra Kumar, founder and chief executive, Value Research.
Mirae wants to expand in India by buying up smaller firms and had held talks in the past with funds such as Taurus. A purchase of ING will add to Mirae’s meagre assets of 500 crore and help it touch the 1,500-crore mark. Vanguard, on the other hand, has been looking to enter India, and an acquisition will give the company a small but important base to start operations.
The Indian mutual fund industry manages asset worth 6.80 lakh crore, according to Sebi data. But growth in the past few years has been slow and anaemic, given extremely volatile market conditions, a slowing economy and a government paralysed by allegations of corruption and insipid leadership.
The industry is highly fragmented with many players operating on wafer-thin margins. Only the top half-a-dozen funds manage to make money, and the exit of Fidelity has increased the clamour for consolidation in the industry. The US giant sold its business in India to L&T Finance earlier this year, the second major exit after StanChart’s sale to IDFC in 2009.
Prospects of a revival hinge upon better sentiment and higher inflows. While the first depends upon government, corporate and global developments, the second appears a much tougher proposition given the actions of institutional and retail investors. A recent McKinsey report says that retail investment inflows into mutual funds are just 57% of what they were during the pre-crisis period. Institutional inflows have also come down with the overall asset under management stagnating at a 4% CAGR over the past three years.
“Mutual fund investment in India continues to be low across both retail and institutional segments. AUM as a percentage of GDP is pegged at 8%, compared with 79% in the US and 39% in Brazil.
GLOBAL RENEWABLE ENERGY M&As AT $21.7 BILLION
NEW DELHI: Around $21.7 billion worth of renewable energy mergers and acquisitions were completed globally in the first quarter this year and more consolidation in the sector is on the cards, Ernst & Young said in a report. The mergers and acquisitions (M&A) activity increased despite difficult economic conditions, largely because of consolidation, according to E&Y’s latest quarterly report on global renewable energy country attractiveness indices. The first quarter of this year saw $21.7 billion worth of renewable energy transactions being completed, a rise of 41 per cent over the last quarter of 2011 and going forward it is likely to rise further. ‘The next 12 months are likely to be characterised by further consolidation in the solar and wind supply chain, with a large number of outbound deals expected from Asia,’ E&Y Energy and Environmental Finance Leader Ben Warren said. (For details log on to : http://millenniumpost.in/NewsContent.aspx?NID=2945)
KRISHIDHAN SEEDS TIES UP WITH MSCGMFL FOR BT COTTON
MUMBAI/PUNE: Pune based Krishidhan Seeds and The Maharashtra State Cotton Growers Marketing Federation Ltd (MSCGMFL) announced their strategic collaboration to promote BT cotton seeds to the farmers. Mahacot (KDCHH-065BG-II) and Mahacot-2 (KDCHH-641BG II) cotton seeds from Krishidhan Seeds, would be made available to deserving farmers through a public – private partnership, for the current kharif season. MSCGMFL supplies seeds to over 2.5 million cotton farmers in India. Mahacot and Mahacot-2 BT cotton seeds are known for their high tolerance towards all major sucking pests, boll worm that are responsible for reducing yield of cotton produce throughout India. Mahacot responds well in both rain fed and irrigated conditions with wide adaptability to all types of soil and gives very high yield. It has indeterminate growth habit which result in very tall crop growth. It has also very good rejuvenation capacity. (For details log on to : http://www.business-standard.com/india/news/krishidhan-seeds-ties-upmscgmfl-for-bt-cotton/475697/)
YAMAHA TO SCALE UP R&D OPERATIONS CHEAPEST BIKE ON THE CARDS
NEW DELHI: Japanese two-wheeler maker Yamaha Motor Co Ltd is looking at scaling up research and development (R&D) operations in India, with an aim to designing the country’s cheapest motorcycle indigenously and shoring up volumes in the fast-growing domestic market. “Until this year, basic development of products was being done by Yamaha at our headquarters in Japan. We have an R&D centre to make minor changes on models in India. In future, our R&D team should be independent and capable of developing a new motorcycle in the commuter segment,” said Hiroyuki Suzuki, chief executive officer and managing director of India Yamaha Motor. The company is working out the investment required for stepping up R&D activities in the country. Yamaha’s new low-cost bike is expected to be priced at around $500 (Rs 27,500), cheaper than the entry-level motorcycle ‘Crux’, tagged at Rs 38,365. Market leader Hero MotoCorp Ltd’s ‘CD Dawn’ is the cheapest product in the category, starting at Rs 36,300 (ex-showroom, Delhi). (For details log on to : http://www.business-standard.com/india/news/yamaha-to-scalerd-ops-cheapest-bikethe-cards-/475763/)
SANGAM (INDIA) COMPLETES RS 180 CRORE EXPANSION PROJECT
MUMBAI: Dyed yarn manufacturer Sangam (India) today announced that the company has completed its Rs 180 crore expansion project to double its denim capacity to 32 million metres. As a part of expansion plan, the company has set up two lines of denim for 8 million each. The first line commenced production in November 2011 while the second was commissioned recently, a company release said here. The Rs 180 crore expansion project has been financed through a mix term loan and internal accruals, the release said. The company has installed 2,304 rotters for open-ended spinning along with of 3,000 mtpa knitting capacity and 7,200 mtpa texturising yarn capacity at its existing facilities at Bhilwara in Rajasthan. (For details log onto : http://economictimes.indiatimes.com/news/news-by-industry/cons-products/garments-/-textiles/sangam-india-completes-rs-180-crore-expansion-project/articleshow/13642704.cms)
GITANJALI PLANS TO INVEST $75 MN IN UAE FOR EXPANSION
DUBAI: Jewellery retailer Gitanjali Group is planning to invest up to $75 million (around Rs 414 crore) in increasing its number of outlets in the UAE to 110 within two years. “We are opening a series of stores in the UAE… We have 50 shop-in-shop contracts all over the UAE. We want to be in 110 shops in the UAE within one and a half years time,” Gitanjali Chairman and founder Mehul Choksi told ‘Arabian Business’. “It is a total investment of up to $50 million to $75 million over the next two years,” Choksi said. The company is also planning to expand the brand into Saudi Arabiaand is looking at opportunities in Qatar, Kuwaitand Bahrain, he added. The expansion is likely to create around 75 new jobs over the next two years. The brand is aimed at the expatriate Indian market, but Choksi said it will also seek to launch products targeting the Arab market. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fashion-/-cosmetics-/-jewellery/gitanjali-plans-to-invest-75-mn-in-uae-for-expansion/articleshow/13632017.cms)
PETROL BULLET BITTEN, GOVT EYES FDI
Having finally bitten the bullet on the price of petrol, the government is now targeting low-hanging reform fruit in a desperate attempt to convince investors that the Indiastory remains alive. Proposals for stake sales in a number of state-owned firms including Nalco and SAIL are being readied, and the long-pending proposal to allow foreign direct investment (FDI) in multibrand retail is likely to be pulled out of cold storage. The finance ministry has also set its sight on pushing through the constitutional amendment Bill for GST in the coming session of Parliament. A fresh attempt to bring the insurance bill to the Cabinet is on the cards — this time with an FDI cap higher than the 26 per cent mooted earlier. And the ball has been set rolling on the much-delayed proposal to hand over operations of airports in Kolkata and Chennai to private sector players. (For details log on to : http://www.financialexpress.com/news/petrol-bullet-bitten-govt-eyes-fdi/955456/)
AIF III MAURITIUS’ FDI PROPOSAL AMONG 25 CLEARED
NEW DELHI: The Government has approved 25 foreign direct investment (FDI) proposals worth Rs 2,973.40 crore including that of AIF III Mauritius. AIF III Sub Pvt Ltd’s proposal to bring in FDI worth Rs 1,000 crore has been approved. The Mauritius-based firm proposes to induct foreign investment in the units of a Fund constituted as a Trust. The other key proposals included Microqual Techno Ltd’s Rs 522.90-crore plan to increase foreign equity to carry out the business of wireless telecommunication. The applications were cleared after recommendations of the Foreign Investment Promotion Board (FIPB) headed by the Economic Affairs Secretary, Mr R. Gopalan, the Finance Ministry said on Tuesday. The proposal of Mauritius-based Mozart for infusion of foreign investment in an existing company in the pharmaceuticals sector (brownfield investments) was also been approved. The company has proposed to bring in investment worth Rs 300 crore. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-economy/article3470750.ece)
CORPORE DEBT RECAST REFERRALS TOUCH ALL-TIME HIGH IN APRIL
MUMBAI: In growing evidence of banks’ deteriorating asset quality, the number of corporate loans referred to the corporate debt restructuring (CDR) cell in April was the highest in any month since the cell was set up in 2001. Senior officials said the cell received 18 cases with an aggregate loan value of R7,000 crore in April. Only on very few occasions before this has the loan value exceeded this amount in a single month. The cases include eight Tayal Group companies for loans worth R2,800 crore, Moser Baer Solar (R740 crore), Renuka Textiles (R232 crore) Aravali Infrapower (R835 crore) and Vardhman Polytex (R449 crore). With the economic slowdown casting a shadow over several sectors including textiles, infrastructure, iron and steel and retail, more companies are lining up for easier repayment terms. The CDR cell received 24 referrals worth R14,544 crore in the three months to March 2012. In the preceding quarter, the number of cases was 25 with the loan value at R23,071 crore, while 19 cases worth R23,071 crore were recorded in the September 2011 quarter. (For details log on to : http://www.financialexpress.com/news/corp-debt-recast-referrals-touch-alltime-high-in-apr/955345/)
STEEL, POWER & CEMENT FIRMS LIKELY TO GET ALTERNATIVE COAL BLOCKS SOON
NEW DELHI: Power, cement and steel companies, which are facing uncertainty due to environmental and other regulatory issues over their captive coal blocks, can now relax. This is because the government will soon come out with a policy on allocation of alternative coal blocks to them. The group of ministers on coal, slated to meet here on Wednesday, is expected to approve the new policy proposed by the coal ministry. The idea, said a government source, is to remove impediments to use captive mining rights. The proposed policy would help develop projects worth billions of dollars in these sectors. The environment ministry’s recent ‘go and no-go’ categorisation had put over 200 coal blocks out of bounds for mining. Though that categorisation has now been withdrawn, ministry of environment is bringing a list of inviolate areas where mining of any form will not be permitted. The new policy on alternate coal blocks can also help companies impacted by this policy. (For details log onto : http://www.financialexpress.com/news/steel-power-&-cement-firms-likely-to-get-alternative-coal-blocks-soon/955360/)
INDIA INC EYES BIGGER SLICE OF MYANMAR’S GROWTH PIE
YANGON: Two years ago, Myanmarwas to the Association of Southeast Asian Nations (Asean) what Bihar was to India: Dogged in its isolation, a region with low development indices and one the West loved to hate — a state perpetually on the defensive. However, Myanmar’s growth has also been as rapid as that seen by Bihar. Ravi Ailawadhi, chief executive of Vihaan Networks, has seen much change in the last few months he’s been here. His company secured a contract for mobile connectivity on highways, using GSM technology and solar power. “We came to this country 10 or 11 months ago, and found the government supportive of our plan to connect the country. We launched field trials and quickly went into business. We got our first contract in September. The Myanmargovernment’s priority is to link villages through a mobile network. It found our idea of using solar power appropriate. So, we are connecting the 600-km highway between Yangon and Mandalaythrough a mobile network,” he told Business Standard. (For details log on to : http://www.business-standard.com/india/news/india-inc-eyes-bigger-slicemyanmars-growth-pie/475787/)
MCA PANEL SEEKS TOUGH BIZ RESPONSIBILITY NORMS
NEW DELHI: Companies may now have to inform shareholders about the policies taken by them to tackle the menace of corruption, including bribery. They may also have to inform shareholders of how many complaints they receive, as well as how many they resolve. The committee, constituted by the Ministry of Corporate Affairs, has given its report on implementing business responsibility norms. In the report, the panel has recommended a framework that would direct a company to disclose specific details on all segments of their businesses, including audits and human resources. The committee has prescribed specific questions to companies. For instance, a company may have to state whether its policy on ethics, bribery and corruption covered itself alone, or did it extend to a group, joint ventures and suppliers as well. It may also have to state the number of stakeholder complaints received in the past financial year and what percentage of this was satisfactorily resolved by the management. The new format also asks questions related to the environment and society to ensure India Inc follows best practices in all spheres of business and addresses concern on human rights violations. (For details log on to : http://www.business-standard.com/india/news/mca-panel-seeks-tough-biz-responsibility-norms/475784/)
GoM MAY ADDRESS JAISWAL’S CONCERN OVER NTPC’S NORTH KARANPURA PROJECT
NEW DELHI: A ministerial panel on mining in forested areas is likely to take into consideration Coal Minister Sriprakash Jaiswal’s concerns regarding the location of National Thermal Power Corporation’s (NTPC) proposed North Karanpura project in Jharkhand, which he says is situated too near to a huge reserve of dry fuel and if the plant is not shifted, then the reserves could be damaged. Official sources said that the matter could come up for discussion during the panel’s meeting on Wednesday, as it is said to be listed in the agenda of the GoM’s deliberations, which is also likely to clear Mahan (belonging to Essar Power and Hindalco) and Chhatrasal (belonging to Reliance Power) coal blocks, as reported by The Pioneer on Tuesday. Though the Group of Ministers (GoM) headed by Pranab Mukherjee had, during its March 1 meeting, decided that the 3×660 MW power project is not required to shift its location from North Karanpura, Jaiswal last month had written to Mukherjee, urging the panel to ask the power PSU to first seek his ministry’s permission before building any structures there. (For details log on to : http://dailypioneer.com/business/69209-gom-may-address-jaiswals-concern-over-ntpcs-north-karanpura-project.html)
OIL PIPELINE TO WAGAH ON THE CARDS: REPORT
ISLAMABAD: Indiahas offered to build a pipeline to the Wagah land border and supply 50 million tonne of POL products a year to meet Pakistan’s requirement, according to media reports on Tuesday. The offer was made during talks on Monday between a visiting Indian delegation led by P Kalyanasundaram, Director (international cooperation) in the Petroleum Ministry, and a Pakistani team headed by joint secretary Shabbir Ahmed of the petroleum ministry. The Indian team also met petroleum minister Asim Hussain, who said Pakistanis interested in importing furnace oil and diesel. Indiaoffered to build a pipeline to the Wagah border to export oil to meet all of Pakistan’s needs if New Delhiis assured of purchases in large quantities over the long run, The Express Tribune quoted its sources as saying. (For details log on to : http://www.financialexpress.com/news/oil-pipeline-to-wagah-on-the-cards-report/955462/)
GVK OBTAINS STATE NOD FOR A$9.9-BILLION AUSTRALIA COAL PROJECT
MUMBAI: GVK, a diversified Indian infrastructure player, has received environmental clearance for the Alpha Coal and Rail Project in Queensland, Australia, said a company statement after receving the Queensland Coordinator General’s Report on the same. In 2010, GVK purchased a controlling share of Hancock Prospecting’s GalileeBasincoal mines in Australia, and 100% of the rail and port assets. GVK invested in three mines (Alpha, Alpha West and Kevin’s Corner) with total resources of 8 billion tonne of thermal coal in addition to the rail and port facilities, said the statement. In 2011, GVK Hancock delivered the first (and only GalileeBasin) bulk samples from its Alpha site to power stations in South Koreaand China, it added. The Alpha Coal Project consists of a 30 million tonne per annum (mtpa) mine, a 495-km standard gauge railway with 60mtpa approvals and a terminal and two berths at Abbot Pointm catering to at least 60mtpa of thermal coal destined for Asian markets. (For details log on to : http://www.financialexpress.com/news/gvk-obtains-state-nod-for-a9.9bn-oz-coal-project/955420/)
ONGC Q4 NET MORE THAN DOUBLES TO RS. 5,644 CRORE
NEW DELHI: State-owned Oil and Natural Gas Corporation (ONGC) on Tuesday reported a 102% jump in net profits for the fourth quarter of 2011-12 at R5,644 crore as a large part of its oil subsidy liability to retailers like IOC had been paid in the previous quarters, unlike the last quarter of the previous fiscal, during which it had bunched up. ONGC’s turnover for the quarter rose 22% to R18,976 crore from the same time a year ago. Net profit for the whole fiscal jumped 33% to R25,123 crore on a record turnover of R66,152 crore, which was a 15% improvement from a year ago. ONGC chairman Sudhir Vasudeva told reporters that despite crude oil price fetching $121.6 in world markets, the company could realise only $50.29 a barrel in the fourth quarter of 2011-12 and $47.95 in the whole fiscal due to the subsidy burden. ONGC paid the highest ever discount to retailers IOC, HPCL and BPCL at R44,466 crore in 2011-12, which was 79% more than what it gave the previous year. (For details log on to : http://www.financialexpress.com/news/ongc-q4-net-more-than-doubles-to-rs.-5-644-crore/955416/)
POWER TRADING PRICES UP 20-25 PER CENT
NEW DELHI: With the mercury rising this month, short-term power prices have seen an increase of 20-25 per cent, with the highest price at which power was traded touching Rs 5 per unit. The average for power trading was Rs 3.5-4 per unit. “Due to mismatch in demand and supply, the prices are expected to increase further but it will not reach too high a level,” Rajesh Mendiratta, the India Energy Exchange’s senior vice-president for business development, told Business Standard. There is a shortage of about 9,000 Mw in overall demand from the grid, at a little over 100,000 Mw. The country’s biggest power exchange, IEX received purchase bids for 77,000 Mw and of 72,000 Mw for sale today. Traded volumes on the exchange have risen to 45,000-50,000 Mw/hour this month on a daily basis from 35,000-40,000 Mw/hour in April, he said. (For details log on to : http://www.business-standard.com/india/news/power-trading-prices20-25/475744/)
HPCL Q4 PROFIT JUMPS FOUR-FOLD TO RS 4,630 CRORE
NEW DELHI: State-owned Hindustan Petroleum Corp Ltd (HPCL) today reported a four-fold jump in its net profit in the March quarter on back of lump sum subsidy it received from the government to cover for fuel losses in the 2011-12 fiscal. Net profit in January-March quarter rose to Rs 4,630.99 crore from Rs 1,122.66 crore in the year ago period, the company said in a press statement here. HPCL got Rs 18,342.77 crore in cash subsidy from the government to make up for 60 per cent of the revenue it lost on selling diesel, domestic LPG and kerosene. It got another Rs 12,079.75 crore from upstream oil companies like ONGC to make up for the rest. The company, however, posts a 40 per cent drop in its net profit in the 2011-12 fiscal to Rs 911.43 crore. This profit was on a turnover of Rs 188,131 crore. “The lower profit after tax was mainly due to increase in interest costs to Rs 2,139 crores, up from Rs 892 crores in the previous year, which was mainly due to increase in gross under-recoveries (revenue loss on fuel sales) and delay in receipt of compensation for the same,” it said. HPCL said sale of petroleum products in the domestic market were at an all time high of 27.75 million tons during the year 2011-12, registering an increase of 7.9 per cent over the previous year, which was the highest growth in the industry. (For details log on to : http://www.financialexpress.com/news/hpcl-q4-profit-jumps-fourfold-to-rs-4-630-cr/955336/)
GDP GROWTH SEEN AT 6.1% IN JAN-MAR, 6.7% IN FY12
NEW DELHI: India’s growth may have slowed to 6.7% in 2011-12 from 8.4% of the previous two years, touching the level seen during the Lehman crisis three years ago as high interest rates, policy paralysis and the global economic crisis crimped demand and slowed industrial activity in the last two quarters, finds an FE poll of economists. According to the median forecast of a poll of 14 economists, Asia’s third-largest economy could grow only 6.1% in the January-March quarter. This is the same as the preceding quarter and the slowest since January-March 2009, when GDP grew 5.9%. In the first half of the fiscal, GDP grew at an average of 7.2% and the average growth in the first three quarters was 6.9%. Official GDP data for 2011-12 will be released on May 31. With the investment cycle yet to see an upturn and without policy options to stimulate the economy, analysts believe growth could moderate further. “We continue to believe the worst is over but there is still pain left,” BofA Merrill Lynch said in a recent report. (For details log on to : http://www.financialexpress.com/news/gdp-growth-seen-at-6.1-in-janmar-6.7-in-fy12/955353/)
NO COLLATERAL, 3RD PARTY GUARANTEE FOR EDUCATION LOANS UP TO R7.5 LAKH
NEW DELHI: Students seeking education loans of more than R4 lakh no longer need any third party guarantee as the Credit Guarantee Fund proposed by finance minister Pranab Mukherjee in this Budget will cover loans up to R 7.5 lakh without any collateral security and third party guarantee. This is a departure from the current scheme of things as under the present Model Educational Loan Scheme developed by Indian Banks Association (IBA), loans above R4 lakh are secured by way of a third party guarantee. The fund, as FE had reported earlier, will replace the human resource development (HRD) ministry’s proposed National Education Finance Corporation (NEFC) for refinancing of education loans. Currently, above R4 lakh and up to R7.5 lakh are secured by way of a third party guarantee but the Credit Guarantee Fund Education Trust (CGFT) scheme, education loans up to R7.5 lakh without any collateral security and third party guarantee would be covered up to 75% of the amount in default. Under the present model, there is a maximum limit for education loan of R10 lakh for studies within the country and R20 lakh for studies abroad. As per the IBA, the public sector banks had sanctioned R15,207 crore worth education loans in 5.42 lakh accounts in the year ended 31 March. The amount of the disbursement was R11,200 crore during the year. (For details log on to : http://www.financialexpress.com/news/no-collateral-3rd-party-guarantee-for-education-loans-up-to-r7.5-lakh/955373/)
FMCG COMPANIES TO GET 90-DAY EXTENSION ON NEW NORMS
NEW DELHI: In what comes as a big relief for FMCG giants like Hindustan Unilever, ITC, Britannia, Parle and others, and also to the consumers, the food ministry is set to give a 90-day extension (against a demand for one year) for the implementation of packaged commodities rules, 2011, which were to come into effect from July 1. The new norms bar the sale of FMCG products in sachets/packs of irregular sizes like 65, 73, 85, 92, 175, 425 (grams/millilitre, whichever is applicable) and makes it mandatory to adhere to the uniform and standardised packaging like of 25, 50, 100 and multiple of 100 units (g/ml). After the implementation of the packaged commodities rules, 2011, tea or coffee can only be retailed in 25 gm, 50 gm, 100 gm, 500 gm, 1 kg and thereafter in multiples of 1 kg pack sizes as opposed to 425s or 712 gm currently sold. (For details log on to : http://www.financialexpress.com/news/fmcg-cos-to-get-90day-extension-on-new-norms/955366/)
DIGITISATION DEADLINE TO BE DEFERRED
NEW DELHI: In anticipation of an adverse comment from the cases filed in Delhiand Mumbai high courts by cable distributors, the government is set to grant a three to six months extension to the June 30 deadline for the much-publicised mandatory rollout of digital addressable system (DAS) in the four metros. DAS rollout meant a mandatory digital set-top-box for every cable subscriber and the end of analogue cable services. This development comes just a month before the expiry of the June 30 deadline. Sources said some operators have gone to court questioning the rationale for the June 30 digitisation deadline when the tariff-order from the Telecom Regulatory Authority of India (Trai) were issued only on April 30, around a week after the Cable norms were notified. “By law, there should be a gap of a minimum of 180 days when such changes in Cable laws/tariff structures are announced. From April 30, a six-month gap will mean September 30. Therefore, the I&B ministry can push up the deadline to either September 30 or October 31 (if considering from May 31) or November 30 (if extending from June 30),” said a senior executive from the cable industry. (For details log on to : http://www.financialexpress.com/news/digitisation-deadline-to-be-deferred/955370/)