MUMBAI: UK-based Thomas Cook Group will sell its entire 77.1% stake in its Indian arm, Thomas Cook India, to Toronto-based Fairbridge Capital, owned by India-born billionaire Prem Watsa of the Fairfax group. The deal is estimated to be worth Rs 1,000 crore, inclusive of the open offer, and at a slight discount to the market.
Fairbridge Capital pipped PE funds Carlyle and TA Partners to emerge as the winner. The multinational travel firm’s Indian operations were put up for sale in January to help the parent climb out of a sorry financial mess. The agreement between Thomas Cook Plc and Fairbridge Capital is expected to be signed shortly.
The terms include the right to use the Thomas Cook brand name for twelve-and-a-half years. The brand licensing rights will be applicable to countries such as India and Mauritius, said a person close to the transaction.
The present management, led by Managing Director Madhav Menon, will remain in the saddle and there is unlikely to be any major changes in operation, a senior official said. Menon said he welcomes the new owner and he is delighted that they share the same values and beliefs as Thomas Cook India and its management team.
This will be the second time the company has changed hands in the past four years. In 2008, Dubai Financial sold its shares in the Indian company to the original London-based promoter.
The shares were sold in March 2008 for 208-249 million euros. Thomas Cook India shares rose 0.82% to Rs 61.20. The deal would pave the way for Fairfax Financial Holdings to enter the Indian market.
The Toronto-based company has been mainly engaged in property, life insurance, reinsurance and investment management businesses. Its founder, Prem Watsa, has been generally called the ‘Canadian Warren Buffet’ due to his successful track record of investments in the past.
As of December 31, 2010, Fairfax had assets of approximately $31.7 billion, and its revenue for the prior twelve months was approximately $6.2 billion.
During the last 25 years (that is, since the present management took over – until fiscal year December 31, 2010), the company’s book value per share has compounded by 25% per year, according to Wikipedia. Thomas Cook Plc UK is struggling to stay afloat after suffering a 573-million pound writedown due to a downturn in its businesses in the UK, Canada and Europe last year.
B M MUNJAL MAKES 3 SONS’ STAKE EQUAL IN HERO PROMOTER FIRMS
NEW DELHI: The Brij Mohan Lall Munjal-led Hero Group has initiated a process to restructure family shareholding in two promoter firms of the country’s largest two-wheeler maker, Hero MotoCorp Ltd. After the restructuring, B M Munjals’ three sons will have equal holding in the promoter firms, Hero Investment Pvt Ltd (HIPL) and Bahadur Chand Investments Pvt Ltd (BCIPL). HIPL and BCIPL hold 43.33 and 8.67 per cent, respectively, in Hero MotoCorp. In a filing with the BSE, the company said B M Munjal’s wife, Santosh, and his second son, Suman Kant, will transfer some of their shares in the promoter firms to Pawan Kant Munjal and Sunil Kant Munjal. According to the statement, Suman Munjal, who holds 21,610 shares representing 71.63 per cent stake in HIPL, will transfer 14,407 shares to his brothers. While Pawan Munjal will get 7,203 shares representing 23.88 stake in HIPL, Sunil Munjal with 7,204 shares will also gain a holding of 23.88 per cent. (For details log on to : http://www.business-standard.com/india/news/b-m-munjal-makes-3-sons-stake-equal-in-hero-promoter-firms/475024/)
WARBURG PINCUS CLOSE TO BUYING PANTALOON STAKE IN FCH
MUMBAI: US-based private equity (PE) firm Warburg Pincus is close to buying out Kishore Biyani-controlled Pantaloon Retail India’s (PRIL) stake in non-banking financial company Future Capital Holdings (FCH), sources said. Sources said Warburg Pincus is now a front-runner after PE firms Bain Capital, Kohlberg Kravis Roberts and Blackstone stepped aside, citing high valuations. Media firm Deccan Chronicle Holdings is also understood to be in the reckoning though Warburg may be willing to pay more, sources said. “As a company policy, we do not talk on deals,” a Warburg Pincus company official said. FCH has been looking for a price of R180 per share for the PRIL stake, sources said. That’s a 29% premium to FCH’s price on Monday, of R139.40. However, its’ not clear whether Warburg Pincus will pay this price. (For details log on to : http://www.financialexpress.com/news/warburg-pincus-close-to-buying-pantaloon-stake-in-fch/952071/)
WIPRO LOOKS AT M&As WORTH $1 BILLION TO BOOST PROFIT
NEW YORK, MUMBAI: Wipro is seeking to make more than $1 billion in acquisitions over the next 18 months, adding intellectual property and software to help boost profit, Chairman Azim Premji said. India’s third-largest compute services provider is targeting deals between $50 million and $300 million, though “it’s not a hard cap,” Premji said in a May 18 interview in New York. The company relies mostly on an internal mergers and acquisitions team led by Rishad Premji, the chairman’s son, to hunt for candidates, rather than using investment banks. “We are trying to create deals, rather than just react to deals which are lying with investment bankers, because we find our win rates are much higher,” said Premji , 66. “We want to supplement our growth rates there and go up the value chain.” Wipro faces competition in its effort to add higher-margin services business. Larger rivals Tata Consultancy Services and Infosys have said they want to make acquisitions in Europeand other non-English-speaking regions for new markets. Global IT services spending growth may slow to 1.3% this year, from 6.5% in 2011, as Europe’s debt struggles continue, research group Gartner said on April 5. Bangalore-based Wipro offers software-development and business process outsourcing services, as well as consulting and product engineering. (For details log on to : http://economictimes.indiatimes.com/tech/ites/wipro-looks-at-mas-worth-1-billion-to-boost-profit/articleshow/13378463.cms)
EVERSTONE CAPITAL BUYS MAJORITY STAKE IN R&R SALONS
BANGALORE: Private equity firm Everstone Capital has acquired a significant stake in R&R Salons, a Bangalore-based company that operates the YLG salon chain. The fund will initially invest Rs 60 crore and will subsequently increase it up to Rs 109 crore ($20 million), according to a person directly involved in the transaction. The investment will come from Everstone Capital Partners II, a $580-million fund that the PE firm is currently investing from said the same person. YLG, co-founded by Rahul Bhalchandra, former head of Pantaloon Retail’s wellness division, runs 19 salons in Bangaloreand one in Pune. The company has been on the look-out for a large capital infusion to build a national footprint. Jaspal Singh Sabharwal, Partner-Private Equity at Everstone Capital, confirmed the transaction but declined to share specifics. “The additional funding will be based on execution of business plan and will be linked to milestones,” he said. (For details log on to: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/finance/everstone-capital-buys-majority-stake-in-rr-salons/articleshow/13368629.cms)
FORTIS HEALTHCARE IN DEAL TALKS TO TAKE CONTROL OF WOCKHARDT HOSPITALS
Leading hospital chain Fortis Healthcare is in negotiations to take management and operational control of the existing portfolio of Wockhardt Hospitals owned by the Khorakiwalas, two sources familiar with the discussions told ET NOW. The discussions are in early stages and i-bankers have been appointed. Fortis is extremely keen to expand its footprint in the hospital sector in India and the Wockhardt Hospitals network has 9 hospitals spread across Bhavnagar, Goa, Nagpur, Nashik and Rajkot amongst other locations”, said one of the two individuals cited above. This is the second time that Fortis has initiated talks with the Khorakiwala’s after sealing a deal in 2009 when it acquired 10 hospitals from the Khorakiwalas for Rs 909 crores. According to the Fortis Healthcare website, the company currently operates 32 hospitals across 12 Indian states. “Wockhardt is keen on reducing its debt but it is unclear how this potential deal will be used to bring down the company’s debt component as the deal structure is yet to be finalised”, added the second individual cited above. (For details log onto : http://economictimes.indiatimes.com/news/news-by-industry/healthcare/biotech/healthcare/fortis-healthcare-in-deal-talks-to-take-control-of-wockhardt-hospitals/articleshow/13353898.cms)
L&T INFOTECH TIES UP WITH BMC SOFTWARE
MUMBAI: L&T Infotech has entered into a strategic partnership with BMC Software for IT infrastructure management services. BMC Software (BMC), headquartered in Houston, is a $ 2.2-billion leader in Business Service Management (BSM). L&T Infotech and BMC aim to offer infrastructure management solutions such as datacentre automation, IT service management (ITSM) and cloud computing management to global clients. L&T Infotech has already launched its shared services platform for IT infrastructure support by leveraging BMC’s suite of tools. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-info-tech/article3443632.ece)
RAVI TECHNOFORGE TO INVEST RS 100 CR FOR EXPANSION
MUMBAI/RAJKOT: Rajkot-based bearings manufacturer Ravi Technoforge Private Limited is looking to invest about Rs 100 crore in fiscal 2012-13 for capacity and technical upgradation. The company has already invested about Rs 150 crore for setting up a new production facility as well as capacity expansion at existing ones. “With last year’s investment our production capacity will increase to 1200 tonnes per month from 700 tonnes by July this year and we will increase it to 1500 tonnes a month by end of 2013. For this we will be investing about Rs 100 crore in current financial year,” said Amubhai Bharadia, chairman and managing director of Ravi Technoforge. Last year, Ravi Technoforge had acquired waste land from the state government to set up a new production facility in the Shapar industrial zone near Rajkot. However, now the company is looking for more such land near its existing plant in Shapar. (For details log on to : http://www.business-standard.com/india/news/ravi-technoforge-to-invest-rs-100-cr-for-expansion/474927/)
WIPRO INFOTECH TURNS FOCUS ON OIL & GAS, BFSI SECTORS
BANGALORE: With the recession-hit telecom and government sectors dragging down its performance, Wipro Infotech now plans to focus more on oil & gas and BFSI sectors. The India-focused arm of Wipro saw a slowdown in the last quarter, which had an impact on Wipro’s total revenues. To counter this, Wipro Infotech is planning to increase its partner ecosystem in West Asia and Indiamarkets. “We are looking to tie up with more partners since we see continued opportunities in verticals like oil and gas, BFSI, government and education,” Mr Anand Sankaran, senior vice-president. He added that in financial services, governments in these regions are looking at Anti Money Laundering (AML) solutions. According to company officials, the company is eying multi-million dollar projects such as the educational institutes run by King Abdullah of Saudi Arabia. (For details log on to: http://www.thehindubusinessline.com/todays-paper/tp-info-tech/article3443631.ece)
CENTRE CITES MODI TO PUSH FOR RETAIL FDI
NEW DELHI: Foreign direct investment (FDI) in multi-brand retail could turn into a reality at least in a clutch of Indian cities soon, with the UPA government set to revive last November’s Cabinet decision to permit up to 51% FDI in the sector. It will, however, be optional for states to implement the decision; there won’t be any forcing of their hand by the Centre. In an interview to FE, commerce and industry minister Anand Sharma said that chief ministers of many states, including Gujarat’s Narendra Modi, have expressed their willingness to permit FDI in multi-brand retail in their cities with a population of 10 million and above. Given the level of acceptance of the policy among states, as many as 30 Indian cities will, over the next few months, have supermarket stores owned by global retail giants like Walmart, Carrefour and Tesco. Clearly hinting at reviving the decision, Sharma made the Centre’s stand clear: “If some states do not want (the policy shift) then other states (which are keen on it) should not be deprived of that.” The minister said Punjab (which has said so in writing), Haryana, Himachal Pradesh, Rajasthan, Andhra Pradesh and Maharashtrawere among the states that supported the policy. (For details log on to : http://www.financialexpress.com/news/centre-cites-modi-to-push-for-retail-fdi/952311/)
VENTURE CAPITALISTS, ANGEL INVESTORS READY FOR A SMOOTH RIDE
MUMBAI: When Raghunandan G and Aprameya Radhakrishna started TaxiForSure.com in June last year, the aim of the two IIM Ahmedabad graduates was to reduce the time of prolonged wait for a taxi in the country. Today, nearing the anniversary of their venture, the duo is happy. For, their debut business has been appreciated by the country’s leading venture capital (VC) firms, which also made an investment in the online taxi booking site. The size of the taxi market in Indiais roughly Rs 14,000 crore and is growing at 12 per cent annually. Organised players, though, hold only 10 per cent of the market, according to industry experts. After investments in well-known players — Meru Cabs and Easy Cabs — VC and angel investors are on a buying spree for stakes in companies related to taxi services across the country. Recent examples: stake buyout in TaxiForSure.com by Accel Partners and Helion ventures, Tiger Global’s investment in Ola Cabs, angel investment in TaxiGuide.in and Inventus Capital’s investment in Savaari Car Rentals. (For details log on to : http://www.business-standard.com/india/news/venture-capitalists-angel-investors-ready-forsmooth-ride-/475027/)
DoT TO PRESS FOR 17% INCREASE IN 2G BASE PRICE ABOVE TRAI’S PROPOSED RATE
NEW DELHI: The telecom department (DoT) will press for a 17% increase in the base price for 2G spectrum bids over the rate proposed by Trai, further adding to the woes of mobile phone companies that were hoping the government would dilute the recommendations of the regulator. A DoT panel studying Trai’s proposals on spectrum auctions has concluded that reserve price for second-generation airwaves in the 1800 MHz band should be revised to Rs 4,245 crore per unit (on a pan-India basis), said a senior official. Trai has proposed a base rate of Rs 3,622 crore per unit. In another step that will upset the industry, the DoT panel has also rejected the regulator’s proposal to allow mobile phone companies to stagger their payments for spectrum bagged through the bidding process. It is also of the opinion that mobile phone companies must not be allowed to mortgage spectrum to raise funds from financial institutions. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/telecom/dot-to-press-for-17-increase-in-2g-base-price-above-trais-proposed-rate/articleshow/13365453.cms)
GOVT HAS LOST CREDIBILITY, SAYS CNN-IBN POLL
NEW DELHI: Prime Minister Manmohan Singh’s government has lost credibility because of its failure to handle social activist Anna Hazare’s movement against corruption and not taking bold economic reform measures, according to a poll marking three years of the second term of the United Progressive Alliance (UPA) government. The results of the poll also showed Gujarat Chief Minister Narendra Modi would be the most popular choice among Opposition leaders for the post of prime minister. The CNN-IBN Opinion Poll, conducted by GfK Mode, showed 66 per cent believed Manmohan Singh’s government had lost credibility, while 59 per cent were unsatisfied with the Union government’s performance. About 58 per cent felt UPA-II would complete its entire term in office. A total of 49 per cent felt the UPA should not get another term in office. About 21 per cent of those who participated in the survey said the biggest reason for the decline in the government’s credibility was failure to properly handle social activist Anna Hazare’s anti-corruption movement. Failure to take bold economic reforms was the second reason (cited by 20 per cent of respondents). Interestingly, 17 per cent believed the Union government had failed to handle scams and tackle corruption. (For details log on to : http://www.business-standard.com/india/news/govt-has-lost-credibility-says-cnn-ibn-poll/474983/)
PROPOSALS WILL LEAD TO RISE OF 4-6 PAISE A MINUTE IN COST FOR FIRMS IN FY13: TRAI
NEW DELHI: The Telecom Regulatory Authority of India (Trai), which carried out an impact analysis based on 12 different scenarios of revenue growth and payment schedules for the industry, has concluded the increase in costs of the operators, as a result of the base price recommended by it, would range between four paise and six paise per minute in the first year—2012-13—of the 20-year period. In the last year of the licence (2031-32), it would range between one paisa and three paise per minute. The analysis was carried out after GSM operators accused the regulator of recommending a base price of Rs 3,622 crore for every megahertz (MHz) of the 1,800 MHz band, which would be 10 times what operators paid for acquiring licences (bundled with 4.4Mhz) in 2008 at Rs 1,658 crore. The GSM operators said the increase in rates would be over 30 paise per minute. The detailed analysis, which has not been made public in the Trai report, has also formed the basis of the regulator sticking to its earlier stand on the base price, in response to clarifications sought by the Department of Telecommunications. (For details log on to : http://www.business-standard.com/india/news/proposals-will-lead-to-rise4-6-paiseminute-in-cost-for-firms-in-fy13-trai/474984/)
JAIPAL REDDY IN TURKMENISTAN TODAY TO SEAL GSPA
NEW DELHI: Indiais expected to sign an agreement with Turkmenistanthis week that will secure 38 million standard cubic meters per day gas supply from the Central Asian country at around $11.5/unit, government officials said. Oil minister Jaipal Reddy is visiting Turkmenistanon Tuesday to sign the gas sale purchase agreement (GSPA) this week, officials said. The GSPA would pave way for construction of $7.5 billion trans-national pipeline, which would also supply gas to Afghanistanand Pakistan. Turkmen gas would be significantly cheaper than liquefied natural gas (LNG) sold in spot market, government and industry officials said. Gas-starved Indiapays a spot price of about $16 a unit for LNG. Petronet LNG has recently contracted LNG import from Australia’s Gorgon project at $15.8 per unit while Gail’s 20-year contract with US’ SabinePassworks out to be around $10-11 per unit. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/jaipal-reddy-in-turkmenistan-today-to-seal-gspa/articleshow/13357862.cms)
INDIA TO DRAG US TO WTO OVER HIKE IN VISA FEE
NEW DELHI: In a bid to curb the protectionist measure taken by America, Indiawill soon file a case in the WTO against the visa fee hike, complaining that Indian IT companies face discrimination with regard to their employees who are on short-term contracts in America. According to a senior commerce ministry official, the ministry has finalised the case. “The USvisa fee hike is a discriminatory move against Indian IT firms. This week, we will formally file the complaint and seek consultations under WTO,” the official told FE. Once, the complaint is filled, the procedure of World Trade Organisation (WTO) will allow Indiato hold consultations with the USagainst the complaint. The UShad raised visa fee in 2010 to fund its enhanced costs on securing border with Mexicounder the Border Security Act. Since then, Indiahas been protesting against the measure. (For details log on to : http://www.financialexpress.com/news/india-to-drag-us-to-wto-over-hike-in-visa-fee/952305/)
UPA REPORT CARD TO FOCUS ON FALL IN FOOD INFLATION
NEW DELHI: The prime minister’s office will cite a 14% rise in per capita income in the country in 2011-12 and a considerable reduction in food inflation as a success story in the UPA government’s report card to be unveiled on Tuesday. The government, which completes three years in office in its second term amidst concerns over the falling growth and depreciating rupee, will also highlight the record power sector output of 20,000 MW in 2011-12 and the spike in social sector spending and grants to states, a PMO source said. The government, which is expecting to face hard questions over its governance, would also highlight the ten percentage point reduction in food inflation achieved during the year. This has substantially reduced pressure on consumers who otherwise were facing a double whammy of a high food prices and low growth. (For details log on to : http://www.financialexpress.com/news/upa-report-card-to-focus-on-fall-in-food-inflation/952290/)
GOVT MAY REVISE IMPORT DUTIES ON GOLD, JEWELLERY
NEW DELHI: The government said on Monday that it might consider tweaking import duties on gold and jewellery to curb the precious metal trade, and introduce attractive financial tools to lure away investors from “unproductive assets”. “The government may consider introducing alternative financial instruments to reduce the attraction of gold as a savings instrument. It may also consider revising customs duties, as also graded wealth tax, on gold and jewellery to discourage investments in unproductive assets. The taxation structure on bullion and jewellery, including value-added tax/ sales tax should be harmonised,” said a white paper on black money. It, however, didn’t elaborate on the types of investment tools the government may introduce. (For details log on to : http://www.financialexpress.com/news/govt-may-revise-import-duties-on-gold-jewellery/952302/)
POWER MINISTRY PANEL TO COMPILE DATA ON IMPORTED EQUIPMENT
NEW DELHI: In a bid to evaluate the performance of overseas power equipment, the Power Ministry is believed to be in the process of collecting information on the performance of Chinese and other imported equipment being used at various power plants according to the sources in the Ministry. A host of power projects are being run on overseas equipment already and the developers are simultaneously placing big orders, especially with Chinese companies, for upcoming plants. A panel set up by the ministry is in the process of collecting data on imported equipment, especially from China, being used at different power plants across the country. After collecting the necessary information, the performance of overseas gears would be evaluated, sources said. (For details log on to : http://www.dailypioneer.com/business/67114-power-min-panel-to-compile-data-on-imported-equipment.html)
RELIANCE INDUSTRIES NOT SO BULLISH ON ITS SHALE GAS BUSINESS: REPORT
MUMBAI: Reliance Industries’ shale gas business is going great guns, notes the company in its annual report for FY12 published today. Its production jumped 7-fold within one year, but problems such as low gas prices, high costs and infrastructure constraints to overcome. The company’s joint ventures will have to look for more liquid rich gas and cut costs to make their investments profitable. In 2010 RIL had entered into three joint ventures (JVs) in the USshale gas assets. These were the JVs with Chevron and Carrizo in Marcellus shale play of Pennsylvaniaand Pioneer Natural Resources in Eagle Ford shale Play of South Texas. In addition, RIL also partnered with Pioneer to develop hydrocarbon-transporting pipelines. FY 2011-12 represented a significant year of growth for RIL’s shale gas business. “As a result of these efforts, gross production from all three JV reported an exit rate of 233 million metric cubic feet per day (MMCFPD) of gas and 34.7 thousand barrels per day of liquids in December 2011 (a 7 fold increase on year-on-year basis),” mentioned the RIL’s annual report. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/reliance-industries-not-so-bullish-on-its-shale-gas-business-report/articleshow/13359781.cms)
POWER PLANT TO SHUT DOWN IF GAS SUPPLIES DWINDLE: LANCO
NEW DELHI: Sounding a warning bell, private power producer Lanco has told the government that any further reduction in natural gas supplies from Reliance Industries’ KG-D6 gas fields would lead to shutting down of power plants. With KG-D6 field output dropping from 61.5 million cubic meters per day to 32.66 mmcmd over two years, the government has made a pro-rata cut in gas supplies to 25 power plants who were allocated gas from Krishna Godavari basin fields. The plants, which are currently operating at less than 38 per cent of their capacity because of the supply reduction, may face further cuts in fuel as government squeezes-in Delhi’s Pragati Power Plant and others as KG-D6 customers. Lanco last week wrote to Pulok Chatterji, Principal Secretary to the Prime Minister, saying it was neither technically nor financial viable for plants to operate at such low Plant Load Factor (PLF) or capacity and will shut down if there was any further cut in supplies. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/power-plant-to-shut-down-if-gas-supplies-dwindle-lanco/articleshow/13356476.cms)
TCI SETS A 6-MONTH DEADLINE FOR GOVT TO ACT ON CHARGES AGAINST COAL INDIA
MUMBAI: After lying low for a few weeks, The Children’s Investment Fund (TCI) has fired a fresh salvo at the Indian government, effectively setting a six-month deadline to act upon the allegations put forth by the foreign institutional investor in the matter of Coal India (CIL). In its latest letter, TCI — which holds a little over 1% in Coal India — has asked the Indian authorities to come forward for ‘formal negotiations’ for an ‘amicable settlement’ of the issues that have been raised by the former on numerous occasions. Meanwhile, reports suggest that the coal ministry officials are not keen on meeting with representatives of TCI who had sought a meeting on May 29. Further, TCI has categorically said that the letter is a notice under the agreement signed between Indiaand Cyprusin 2002 for mutual promotion and protection of investments and further action will be taken if the government fails to act within six months. (For details log on to : http://www.financialexpress.com/news/tci-sets-a-6month-deadline-for-govt-to-act-on-charges-against-coal-india/952063/)
OMCs TO REPORT PROFITS IN Q4 ON SUBSIDY BOOST
NEW DELHI: Oil marketing companies IOC, HPCL and BPCL would be able to report profits for the fourth quarter of 2011-12 on the strength of their refining margins and the extra government subsidy to compensate about 80% of their losses incurred in the period due to selling auto and cooking fuels below cost. As per a petroleum ministry communication to oil retailers on Monday, IOC would get R20,861 crore, HPCL R8,486 crore and BPCL R9,153 crore as state subsidy for the January-March period of 2012, said sources. The total subsidy for the period works out to R38,500 crore, while retailers will have to absorb the remaining loss of close to R10,000 crore. However, a 4% appreciation of the rupee during the period would depress even the companies’ refinery margins for the fourth quarter of the 2011-12, limiting their profitability. Refinery margin is what they earn in dollar terms while transferring finished petroleum products at global (import parity) prices to their marketing divisions, which retail these at state-set prices, incurring what is called under-recoveries or marketing losses. (For details log on to : http://www.financialexpress.com/news/omcs-to-report-profits-in-q4-on-subsidy-boost/952315/)
NO-GO GHOST STILL HAUNTS COAL INDIA
NEW DELHI: More than eight months after the government scrapped the controversial ‘no-go’ policy, which had banned mining in some areas, state-owned Coal India Ltd (CIL) is still struggling to operate its new projects located in the so-called no-go areas in the absence of a formal go-ahead from the environment ministry. The delay is set to stem the miner’s efforts to meet new supply obligations, further aggravating the ongoing coal crisis in the country. “Since September last year, only two of our new mining projects have received clearance and, that too, outside of the no-go list. Overall, 179 proposals are still awaiting green clearances,” CIL Chairman S Narsing Rao told Business Standard. This includes 132 proposals awaiting the first stage clearance and 47 waiting for the second stage nod from the ministry. Around 40 of CIL’s new projects are stuck in the no-go zones. (For details log on to : http://www.business-standard.com/india/news/no-go-ghost-still-haunts-coal-india-/474975/)
PRIVATE FIRMS GOT UNDUE BENEFITS OF RS 1.8L CRORE IN ‘COALGATE’: CAG
NEW DELHI: The Comptroller and Auditor General’s final report on allocation of coal blocks between 2004 and 2009 without auction is expected to peg the value of “undue benefits” that the government extended to private entities alone at more than Rs 1.8 lakh crore, sources have indicated. The last draft of the report, first reported by TOI on March 22, had said the government extended undue benefits of Rs 10.67 lakh crore by giving away 155 mines to 100 commercial entities, including public sector bodies, without bidding since 2004. The government auditor has brought down the value of undue benefits by taking out public sector and state government entities from the final report and focusing only on private ventures. This was done at the coal ministry’s behest, which argued during the ‘exit conference’ that public sector entities are audited separately. (For details log on to : http://timesofindia.indiatimes.com/india/Private-firms-got-undue-benefits-of-Rs-1-8L-cr-in-Coalgate-CAG/articleshow/13365698.cms)
PMO BACKING FOR RELIANCE ON GAS PRICING DRAWS FIRE
NEW DELHI: The PMO’s decision to back the demand by Reliance Industries Limited (RIL) for upward revision of KG-D6 gas prices has divided both the government and energy stakeholders, with the Petroleum Ministry and the Association of Power Producers (APP) remaining strongly opposed to the move before the scheduled 2014 deadline. Any hike in prices before then, the latter say, is likely to benefit the Mukesh Ambani-owned RIL by around $8 billion and sharply increase the government’s subsidy bill. The Prime Minister’s Office has referred RIL’s demand for gas price revision to the Petroleum and Natural Gas Ministry despite the latter’s earlier refusal to tinker with the 2014 date, suggesting that legal opinion on the issue be sought and placed before the Empowered Group of Ministers (EGoM) headed by Finance Minister, Pranab Mukherjee. (For details log on to : http://www.thehindu.com/business/Industry/article3442556.ece)
GOVT WARNS SAIL OF ACTION FOR ‘UNSATISFACTORY’ PERFORMANCE
NEW DELHI: Steel major SAIL on Monday got a dressing down from the government over “unsatisfactory” performance and poor progress in expansion and modernization programmes, leading to cost escalations. While SAIL chairman C S Verma termed the Maharatna’s performance as satisfactory, steel minister Beni Prasad Verma came down heavily on the company, warning that “administrative decisions” will be taken if performance is not turned around. “I am not satisfied with the performance of SAIL over the last 1-2 years,” the minister said at a meeting where the SAIL chairman was also present. He said SAIL’s expansion and modernization programmes were not being completed on time, leading to cost escalations. “Improve performance and complete the work on time with responsibility,” the minister added. The minister said that SAIL should have boosted its production. “Demand is not less. It is too much and cannot be met.” He said that SAIL should make “time-bound plans” to finish expansion plans on schedule. “If not, administrative decisions will need to be taken,” the minister said, adding that the government will form a committee to fix responsibility. (For details log on to : http://timesofindia.indiatimes.com/business/india-business/Govt-warns-SAIL-of-action-for-unsatisfactory-performance/articleshow/13365978.cms)
FMCG COMPANIES CONTINUE TO ACHIEVE CONSUMPTION-DRIVEN GROWTH
India’s fast-moving consumer goods, or the FMCG sector, has been able to weather the impact of an economic slowdown and rising input costs yet another quarter, as firms led by HUL beat street expectations both on top line and bottom line growth. A study of the aggregate financial performance of the leading 10 FMCG companies over the past eight quarters shows that the industry has grown at an average 16-21% in the past two years with average operating margins being 22%. Very few other industries can boast of having such a performance track record. “The consumer sector typically is the last and the least to suffer during a slowdown,” says Manoj Menon, senior analyst at Kotak Institutional Equities. Most companies are reaping the benefits of the direct distribution expansion mostly in rural India. HUL, for instance, has tripled its rural penetration in the last couple of years. Sales from modern trade have also been a strong growth driver for companies. Marico has posted a growth of over 45% in revenues from its rural and modern trade businesses during FY12. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/fmcg-companies-like-hul-dabur-godrej-marico-continue-to-achieve-consumption-driven-growth/articleshow/13368922.cms)
REALTY DEALS UNDER SCANNER
NEW DELHI: A national regulator with appropriate powers over the realty sector may be an efficient way of clamping down on realty deals structured to evade taxes, the government said in a white paper on black money tabled in Parliament on Monday. “To reduce the element of black money in transactions relating to immovable property, the provision of no-objection certificate (NOC) may be introduced in the income tax law with safeguards to reduce administrative complications and increased ease of compliance, so that an appropriate and uniform database is set up and a proper national-level regulation put in place,” the white paper said. The system should be computer-driven with minimal interaction between the tax authorities and taxpayers, and enforced by a dedicated unit within the investigative machinery of the income tax department. The real estate sector contributes about 11% of India’s gross domestic product (GDP). Investment in property is a common means of parking unaccounted money, and real estate transactions are often under-reported or not reported, mainly on account of high property transaction taxes or stamp duty. (For details log on to : http://www.hindustantimes.com/business-news/WorldEconomy/Realty-deals-under-scanner/Article1-859247.aspx)