MUMBAI:Institutional Investor Advisory Services India (IIAS) and InGovern, the two leading proxy institutional advisory firms are divided over their recommendations on the SesaGoa-Sterlite merger ahead of the crucial court-convened meeting of shareholders.
Since the announcement of the amalgamation in February, the entire proposal has caused consternation among shareholders of both companies.
Some shareholders of Sesa Goa and Sterlite Industries have opposed Anil Agarwal’s plans to create a mining behemoth by combining the two companies along with some other group companies.
While some institutional shareholders have been discussing the implications of the merger, others such as Sesa Goa’s largest institutional shareholder, Templeton, which holds around 12%, are trying to muster adequate support to block the resolution. Uncomfortable with the structure, reports suggest that the fund is talking to other institutional shareholders to stall the proposed merger.
Even as media reports aver that Templeton, an activist minority shareholder, has reservations against the proposed merger, it seems daunting for the naysayers to block the merger, as over 25% of votes will be needed for a special resolution to be blocked. IIAS’s recommendation to vote against has come as a vindication for the warring fund.
IIAS and InGovern are advisory firms which provide participants in the Indian market with independent opinions, research and data on corporate governance issues.
However, both the firms seem to be divided on their opinion. While InGovern has recommended a vote in favour of the proposal, IIAS is against the merger.
Shriram Subramanian, founder and managing director, InGovern Research Services says that the entire transaction gives a cleaner structure with a well-diversified portfolio of minerals and mining assets. “We advise shareholders of Sesa Goa and Sterlite Industries to vote for the amalgamation.”
But he added as a rider that shareholders of both the companies will have to weigh the risks associated with allegations of human rights violations, environmental risks with Vedanta Aluminium before voting for the proposal.
“Also, the swap ratio seems to be tilted in favour of Sterlite shareholders,” he said. The court convened meeting slated on June 19 and June 21 for Sesa Goa and Sterlite, respectively, is expected to see some action.
A note from IIAS said that Vedanta Resources is diluting its ownership in subsidiaries, which has significant debt. “We recommend voting against after considering the high consideration paid to VRL for acquiring 70.5% in Vedanta Aluminium. The merger favours VRL and VAL shareholders as it gives them an access to cash surpluses of Sesa Goa and Sterlite and its subsidiaries and extend its debt repayment schedule.
Consolidation of VAL with Sesa Sterlite would have been feasible post acquisition of mining approvals from the ministries and at a fair valuation.” Meanwhile, the overhang over the merger has resulted in an upsurge in arbitrage activity with many traders looking to cash in on the differential caused due to the swap ratio, which widened over the past few weeks between Sesa Goa to Sterlite Industries, which is now available at a substantial discount.
Even as shareholders squabble, traders are looking to cash in on the possible arbitrage opportunities of around 15-20% available through the cash and futures window thrown in by the supposed mis-pricing. Some brokerages have told their clients to shift their investments to Sterlite from Sesa to benefit from the merger overhang.
Chokkalingam G, ED & CIO, Centrum Wealth Managers said, “We are suggesting investors to shift investments from Sesa Goa to Sterlite industries to benefit from the unique stock price situation. Sterlite shares trading at a discount of around 18-20% to their derived price from Sesa Goa’s current market price based on the proposed merger ratio. The market is still wary of the event and this is reflected in the stock prices.”
On Tuesday, Sesa Goa shares closed at 176.5, while Sterlite closed at 90. So, if an investor buys 1,000 shares of Sterlite at CMP of 90 (total of 90,000), he will get 600 shares of Sesa, which are valued at around 1,06,000, thereby benefiting by around 16,000 or 18% once the prices converge if the proposal goes through.
Some traders have been going long on Sterlite and short on Sesa Goa, resulting in Sesa Goa’s June futures to trade in discount from the cash market price. Due to the discount, the arbitrage through futures is around 14-15% compared to 18-20% in the cash market over the past few days.
The gap has widened considerably since the beginning of May, resulting in an attractive merger arbitrage. Analysts say prices are expected to converge once the approval is secured in the court-convened meeting.
ONGC MAY BID FOR $5-BN CONOCO OIL SANDS ASSETS
KUALA LUMPUR: Oil and Natural Gas Corp (ONGC), India’s biggest government-owned energy explorer, is considering bidding for part of ConocoPhillips Canadian oil sands holdings worth around $5 billion, a source with direct knowledge of the situation told Reuters on Tuesday. The Houston-based company has been looking to sell assets in a number of countries including Nigeriaas part of a global restructuring. ConocoPhillips recently completed the spin-off of its refining activities into Phillips 66, a newly created independent UScompany. ConocoPhillips said in January that it is selling a stake in six Albertaproperties that produce 12,000 barrels of oil a day from an estimated 30 billion barrels of bitumen. Asked whether ONGC Videsh, the overseas arm of ONGC, was interested in buying the assets, the source said: “It’s in the process. It is seriously looking at it.” (For details log on to : http://www.financialexpress.com/news/ongc-may-bid-for-5bn-conoco-oil-sands-assets/958368/)
MORGAN STANLEY’S INFRA PE FUND IN TALKS TO BUY LANCO’S ROAD ASSETS
MUMBAI: Private equity (PE) players, who burnt their fingers following big-ticket deals in India’s power sector, are now showing interest in less risky road projects. Morgan Stanley Infrastructure Partners, a $4-billion global infrastructure fund, is in early discussions with infrastructure company Lanco Infratech to buy its 401 km of highway projects, in various stages of construction, which are up for sale. A few other infra-focused PE firms are also engaged in due diligence for Lanco’s road assets. The valuation was in the range of Rs 1,000-1,200 crore, said sources. Ernst & Young was the advisor to Lanco in the sale, the sources added. Gautam Bhandari, managing director of Morgan Stanley Infra-structure Partners, declined to comment on his company’s interest in Lanco. A Lanco Infratech spokesperson also declined to comment. Morgan Stanley Infrastructure Partners entered into a joint venture with Spanish company Isolux Corsán to invest in road projects in Indialast year, with a plan to contribute $200 million each to the joint venture. (For details log on to : http://www.business-standard.com/india/news/morgan-stanleys-infra-pe-fund-in-talks-to-buy-lancos-road-assets/476440/)
TV18-VIACOM TO TAKE ON STAR-ZEE IN DISTRIBUTION
MUMBAI: MediaPro, the STAR-Zee joint venture that controls the distribution of 78 television channels, has some serious competition. TV18 and Viacom18 on Tuesday announced a 50:50 joint venture, IndiaCast, to create a platform to distribute nearly 57 channels. The third large distribution consortium, the Sony-Discovery OneAlliance, controls around 26 channels. Before it was bought over, Eenadu used to distribute its 11 channels on its own. The TV18 and Viacom channels were distributed by another JV (joint venture) between Network18 and Sun TV. This JV will now only distribute all the channels of Viacom, Eenadu and TV18, apart from Sun TV in Tamil Nadu. However in the north, Sun TV channels will be distributed by the new announced JV. Unlike the other tie-ups, IndiaCast will consolidate domestic as well as international channel distribution (leveraging Viacom’s global clout), placement services and content syndication and also include other new media platforms like IPTV, mobile platforms and HITS. (For details log on to : http://www.business-standard.com/india/news/tv18-viacom-to-takestar-zee-in-distribution-/476432/)
BRITANNIA PLANS TO GO WEST, TARGETS INDIAN DIASPORA
BANGALORE: Britannia Industries, which has a near dominant control in the Indian biscuits market, is embarking on a global expansion to shore up its growth story. The company, which logged 19 per cent growth in top line at Rs 5,400 crore, derives around Rs 250 crore from global operations and is looking at all vectors to expand its presence overseas. “Several of our bakery and dairy brands are available in approximately 30 countries, and we want to open up new geographies with new offerings,” Managing Director Vinita Bali said. Britannia, in addition to a decent presence in West Asia, Southeast Asia, Africa and Australia, has entered mature North American and UKmarkets. “We are targeting the Indian diaspora in the United States, Canadaand the UK. It is indeed a highly competitive market, but is a large one, as well,” Balisaid about sales prospects there. According to her, Britannia has hardly touched the tip of the iceberg in reaching out to the Indian diaspora, and intends to reach beyond this target segment pretty soon and rely on the distributor model. Britannia intends to ride on the established organised retail market in mature markets and go for the hard sell at the point-of-sale terminals to reach out to the consumer. (For details log on to : http://www.business-standard.com/india/news/britannia-plans-to-go-west-targets-indian-diaspora/476441/)
DEVYANI INTERNATIONAL COOKS PLANS TO GROW RETAIL BRANDS
BANGALORE: QSR (quick service restaurant) chain Devyani International plans to grow its Swensen’s and Vaango brands through a market saturation strategy rather than expand rapidly across the country. Swensen’s is a US-based luxury ice-cream retailing brand, while Vaango is a South Indian food retailing brand. DI is the master franchisee for Pizza Hut, KFC, Costa Coffee and Swensen’s ice-creams in India, while it owns the Vaango chain of South Indian food outlets. The company plans to add around 140 stores at an investment of about Rs 200 crore in the current fiscal across its five QSR brands. Swensen’s, known for its sundaes, currently has seven outlets in Bangaloreand plans to enter Chennai and Hyderabadduring the next financial year. Similarly, Vaango, which has seven outlets in Delhiwill be taken to other regions only after the current fiscal, said Mr Virag Joshi, CEO and President, Devyani International. “We want to achieve operational excellence and better control before expanding to other markets,” he explained. The company plans to invest about Rs 100 crore on expansion of Swensen’s chain in the next five years. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-marketing/article3494720.ece)
FDI IN MULTI-BRAND RETAIL: GOVT SEEKS SUPPORT OF ALLIES, OPPOSITION
NEW DELHI: Drawing flak for economic growth slipping to a nine-year low of 6.5 per cent in 2011-12, the United Progressive Alliance (UPA) government on Tuesday appealed to both allies and the Opposition to support it in opening the multi-brand retail sector to foreign direct investment (FDI). It also sought their support for other reforms to help boost the economy. Commerce & Industry Minister Anand Sharma said those who did not want implementation of the Cabinet decision on FDI in multi-brand retail should be respected, but added those who supported the move should be allowed to do so. He said parties across the political spectrum should help in the growth agenda. When told some UPA allies were also opposing FDI in multi-brand retail, he said, “I am appealing to them as well… The time has come to convert major economic reforms into policy initiatives,” he added. The minister said he would continue with “consistent political persuasion, since more than half the states are keen (on FDI in retail). Mamata Banerjee (Trinamool Congress chief) has strong reservations. I do respect (these)”. However, he said some chief ministers had conveyed their support and wanted to open the sector to foreign investment. (For details log on to : http://www.business-standard.com/india/news/fdi-in-multi-brand-retail-govt-seeks-supportallies-opposition/476447/)
EGOM CALLS FOR AUCTION 13.75 MHz SPECTRUM
NEW DELHI: The panel of ministers headed by Finance Minister Pranab Mukherjee on Tuesday decided to sell up to 13.75 MHz of spectrum in the 1800 MHz band in the upcoming auctions, raising the possibility of two mobile phone companies winning back their cancelled permits. The nine-member Empowered Group of Ministers (EGoM) did not take a decision on the reserve price for spectrum that will be sold in the auctions, but decided to stick to the Supreme Court-mandated August 31 deadline to complete the sale process, said two officials. It also decided that airwaves allotted in this auction will be technology-neutral, and it will be up to the winner to decide whether it wants to offer 2G, 3G or 4G services on these frequencies. An official present at the meeting said the controversial proposal to refarm or redistribute the 900 MHz spectrum of existing operators was not discussed. (For details log on to: http://economictimes.indiatimes.com/news/news-by-industry/telecom/2g-case-egom-calls-for-auction-13-75-mhz-spectrum-2-telcos-can-win-back-cancelled-licenses/articleshow/13859063.cms)
SRIPRAKASH JAISWAL DUBS COAL AUCTION ANTI-PEOPLE
NEW DELHI: It’s the interest of the common man that was at the core of the UPA government’s policy on allocation of coal blocks, Union coal minister Sriprakash Jaiswal insisted on Tuesday, and termed the auction or bidding alternative as anti-poor and anti-consumer. A day after party leaders at the Congress Working Committee meeting urged ministers to defend the government’s economic policies and decisions rather than being apologetic about them, Jaiswal tore into the Opposition’s charge that allocating coal blocks instead of auctioning them had cost a massive loss to the state exchequer. The minister said the government’s policy had always been dictated by affordability of electricity to the common man. ‘If we have the coal and cannot use it, then what¿s the point in having it’? (For details log on to : http://www.dailymail.co.uk/indiahome/indianews/article-2155012/Sriprakash-Jaiswal-dubs-coal-auction-anti-people.html?ito=feeds-newsxml)
RIL SEEKS HUGE RISE IN KG-D6 GAS PRICE
NEW DELHI: Mukesh Ambani-led Reliance Industries Ltd (RIL) has sought a two-three fold increase in the price of gas being produced from its Krishna-Godavari (KG)-D6 fields, also India’s largest gas producing field, off the eastern coast. In a recent letter addressed to the empowered group of ministers (EGoM), which will decide on whether or not to raise the price of KG-D6 gas before 2014, RIL has said the price of gas from KG-D6 should be linked to the price of imported LNG secured under long-term contracts. Against the KG-D6 gas price of $4.2 per unit, the landed price of imported LNG secured through long term contracts is around $10-12 per unit. “While the price of $4.2 per unit certainly needs revision, its linkage to imported LNG is not correct,” said a former petroleum secretary on the condition of anonymity. “At present, the gas that you are planning to import from Turkmenistanexclusive of transportation and other charges is $7-7.5 a unit at their border. So if a third country can sell you gas at that price, why should our own domestic gas be priced any higher, he added. (For details log on to : http://www.hindustantimes.com/business-news/CorporateNews/RIL-seeks-huge-rise-in-KG-D6-gas-price/Article1-866513.aspx)
OIL FIRMS CAMPAIGN TO JUSTIFY PRICE HIKE
NEW DELHI: Stung by the sharp criticism from all parties across the political spectrum — including two union Cabinet ministers from the ruling UPA government — for the recent R7.5-per-litre hike in petrol price, the three state-owned oil marketing companies — Indian Oil, Bharat Petroleum and Hindustan Petroleum — on Tuesday ran a nationwide ad campaign to justify step. The message they sought to convey was that their combined profits are not “huge” but just enough to maintain their blue chip status and credit ratings at the global level. The oil companies also said that a combined profit of R6,177 crore during 2011-12 on a combined turnover of R8,33,000 crore worked out to a mere 0.7% of turnover — which is not even sufficient to meet their capital expenditure requirements. The campaign did not however pacify the political class, who termed it a “political gimmick” and “useless tactics”. (For details log on to : http://www.hindustantimes.com/business-news/CorporateNews/Oil-firms-campaign-to-justify-price-hike/Article1-866515.aspx)
SERVICES PMI RISES TO 3-MONTH HIGH IN MAY
NEW DELHI: After dismal data on growth and production, the Indian economy today received a shot in the arm from the HSBC Purchasing Managers’ Index (PMI) for services The widely-tracked index rose to a three-month high of 54.7 points in May, against 52.8 points in April. The rise was attributed to a sustained increase in new work, said Markit Economics, which compiles the data. A reading of more than 50 points denotes expansion, while that below 50 means contraction. Services PMI in May, however, was lower than the reading of 58 points in January. The data follow the not-so-robust growth in services, along with contraction in manufacturing, pulling down growth in the gross domestic product for the quarter ended March 31 to an at least 32-quarter low of 5.3 per cent. Services rose 7.5 per cent in that quarter, against 10.4 per cent growth in the corresponding period of the previous financial year. Optimism in the service sector was the highest in 15 months, with the Business Expectations Index rising by more than 14 points in May, compared to the reading in March. (For details log on to : http://www.business-standard.com/india/news/services-pmi-rises-to-3-month-high-in-may/476446/)
RGTIL & GAIL MAY LOSE KG-D6 PIPELINE PERMITS
MUMBAI: The petroleum regulator has recommended cancellation of licences for five pipelines that state-run GAIL India and a Mukesh Ambani-controlled company were planning to build to transport natural gas from Reliance Industries’ D6 block, where output has fallen sharply, official sources said. The oil ministry has received a communication from the Petroleum and Natural Gas Regulatory Board (PNGRB) saying the licence for one pipeline being planned by GAIL and four by Reliance Gas Transportation Infrastructure (RGTIL) should be revoked as work has not progressed on the projects for a long time. GAIL and RGTIL did not respond to ET’s queries. A source close to RGTIL, which is controlled by Mukesh Ambani, said building pipelines would be justified only if gas was available, and if output from D6 rose, the company could build the pipelines quickly. D6 output has dropped to 34 mmscmd since hitting a peak of 61.5 mmscmd in March 2010. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/pngrb-seeks-cancellation-of-kg-d6-pipeline-permits-given-to-rgtil-gail/articleshow/13859353.cms)
GLOBAL COAL PRICES COOL, BUT WEAK RUPEE WORRIES IMPORTERS
KOLKATA | MUMBAI: Power companies that use imported coal have got a respite from skyrocketing fuel costs as international coal prices have softened considerably, and are projected to fall further, but the depreciation of the rupee has limited their gains. The coal price index for Australian coal, popularly called the NewCastle Index, and an Asian benchmark had jumped 92% between April 2009 and March 2011 to touch 127.87, but has cooled off to 98.24 last month, dropping 23% over the past year, including a 14% decline since May. API4, the index for South African coal, mirrored the trend. Experts believe that the prices may decline further in the months ahead, making it easier for Indian power generation companies that are reeling under short supply of coal from Coal India. Power producers such as NTPC, DVC and the Adani group say that generation cost in the past few months has declined by up to 5 paise per unit as the rupee’s depreciation limited the benefit of cheaper coal. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/power/global-coal-prices-cool-but-weak-rupee-worries-importers/articleshow/13859416.cms)
INDIA OFFERS SOPS TO PUSH EXPORTS OF GREEN PRODUCTS
NEW DELHI: Indiahas offered key incentives to exporters to tap the growing demand for clean energy equipment and non-polluting electric vehicles in overseas market, which would help it overcome the rising trade deficit. The commerce ministry has identified a total of 16 green products including solar power equipment for export promotion after a mid-term review of its 2009-14 foreign trade policy. The list also includes equipment like windmills, bio-mass gassifier, waste boiler as well as electric vehicles. The ministry has reduced export obligation for manufacturing of these products to 75% under EPCG (Export Promotion Capital Goods) Scheme. This comes at a time when the Indian manufacturers of clean energy equipment are sensing opportunities for themselves in the export market as several countries in Latin America and Africago for big capacity addition in clean energy. Meanwhile, Chinese solar equipment suppliers have been shut out of the lucrative USmarket owing to imposition of anti-dumping duty. Significantly, Indian clean energy equipment suppliers have been eying the export for a while. But they have been unable to make much of a dent in the absence of trade incentives. Tough Chinese competition made their task even more difficult. (For details log on to : http://www.financialexpress.com/news/india-offers-sops-to-push-exports-of-green-products/958401/)
GVK COAL PROJECT IN AUSTRALIA UNDER GREEN THREAT
NEW DELHI: The Australia government has said it would delay environment clearance to GVK Power and Infrastructure’s A$10-billion ($9.72-billion) coal mining and rail project in Queensland province, in a move that would set back the company’s plan to tap the strong demand for coal in India. “I am stopping the clock on the Alpha project. We have no interest in a delayed process. But we are not willing to compromise environmental standards,” environment minister Tony Burke was quoted as saying by agencies. He said GVK must work with national authorities to secure clearance for the project. This came as a surprise as the federal government was not expected to halt environment clearance to the project which had already bagged the go-ahead from the provincial government. However, GVK remains confident about securing federal government’s green nod for the project. “The work conducted over the last four years has been extremely robust and a very detailed process has been followed. GVK remains extremely confident of a positive outcome,” the company said. (For details log on to : http://www.financialexpress.com/news/gvk-oz-coal-project-under-green-threat/958366/)
COAL INDIA DROPS PLAN FOR DIRECT IMPORT OF COAL
KOLKATA: Coal India (CIL) has dropped plans of importing coal directly and will instead ask MSTC to import on its behalf if it is forced to import coal to meet its supply obligations. A CIL official told FE that the company has decided to keep itself free from any import activities and stay away from long-term import contracts in favour of yearly deals. This is in sharp contrast to what CIL was considering a few months back — long-term import contract preferably for 10 years and at prices at least 10% lower than the index prices during the corresponding period. CIL chairman and managing director S Narsing Rao said that CIL would be able to supply 65% of the trigger level to its customers and there would be a 15% gap between its committed quantity and the quantity it would be able to supply. (For details log on to : http://www.financialexpress.com/news/coal-india-drops-plan-for-direct-import-of-coal/958362/)
POWER MINISTRY WANTS COALMIN TO CHANGE FSA PENALTY RULES
NEW DELHI: Unhappy with the minimum penalty norms in Coal India’s fuel supply agreements (FSA), the power ministry has approached the coal ministry to change the disputed clauses. ‘‘We are trying … we are taking up this issue with Coal Indiaand ministry of coal. Disincentives are not there for three years and after three years penalty is only 0.01% … we would want it to be changed,’’ power secretary P Uma Shankar told reporters here. He said that the ministry is in talks with the coal ministry over the penalty clause in fuel supply agreements and hopes to sign pacts with amended conditions soon. ‘‘We hope to finalise the points and also hope to sign the FSA with the conditions that we want,’’ he said. Coal Indiahad suggested a 0.01% penalty on not delivering the fuel in time, but the penalty would only be applicable after three years of signing the pact. (For details log on to : http://www.financialexpress.com/news/power-min-wants-coalmin-to-change-fsa-penalty-rules/958233/)
GOVERNMENT LOOKS AT AUCTIONING COAL MINES TO NEW POWER PLANTS
NEW DELHI: The government is looking at the possibility of allocating coal mines, which have been earmarked for the power sector in the upcoming auction of 54 mines, to new power plants only. “Coal blocks for power generation would be only for the new power plants,” says an official document highlighting the details of a meeting of the Coal Ministry held with representatives of the state governments. Of the 54 coal blocks identified by the government a couple of days back, a maximum of 16 have been earmarked for the power sector and 12 for PSUs, among others. The Coal Ministry also said that the state government will have to apply for the blocks earmarked for the power sector for which tariff-based bidding will have to be carried out for award of the power project, the document said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/indl-goods/svs/metals-mining/government-looks-at-auctioning-coal-mines-to-new-power-plants/articleshow/13845913.cms)
POWER EXCHANGES PURSUE NPEX FOR PARTNERSHIPS
NEW DELHI: The existing power exchanges are pursuing the National Power Exchange Ltd (NPEX) to carry out business jointly. Sources privy to the development said that NPEX has got feelers from the Indian Energy Exchange (IEX) and Power Exchange India Ltd (PXIL) to come in as a partner. “The power trading market in the country is very shallow at present. NPEX is exploring whether there is room for a third exchange in the country or to do business jointly,” sources added. NPEX is a joint venture promoted by NTPC, NHPC, Power Finance Corporation and Tata Consultancy Services to undertake the business of setting up and operating a national-level power exchange. Its other equity partners are Bombay Stock Exchange, IFCI, Meenakshi Power and DPSC. (For details log on to : http://www.thehindubusinessline.com/companies/article3494045.ece)
EXPORT SOPS EXTENDED, SEZ PACKAGE COMING
NEW DELHI: The government on Tuesday came to the rescue of exporters by extending some promotion schemes and providing incentives to tap new markets, with an aim to increase outbound shipments by 20 per cent this fiscal. A two per cent interest subvention for labour-intensive sectors and the Export Promotion Capital Goods (EPCG) scheme were extended by a year and their coverage widened. In another significant step, Commerce and Industry Minister Anand Sharma said the ministry would issue new guidelines for promoting exports from Special Economic Zones (SEZs). He said exports from these tax-free zones had been falling for the past couple of years due to the imposition of minimum alternate tax and dividend distribution tax. However, the government refrained from introducing any new scheme in the much-awaited annual supplement (2012-13) to the Foreign Trade Policy (FTP) 2009-2014. (For details log on to : http://www.business-standard.com/india/news/export-sops-extended-sez-package-coming/476433/)
FMCG COMPANIES KEEP FINGERS CROSSED OVER MONSOON
MUMBAI: Consumer goods companies remain hopeful of good rainfall this year despite the prediction of a possible drought-causing El Niño weather phenomenon in August-September. Indiawas last hit by an El Niño, caused when there is a shift in ocean temperatures and atmospheric conditions in the Pacific Ocean, in 2009. The last two years were good in terms of rains for India, with the kharif crop output rising 10 per cent and nearly four per cent, respectively. “Weather reports suggest the rainfall this year will be good. We remain hopeful it will,” says Adi Godrej, chairman, Godrej Group. “Our assessment is that there will be no negative impact as a result of weak rains. In our view, the monsoons will be good,” says Naresh Bhansali, chief executive officer, finance, strategy & business development, Emami Ltd. C K Ranganathan, chairman & managing director, CavinKare, says, “We subscribe to weather forecast reports ourselves and what we are seeing suggests the monsoons this year will not be weak. We are keeping our fingers crossed.” (For details log on to : http://www.business-standard.com/india/news/fmcg-companies-keep-fingers-crossed-over-monsoon/476443/)
AUSTERITY STEPS EXTENDED TO AUTONOMOUS BODIES
NEW DELHI: The government today extended the austerity measures announced last week to its autonomous bodies. The instructions for cutting down on expenditure would now also apply to other bodies funded by the government. “In consonance with the office memorandum dated May 31, 2012, appropriate measures need to be put in place to rationalise the expenditure of autonomous bodies also,” the government said in a fresh memo. Some of the autonomous bodies of the government include Agricultural and Processed Food Products Export Development Authority; Federation of Indian Export Organisations; Telecom Regulatory Authority of India; Income Tax Appellate Tribunal; Securities and Exchange Board of India; National Highways Authority of India; Pension Fund Regulatory Development Authority; Reserve Bank of India and National Institute of Public Finance & Policy. Last week, the government had announced measures to cut expenditure. Apart from a 10 per cent cut in non-Plan expenditure, it barred ministries from holding conferences in five-star hotels, buying new vehicles or travelling abroad unless absolutely necessary. A ban on creation of new government posts was also imposed. (For details log on to : http://www.business-standard.com/india/news/austerity-steps-extended-to-autonomous-bodies/476460/)
CII SETS AGENDA FOR ECONOMIC REVIVAL, URGES GOVT TO ACT
HYDERABAD: Suggesting an action plan for putting the country on a revival path, the Confederation of Indian Industry (CII) on Tuesday cautioned the government the situation would worsen if it failed to act immediately. At its national council meeting here on Tuesday, the industry body mooted a 10-point economic revival package with specific monetary and fiscal steps, including lifting the foreign direct investment caps in the aviation, retail, defence and insurance sectors. “Industrial growth is particularly poor and corporate profits have been declining. Growth in investments is also moderating, while investor perception about Indiaturned negative, owing to the sharp fall in the rupee. This is the time to show extraordinary leadership. This is the time for everyone, including the Opposition and states, to come together,” said CII President Adi Godrej. Revival measures had to be initiated to revive growth through reforms and governance, Godrej told reporters after the meeting. He added it was possible to achieve a growth rate of nine per cent in 2013-14, if the country put its act together. (For details log on to : http://www.business-standard.com/india/news/cii-sets-agenda-for-economic-revival-urges-govt-to-act/476450/)
HYDERABAD & KOLKATA PLAN META VARSITIES
NEW DELHI: Following in the footsteps of Delhi, universities in Kolkata and Hyderabadwill soon establish their own meta university — a network of universities which allow students to choose courses from across disciplines from different institutions. The ministry of human resource development has written letters to the vice-chancellors of the Kolkata and Hyderabaduniversities to explore opportunities for launching meta universities on the lines proposed by the leading educational institutions of Delhi. For the first such university in the country, Jawaharlal Nehru University, Jamia Milia Islamia, Delhi University and Indian Institute of Technology, Delhi have come together and have initiated work of launching meta university and commencing courses from the next session. These institutions have identified three principal areas of climate change, public health and education with each institution utilising its existing infrastructure and capabilities. (For details log on to : http://www.financialexpress.com/news/hyderabad-&-kolkata-plan-meta-varsities/958409/)
FTP TO IMPART COMPETITIVENESS TO EXPORTS: INDIA INC
NEW DELHI/CHENNAI: Exporters and India Inc alike gave the thumbs up to the Foreign Trade Policy (FTP), saying it will help impart competitiveness to exports. “The positive move of allowing duty-free scrips under export promotion schemes for payment of excise duty is worth special mention. This is indeed significant and will help exporters in procuring from domestic manufacturers,” said Ficci president RV Kanoria. Federation of Indian Export Organisations (FIEO) president Rafeeq Ahmed said the measures would have a lasting and positive impact on the country’s trade. “In the wake of contraction of global demand and impending euro zone crisis , the support extended through the FTP is tremendous and will help in imparting competitiveness to exports. The announcements have exceeded our expectations. Labour intensive sectors like textiles have been the thrust area of the FTP,” Ahmed said. (For details log on to : http://www.financialexpress.com/news/ftp-to-impart-competitiveness-to-exports-india-inc/958407/)
FOREIGN AIRLINES MAY NOT GET TO EXPAND IN INDIA
NEW DELHI: In what could spoil expansion plans of carriers like Emirates and Qatarin India, the aviation ministry is planning to slap a freeze on allowing more flights to these carriers under the bilateral agreement. “Most of these carriers have already fully utilised their traffic rights under the bilateral agreements, whereas our domestic carriers have not been able to utilise even 50% of it. Why should we allow foreign airlines to increase more flights unless our carriers are not benefitted,” Ajit Singh, civil aviation minister told Financial Express. The Indian carriers including Air India, Jet Airways, Kingfisher and now the low-cost carriers like SpiceJet and IndiGo which have recently added some flights to Middle East, utilise only marginal traffic rights. The proposed freeze would be to bring parity between the flights being flown by the foreign airlines and domestic airlines under a particular bilateral agreement. For example, on Qatarroute, Indian carriers utilise only 28% of the permitted flights. For Dubai, they fly up to 62% of the allowed capacity. (For details log on to : http://www.financialexpress.com/news/foreign-airlines-may-not-get-to-expand-in-india/958403/)