MUMBAI: Amid market speculation of rival groups looking to buy into Escorts Ltd, the promoters on Thursday bought 4.2 million shares in the company from Reliance Asset Management. Escorts Group promoters, the Nanda family, raised stake in Escorts Ltd to 31.67 per cent from 27.67 per cent.
Notably, Escorts was among the first Indian companies to face the threat of a hostile takeover bid by Lord Swaraj Paul in 1983, much before the economy was liberalised. However, that bid was thwarted by the Nanda family, citing rules governing non-resident Indians. Merger and acquisition specialists believe the case became the starting point of the evolution of the Takeover Code. The company, started by H P Nanda and Yudi Nanda in Lahore in 1944, is headed by Rajan Nanda, the group chairman and Nikhil Nanda, the joint managing director.
Just before Thursday’s close, the market was abuzz with news that Mahindra & Mahindra was in the race to acquire a stake in the company. When asked, a Mahindra & Mahindra spokesperson said, “The company does not comment on market speculation.”
By that time, it was apparent the four per cent stake in Escorts had been bought by the promoter family itself. By that time the stock had jumped 5.54 per cent to Rs 81.
The Nandas acquired four per cent stake for Rs 32 crore from Reliance Asset Management, which held eight per cent. The transaction was done through investment company Har Parshad & Co, controlled by the Nandas.
Commenting on the development, an Escorts spokesperson said, “The promoter group has bought what was available in the market. The fact that the mutual fund continues to hold the remaining four per cent should convey the faith that investors have in the company.”
Escorts feels not much should be read into the deal, a routine purchase of shares, and the company is threatened only as much as any other in the listed space with below 51 per cent promoter holding.
Nikhil Nanda, joint MD, Escorts, said, “There is no truth in these rumours. All kinds of names are being thrown up now and I don’t know why speculators are coming out with these completely baseless rumours. As a group, we have been making creeping acquisitions for the past six years. We have already acquired 10 per cent and this is an additional four per cent. We believe in creating long-term value and we’re here to stay.”
The Escorts Group is among the country’s leading engineering conglomerates operating in the high-growth sectors of agri-machinery, construction & material-handling equipment, railway equipment and auto components. For the year ended 2010-2011, the company’s sales stood at Rs 3,210 crore, reflecting a 16 per cent growth over the previous year. However, its net profit contracted 13 per cent to Rs 120 crore compared to Rs 138 crore in the previous year.
LAW FIRMS RECORDED 10% RISE IN M&A DEALS IN JANUARY-MARCH QUARTER
MUMBAI: Mumbai-based corporate law firm Desai & Diwanji remain the country’s biggest law firm in terms of the number of M&A deals in the January-March quarter, while Amarchand & Mangaldas topped in terms of deal value, according to data on Mergermarkets. Indian law firms recorded a 10% year-on-year rise in the value of merger and acquisition deals in January-March, led by domestic transactions as European economic crisis continued to weigh on cross-border deals. However, the number of deals during the quarter was down 21% from the same period a year ago. In the first quarter of 2012, law firms advised more than 57 M&A deals worth $16.49 billion, which in value terms is 56% of the total value of transactions during the whole of 2011. (For details log on to : http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/law-firms-recorded-10-rise-in-ma-deals-in-january-march-quarter/articleshow/12740102.cms)
HITACHI CONSULTING ACQUIRES US-BASED PRIZIM INC
HYDERABAD: HitachiConsulting, the global business and IT consulting company of Hitachi, today said it has acquired US-based firm Prizim Inc. The acquisition will strengthen Hitachi Consulting’s sustainability offerings and help the company’s growth in the public sector along with other key industries like media and entertainment, communications, consumer products, energy and manufacturing, the company said in a release. Financial details of the deal were not disclosed. Phil Parr, President and CEO of Hitachi Consulting, said the acquisition of Prizim, a management consulting firm, is an important building block in the quest to strengthen company’s management consulting business with high value solutions and services. “Prizim’s industry-leading services and high level of sustainability expertise is a great complement to our existing environmental sustainability solutions,” he said. (For details log on to : http://www.business-standard.com/india/news/hitachi-consulting-acquires-us-based-prizim-inc/163346/on)
BEST FOODS TO TIE UP WITH HOTEL CHAINS FOR MORE BUSINESS
KOLKATA: Best Foods, an integrated basmati rice player with presence across value chains, is planning to shore up its packaged rice business by tying up with hotel chains and increase retail outlets across the country, a top company executive said Thursday. “Currently we have tied up with 30 hotel chains. We are planning to tie up with 60 hotels by the end of 2012,” Best Foods Business Director Aayushman Gupta told reporters here. Gupta said the company, which currently has 20 percent market share in the country in packaged rice category, was expecting its share to grow significantly by the year-end. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/cons-products/food/best-foods-to-tie-up-with-hotel-chains-for-more-business/articleshow/12733829.cms)
HERO TO PUSH 2-WHEELER PRODUCTION TO 800/HR
MUMBAI: Riding high on new launches and its rapid expansions into the hinterlands, Hero MotoCorp has pushed its total production capacity to seven million units — that is, more than 800 units per hour. The world’s largest two-wheeler producer (formerly called Hero Honda), which has a share of 45 per cent in the domestic two-wheeler market, said it was now looking to beat the industry growth of 10-12 per cent projected for this financial year. Last year, India’s domestic two-wheeler industry, which is the world’s second largest, comprising motorcycles, automatic scooters and mopeds, saw a growth of 14 per cent with sales crossing 13.43 million units. Hero recorded a growth of 15 per cent during the same period. Anil Dua, senior vice-president (marketing & sales), Hero MotoCorp said, the company expected the industry to grow by about 10-12 per cent in the new financial year. “As in the past, we shall be pushing the pace of this growth,” he added. “In the executive segment, like in the previous years, Splendor and Passion each clocked million-plus unit sales in 2011-12.” (For details log on to: http://www.business-standard.com/india/news/hero-to-push-2-wheeler-production-to-800hr/472033/)
P&G TO BUILD LARGEST INDIAN PLANT IN HYDERABAD
Hyderabad| Mumbai: Procter & Gamble, the world’s largest consumer goods company, will build its largest manufacturing plant in the Indian sub-continent in Hyderabadby investing 345 crore. The plant, to be spread across 170 acres at Mahbubnagar district, will make products across categories such as laundry, personal and baby care, a person, who is the know said on condition of anonymity. P&G India’s associate director, product supply, Madhav Rao confirmed that the maker of Tide detergent and Head & Shoulder shampoo will build a manufacturing facility in Hyderabad. The plant will start commercial production in two years. Andhra Pradesh industries secretary TS Appa Rao said P&G has awarded the construction contract to L&T. “They have asked for a tailor made package of tax breaks and the state investment promotion board is considering it,” Rao said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/pg-to-build-largest-indian-plant-in-hyderabad/articleshow/12740320.cms)
SCHMERSAL INVESTS RS 54 CR TO SET UP FACILITY IN PUNE
MUMBAI: Schmersal India, the 100 per cent subsidiary of the Schmersal Group, a leading electrical and electronic safety switchgear and systems maker, today said it has set up its first manufacturing plant in the country in Pune with an investment of around Rs 54.4 crore. Spread over five acres, the plant at Ranjangaon MIDC in Pune, which is expected to be operational by April 2013, will manufacture electromechanical safety devices, electronic sensors and lift switchgear, the company said in a statement. “Indiais an important and strategic market for Schmersal and this facility has been envisaged keeping in view the tremendous potential within the country,” Schmersal Group Chief Executive Officer Philip Schmersal said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/cons-products/electronics/schmersal-invests-rs-54-cr-to-set-up-facility-in-pune/articleshow/12730920.cms)
GOVT SPENDING ON PROJECTS HITS ALL-TIME HIGH
NEW DELHI: In what belies the popular notion of a depressed investment environment in the country, the government’s spending on central sector projects commissioned in the first half of the previous financial year had risen exponentially, according to data obtained from the Ministry of Statistics and Programme Implementation (MoSPI). In the central sector, India commissioned projects worth a record Rs 43,000 crore between April and September 2011-12, a whopping 250 per cent jump over the investment of Rs 17,835 crore in projects completed during the same period in 2008-09, which in turn was a 38 per cent rise over the amount spent in 2005-06. The three-year comparison results from the lack of corresponding figures for 2009-10 and 2010-11, as MoSPI publishes data with a huge lag. The rising investment trend was also corroborated by data from the Centre for Monitoring Indian Economy released yesterday. The research body had said projects worth Rs 4 lakh crore were completed in 2011-12, the highest in the last few years. It had added the pipeline of outstanding projects, involving an investment of Rs 140 lakh crore, was large enough to allow the Indian economy to grow at a brisk pace, even if no new project was announced in the next five years. (For details log on to : http://www.business-standard.com/india/news/govt-spendingprojects-hits-all-time-high/472025/)
GEOLOGICAL SURPRISES, DELAYS DRIVE UP HYDRO POWER TARIFFS
NEW DELHI: The notion that hydro power is cheaper than thermal power is proving to be a fallacy. An FE analysis of the tariffs of some of the country’s largest hydro stations has revealed that they generate electricity at a cost much higher than most thermal plants. Thermal stations using domestic coal generate electricity at less than half the cost of some hydro stations like GVK Group’s 330MW project at Alaknanda in Uttarakhand. Even plants using use costlier fuels like imported coal and LNG generate electricity at costs significantly below many hydro projects. In most cases, hydro power has become expensive due to geological surprises and the consequent rise in capital expenditure. Environmental issues have also resulted in cost escalation of many hydro projects. (For details log on to : http://www.financialexpress.com/news/geological-surprises-delays-drive-up-hydro-power-tariffs/939098/)
MAJOR ECONOMIC REFORMS MAY HAVE TO WAIT TILL 2014 POLLS: BASU
WASHINGTON: Major economic reforms in India, which have already hit a roadblock, are unlikely to happen before the next Parliamentary elections in 2014, chief economic advisor Kaushik Basu has said. Addressing a meeting at the Carnegie Endowment for International Peace, an eminent Washington-based think tank, Basu said that relatively less important Bills might sail through Parliament. Post-2014, he said, “you would see a rush of important reforms” and after 2015 Indiawould be one of the “fastest-growing” economies of the world. The new government, if in majority, would start with the reforms in a big way because there is a sense that it needs to pick up, Basu added. (For details log on to : http://www.financialexpress.com/news/major-economic-reforms-may-have-to-wait-till-2014-polls-basu/939082/)
CENTRE, STATES MAY CUT TAXES ON FUEL
NEW DELHI: The government is thinking of a cushion for you to soften the blow of high oil prices. To prevent rising crude oil prices from hurting consumers and fuelling inflation, the government is working on a comprehensive “rescue package” that includes a significant reduction in central excise duties and sales tax levied by states on petroleum products. Taking a cue from the Goa government — which reduced sales tax and brought down petrol prices by Rs. 11 a litre — and following the ultimatum served by state-owned oil companies on Tuesday over hiking petrol prices by a steep Rs. 8 a litre, the government plans to to ask Congress-governed states to cut sales tax on petrol and diesel. The central government is also preparing to cut excise duty on petrol and diesel. The measures are expected to shield consumers from an across-the-board steep hike in fuel prices (petrol, diesel and cooking gas) planned by oil companies. Hectic parleys are on within the government “to see how best the impact of the fuel price hike on the consumers can be minimised,” a government official told Hindustan Times. (For details log on to: http://www.hindustantimes.com/business-news/WorldEconomy/Centre-states-may-cut-taxes-on-fuel/Article1-843121.aspx)
GOVT PLANS ‘ROOFTOP’ SOLAR POWER POLICY
MUMBAI/AHMEDABAD: After dedicating to the nation 600 megawatts (Mw) of solar power projects in different parts of Gujarat, state chief minister Narendra Modi on Thursday hinted to come out with a rooftop solar power plant policy to encourage people to produce their own electricity and earn by selling the surplus power to the state grid. At a function to mark the opening of the GujaratSolarParkat village Charanka of Patan district on Thursday, Modi mentioned that the said policy would make the people self-reliant in power generation. This would also encourage them to lease out their roof tops for solar power generation, which would yield additional income for the betterment of their life. The Gujaratgovernment had initiated a 5 Mw rooftop programme in the state capital, Gandhinagar. The project is now being extended to five more cities and towns in the state. “When we announced the state’s solar energy policy in 2009, our aim was to facilitate large scale generation, as larger generation brings down the cost to an affordable level. Today, you can see the rate has come down from Rs 15 per unit to around Rs 8.50 per unit. I am hopeful that one day cost of solar power generation will come down to the level of gas- or coal-based power generation,” Modi stated at the function. (For details log on to : http://www.business-standard.com/india/news/govt-plans-rooftop-solar-power-policy/471960/)
CAIRN GETS NOD TO RAISE OUTPUT FROM RAJASTHAN BLOCK
NEW DELHI: Cairn Indiahas got the nod for increasing output by another 25,000 barrels a day of oil from its producing Mangala fields in the Rajasthan block. This development comes at a time as the company closes its fourth quarter numbers for the fiscal 2011-12 on Friday. High crude oil prices during the period will boost the company’s numbers during the fiscal. The crude oil from Rajasthan is sold to the domestic refiners at an average 10-15 per cent discount to Brent on the basis of prices prevailing. Brent has averaged $123 a barrel during the period. Mangala field in Rajasthan is consistently producing at 125,000 barrels a day since August 2010. Now, the field can take the output to 150,000 barrels a day. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-corporate/article3333346.ece)
NO FREE MINES WITH ULTRA MEGA POWER PLANTS ANYMORE: COAL MINISTRY
NEW DELHI: Bidders for upcoming ultra mega power plants in Odisha and Chattisgarh will have to pay a reserve price to the state government for coal mines that come bundled with the project, ending a long established policy regime in which the mines were allotted free. The coal ministry is in the process of finalizing norms for calculating the reserve price for the mines, bidding norms and a model agreement for which it has received expression of interest from consultants, coal secretary Alok Perti said. The ministry plans to finalize these guidelines by September this year. The new norms will change the economics of large power projects known as ultra mega power projects as they have till now been awarded based on the electricity tariff, while the mines came free. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/metals-mining/no-free-mines-with-ultra-mega-power-plants-anymore-coal-ministry/articleshow/12739910.cms)
INDIA TOPS CONSUMER CONFIDENCE IN ASIA: SURVEY
DUBAI: Indiahas been ranked as the most optimistic nation in Asiain a global consumer confidence survey released here. At 81.2, in an index which is calculated with zero as the most pessimistic 100 as the most optimistic, Indiawas the leader of the pack in Asia, said MasterCard Worldwide Index of Consumer Confidence. The index is based on a survey which measures consumer confidence on prevailing expectations in the market over the next six months, based on indicators such a economic growth, employment, stock market, regular income and quality of life. It involved 12,915 respondents in 25 countries and recorded a three-point rise in Middle East consumer confidence from the previous six month period, bringing the index to (85.7), significantly higher than Africa(73.8) and Asia Pacific (52.1). (For details log on to : http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/india-tops-consumer-confidence-in-asia-survey/articleshow/12729815.cms)
INDIA LAUNCHES 5,000-KM RANGE AGNI-5 MISSILE SUCCESSFULLY
NEW DELHI: The tension sharpened at the launch area at WheelerIslandon the Odisha coast this morning as the massive, 50-tonne, 17.5-metre-high Agni-5 missile was elevated into the vertical launch position, and the pre-launch checks began. The previous evening, exactly at this stage, lightning and thunder in the skies above had led to the launch being put off till morning. At 8.07 am the countdown went… 5… 4… 3… 2… 1… Now… and a giant ball of fire leapt out as the missile’s first stage ignited. As the Agni-5 rose smoothly off the launch pad, scientists checked off the health of its systems on the public address system, their voices calm, measured, almost surreal, given the tension amongst the viewers. After 90 seconds, the first stage burnt out and separated. The missile was travelling at exactly the speed it should have been. Then, on schedule, the second stage burnt out and separated, an all-new composite stage that had performed exquisitely. By now there was already the sense that this would be a perfect test. (For details log on to : http://www.business-standard.com/india/news/india-launches-5000-km-range-agni-5-missile-successfully/472012/)
LILLIPUT SHAREHOLDERS APPROACH DELHI HC TO UNSEAL INTERIM REPORT
NEW DELHI: Bain Capital and TPG, the largest outside shareholders of Lilliput, on Thursday filed an application with the Delhi High Court asking to unseal the interim report filed by the court-appointed independent auditors M/s S S Kothari, Mehta & Co (SSK). Bain and TPG also asked the court to appoint a local commissioner to take possession of the books of account and records of the respondent company. Since the first allegations of accounting irregularities at the company last year, Bain Capital and TPG’s entities have focused on getting the company to pursue an independent audit. The two had filed a petition against Lilliput Kidswear and its promoter, Sanjeev Narula. In response to which, the court appointed S S Kothari, a reputed Delhi-based audit firm, vide an order dated November 4, 2011, for conducting an independent audit of the books of account of the company. SSK were appointed as a consensus choice between the parties. Lilliput chief executive Sanjay Narula, however, did not respond to a query on the high court petition by the two investors. Bain Capital and TPG were also not available for comment. (For details log on to : http://www.business-standard.com/india/news/lilliput-shareholders-approach-delhi-hc-to-unseal-interim-report/472035/)
FY12 EXPORTS UP 21% AT $303.7 BILLION TRADE DEFICIT AT RECORD $184.9 BILLION
NEW DELHI: Merchandise exports reached $303.7 billion in 2011-12, a rise of 21 per cent over $251.1 billion in 2010-11, while imports stood at $488.6 billion, rising 32.1 per cent compared with $369.8 billion in the previous financial year. Thus, though exports surpassed the government’s target of $300 for 2011-12, the surge in imports led to the highest-ever trade deficit of $184.9 billion, and this is expected to raise the current account deficit (CAD) to four per cent of the gross domestic product, against the forecast of 3.6 per cent by the Prime Minister’s Economic Advisory Council. Swelling of the trade deficit to record levels was primarily attributed to a huge surge in the import of petroleum products and gold. “What has primarily driven trade deficit is petroleum and gold. In these, imports were higher by about $69 billion, compared to 2010-11, and that almost entirely accounts for the rise in the trade deficit from $118 billion in 2010-11 to $185 billion in 2011-12,” Commerce Secretary Rahul Khullar said, while releasing the initial numbers. The official data on foreign trade would be released on May 2. (For details log on to : http://www.business-standard.com/india/news/fy12-exports21-at-3037-bn-trade-deficit-at-record-1849-bn/472020/)
AVIATION SECTOR ALLOWED TO RAISE UP TO $1 BILLION IN ECB
NEW DELHI: After clearing the implementation of relaxed external commercial borrowing (ECB) norms to meet capital requirements in the power and road sectors yesterday, the finance ministry today paved the way for implementing the measures announced in the Budget for the airline sector. Keeping in mind the immediate financing concerns of the civil aviation sector, Finance Minister Pranab Mukherjee, in his Budget speech, had announced companies in the aviation sector would be allowed to avail of ECBs for one year for working capital and refinancing of working capital rupee loans. ECBs under this provision would have a ceiling of $1 billion for the entire civil aviation sector. The cap for individual airline companies has been fixed at $300 million. This may be availed either in a lump sum or in tranches, depending upon the utilisation of the limit during a particular financial year. Saying the Reserve Bank of India (RBI) would come out with the relevant circulars and notification for implementing these measures within a week, Joint Secretary, (capital markets), Thomas Mathew, said the proposals of individual companies would be considered by RBI under the approval route, based on parameters such as cash flows and the capacity of individual companies to repay these loans from their foreign exchange earnings. (For details log on to : http://www.business-standard.com/india/news/aviation-sector-allowed-to-raiseto-1-bn-in-ecb/472021/)
BETTER TIMES AHEAD FOR AIRLINES
NEW DELHI: Loss-making Indian airlines should see better times in 2012-13 due to an improvement in pricing power after the gradual but substantial cancellation of flights by crisis-hit Kingfisher Airlines. However, they may not make profit in the fourth quarter of 2011-12, as high costs, especially of aviation turbine fuel (ATF), are likely to offset their earnings. “The finances of airlines would improve in 2012-13 on the back of better pricing of tickets due to rationalisation of capacity. Capacity addition would also be moderate and the airlines would make money,” said Kapil Kaul, chief executive officer (South Asia), Centre for Asia Pacific Aviation. He said the fourth-quarter numbers would look better because of Kingfisher cancelling flights, pushing up domestic fares. But the impact of good numbers may not show in the financials due to a rise in operating costs. (For details log on to : http://www.business-standard.com/india/news/better-times-ahead-for-airlines/472004/)
TRAI’S PROPOSAL TO REDUCE CHANNEL SPACING MAY DELAY FM-III ROLLOUT
NEW DELHI: Much against the collective view of most private FM radio broadcasters, the Telecom Regulatory Authority of India (Trai) has batted for a 50% reduction in the minimum spacing between two adjacent FM stations. This virtually means delay in the third-phase rollout of private FM policy which envisages 800-plus new FM stations in Indiawithin next two years. FM-III is crucial for the financial health of the radio industry and therefore most FM operators had not supported the Trai’s suggestion at the consultation phase. Also, the government has already finalised a list of 839 FM channels across 280 towns for the FM-III roll out. Cabinet nod has also been obtained. Trai’s recommendation if accepted, will virtually double the number of FM stations in each service area (town) as it calls for reduction in the current channel spacing of 800 kilo hertz (kHz) between two stations to 400 KHz. Also, a fresh Cabinet approval may be required for the additional number of FM stations that will come up now. (For details log on to : http://www.financialexpress.com/news/trais-proposal-to-reduce-channel-spacing-may-delay-fmiii-rollout/939093/)
NEW CII CHIEF GODREJ PITCHES FOR REFORMS, MORE RATE CUTS BY DECEMBER
NEW DELHI: Godrej Group chairman Adi Godrej, who took over as the new president of the Confederation of Indian Industry (CII) on Thursday, made a pitch to the government to revive stalled reforms, initiate policies to achieve economic growth and for stronger governance. “Given the current status of the economy, we have ahead of us the herculean task of reviving economic growth to the pre-crisis level of over 9%. This needs structural reforms both at the central as well as the state level,” he said. Godrej said the government’s decision to slap retrospective tax on various deals has “created strong negative sentiments” among global investors. “Those kind of policies along with the General Anti-Avoidance Rules (GAAR) should be amended,” Godrej said in his first press conference after assuming office as the head the country’s largest industry body. (For details log on to : http://www.financialexpress.com/news/new-cii-chief-godrej-pitches-for-reforms-more-rate-cuts-by-dec/939079/)
GOAFEST ADVERTISING CONCLAVE SEEKS GOOD CLIENT PARTICIPATION
GOA: “Let great ideas lead our advertising strategy. Break the bureaucracy of idea transfer to deliver better ideas faster,” said Tim Love, vice-chairman of the Omnicom Group, one of the leading advertising groups in the world, while speaking at the Goafest Advertising Conclave 2012 held in Goa. “Today the consumer is our client — not the other way around. Our advertising industry today exists in the idea exchange between people, corporations, brands and nation,” Love said at the conclave, whose theme was ‘Ideas that impact the full circle’. Jean-Yves Naouri, chief operating officer of Publicis Group, a leading global advertising group, said that social media marketing has changed the rules of the game in the global ad industry. (For details log on to : http://www.financialexpress.com/news/goafest-advertising-conclave-seeks-good-client-participation/939128/)
DOMESTIC PHARMA MARKET GROWS 22% IN MARCH
NEW DELHI: The domestic pharma market witnessed 22% growth in March, its highest in the last 18 months. For the 12 months ended March, the growth stood at a healthy 16%. In March, GSK Pharmaceuticals, Sun Pharmaceuticals, Alkem Laboratories and Mankind Pharma were some of the companies in the top 10 that showed strong performance with growth exceeding 24%. All the top 20 pharma companies by marketshare registered double-digit growth in March. A growth of this magnitude for the last month of the fiscal has been dubbed as a surprise by analysts. “The performance of the domestic pharma market has been bright and strong. The Indian pharma market keeps on throwing surprises from time to time and the month of March was one such case,” said Hari Natarajan, head, pharma trac, Aiocd Awacs, a pharma market research firm. (For details log on to : http://www.financialexpress.com/news/domestic-pharma-market-grows-22-in-march/939141/)
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