Deal with Aditya Birla Group will help Biyani move closer to his goal of making his company debt-free by March ’13
MUMBAI: Life has turned full circle for Kishore Biyani.
He set up a garments company in 1987 that went on to become Pantaloon Retail (India) Ltd (PRIL), the largest listed retail company in India and one of the most profitable operations in the Future Group that he controls. Now, in a deal that was announced on Monday, the Aditya Birla Group will take control of a new company that will own 86 apparel stores and outlets run by PRIL.
Analysts say the agreement will give a “breather” to Biyani as he moves closer to an ambitious goal he has set for himself: to make his company debt-free by March 2013. The deal with Aditya Birla Nuvo Ltd (ABNL) will slice away Rs.1,600 crore of debt from PRIL’s balance sheet.
Biyani had told The Economic Times newspaper in March that he was working on 18 deals to be closed over the next year. These would help him cut debt, though observers point out that working with the diverse partners who will come on board thanks to these deals will pose management challenges for a group that has depended so heavily on the entrepreneurial skills of one man.
The retailer has also been in talks for divesting his non-core businesses, like investment company Future Capital Holdings Ltd and insurer Future Generali India Life Insurance Co. Ltd, for over two years, Mint had reported in March 2010. He had insisted then that he wanted to “run and operate the retail businesses”. Monday’s deal for his flagship brand, in that context, indicates Biyani’s single-mindedness in offloading debt from the company’s books.
“He (Biyani) has been on record about debt restructuring and getting brand new investors in each of the formats,” said Saloni Nangia, president (retail) at retail consultancy firm Technopak Advisory Services Pvt. Ltd.
PRIL was a comparatively easier sell. “They had so much debt, they had to do it. And it is difficult to strike a deal in loss-making business,” said Rahul Kundnani, a sector analyst with Mumbai-based brokerage firm SBICap Securities Ltd, explaining that the Future Group’s home, furniture and electronics businesses are still struggling to make it big.
There are other potential hurdles as well. One source of fresh capital is uncertain till the government clears foreign direct investment in the multi-brand retailing businesses that Biyani manages. The timing for deals in the non-retail businesses also remains uncertain. Selling the family silver in that case makes for a “smart move”. “This (Pantaloons format) is a good, profitable business. They could have got a good valuation there. This (deal) is a breather for the company,” added Kundnani.
The Future Group is weighed down by a mountain of debt, taken on in the boom years to finance rapid expansion that had helped Biyani become one of the most successful retailers in India. According to the latest available yearly data, for June 2011, debt in its retail operations stood at Rs.4,200 crore; on a consolidated basis, including Future Capital,
the total debt of the group was Rs.7,846 crore.
The cost of servicing this debt has hurt cash flow. In the quarter ended March, PRIL reported interest costs of Rs.244.1 crore, compared to an operating profit of Rs.355.97 crore. In other words, nearly two out of every three rupees earned from operations were being used to service debt, a huge burden.
A JP Morgan Securities report on 11 April estimated interest payments—described as “a key drag”—to be as much as 54% of FY12’s Ebitda (earnings before interest, tax, depreciation and amortization). It also estimated that PRIL would need a capital expenditure of Rs.700-800 crore for FY12 to fund space additions as well as refurbish
existing stores.
The deal with the Aditya Birla Group will offer some relief—but only some.
“There is a lot of pressure on the group to reduce its debts. The deal (with the Aditya Birla Group) will see its interest outgo reduce by as much as Rs.90-100 crore,” said Abhishek Ranganathan, research analyst (retail and real estate), institutional equity research at MF Global Sify Securities India Pvt. Ltd. However, “the savings will only accrue on the deal completion, which is yet another 8-10 months away”.
Rating agency Credit Analysis and Research Ltd’s (CARE’s) sector expert Milind Gadkari said the Pantaloon deal has boosted Biyani’s “staying power” as he strives to drive a harder bargain on all the other stake sales or waits for a better valuation. “This starts the process. There was a lot of (restructuring) talk, but this is the first tangible thing that has come through. It puts them in a stronger position to negotiate their successive equity stake sales.”
A Future Group spokesperson said on Monday that the deal was the first in the series of debt-paring announcements that are to come by June.
In a 12 April note, CARE outlined its key concerns on PRIL, saying its “ratings…continue to be constrained by moderate debt coverage ratios, debt funded expansion leading to higher leverage, working capital intensive nature of the business and…continue to factor in the support PRIL may have to extend to its loss making subsidiaries/joint ventures”.
In terms of profitability, Pantaloons, followed by Central, and the foods and groceries business under Big Bazaar, Food Bazaar and KB Fair Price, are the most profitable, with scalable business models. The home and electronics businesses are still in the red, said Sangeeta Tripathi, a senior equity research analyst at brokerage firm ShareKhan Ltd.
Analysts also point to the flip side of having a pack of partners across the group, some of which could be strong international or domestic entities, implying they will bring their imprint into the businesses, which have largely been run as a one-man show so far. “The deal, as described, gives ABNL more than a 50% stake. It already has a big retail footprint. They are not novices. There will be a definite shift in the fashion side (of the business). The Aditya Birla gene has also to be accounted for,” said Gadkari.
Kundnani of SBICap also pointed to the challenge in aligning culturally if Biyani is able to cut all the deals he needs, to become debt-free. “It will definitely become more complicated. This will be KB’s (Biyani’s) true test of how he strings together all these partners and grows the business. It (restructuring) will create a completely new DNA for the company,” he said.
MADHUCON PROJECTS SIGNS PPA FOR 300 MW INDONESIAN POWER PROJECT
HYDERABAD: Indian infrastructure firm Madhucon Projects, which is setting up its first overseas power project in Indonesia, has on Tuesday announced signing a power purchase agreement (PPA) with the Indonesian government power utility PTPLN (PERSERO). Madhucon, which is currently setting up 1,920MW of power projects near Krishnapatnam in Andhra Pradesh, has won the bid to build the 300MW mine mouth coal fired steam power plant at Dawas in South Sumatrainvolving an investment of $410 million. In a statement, Madhucon said the PPA with the Indonesian entity was signed by its director Nama Krishnaiah and PTPLN (PERSERO) director Nur Pamudji. Of the project cost of around Rs 2,000 crore, Madhucon Projects will infuse Rs 325 crore as equity while the other group companies will invest Rs 125 crore wherein the project will be funded through a debt-equity of 75:25. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/power/madhucon-projects-signs-ppa-for-300-mw-indonesian-power-project/articleshow/12952219.cms)
INDIA STEPPING ON THE GAS TO FINALISE TAPI PACT
NEW DELHI: Indiais speeding up its efforts to sign an agreement for importing gas through the US-backed $10-billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. At the same time, it is going slow on the Iran-Pakistan-India (IPI) project that would have moved huge quantities of gas from the south Pars field in the Persian Gulf into India. Some government officials see this as an indication that Indiais toeing the USline and reducing its energy dependence on the sanctions-hit Iran. The urgency on the part of the government is palpable. The petroleum ministry recently wrote to the National Security Council (NSA) secretary Lata Reddy on April 2 that “There is an urgency for signing the gas sales and purchase agreement (GSPA) under the TAPI gas pipeline project”. A cabinet note is ready, and when it gets the nod, Indiawill sign the GSPA for importing gas under this project, the petroleum ministry officials confirmed. (For details log on to : http://www.hindustantimes.com/business-news/Markets/India-stepping-on-the-gas-to-finalise-TAPI-pact/Article1-849264.aspx)
NATIONAL FERTILIZERS PLANS OPEN TENDER FOR ADDITIONAL CAPACITY
NEW DELHI: State-owned National Fertilizers Ltd (NFL) plans to float an open tender for the additional gas capacities it requires to upgrade three plants, two officials independently said. Both the officials—one from the fertilizer ministry and the other from NFL—declined to be identified. NFL plans to float the tender as no gas has been allocated to it since not enough gas from domestic sources is available. Typically, gas from domestic sources is allocated by a ministerial panel. In addition to this, although companies contract imported regassified liquefied natural gas (R-LNG) on a long-term basis, or buy it from the international spot market, such contracts are typically not put on an open tender. (For details log on to : http://www.livemint.com/2012/05/01190028/National-Fertilizers-plans-ope.html?atype=tp)
REGEN POWERTECH RAISES RS 52 CRORE FROM PEs FOR EXPANSION
BANGALORE: ReGen Powertech, the Chennai-based wind turbine maker has raised Rs 52 crore from two large private equity firms, as it looks to upgrade the capacity at its manufacturing plant in Udaipur. TVS Capital, jointly promoted by the TVS and Shriram Groups, and Summit FVCI, a fund advised and managed by existing strategic investor, M Cap Fund Advisors, have invested Rs 37 crore and Rs 15 crore, respectively, in the company, a deal which values the company at Rs 1,850 crore. The transaction, which closed late last week, will now see the former pick up a 1.95% stake in the company, while Summitwill have 0.79% stake in the venture. M Cap, through Summit, will now hold around 3% in ReGen Powertech. “We have diluted around 2.81% stake for the investments. M Cap Advisors, who had already invested Rs 40 crore, have now raised their investment to Rs 55 crore, through Summit, FVCI,” R. Sundaresh, joint managing director, ReGen Powertech told ET. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/power/regen-powertech-raises-rs-52-crore-from-pes-for-expansion/articleshow/12958238.cms)
NTPC-SIMHADRI TO SUPPLY 452 MW TO AP IN PHASE II
VISAKHAPATNAM: The NTPC-Simhadri power project is making all efforts to start commercial production from the unit and AP will get 452 MW from the 1,000-MW (two units of 500 MW each) generated in the second phase, according to Mr D.K Sood, General Manager in-charge of the plant. While talking to reporters here recently, he said the power situation in Andhra Pradesh was critical and there was pressure from the State Government to complete the second phase quickly. “We have synchronised the fourth unit on March 30 and we will shortly start trial production soon. AP, Tamil Nadu, Karnataka, Kerala and Puducherry will share the power generated in the second phase, 1,000 MW. AP’s share will be 452 MW. The entire power in the first phase (2 units of 500 MW each) goes to AP,” he added. (For details log on to : http://www.thehindubusinessline.com/companies/article3374140.ece?homepage=true&ref=wl_home)
ADVANCED HAIR STUDIO TO EXPAND IN INDIA
CHENNAI: Hair replacement and re-growth firm Advanced Hair Studio India, part of Advanced Hair Studio (AHS) with headquarters in Londonand Melbourne, is planning to invest Rs 250 crore to expand its presence both in the Indian subcontinent and West Asia, within 2015. The company is planning to expand its presence in Indiafrom the present five centres to 20 by 2015. It is also planning to form joint ventures to set up centres in Colombo, Dhaka, Abu Dhabi and Dubai in next two to three years, said Sanket Shah, CEO, Advanced Hair Studio India Pvt Ltd. (For details log on to : http://www.business-standard.com/india/news/advanced-hair-studio-to-expand-in-india/473169/)
METASEARCH SITE WEGO.COM TO TRAVEL TO INDIA
NEW DELHI: Singapore-headquartered travel metasearch site Wego.com is foraying into India. The company has set up an office in Bangalorewith 10 employees and plans to launch wego.co.in, the Indiaversion of the site, by the end of this month. Wego is tying up with all major travel portals in Indiato enable metasearch. Metasearch engine is a search tool which combines results from several search engines, giving a more comprehensive result to a query. Wego.co.in would collate the results of other portals or search engines like MakeMyTrip.com, Yatra.com, and Via.com. Wego enables a view of available flights, hotels, travel packages and deals from over 150 travel websites. The company has tied up with hotels from the Taj Group, Lemon Tree, Accor Hotels, etc, in India. It also offers a feature, DateWise, a search tool suggesting cheapest days on which one should fly. (For details log on to : http://www.business-standard.com/india/news/metasearch-site-wegocom-to-travel-to-india/473134/)
AUSTRALIA GEARING UP FOR MAJOR INVESTMENTS IN LNG PROJECTS
PERTH: Australiahas embarked on a major expansion and investment programme for putting in place massive liquefied natural gas (LNG) infrastructure with around $170 billion worth of current and new projects taking shape. Already the fourth largest exporter of LNG in the world, Australiais the third largest LNG exporter in the Asia-Pacific region having exported 18.9 million tonnes of LNG in 2011 worth around $11.1 billion. “The investments in the energy sector have been growing at a massive scale. We have already committed investments of around $170 billion in the LNG sector alone for new energy projects. Companies are setting up projects to match the rise in demand from various parts of the world, especially emerging economies such as Chinaand India,” Australia’s Minister for Resources and Energy Martin Ferguson told visiting Indian journalists. (For details log on to : http://www.thehindu.com/todays-paper/tp-business/article3375077.ece)
SHIFTING FOCUS: PHARMA MNCs NOW LOOK TO TIE-UPS WITH INDIAN FIRMS
HYDERABAD: In June 2008, when Japanese drugmaker Daiichi Sankyo acquired Ranbaxy Laboratories, Daiichi’s chief executive Takashi Shoda said, “Acquisitions are more attractive than alliances,” setting the stage for more Indian companies to be taken over by their powerful European and American counterparts. But, today, Big Pharma thinks otherwise. With Indian drug makers flooding the developed markets, GSK, Merck, Pfizer and the likes who are traditional rulers now prefer tie-ups over acquisitions with Indian players. A testimony to this change in strategy is the numbers of partnerships that have emerged in the last few years. Domestic companies see many reasons to this phenomenon. Multinational pharmaceutical companies find it difficult to sustain the growth momentum that they have been witnessing for the last couple of years. A fast exhausting pipeline of drugs, expiry of existing patents and enormous cost involved in developing new products have impelled them to consider partnerships with their Indian counterparts. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/healthcare/biotech/pharmaceuticals/pharma-mncs-gsk-merck-pfizer-and-others-prefer-tie-ups-over-acquisitions-with-indian-firms/articleshow/12957367.cms)
EXPORTS FALL FOR THE FIRST TIME SINCE 2009
NEW DELHI: Exports fell for the first time since the 2009 global financial crisis in March this year, as demand weakened in the US and Europe. Exports dropped 5.7 per cent to $28.6 billion from the same period a year earlier. Commerce Secretary Rahul Khullar warned in January that exporters in Indiafaced a “difficult year”, pointing to economic and financial weakness in the European Union, India’s largest trade partner. The current account deficit was $19.6 billion in the December quarter, higher than $9.7 billion a year earlier. Rising global oil prices pushed up import bills for the country, which buys 80 per cent of its oil from overseas. The deterioration in the current account deficit is expected to pile pressure on the rupee, which fell nearly 16 per cent against the dollar in 2011. (For details log on to : http://www.business-standard.com/india/news/exports-fall-forfirst-time-since-2009/473162/)
NPCIL TOLD TO PUBLICIZE SAFETY ANALYSIS REPORTS
NEW DELHI: The Central Information Commission (CIC) has directed India’s nuclear power plant operator to publicize safety analysis reports of the Kudankulam atomic power plant within a month. In a contentious two-year dispute between environmentalists and the nuclear power establishment, the apex information commission, in an order on its website, has said that the reluctance to make the reports public could erode public confidence in the government’s decisions. “If such reports are put in public domain, citizen’s views and concerns can be articulated in a scientific and reasonable manner,” read the CIC order. “Otherwise, citizens would believe that the government’s decisions are arbitrary or corrupt. Such a trust deficit would never be in the interest of the nation.” (For details log on to : http://www.livemint.com/2012/05/01223117/NPCIL-told-to-publicize-safety.html?atype=tp)
GOVT IN A BIND OVER CAIRN PLEA TO SELL CRUDE TO RIL REFINERY IN SEZ
NEW DELHI: Cairn India has sought government’s permission to sell crude oil to Reliance Industries’ refinery in the special economic zone (SEZ), putting the oil ministry in a fix because such supplies are regarded as deemed exports, which are forbidden by the production sharing contract. The oil ministry has recently allowed Cairn to raise crude oil output from its Rajasthan block by 17% to 8.785 million tonne in 2012-13 from 7.5 million tonnes last year. It plans to sell 3.25 million tonnesn to Essar, 3.96 million tonnes to the other refinery of Reliance Industries, which sells products in the domestic market, and the balance to state-run MRPL and IOC. While this is enough to absorb the entire production, the company wants to have the option of selling crude oil to Reliance’s export-focused refinery because it may have surplus oil if any buyer shuts down its refinery for maintenance, or if there is an accident. If it does not have the option, it would be forced to cut production because it has limited storage capacity, officials in Directorate General of Hydrocarbons (DGH) and oil ministry said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/govt-in-a-bind-over-cairn-plea-to-sell-crude-to-ril-refinery-in-sez/articleshow/12957364.cms)
INDIA IS WORLD’S MOST OPTIMISTIC MARKET: NIELSEN
India has once again emerged as the most optimistic market in terms of consumer confidence, but there is still some amount of cautiousness when it comes to spending spare cash, says a Nielsen survey. This is the ninth consecutive quarter wherein Indiahas retained the tag of the world’s most optimistic market with an increase of one point in consumer confidence to 123. “Indiaonce again topped the global index indicating a high level of confidence amongst consumers, who are optimistic yet cautious,” Nielsen India Managing Director Justin Sargent said. “This optimism is reflected in Indian consumers’ increased confidence in job prospects, which is a good sign for the economy. However, job security is still a cause for concern and consumers are still cautious when it comes to spending spare cash,” he added. (For details log on to : http://economictimes.indiatimes.com/news/economy/indicators/india-is-worlds-most-optimistic-market-nielsen/articleshow/12951010.cms)
NMDC RAISES IRON ORE PRICE 10% AS DEMAND SURGES
NEW DELHI: NMDC has hiked iron ore prices by around 10 per cent on rising demand for the raw material used in making steel. The state-run miner’s latest move may prompt key customers such as Essar Steel India Ltd, JSW Steel Ltd and Rashtriya Ispat Nigam Ltd (RINL) to revise their prices upwards. “Prices of iron ore lumps have been increased by 10 per cent and fines by about 8 per cent,” said Mr N. K. Nanda, acting Chairman and Managing Director, NMDC. The latest hike ranges from Rs 250-400 a tonne. Higher grade ore lumps with 65 per cent iron content are now priced at Rs 5,400 a tonne, while the fines with 64 per cent iron are priced at Rs 2,800, Mr Nanda said. NMDC has a 40 per cent share of the country’s iron ore market. (For details log on to : http://www.thehindubusinessline.com/todays-paper/article3374867.ece)
COAL, FERTILISER SECTORS PREFER RAILWAYS DESPITE HIGHER FREIGHT RATES
NEW DELHI: Railways is still the preferred mode of transportation for commodities such as coal, raw material for steel plants, fertiliser and foodgrains. This is despite the steep freight rate hikes effected earlier this year. But a drop in throughput of cement might be a cause for concern. This is according to the freight loading and throughput data for March 2012, which is an early indication. Many of these commodities cannot shift to the competing mode of transport immediately, and some of the traders have also passed on the increase in freight charges to their customers. Indian Railways, with effect from March 6, introduced freight rate hikes of 20-28 per cent for all commodities, barring iron ore, for exports and containers. (For details log on to : http://www.thehindubusinessline.com/todays-paper/article3374863.ece)
INDIA TO HOST REGIONAL INVESTORS MEET ON AFGHANISTAN: KRISHNA
NEW DELHI: The Indian Government will soon host a meeting of regional investors on Afghanistanin New Delhi. This was announced by the Foreign Minister, Mr S.M. Krishna, after co-chairing the inaugural session of the India-Afghanistan Partnership Council. The Council meeting was also attended by the Foreign Minister of Afghanistan, Dr Zalmai Rassoul. Mr Krishna said that the hosting of the meeting was a measure of India’s ongoing commitment to the long-term prosperity of Afghanistan. Senior officials of the Ministry of External Affairs said that the meeting will be attended by all stakeholders including Indian industry, apex chambers of commerce and industry. “The meeting will be held before the Tokyomeeting on Afghanistan. The Delhimeeting will act as a sort of the bridge between the earlier Istanbulmeeting on Afghanistanand the Tokyomeeting,” a senior official said. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-economy/article3374853.ece)
US PUTS INDIA, CHINA & PAK ON IPR WATCH LIST
WASHINGTON: The USgovernment has put India, Chinaand Pakistanalong with 10 other countries on the ‘‘intellectual property watch list’’ (IPR) for failing to prevent the theft of copyrighted property. Other nations on the watch list are Canada, Argentina, Algeria, Chile, Indonesia, Israel, Russia, Thailand, Ukraineand Venezuela. These countries will be the subject of particularly intense bilateral engagement during the coming year, US trade representative Ron Kirk said in a statement, releasing the annual ‘‘Special 301’’ report on the adequacy and effectiveness of US trading partners’ protection and enforcement of IPR. The report said Indiamade limited progress on IPR protection and enforcement in 2011, and its legal framework and enforcement system remain weak. (For details log on to : http://www.financialexpress.com/news/us-puts-india-china-&-pak-on-ipr-watch-list/944063/)
MINES MINISTRY CAN ALLOCATE LEASES ON FIRST COME, FIRST SERVED BASIS, SAYS AG
NEW DELHI: The government can go ahead and allocate mining leases on a first come, first served (FCFS) basis, attorney general GE Vahanvati has told the government. The AG’s advice, sought by the mines ministry where around 400 requests for mining leases are pending, comes at a time when the larger issue of allocating natural resources through auctions is being heard in the Supreme Court as part of the presidential reference made by the government. In tendering the advice, the AG has gone by the context of the Supreme Court ruling on February 2, which cancelled 122 licences granted by former telecom minister A Raja through a skewed FCFS policy. Calling for their cancellation, the SC had said that all natural resources should be allocated through auctions alone. Though the government did not challenge the cancellation of the licences, it has made a presidential reference to the SC seeking to know if the auction criteria would apply to all natural resources in all circumstances or only telecom spectrum. (For details log on to : http://www.financialexpress.com/news/mines-ministry-can-allocate-leases-on-first-come-first-served-basis-says-ag/944251/)
GSPL, 3 OIL PSUs INK PACT FOR CROSS-COUNTRY GAS PIPELINES
AHMEDABAD: Gujarat State Petronet Ltd (GSPL) and three public sector oil companies — Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) — have entered into joint venture agreements for setting up three cross-country natural gas transmission pipelines. According to a statement filed with the Bombay Stock Exchange, the GSPL-led consortium executed the agreements on April 30 for developing the pipelines of 3,995 km. The consortium partners were awarded the letters of authorisation (LoA) on July 7, 2011, by the industry regulator, Petroleum & Natural Gas Regulatory Board. The three pipelines are Mallavaram-Bhilwara (1,585 km), Mehsana – Bhatinda (1,670 km) and Bhatinda-Jammu-Srinagar (740 km). (For details log on to : http://www.business-standard.com/india/news/gspl-3-oil-psus-ink-pact-for-cross-country-gas-pipelines/473152/)
MAINTAIN GCV COAL USAGE AT 30 PER CENT: CEA TO POWER UTILITIES
MUMBAI: Considering the growing need for imports due to constraints in the availability of domestic coal, the Central Electricity Authority (CEA), in an advisory, has told all power-generating companies, power project developers and power equipment manufacturers that boilers, including auxiliaries, should be designed for a 30:70 blend ratio, in which 30 per cent would be imported/high gross calorific value (GCV) coal, while 70 per cent would be indigenous coal. The CEA has also said station facilities should be designed for unloading, handling and blending imported/high GCV coal. The advisory, issued on April 19, is crucial, as the power ministry has proposed capacity addition of 75,000 Mw during the 12th Plan. Of this, about 55 per cent is expected to be coal-based. CEA’s advisory is also important, as Coal Minister Sriprakash Jaiswal had recently estimated India’s coal imports by the end of 12th Plan at 250 million tonnes. The CEA, therefore, said, “Coal quality is a major input parameter for the design of a power plant boiler. Large coal quality variations may not be readily accommodated in a plant, and may lead to loss in efficiency. It is thus considered prudent that all future coal-fired thermal power stations to be set up in the country shall be designed to enable the use of a higher percentage of imported/high GCV coal, as may be required.” (For details log on to : http://www.business-standard.com/india/news/maintain-gcv-coal-usage-at-30-cea-to-power-utilities/473137/)
WHITE-COLLAR STRIKE HITS OUTSOURCING COMPANY WNS
MUMBAI: A section of employees of the New York Stock Exchange-listed WNS has gone on strike to demand better wage hikes and protest against the retrenchment of five employees. The strike has been on for four days at the Nashik centre of the BPO (business process outsourcing) company, which has a headcount of 23,874. The employees have also taken help from local politicians. The Nashik unit of WNS has a headcount of 1,100-1,200 at two offices. Sources in the know say employees from both offices have joined the strike. The number of employees on strike is said to have risen to nearly 500. Though WNS did not reply to an email, sources within the company confirmed a number of employees were agitating. “There are a handful of employees who started the agitation. But that has not impacted operations in any way. Increments are based on the business model,” said a senior executive from the Nashik centre on the condition of anonymity. Nashik mayor Yatin Wagh told Business Standard, “A delegation of WNS employees has already briefed MNS (Maharashtra Navnirman Sena) legislator Vasant Gite. They have put forward their arguments related to the removal of some employees. Besides, the employees have made a strong pitch for better salaries.” (For details log on to : http://www.business-standard.com/india/news/white-collar-strike-hits-outsourcing-company-wns/473161/)
MSOs WELCOME FREEDOM TO FIX RATE
NEW DELHI: Broadcasters and multi-system operators have largely welcomed the Telecom Regulatory Authority of India (Trai)’s move to allow multi-system operators to determine fees for carriage of channels on their network. The regulatory body had in its tariff order issued yesterday permitted multi-system operators (MSOs) to fix carriage fee, keeping in view that they are making substantial investments for implementation of digital addressable cable TV Systems. Trai has, however, said the fees determined have to be notified in the reference interconnect offer and cannot be increased for at least two years. It has held the authority would intervene if it is felt that the fee fixed is unreasonable. MSOs are major cable operators who give feed to local cable operators. M G Azhar, president (strategy & business development) of multi-system operator Den Networks, said, “It is a welcome move. It will help all in the value chain: Consumers will have more choice in terms of content, broadcasters will benefit from the reduction in carriage fees and MSOs will gain from the increased volume of business they get, both in terms of carriage of channels and the enhanced addressable subscriber base.” (For details log on to : http://www.business-standard.com/india/news/msos-welcome-freedom-to-fix-rate/473156/)
DLF MAY PUT OFF NTC MILLS LAND SALE TILL FY14, SAYS VERITAS
TORONTO, NEW DELHI: At a time when the market is abuzz with speculation over DLF’s Mumbai land sale, Toronto-based research firm, Veritas Investment Research, has come out with a contrarian view, claiming the developer may not sell it before 2014, looking at “personal gains”. In its report, shared with Business Standard, Veritas has said it does not believe the NTC Mill land in Mumbai is up for sale at present, as the DLF management wanted to hold on to it till 2013-14, when its ownership share in the properties would increase. In March, Veritas had released a synopsis of its report on DLF to the media. Without commenting on the Veritas report, Sriram Khattar, senior executive director, DLF, said: “As already disclosed in the third quarter (2011-12) analysts’ presentation, we are in the process of divesting certain non-core assets, including Mumbai mill land, during the current financial year.” DLF is learnt to be in negotiation with several players at this point for selling the 17-acre plot in Mumbai. (For details log on to : http://www.business-standard.com/india/news/dlf-may-put-off-ntc-mills-land-sale-till-fy14-says-veritas/473158/)
CACP RECOMMENDS HEFTY RISE IN MSPs OF PULSES, OILSEEDS
NEW DELHI: To encourage the production of oilseeds and pulses, rather than foodgrains, the Commission for Agriculture Costs and Prices (CACP) has recommended a steep increase in the minimum support price (MSP) of major oilseeds grown during the kharif season, like soybean and groundnuts, along with those for pulses like moong, urad and tur. However, this is unlikely to hit the retail prices of most of these commodities, though it may raise their benchmark rates, as the average market price in many cases is below the MSP recommended by CACP. Tur, moong and sunflower seeds are exceptions. Prices are also unlikely to be impacted much, as barring paddy and cotton, state agencies seldom carry out extensive purchases that tilt domestic prices towards MSPs. The recommendations, finalised recently after extensive consultations, would now be placed before the Cabinet, which reserves the right to alter these. (For details log on to : http://www.business-standard.com/india/news/cacp-recommends-hefty-rise-in-mspspulses-oilseeds/473136/)
INDIAN COMPANIES STEPPED UP US HIRING DURING RECESSION: CII
TORONTO: Indian companies in the United Stateshave stepped up hiring, even through the current economic slowdown, according to a study by the Confederation of Indian Industry (CII) released in WashingtonDC. Nearly three-quarters of these companies have a higher headcount now, compared to the pre-recession period. The report, titled ‘Indian Roots, American Soil: Adding Value to US Economy and Society’, compiles data from a survey of 36 major Indian companies doing business in the USacross a wide range of sectors. While these represent just a fraction of the hundreds of Indian companies operating in the US, these alone employ about 52,000 workers in the country. Over 70 per cent of these companies have increased staff since 2005, and expect to create another 3,400 jobs this year. The report also estimates the surveyed companies saved over 2,000 jobs by carrying out 72 mergers and acquisitions (M&As) since 2005. M&As are also projected to create 236 additional jobs this year. (For details log on to : http://www.business-standard.com/india/news/indian-companies-steppedus-hiring-during-recession-cii/473138/)
NEO SPORTS ENTITLED TO 7% INCREASE IN FEE, TDSAT TELLS BIG TV
NEW DELHI: Telecom tribunal TDSAT has held that sports broadcaster Neo Sports is entitled to 7% increase in subscription fee for its channels from ADAG group firm Reliance Big TV. “Petitioner (Neo Sports) is entitled to 7% increase on the subscription fee on and from January 1, 2009,” said a TDSAT bench headed by its chairman Justice SB Sinha. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) further said that BiG TV “must allow the petitioner to audit its system within two weeks from date” for calculation of the average number of subscribers. Big TV had subscribed to the sports broadcaster’s two channels — Neo Cricket and Neo Sports — for its direct-to-home platform. The TDSAT’s direction came over the plea of Neo Sports, which had entered into an agreement with the ADAG group firm in June 2008. (For details log on to : http://www.financialexpress.com/news/neo-sports-entitled-to-7-increase-in-fee-tdsat-tells-big-tv/944223/)
DOUBLING HIGHER EDUCATION ENROLMENT TO MEET TARGET WILL COST R9.5 LAKH CRORE BY 2020
NEW DELHI: India’s target of doubling the gross enrolment ratio (GER) in higher education by 2020 will come at a price of R9.5 lakh crore and require an additional 10,510 technical institutions, 15,530 colleges and 521 universities. GER is the number of actual students as a share of all potential students. The human resource development (HRD) ministry has set a goal of doubling GER to 30% by 2020 from the current 15%. The ratio was approximately 12% in 2008-09 — only a fourth of the average GER in developed countries (54.6%), even worse than developing countries in transition, which have 36.5%. “The investment required in higher education is more than R9 lakh crore if we want to achieve 30% GER.This includes the cost of setting up more institutes, infrastructure and salaries,” said a ministry official. These are the estimates of the National University of Educational Planning and Administration. (For details log on to : http://www.financialexpress.com/news/doubling-higher-education-enrolment-to-meet-target-will-cost-r9.5-lakh-cr-by-2020/944254/)
HIGHER SALARIES, CHALLENGES LURE WORKFORCE TO TEMPING
NEW DELHI: Higher salary, challenging work profile and increasing importance of temporary jobs is leading youngsters to leave their permanent jobs in the corporate sector and join temping or staffing companies. Asha D’ souza, for one, recently left her job at Accenture to join Synova, a consulting company that also helps big organisations with temporary staff. “I got a 30% salary hike after joining Synova, which would not have been possible if I joined another company with the same profile. I was looking for a different working profile, that too with different companies,” says D’souza. After six years of working in three permanent jobs, Dsouza realised that temping was a good option to make her career more challenging, of course coupled with bigger bucks. (For details log on to : http://www.financialexpress.com/news/higher-salaries-challenges-lure-workforce-to-temping/944237/)
AUTO SALES STUTTER ON EXCISE DUTY HIKE
NEW DELHI: The excise duty hike dragged domestic auto sales during April even though the country\’s largest automaker, Maruti Suzuki India (MSI), driven by spurt in sales of Ertiga and DZire, posted a growth of 4% across segments at 90,255 units compared to 87,144 units in April last year. However, most automakers, including Tata Motors, witnessed a decline in the sales of the passenger cars. “We continue to maintain a tough outlook for at least the first six months of the year and this could possibly ease once the interest rates come down, maybe in the second half of the fiscal,” Vishnu Mathur of Society of Indian Automobile Manufacturers (Siam) explained, reiterating the auto industry\’s outlook post the two percentage point hike in the Budget. (For details log on to : http://www.financialexpress.com/news/auto-sales-stutter-on-excise-duty-hike/944232/)
SAMVARDHANA RAISES R222 CRORE THROUGH ANCHOR INVESTORS
MUMBAI: The R1,665-crore IPO of auto-parts maker Samvardhana Motherson Finance (SMFL) will begin on Wednesday, billed as the largest private sector public issue in more than two years. The company has set a price band of R113-118 for the issue that would close on May 4. SMFL’s IPO would be the largest private sector offer after JSW Energy mopped up about R2,700 crore through initial share sale in December 2009, according to market sources. Institutional investors like First State Investments (Hong Kong), Ivy Pacific Opportunities Fund, Birla Sun Life, government of Singaporeand Monetary Authority of Singapore have subscribed to the anchor investor portion of the company. According to a company release, the anchor investors have been allotted 1.93 crore equity shares at a price of R115 per share, aggregating to R222.03 crore. (For details log on to : http://www.financialexpress.com/news/samvardhana-raises-r222-crore-through-anchor-investors/944230/)
ICAI GROUP ON BLACK MONEY TO SUBMIT REPORT SOON
THIRUVANANTHAPURAM: The Institute of Chartered Accountants of India (ICAI) core group mining data on black money and benami transactions will submit its report to the Government soon. Mr Jaydeep Narendra Shah, President, ICAI, announced this here on the occasion of the 40 {+t} {+h} anniversary of the Thiruvananthapuram branch. Following an Election Commission request, the ICAI recently released a guidance note covering uniform accounting and auditing framework for political parties. It outlines uniform practices and formats for financial statements, including disclosure of income, assets and liabilities. The ICAI has also offered assistance to capital market regulator Securities and Exchange Board of India to monitor market intermediaries. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-economy/article3374851.ece)
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