MUMBAI: The Ajay Piramal Group is set to buy a European drug firm that will expand the group’s ability to conduct basic pharmaceutical research, a weakness that has long hobbled Indian pharma companies. The firm, whose identity is not known, will help the Piramal Group do basic research in collaboration with universities and public institutes. An announcement is expected on Monday from the Piramal Group.
Details about the transaction are not known. Piramal is expected to pay $50-100 million for the firm.
The CEO of drug discovery and development, Somesh Sharma, is spearheading the deal, while group chairman Ajay Piramal’s son-in-law Peter D Young, who joined the group recently as vice-president, will handle the strategy for the business.
Indian drug companies have now started investing in basic drug research after years of spending money on a business model which copied patented drugs and relied on litigation and aggressive marketing to push the product after patent expiry.
But the model has suffered a series of setbacks after western companies fought back to protect their market and the competition and steep price falls hurt margins of Indian companies. Their attempts to do basic research have also been thwarted by some high profile setbacks.
Piramal has been trying to expand into basic research especially after the sale of the pharmaceutical business to Abbott Labs in 2010 for about Rs 17,000 crore. The Indian drug market is highly fragmented and competition is intense.
The Piramal Group, which is into the businesses of healthcare, drug discovery & research, glass, real estate and financial services, had a turnover of over $900 million in 2010-11. Piramal Healthcare after selling its domestic formulation business to US drug multinational Abbott for about Rs 17,000 crore looking to diversify its business.
Piramal Healthcare is one of India’s largest healthcare companies, with a growth track record of above 29% CAGR since 1988. With assets across North America, Europe and Asia, Piramal Healthcare is also one of the largest custom manufacturing companies across the world. It has significant presence in the global critical space with sales of anesthesia products to over 100 countries. Recently the company changed its name to Piramal Enterprises.
COMPETITION PANEL CLEARS AMALGAMATION OF INDIA POWER CORPORATION INTO DPSC
NEW DELHI: The Competition Commission of India has given its nod for amalgamation of India Power Corporation Ltd (IPCL) into DPSC Ltd. As a result of the amalgamation, IPCL’s investments in various companies including power sector companies, will get transferred to DPSC. Kolkata-based DPSC is a NSE-listed company while IPCL is an unlisted company. DPSC was incorporated in 1919 by Andrew Yule and Co Ltd. In 2010, SREI group acquired 93 per cent stake in DPSC Ltd. The company is engaged in generation, transmission and distribution of electricity. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-corporate/article3318335.ece)
INDIAN FIRMS’ ACQUISITIONS BUCK GLOBAL SUCCESS TREND
PUNE: Indian companies that have made acquisitions over the last few years have managed to do a better job at running them and hitting a higher success ratio. Globally, one in every two acquisitions fails but Indian companies have bucked this trend and only one in three acquisitions was a failure. So there is something right that the acquiring companies are doing and foremost among them is that Indian companies tend to leave the acquired companies alone and do not attempt to impose any Indian way of doing business on these overseas companies, says Prashant Kale, associate professor of strategic management with Rice University’s Jones School of Management and research fellow with Wharton School’s Mack Centre for Technological Innovation. (For details log on to : http://www.financialexpress.com/news/indian-firms-acquisitions-buck-global-success-trend/937180/)
CIL MAY SIGN FUEL PACTS WITH 50 POWER FIRMS INCLUDING NTPC, DVC
NEW DELHI: Coal Indiais expected to enter into fuel supply agreements (FSAs) with as many as 50 firms, including NTPC, Reliance Power and DVC, for a total capacity of 28,000 MW, sources said. The proposed move follows issuance of a Presidential directive to Coal India (CIL) for supplying a minimum assured quantity of fuel to power producers. “CIL will enter into FSAs with 50 power companies, which include NTPC and DVC. As far as private firms are concerned the PSU may ink fuel pact for (Reliance Power’s) Rosaplant among others,” sources told PTI. The government on 3 April issued a Presidential directive to the Maharatna PSU to sign fuel supply agreements (FSAs) with the power producers assuring them of at least 80% of the committed coal delivery. The directive came in the wake of Coal Indiafailing to meet the deadline of 31 March, set by the Prime Minister’s Office for CIL to enter into FSAs with power producers for minimum assured supply. (For details log on to : http://www.livemint.com/2012/04/08122100/CIL-may-sign-fuel-pacts-with-5.html)
LINC PEN TO SET UP RS 25 CRORE PLANT IN GUJARAT
MUMBAI: Writing instruments maker Linc Pen and Plastics plans to set up a manufacturing facility in Gujaratat an investment of Rs 25 crore. “We are planning to set up a factory in Gujarat. We hope to make it functional from next financial year. Our capacity will also increase by 20 per cent with that,” Linc Pen Managing Director Deepak Jalan told PTI. The company’s facilities in West Bengalcan produce close to 10-12 crore pens per month. As to investment in Gujarat, Jalan said, “It will be around Rs 25 crore.” “We are starting the construction now and it is on Gujarat-Maharashtra border,” he added. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/paper-/-wood-/-glass/-plastic/-marbles/linc-pen-to-set-up-rs-25-crore-plant-in-gujarat/articleshow/12674178.cms)
COFFEE DAY GROUP BREWS RS 400-CR EXPANSION PLAN
BANGALORE: The Coffee Day Group, which straddles diverse businesses ranging from coffee retailing to wealth management to logistics, is setting out on a Rs 400-crore expansion this financial year. Best known for its Cafe Coffee Day (CCD) chain of coffee shops across India, the Group is increasing its thrust on its software special economic zone (SEZ), through an expansion spanning a million sq ft of space, for which it is understood to be raising debt of Rs 200 crore. The Group has 91 acres of land off the Bangalore-Mysore highway, besides another 23 acres in Mangalore, which is being developed. Large technology companies, such as HP-MphasiS, MindTree and Texas Instruments are among the occupants of the SEZ. V G Siddhartha, chairman & founder of the group, confirmed the expansion plans. Besides realty, he said another sector in focus this year would be its recently acquired business in logistics. “Sical Logistics, which we acquired, has immense potential and we will fine-tune the operations,” he added. (For details log on to : http://www.business-standard.com/india/news/coffee-day-group-brews-rs-400-cr-expansion-plan/471457/)
APOLLO GROUP TO INVEST RS 15 CRORE FOR HEART HOSPITAL IN AHMEDABAD
MUMBAI/AHMEDABAD: While it is expanding its current 200 beds hospital to 400 beds in Ahmedabad, Apollo Group of Hospitals is now planning to set up an acute heart hospital as well in the city. To be set up for a rough investment of Rs 15 crore, the new facility will be ready by July 2012. “While we had a full fledged hospital functioning in the city, we believe Ahmedabad needed an acute heart facility where intervention procedures could be carried on 24×7. The new facility will come up by July for which we have hired project consultant company to draw a plan for us,” said Prathap Reddy, chairman of Apollo Group of Hospitals. The healthcare group has also expanded its oncology unit at Ahmedabad. “We had been running a comprehensive cancer program for last five years at Apollo Hospitals Ahmedabad. We started with 13 beds in the unit and now with the average occupancy reaching 25, we have expanded the facility,” Reddy added. (For details log on to : http://www.business-standard.com/india/news/apollo-group-to-invest-rs-15-cr-for-heart-hospital-in-ahmedabad/471394/)
FDI IN SERVICES UP 62% IN APRIL-JANUARY OF 2011-12
NEW DELHI: Uncertain economic conditions in the western markets are working to India’s advantage when it comes to foreign direct investment (FDI) inflows into the services sector, which went up by an impressive 62 per cent during April-January last fiscal. The financial and non-financial services sector had attracted FDI worth $4.83 billion during the 10-months period of 2011-12 as compared to $2.98 billion in the same period of previous year, according to official data. Experts feel Indiaoffers a safe investment destination at a time when there is so much uncertainty in the western markets. “When the western markets are reeling under economic crisis, foreign investors are looking at Indian markets, as a better and safe destination. The trend also reflects confidence in India’s growth story,” KPMG Executive Director Krishan Malhotra said. (For details log on to : http://economictimes.indiatimes.com/news/economy/indicators/fdi-in-services-up-62-in-april-january-of-2011-12/articleshow/12673559.cms)
REMOVE FDI CAP IN CIVIL AVIATION: PANEL
NEW DELHI: The Estimates Committee of Parliament has recommended removing the cap in Foreign Direct Investment in the civil aviation sector. A report of the committee on the sector, adopted in the last meeting, noted that such a cap is limiting the growth of aviation sector in India. Though adopted in the panel, the report is yet to be tabled in Parliament. The committee in a detailed report on the “development and regulation of civil aviation” said the benefits of opening up the passenger airlines sector for investment by foreign airline companies are manifold. “Apart from addressing the shortage of funds, this would help raise the level of services for the consumers and promote healthy competition,” the report said adding that FDI cannot be the “sole solution” to the Indian aviation sector’s debt problems. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-economy/article3318345.ece)
GOVT WORKING ON PROPOSAL TO ENGAGE PRIVATE COMPANIES FOR CIL MINES
NEW DELHI: Facing criticism for its inability to meet the growing demand for coal, the government is working on a proposal under which Coal India Ltd (CIL) would engage private sector companies to undertake mining on behalf of the public sector undertaking (PSU). The proposal to involve the private sector under the public-private partnership mode, sources said, was recently discussed between Planning Commission Deputy Chairperson Montek Singh Ahluwalia and Coal Secretary Alok Perti. The coal ministry, they said, is considering a model agreement — mining, development and operations — under which the private sector entity would undertake mining operations, while the ownership and sale of coal would rest with CIL. Ahluwalia, in a letter to coal minister Sriprakash Jaiswal, had recently said, “It should be possible to expand coal mining operations rapidly through a PPP model that can enable a fair and transparent framework based on competitive bidding.” (For details log on to : http://www.business-standard.com/india/news/govt-workingproposal-to-engage-pvt-cos-for-cil-mines/471465/)
POWER MINISTRY WANTS NO MORE WAIT FOR COAL REGULATOR
KOLKATA: Amid the controversy over Coal India Ltd’s (CIL) signing of fuel supply agreements (FSAs) with power companies, the Union power ministry has demanded quick action on a regulator for the coal sector, to decide on allotment and pricing issues, including whether to go ahead with the gross calorific value (GCV) pricing system or not. Late last month, power minister Sushilkumar Shinde had written a letter to his counterpart, Sriprakash Jaiswal, in the coal ministry in this regard. “We have already written a letter urging the coal ministry that a regulator is the need of the hour in the coal sector and it should be in place immediately. The regulator should decide on allotment of coal and pricing. There are a lot of questions regarding whether Coal Indiashould continue under the GCV system or should go back to the earlier Useful Heat Value (UHV) system,” said K C Venugopal, minister of state for power. (For details log on to : http://www.business-standard.com/india/news/power-ministry-wants-no-more-wait-for-coal-regulator/471471/)
RELIANCE’S SOLAR PROJECT GETS $80-M LOAN FROM US EXIM BANK
CHENNAI: The US Export-Import Bank has approved $80 million in export financing for a solar project in India. Supporting US jobs at companies in eight States, the bank’s board of directors approved $80.32 million direct loan for the purchase of ‘concentrated solar power technology’ by Reliance Power in Rajasthan. The project — Rajasthan Sun Technique Energy Private Ltd — is a subsidiary of Reliance Power and is being co-financed by the Asian Development Bank and FMO, the Dutch development bank. Since last year, the bank has financed seven Indian solar power generating projects. With today’s transaction, the bank’s total authorisations for these projects is $256.7 million, supporting 205 MW. renewable energy generating equipment. This will generate enough electricity to power about 2,50,000 homes in India. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-economy/article3318350.ece)
OMAN GAS PRICE HIKE: CABINET TO DECIDE ON ARBITRATION IN LONDON
NEW DELHI: The Union Cabinet will soon take a call on the vexed issue of whether to go for international arbitration at a Londontribunal against Oman, which raised natural gas price from 77 cents to $3 per unit, leading to a sharp rise in the price of fertiliser imported by Indiaunder a long-term off-take agreement. The finance ministry has rejected a request for increasing the price of urea imported from Omifco, an equal joint venture of Indian and Omanfirms, in line with the higher gas price implemented by the Arab nation at the beginning of this year. Confident of victory in the dispute, North Block strongly favours taking the matter to the International Arbitration Tribunal in London, but other ministries including the chemicals and fertilisers ministry do not favour any such step, fearing disruption in the supply of the most commonly used plant nutrient in India. (For details log on to : http://www.financialexpress.com/news/oman-gas-price-hike-cabinet-to-decide-on-arbitration-in-london/937219/)
DRUG MNCs BAULK AT PATENT ISSUES
MUMBAI: After a two-decade stint with Pfizer India, Kewal Handa, managing director, is hanging up his boots in August. A management accountant and company secretary by qualification, Handa, who joined as a controller of information systems at Pfizer India, rose through the ranks and has been MD since 2005. He has steered the company through two mergers, Parke-Davis and Pharmacia, and the ongoing integration with Wyeth, which the USparent acquired in January 2009 for $68 billion. A sport enthusiast, he loves tennis and cricket. Handa, also MD of Wyeth, is credited with opening up new avenues for the parent both in branded generic medicines and allied pharma activities like contract manufacturing and BPO operations. However, the increasing number of litigations against patented drugs and the recent patent controller’s order allowing local firm Natco to make and sell copycat versions of German firm Bayer’s cancer drug through the compulsory licensing route can dent multinationals’ confidence in the Indian market, he tells FE’s MG Arun in an exclusive interview. (For details log on to : http://www.financialexpress.com/news/compulsory-licensing-can-dent-mncs-confidence/937156/0)
ONGC PAYING FOR FUELLING OIL RETAILERS
NEW DELHI: Produce more is what ONGC is often told. But, how does the public sector giant increase its output when its finances are being squeezed because of Government policies, subsidies and now increased cess. The public sector oil major is seeking a remunerative crude oil price that will help sustain its operations. For, if the present mechanism continues, ONGC’s internal resources will not be able to sustain it beyond two years. Also, meeting its planned outlay for 2012-13 of over Rs 33,000 crore will be tough, if the present situation continues. It will either have to dip into its cash reserves or borrow. So far (the first nine months of the current fiscal) ONGC has already given Rs 30,000 crore towards subsidy. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-economy/article3318347.ece)
BHUTAN LIKELY TO CUT POWER EXPORT TO INDIA
NEW DELHI: Bhutanis likely to cut power export to Indiain coming years even as it plans to import electricity during winter. Bhutanis expected to slash power export to Indiaas the neighbouring country’s own electricity consumption rises fast due to industrialisation. This move may force Indiato review its strategy to meet long-term power requirement. Power import from Bhutanis progressively declining as availability of surplus electricity in the neighbouring country thins due to its rising consumption. Bhutanis expected to export only 5,480 million units of electricity to Indiain 2012-13, compared to 6,500 million units in 2010-11 and 5,586 million units in 2011-12 According to sources in the Indian government, the falling import quantum is due to reduction in availability of surplus power in the country. (For details log on to : http://www.financialexpress.com/news/bhutan-likely-to-cut-power-export-to-india/937199/)
POWER MINISTRY TRIPS ON TRANSPARENCY, SEEKS TO HIDE FACTS TO ENSURE FUND FLOW
NEW DELHI: In a development that makes a mockery of the government’s proclaimed transparency drive, the power ministry has asked the coal ministry not to make public the list of power projects that would get coal linkage under the new mandatory fuel supply agreements with Coal India. This results from a concern that such a list could hurt projects that do not have coal linkages, as funding agencies would be wary to extend loans to them even if they report substantial progress. In an official communication, the power ministry has said that while coal ministry has indicated its willingness for signing FSAs of 60,000 MW, more power projects which are under construction have met all milestones of letter of acceptance, but have not really got the linkage. “In case the financial/lending institution do not find these projects in the list, it is likely to have adverse impact on their loan disbursal, pace of implementation and financial closure,” the power ministry letter has said justifying no disclosure of power projects getting benefit of coal linkage from CIL under the terms of FSA. (For details log on to : http://www.financialexpress.com/news/power-ministry-trips-on-transparency-seeks-to-hide-facts-to-ensure-fund-flow/937197/)
NOW, COAL MIN CONTESTS CAG’S LOSS ESTIMATES
NEW DELHI: The coal ministry has contested the national auditor’s assessment that the government lost nearly R10.7 lakh crore by not auctioning 155 coal blocks during 2004-2009. The ministry has asked the Comptroller and Auditor General (CAG) to rework its draft performance audit report, giving due consideration to several external factors including cost of financing and the specifics of each mine which, inter alia, determine the cost of mining for captive projects. According to a leaked CAG draft report, the absence of auctions benefitted 100 private and government companies, causing losses around six times the presumptive losses on 2G spectrum allocation, which CAG earlier estimated R1.76 lakh crore. The CAG compared the cost for captive miners with the difference between cost and sale price of coal of similar grade of nearby Coal Indiasubsidiaries (multiplied by the estimated reserves in each captive block) to arrive at its figures. (For details log on to : http://www.financialexpress.com/news/now-coal-min-contests-cags-loss-estimates/937213/)
CIL BOARD MAY MEET TODAY TO CONSIDER FSA
NEW DELHI: CIL board is likely to meet tomorrow to consider the model agreement with power producers for assured supply of the fuel in the wake of the Presidential directive for signing fuel supply pacts. The government issued a Presidential directive on April 3 to CIL to commit a minimum 80 per cent of fuel supply to power producers, failing which the PSU would be subject to paying a penalty. The directive was issued to the PSU, as it did not meet the deadline of March 31, set by the Prime Minister’s Office to enter into agreements with power producers, which were facing fuel crunch. As the government has a majority stake in CIL, it has powers to direct the company on a particular course of action. (For details log on to : http://www.business-standard.com/india/news/cil-board-may-meet-today-to-consider-fsa/471467/)
INDIA SEEKS ‘DATA SECURE NATION’ STATUS, MORE HI-END BUSINESS FROM EUROPEAN UNION
NEW DELHI: New Delhihas demanded that the European Union lift restrictions on flow of sophisticated outsourcing business to Indiaby designating it as a data secure country. Indiais among the countries not considered data secure by the EU. This prevents flow of sensitive data, such as patient information for telemedicine, to Indiaunder data protection laws in the EU. The issue has been taken up by New Delhiin the bilateral free trade agreement being negotiated, which includes an extensive chapter on free flow of services. “Recognition as a data secure country is vital for Indiato ensure meaningful access in cross border supply,” a government official told ET, adding, “We have made adequate changes in our domestic data protection laws to ensure high security of data that flows in.” The EU Data Protection Directive requires member countries to ban transfer of personal data to a non-EU country unless the nation ensures adequate privacy protection. (For details log on to : http://economictimes.indiatimes.com/news/economy/foreign-trade/india-seeks-data-secure-nation-status-more-hi-end-business-from-european-union/articleshow/12681901.cms)
GUJARAT‘S ALPHONSO MANGOES TO SHINE ON WALMART SHELVES
SURAT: The famous Valsadi hafoos ( alphonsos) and kesars will soon fill the shelves of the world’s largest retailer , Walmart. Valsad, popular for its alphonso and kesar mangoes, especially in the US, has become a favoured destination for Wal-Mart to directly source organic mangoes from orchards. Walmart, through its Indian joint venture Bharti Walmart Private Limited, has decided to foray into the region on a big scale to provide export market access to the mango farmers of Valsad. A spokesperson of Bharti-Walmart confirmed the move. “We are looking at engaging mango farmers of Valsad for direct sourcing of alphonso and kesar from the region. A meeting in this connection was organized with the horticulture department and the farmers,” the spokesperson told TOI. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/gujarats-alphonso-mangoes-to-shine-on-walmart-shelves/articleshow/12672382.cms)
CMIE MAINTAINS FORECAST OF 7.6 PC GDP GROWTH IN FY 13
Centre for Monitoring Indian Economy (CMIE) has said that it maintains its GDP growth forecast for FY 13 at 7.6 percent, against the estimated 6.8 percent in FY 12. The union budget for 2012-13 failed to provide any thrust to the slacking pace of economic growth, as no major reforms were announced, nor any concrete measures were introduced to enforce fiscal discipline, CMIE said. “We do not anticipate any improvement in economic activity on account of the budget proposals. Consequently we have maintained our GDP growth forecast for 2012-13 at 7.6 percent against the estimated rise of 6.8 percent in 2011-12,” CMIE said in its monthly report here. The government did raise excise duty and service tax from 10 percent to 12 percent. This is expected to lead to inflationary pressure, both at the wholesale and retail level. However, demand is not expected to be affected on account of higher inflation, it added. (For details log on to : http://economictimes.indiatimes.com/news/economy/indicators/cmie-maintains-forecast-of-7-6-pc-gdp-growth-in-fy-13/articleshow/12672354.cms)
RETAIL INC STUMBLES IN DIRECT SOURCING OF FRESH PRODUCE
NEW DELHI: Between the cup and the lip, the farm-to-fork strategy has faltered. Modern retailers who came of age in the last seven years have failed to make headway in direct sourcing of fresh fruits and vegetables from farmers, turning instead to wholesale markets they had originally intended to bypass. Tata Chemicals, which formed a joint venture with Ireland’s Total Produce to open a chain of fresh produce in several cities, has closed the venture as it failed to take off. Global fresh sourcing firm Unifrutti is struggling after entering Indiasome years ago. Reliance Retail long ago scrapped its cash-and-carry chain to sell fresh produce procured directly from the farmers while Jain Irrigation shelved plans to open a chain of wholesale outlets to sell fresh produce. (For details log on to : http://www.financialexpress.com/news/retail-inc-stumbles-in-direct-sourcing-of-fresh-produce/937207/)
HOTEL COMPANIES MAY POST MUTED GROWTH IN FY12
NEW DELHI: Reflecting a sluggish economic scenario and lower business and consumer sentiment, the hospitality industry is set to finish fiscal 2012 on a weaker note. With softer average room rates (ARRs), hotel companies are likely to report muted growth and lower operating margins for Q4 and fiscal 2012, say industry analysts. It has been a double whammy for hospitality companies. On the one hand, the sector is grappling with high input costs and, on the other, room rates have been under pressure owing to the increased supply. As per the estimates of brokerage firm ICICI Securities, despite the last quarter being the peak season for the hotel industry, major hotel players are likely to report a moderate growth of 5-6% year-on-year in revenues during the fourth quarter of fiscal 2012. (For details log on to : http://www.financialexpress.com/news/hotel-cos-may-post-muted-growth-in-fy12/937157/)
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