Mumbai: The Hinduja Group, owned by the London-based non-resident Hinduja family, will sell a minority stake in truck financier Ashok Leyland Finance or ALFL to private equity investors to raise roughly R100 crore by June and an additional R100 crore by January 2013, a senior company official said.
“The finance business needs capital and we have appointed Chennai-based investment bank Spark Capital to raise money,” S Nagarajan, ALFL managing director said in a telephonic interview on Friday. “We expect to close the deal by June and will issue fresh shares to investors.”
“The quantum of stake to be sold will depend on ALFL’s value,” added Nagarajan,who declined to divulge the names of the interested investors.
ALFL, 50% owned by India’s truck and bus maker Ashok Leyland, will use the money to expand its network and has plans to increase its assets under management to R5,000 crore by March 2013 from R3,000 crore now. “Our challenge is to scale up,” Nagarajan said, adding that the two-year-old company now has 450 branches and 1,500 employees.
ALFL’s remaining 50% is owned by Hinduja group companies. “Our share capital will increase by R100 crore to R425 crore by March 2013,” Nagarajan said.
ALFL, which earns 40% of its business by providing finance to buyers of its its parent’s vehicles, is dwarfed by other truck financiers like Shriram Transport Finance, which has R40,000 crore assets under management.
There are four challenges for truck financiers. One, the ability to borrow at cheaper rates, two, an excellent pool of repaying borrowers, three, the availability of capital and four, a wide network.
“We borrow 80% of our loans from banks and the rest 20% from retail depositors and by issuing non-convertible debentures,” said Umesh Revankar, managing director, Shriram Transport Finance. The company lends 75% of its loans to second-hand truck buyers who are normally discouraged by banks. It has Rs 18,000 crore of securitised portfolio, which means loan receivables are securitised with other lenders for upfront payment.
“Freight availability for customers is the biggest challenge,” said Revankar.
ALFL is also slowly reducing its dependence on financing Ashok Leyland products. “We have chosen to finance anything on wheels to widen our product finance,” said Nagarajan. “We now finance from two-wheelers to second-hand trucks, which now accounts 20% of the company’s loans.”
“In the long run, these vehicle financiers’ need to shore up the capital base will create opportunities for private equity funds to purchase stakes on these NBFCS (non-banking financial companies),” said R Subramaniam, vice-president at Avalon Global Research. These companies face two main challenges, said Subramaniam. One is to have a good management in place, and the other is to work within the tight Reserve Bank of India framework for deposit-taking NBFCs.
According to Subramaniam, at the national level, they have to mobilise deposits though brokers, which are through fixed deposits or unsecured debentures.
GERMANY‘S RHI MAY BUY ORIENT REFRACTORIES FOR RS 600 CRORE
MUMBAI: Germany’s RHI AG, a leading refractory manufacturer, may acquire Delhi-based Orient Refractories in a transaction valued at about Rs 600 crore, two people close to the development said. The deal is likely to be signed in the second week of June. Talks between the two companies have been going on from last year. Orient Abrasives split its refractory division into Orient Refractories with the intention of selling a stake. The valuation of Orient Refractories is at a 66% premium to its current market capitalisation. According to people close to the negotiations, RHI has agreed to buy 48.61% of the stake held by promoters Rajendra Kumar Rafgarhia and family for about Rs 300 crore. RHI will also make a mandatory open offer for a 26% stake as per takeover regulations. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/indl-goods/svs/engineering/germanys-rhi-may-buy-orient-refractories-for-rs-600-crore/articleshow/13028712.cms)
ETF ROUTE FOR PSU STAKE SALE MAY BE A CLEVER IDEA, BUT NOT AN EASY SELL
At some point in the coming ten months or so, the Government of India shall presumably make a determined attempt to sell about Rs 30,000-crore of public sector shares to investors. For obvious reasons, out of all the promoters in the country who are waiting to hit the primary markets, the government is the only one which has publicly committed itself to such an exercise. It needed to pencil in a certain amount into the Union Budget, and that amount had to be a number with enough zeros in it to have some measurable impact on the budgeted fiscal deficit. Unfortunately, it seems that the government has little confidence that such a campaign of stock sale can be mounted successfully. Nothing unusual about this -in the current climate, there would be few promoters who would have any confidence in being able to collect large amounts of cash from investors. But for the government, the alternative of raising debt is already a problem. The other (real world) alternative that a promoter would try – getting group companies to subscribe to failing issues (as in the ONGC-LIC affair) also has its limits, even though those limits are likely to be tested and stretched in the coming months. (For details log on to : http://economictimes.indiatimes.com/news/economy/policy/etf-route-for-psu-stake-sale-may-be-a-clever-idea-but-not-an-easy-sell/articleshow/13027393.cms)
THOMAS COOK, EXPEDIA TIE UP FOR FREE VISA SERVICES
MUMBAI: Expedia, one of the world’s largest online travel companies, will tie up with travel and travel-related financial services firm Thomas Cook to offer free visa assistance services to make it easier for travellers to book international holidays online. “Next month, we will launch a free visa assistance service in collaboration with Thomas Cook,” Vikram Malhi, Expedia India, told FE. “We will send a person to the traveller’s home to collect the documents and through our partner Thomas Cook’s help, we will get the visa done in a seamless and easy process for the traveller. We wanted a credible partner for visa services and that is why we picked Thomas Cook as they have been in this market for a long time,” he added. This is the second time after Yatra.com that an online travel agent is offering visa services. Expedia’s competitors MakeMyTrip and Cleartrip do not offer such services. One can, however, download visa forms from MakeMyTrip. The launch of the new service could help the website attract more first-time passengers for booking international holidays. (For details log on to : http://www.financialexpress.com/news/thomas-cook-expedia-tie-up-for-free-visa-services/946201/)
FUTURE, HYPERCITY BET BIG ON FRESH PRODUCE IN FOOD BIZ
MUMBAI: Kishore Biyani’s Future Group wishes to raise the share of fresh produce from five per cent now to 10-12 per cent in its food stores in the next two quarters to capture higher consumer spending on such items. A Future executive said this plan had been in the works for many months, part of an overall aim to take the share of food in group revenue from the present 30 to 45 per cent. Currently, the group makes Rs 350-450 crore from fresh food in its stores such as Big Bazaar and Food Bazaar. It can generate sales of Rs 1,000-1,200 per sq ft in a month in the next couple of quarters. “We have made a lot of investments in the back-end, which is ready to show results now. We have 220 stores between Big Bazaar and Food Bazaar, which justify our investments in this segment, “ said the executive, who did not want to be named. (For details log on to : http://www.business-standard.com/india/news/future-hypercity-bet-bigfresh-produce-in-food-biz/473628/)
BETA WIND FARM TO INVEST RS 1,857 CRORE IN TN, GUJARAT, ANDHRA
CHENNAI: Beta Wind Farm Pvt Ltd is planning to invest Rs 1,857 crore to set up a wind energy farm each in Tamil Nadu, Andhra Pradesh and Gujarat, according to the subsidiary of Orient Green Power Company Ltd, owned by the Shriram Group. Beta was earlier planning to set up the proposed farms with the same total capital in Tirunelveli, Tuticorin and Theni , but it later decided to split the 300-megawatt endeavour and go for two more states, stating certain bottlenecks in Tamil Nadu. Orient Green Power, in a communication to the shareholders, said “evacuation and infrastructure issues” in Tamil Nadu had prompted Beta to revisit the plan. It has now “decided to set up wind farms with a generation capacity of 156 Mw in Tamil Nadu and 144 Mw in the states of Gujaratand Andhra Pradesh, where also the returns are expected to be equally attractive in terms of power generation”. A consortium of 10 banks, led by Axis Bank, has sanctioned Rs 1,236 crore as a rupee term loan to Beta, which is engaged in generation, accumulation, transmission, distribution and supply of electricity, besides setting up of and/or maintenance of wind energy farms. The others banks include Canara Bank, Dena Bank, Karnataka Bank, Tamilnad Mercantile Bank, Vijaya Bank and Indian Overseas Bank. (For details log on to : http://www.business-standard.com/india/news/beta-wind-farm-to-invest-rs-1857-cr-in-tn-gujarat-andhra/473615/)
GODREJ PROPERTIES PLANS TO TREBLE LAUNCHES IN 2012-13
MUMBAI: Godrej Properties, the realty development arm of the Godrej Group, had planned as many as 15 launches in 2012-13, including new phases in existing projects, said Pirojsha Godrej, managing director. It launched five projects in FY12. “Although demand has reduced over the last six months and economic sentiment is weak, we remain bullish on the sector. We feel things will improve over the next few months,” said Godrej, after announcing the company’s results yesterday. The company had signed 10 development deals with various land owners in FY12, he said. And, the company is to continue focus on residential properties for sustained cash flows. Nine of the 10 deals had been done in the residential segment, he said. Adding: “We believe customer advances will help us fund our projects.” (For details log on to : http://www.business-standard.com/india/news/godrej-properties-plans-to-treble-launches-in-2012-13/473617/)
KTM READIES NEXT-GEN BIKES WITH BAJAJ
MUMBAI: After the initial success of the mini street motorcycle produced at Pune but sold in Europe, KTM Power Sports AG, one of Europe’s largest bike producers, has charted a series of new product developments with its Indiapartner, Bajaj Auto. The Austria-based two-wheeler major is developing a high-capacity motorcycle in partnership with Bajaj Auto, India’s second-biggest two-wheeler producer, in addition to more platforms for newer models for the future. Engineers of KTM and Bajaj are developing a motorcycle powered by a 375cc engine at Bajaj’s research and development center at Akurdi, Pune. This model could have one of the biggest engine capacities fully produced in Indiaafter the Royal Enfield models. (For details log on to : http://www.business-standard.com/india/news/ktm-readies-next-gen-bikesbajaj/473627/)
STAR EXPANDS OK BRAND WITH A NEW MOVIE CHANNEL
NEW DELHI: India’s largest broadcaster, STAR India, has extended the newly launched ‘Ok’ brand beyond the Hindi general entertainment segment (GEC) with the launch of a new movie channel, ‘Movies Ok’. As with ‘Life Ok’, conceived and developed to compete with market leader STAR Plus, Movies Ok will slug it out for eyeballs with STAR Gold in the Hindi movie category. Sanjay Gupta, chief operating officer, STAR India, said, “This is our first attempt to extend the Ok brand beyond the Hindi GEC space. The tagline is jo apne paas hai wohi khaas hai (the ones who are close are special) and this mantra would be visible in the content shown across the channels with the ‘Ok’ branding.” Movies Ok would screen movies for hardcore family consumption. Movies Ok will compete for viewership in a segment that has close to 12 channels, including SET Max, Zee Cinema, UTV Movies, UTV Action and Zee Premier. Hemal Jhaveri, general manager, Movies Ok, said, “We have the investments in place to introduce multiple channels. We have a library of around 1,200 movies, which would give us the room to differentiate the content we offer on both our movie channels.” (For details log on to : http://www.business-standard.com/india/news/star-expands-ok-branda-new-movie-channel/473629/)
CARBORUNDUM UNIVERSAL LINES UP RS 200-CRORE CAPEX
CHENNAI: Carborundum Universal Ltd plans Rs 200-crore capex in 2012-13. For its domestic business, the company has lined up capacity expansion plans in abrasive thin wheels, converted coated products, sintered aluminia grains, alumina zirconia grains and lined equipment fabrication facility. The company is also pursuing opportunities to set up a greenfieldproject to meet the additional requirement of fired and castable refractories. For its overseas business, expansion of capacity in Russiaand South Africawill be completed this year, a release from the company said. For the quarter ended March 31, the company has posted a net profit of Rs 54 crore, against Rs 49 crore in the comparable quarter previous year. Turnover for the quarter under consideration stands at Rs 523 crore (Rs 434 crore). (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-corporate/article3391449.ece)
AMERICAN TOURISTER EYES RS 650 CRORE SALES, BETS BIG ON NON-TRAVEL SEGMENT
MUMBAI: The US-based family travel solutions provider American Tourister, from the Samsonite Group, is looking at sales growth of 60 per cent and the revenue touching around Rs 750 crore this year, buoyed by the rising demand in the non-travel segment. “The brand should be able to close between Rs 650 and 750 crore this year. Last year, we were about Rs 500 crore. Non-travel segment should contribute about 35 per cent of this turnover,” Samsonite group South Asiamarketing director Sudip Ghose told reporters here. The company labels non-travel category as those travel bags being used by backpackers and all those travel gears such as duffel bags, adventure gears, laptop bags, pouches among others, except suitcases. The company is betting big on the non-travel gear segment and is eyeing to double the revenue to Rs 100 crore this year from its backpack category, he said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/cons-products/durables/american-tourister-eyes-rs-650-crore-sales-bets-big-on-non-travel-segment/articleshow/13019956.cms)
FORCE MOTORS IN TALKS WITH GUJARAT GOVT TO SET UP FACILITY
MUMBAI: Pune-based Force Motors Ltd is in talks with the Gujaratgovernment to set up a facility to expand its commercial vehicle business. “We are awaiting approval from the board regarding the new unit in Gujarat,” managing director Prasan Firodia said in a telephone interview. “Once that is done, we shall make an announcement.” The maker of Tempo, Trax and Traveller brands will firm up plans for the Gujaratfactory in another two months, Firodia said, but declined to provide any investment details. Force plans to invest around Rs.2,000 crore into the project for which the company will acquire 700-800 acres, either in Sanand or Halol, a Gujaratgovernment official said, requesting anonymity. Force manufactures its commercial vehicles at a Pithampur facility in Madhya Pradesh. The factory operates at 65% of its full capacity. However, with new products being added to the range, the capacity will be utilized very soon, said Firodia. (For details log on to : http://www.livemint.com/2012/05/06211956/Force-Motors-in-talks-with-Guj.html?atype=tp)
GOVT WANTS BETTER FIX ON UMPP COAL
NEW DELHI: With excess coal becoming an issue of contention in the Sasan ultra mega power project (UMPP) of Reliance Power in Madhya Pradesh, the government has decided to be cautious and allot coal blocks only after a higher degree of certainty about reserves. The ministry of power is likely to ask government-owned Power Finance Corporation (PFC) for exploration through an outside agency and be prepared with an indicative geological reserve figure at least a month in advance before seeking final bids for UMPPs. The proposal to involve PFC came up after CMPDIL and MECL, the two agencies that currently conduct preliminary exploration, said they wouldn’t like to do so any more, since their resources were tied up for the next few years. In a recent ministry meeting, PFC was asked to apply for a prospecting licence within three weeks of allocation of coal blocks to the special purpose vehicles created by the company for implementing the projects. Since that could lead to a jurisdiction battle between the ministries of coal and power and delay the Chhattisgarh and Odisha UMPPs, a senior official in the power ministry said a final view was yet to be taken. (For details log on to : http://www.business-standard.com/india/news/govt-wants-better-fixumpp-coal/473618/)
45 INDIAN CEOS HEAD TO PAKISTAN TO PITCH FOR FREE TRADE AND INVESTMENT
NEW DELHI: Weeks after Pakistanopened up a long-standing barrier to Indian imports by moving to a negative list of trade items from a restrictive positive list, 45 Indian CEOs are headed to Lahorefor a two-day conference with the who’s who of the Pakistani establishment including prime minister Yousuf Raza Gilani. “We must expand on the positive sentiment between the two countries in recent months to boost trade and investments,” said Confederation of Indian Industry (CII) president and Godrej group chairman Adi Godrej, who leads the Indian contingent for the Second India Pakistan Economic Conference. The conference, which begins on Monday, is being organised under the aegis of Aman Ki Asha, an initiative of The Times of India and the Jang group of Pakistan. “We are striving for a meeting of minds between the two countries’ industrialists and decision makers,” said Godrej, adding that Indian CEOs have one-on-one meetings scheduled with the Pak PM, foreign and finance ministers as well as opposition leaders like former cricketer Imran Khan. Godrej told ET that he firmly believes that stronger economic ties between Indiaand Pakistancan bring lasting peace to the region. (For details log on to : http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/aman-ki-asha-45-indian-ceos-head-to-pakistan-to-pitch-for-free-trade-and-investment/articleshow/13026974.cms)
TELECOM CHIEFS CONTEST RE-AUCTION CALCULATION
NEW DELHI: GSM telecom service providers, who are meeting Communications Minister Kapil Sibal on Tuesday, will question three key recommendations of the Telecom Regulatory Authority of India (Trai) on the re-auction of 2G (second-generation) spectrum. These would include the assumption that the base price for 1,800 MHz spectrum must be 80 per cent of the final discovered price. They will also question the regulator’s calculation of the reserve price, based on the final discovered price of 3G (third-generation) spectrum auctioned two years earlier. Instead, operators will push for alternatives, such as basing the reserve price on the auction price for Broadband Wireless Access (BWA) spectrum, which is much lower and also of high value, since it can support 4G (fourth-generation) services. They say while 3G operators paid Rs 3,350 crore for 1 MHz of spectrum, BWA operators forked out only Rs 642 crore for the same amount. Two, they will ask for reduction of the reserve price so that it is between 15 to 20 per cent of the final price as discovered by the regulator, based on previous auctions. Third, suggest an alternative auction methodology, based on the highest revenue share offered by an operator. (For details log on to : http://www.business-standard.com/india/news/telecom-chiefs-contest-re-auction-calculation/473635/)
IT’S ADVANTAGE TOKYO IN INDIA-JAPAN ECONOMIC PACT
NEW DELHI: Since the India-Japan Comprehensive Economic Partnership Agreement (Cepa) took effect last August, trade between the two countries has grown a bit faster compared with the traditional growth. However, this is in favour of Japan. Though it is too early to arrive at definite conclusions, the trend up to March signals Tokyosuccessfully using tariff cuts to penetrate deeper into the Indian market for goods. India-Japan merchandise trade grew 38% since August last year. Japanese exports to Indiashowed a record jump of 40.96% in 2011-12, while its imports from Indiamanaged to grow only 18.39%. This contrasts with the fact that Indian exports to Japanin 2010-11 had grown 43% and imports had grown only 28%. So, Cepa seems to have just reversed the trend within a short while. During 2009-10, the growth in Indian exports to Japanwas 19.9% and imports showed negative growth (-14.6%). (For details log on to : http://www.financialexpress.com/news/its-advantage-tokyo-in-indiajapan-economic-pact/946186/)
ADANI GROUP TO SOON DECIDE ON CONSULTANTS FOR RESTRUCTURING
MUMBAI: The over Rs 32,000-crore Adani Group will soon pick consultants for streamlining businesses to help it turn into a “global integrated company”. Consultants KPMG, McKinsey & Co, Booz and Co, Accenture and PricewaterhouseCoopers have started exploratory analysis of the group’s businesses and practices to suggest ways to optimise performance. Sources close to the development said Adani is likely to finalise consultants and give mandates for different business verticals and operations over the next one month. “We want to become a global company. For that we must make sure that our processes are flexible, intelligent, efficient and scalable,” said Ravi Sharma, Adani Power’s CEO who is spearheading the restructuring. Sharma said, “We have started an exercise at the group level for business process transformation with the aim to build world-class processes.” (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/services/consultancy-/-audit/adani-group-to-soon-decide-on-consultants-for-restructuring/articleshow/13028817.cms)
TURF WAR BETWEEN COAL, PETROLEUM MINISTRIES, A STUMBLING BLOCK FOR METHANE EXTRACTION
KOLKATA: Everyone knows that coal methane can be a viable energy source in a gas-starved Eastern Region. The region arguably pays highest prices for gas in the country indicating demands far outstripping a few thousand cubic metres of coal-bed-methane supplies. But, that doesn’t make much difference to the officialdom in the Union Government. For more than a year now a turf battle between coal and petroleum ministries is blocking way for private investment in harnessing nearly 25 billion cubic metre of methane from gassy mines. And, even if they arrive at a ‘consensus’ as in January 24 to pave way for such investments “within a month”, Babus simply forget to live up to their promises. In April last year, Coal Indiadecided to invite private participation for extraction of methane from five extremely gassy underground mines in Jharkhand. According to the regulations set by the Directorate General of Mine Safety, high concentration of gas made underground mining “unsafe” in the identified assets. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-corporate/article3391452.ece)
IRAQ TOPPLES IRAN, BECOMES 2ND LARGEST CRUDE OIL SUPPLIER TO INDIA
NEW DELHI: The pressure of US sanctions on Iranis evident with Indian refiners shifting attention to other crude oil producing nations. Though Indiahas been maintaining that it is not reducing imports from Iran, the import numbers for 2011-12 tell a different story. Supplies from Iraqand Kuwaithave seen a significant increase, even as Saudi Arabiamaintained its position as the largest supplier. Till now, Iranwas India’s second-biggest crude oil supplier after Saudi Arabia, meeting about 12 per cent of the country’s needs, but the position has been taken over by Iraq. Domestic refiners such as Hindustan Petroleum Corporation, Mangalore Refinery and Petrochemicals Ltd and Essar Oil are expected to cut sourcing from Iranby at least 10 per cent. Bharat Petroleum Corporation has already stopped sourcing. (For details log on to: http://www.thehindubusinessline.com/todays-paper/article3391474.ece)
NO BIG LOSS FOR RIL ON D6 ORDER, SAYS GOVT
NEW DELHI: The oil ministry’s move to disallow Reliance Industries (RIL) recovery of $1 billion cost at its KG D6 block until gas production improves, is unlikely to hurt the company significantly. For the government, the move at this juncture would mean an immediate revenue flow of $100 million as its share of profits from the venture. The government wants RIL not to recover the $1 billion cost in the two years when gas production fell below target (2010-11 and 2011-12) and add the disallowed cost to the profits of those years. Under the production sharing contract (PSC), profits are required to be shared with the government according to a formula. So, even after disallowing the cost, Reliance would still get 90% of such incremental profit ($900 million) as its share of profit petroleum without any delay. The remaining $100 million would, of course, go to the government cumulatively for the two years, said a government official, quoting the PSC’s terms. (For details log on to : http://www.financialexpress.com/news/no-big-loss-for-ril-on-d6-order-says-govt/946314/)
MINISTRIES FOR FREEZING COAL INDIA COMMITMENTS TO POWER PROJECTS
MUMBAI: Amid the growing restriction over the availability of coal in the country, the ministries of coal and power have arrived at a consensus to freeze the capacity and list of power projects linked to Coal India Ltd (CIL) companies. The power ministry has identified projects of 127,448 Mw capacity that would need 557 million tonnes of coal for the signing of fuel supply agreements (FSA) with CIL and its subsidiaries. Another 18,271 Mw, needing 122 mt of coal was commissioned between then and March 2012. The rest would be commissioned by 2014-15. The ministry has prepared a list of these projects, based on their preparedness, including placement of orders for machinery and equipment and start of construction. (For details log on to : http://www.business-standard.com/india/news/ministries-for-freezing-coal-india-commitments-to-power-projects/473634/)
IRAN EMERGES AS MAJOR OIL MEAL EXPORT DESTINATION FOR INDIA
MUMBAI/AHMEDABAD: The sanction-stricken Iranis silently emerging as India’s biggest destination for oil meal exports. As per the latest figures issued by the Solvent Extractors’ Association (SEA) of India, Iranimported 97,904 tonnes of oil meals in April 2012 compared to 50,022 tonnes in April 2011, up by 95.72 per cent making it the largest importer of oil meals from Indiaduring the month. Industry insiders attribute this sharp growth in Iran’s oil meal imports from Indiaas a fall out of the trade embargo put on the country by Europe and the USfor its alleged nuclear proliferation programme. “There has been a trade embargo on Iranfrom Europeand US. Turkeytoo has banned its trade with Iran. Latin America, which was a major supplier of oil meals to Iran, is faced with drought. So, now Iranhas to depend largely on Indian imports of animal feed,” said Biren Vakil, an industry expert in Ahmedabad. (For details log on to : http://www.business-standard.com/india/news/iran-emerges-as-major-oil-meal-export-destination-for-india/473572/)
INDIA INC HOLDS ON TO ITS CASH
MUMBAI: “Cash is king” is an old expression and Indian companies seem to be following it to a tee. Sample this: 10 Indian companies are holding as much as Rs 2.34 lakh crore. The companies include Reliance Industries (RIL), Infosys, Coal India, Cairn Indiaand ONGC, among others. Almost one-third the amount, or Rs 70,252 crore, is held by just one company — RIL. The amount is 19.5 per cent of the company’s annual revenue. Infosys’ Rs 20,591-crore (around $4-billion) cash represents 61 per cent of the company’s sales for the year. Oil Indiawas sitting on Rs 12,589 crore of cash and cash equivalent in September itself. The number at 134.9 per cent exceeded its sales substantially. No wonder, analysts are beginning to ask questions. While CLSA has written an open letter to Infosys CEO S D Shibulal, others are asking companies like RIL and ONGC how they wish to deploy their cash. (For details log on to : http://www.business-standard.com/india/news/india-inc-holdsto-its-cash/473620/)
VECTRA’S ABSENCE MAY HIT OIL PRODUCERS
MUMBAI: Home ministry has withdrawn security clearance to Global Vectra Helicorp Ltd, a provider of charter services. It may be called a collateral damage. After hitting the country’s defence establishment, Vectra Group may have an impact on the oil and gas industry. The ministry of home affairs (MHA)’s order to withdraw security clearance to Vectra Group’s aviation subsidiary, Global Vectra Helicorp Ltd, may impact the offshore operations of state-run Oil and Natural Gas Corporation (ONGC), Gujarat State Petroleum Corporation (GSPC), Reliance Industries (RIL) and British Gas (BG). The companies are now looking at optimising operations to avoid impact to critical operations. “The move may impact our operations. We have our contingency plans in place, wherein we may seek help from our other service providers to press for more machines in service,” said a senior ONGC official, on the condition of anonymity. (For details log on to : http://www.business-standard.com/india/news/vectras-absence-may-hit-oil-producers/473626/)
ABBOTT’S FDA MOVE COULD BLOCK INDIAN BIOSIMILAR DRUG COS
NEW DELHI: Innovator firm Abbott Labs has moved the US Food and Drug Administration (USFDA) and has urged it to block a lion’s share of the existing biologicals market from generic versions or biosimilars as they are commonly known. The move, if approved by the USFDA, could dampen the prospects of Indian drugmakers eyeing the USmarket. In its petition, Abbott has urged USFDA not to grant licences to any biosimilar drug firm, the applications for which were received before March 23, 2010. It was on this date that US president Barack Obama had signed a legislation authorising USFDA to approve biosimilars, thereby, creating a regulatory pathway for generic drugs — ‘highly similar’ to already licensed biological drugs. (For details log on to : http://www.financialexpress.com/news/abbotts-fda-move-could-block-indian-biosimilar-drug-cos/946198/)
MINISTERS’ PANEL MAY VET TRAI’S FM-III SUGGESTIONS
NEW DELHI: To steer clear of any future legal implications and ensure transparency, an empowered group of ministers (EGoM) may soon take up the issues of additional spectrum availability and additional FM radio channels in existing as well as new towns, identified for the third-phase of FM radio expansion (FM-III). The information & broadcasting (I&B) ministry has sought the setting up of a separate EGoM for FM-III to consider the recent recommendations issued by the Telecom Regulatory Authority of India (Trai) which have left private FM broadcasters divided. This comes at a time when issues related to 2G spectrum in the telecom sector are already before an EGoM, headed by the finance minister. (For details log on to : http://www.financialexpress.com/news/ministers-panel-may-vet-trais-fmiii-suggestions/946192/)
AUCTION OVERSEER SLAMS TRAI OVER 2G DIRECTIVES
NEW DELHI: After the mobile operators, a key government official appointed for overseeing the forthcoming 2G spectrum auction has trashed the recommendations of the Telecom Regulatory Authority of India (Trai). JS Deepak, a joint secretary in the commerce ministry who has been given additional charge to oversee the auctions since he was the official who conducted the 3G auctions, in a 17-page note that has been reviewed by FE, has faulted Trai’s recommendations mainly on three grounds: 1) Mathematical errors in computing the reserve price of R18,110 crore for 5 MHz spectrum; 2) No provision to charge market-discovered price from dual-technology operators who were also given spectrum at R1,658 crore in 2007-08; and 3) Liberalisation of spectrum without mentioning that if this applies to 3G and broadband wireless access (BWA) spectrum holders, it would upset the level playing field and lead to loss of revenue to the government. (For details log on to: http://www.financialexpress.com/news/auction-overseer-slams-trai-over-2g-directives/946318/)
UP TO 53% HIKE IN MSPs COULD FUEL INFLATION
NEW DELHI: The Commission For Agricultural Costs and Prices (CACP) has recommended a rise in the benchmark state-fixed prices of summer-sown crops in the range of 15.7% to 53% for the year starting July, reinforcing fears of a spurt in food inflation, potentially leading to a more generalised rise in inflation. This could have serious implications for the Reserve Bank of India’s (RBI) monetary policy. The central bank had spoken of a persistent upside risk to inflation while it grudgingly opted for easing action last month and warned about limited room for further easing. During the last Five-year Plan through the 2011-12 fiscal, the government had raised the minimum support price (MSP) of crops in the range of 29% to 107%, and while this has boosted rural income and purchasing power, the higher MSPs also contributed to inflation. (For details log on to : http://www.financialexpress.com/news/up-to-53-hike-in-msps-could-fuel-inflation/946310/)
GOVT POLICIES NO BIG PUMP-UP FOR OIL REFINERS
NEW DELHI/LONDON: Refining hub! Sounds good. But only on paper, says the domestic oil refinery and retailing industry. The lack of a regulatory level playing field at home means the industry’s options are constrained, and not necessarily driven by profits or choice. Indiais well positioned to be such a hub: Refining capacity is close to 213 million tonnes and by March 2017, it should exceed 310 mt, with modern refiners being able to churn out products that match the highest international standards. In 2011-12, the country earned $58.23 billion from petroleum product exports, up from $43.34 billion in 2010-11, overtaking the equivalent figure for gem and jewellery exports. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-economy/article3391458.ece)
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