Mumbai: India’s largest tractor and utility vehicle maker, Mahindra & Mahindra , will invest R2,500 crore in next three years until fiscal 2015 in group companies and for acquisitions, Pawan Goenka, president (automotive and farm equipment) said a day after the company announced its financial results.
“The money will be used for acquisitions and equity investment in group companies,” Goenka said. “But, having said that, if we see that there is an interesting acquisition target which exceeds this budget, I’m sure we can raise the funds for that.” In the past few years, the $15.4 billion group has grown by purchasing companies both in India and overseas. In 2011, it purchased the struggling South Korean car maker Ssangyong Motors for approximately R2,500 crore and gobbled up Satyam Computers and two wheeler maker Kinetic Motors.
M&As IN VOGUE DESPITE REGULATORY HURDLES: STUDY
MUMBAI: Mergers and acquisitions continue to be a favourite among companies for geographical expansion and to strengthen their services or products within the domestic market despite regulatory hurdles, according to a report ‘New Dimensions in M&A Regulatory Framework’ released by M&A consultancy firm Grant Thornton along with Assocham. “M&A activity driven by growth hungry companies in a tepid environment, ageing western population and strong access to funding in organic growth by far is the fastest way of expansion with companies looking to access new geographies and build scale,” says Munesh Khanna, senior partner at Grant Thornton India Advisory Pvt Ltd. India and China are the only two emerging nations that serious plans to expand overseas. Today, Indian promoters have acquisition on their agenda because they are focusing on driving value. (For details log on to : http://www.financialexpress.com/news/m&as-in-vogue-despite-regulatory-hurdles-study/956528/)
PRIVATE EQUITIES EYE FOOD AND BEVERAGE, HOSPITALITY SECTORS
MUMBAI: Small retail format stores, hospitality and food and beverage sectors are to be the new hotspots attracting private equity money as fund managers bet on the domestic consumption story, said a Deloitte-Assocham report. “Our discussions with investors indicate an appetite for directing monies into companies that would benefit from the strength of domestic consumption in India. Potential beneficiary segments being small retail format stores, hospitality and food and beverage,” the report said. In 2011, private equity firms closed 531 deals, 40% more than it did in 2010, ranking Indiaas the fastest-growing market in Asia. Industry believes that for private equity to realise its full potential, issues like uncertain tax regime and limited opportunities in regulated sectors like multi-brand retail need to be addressed. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/finance/pes-eye-food-and-beverage-hospitality-sectors/articleshow/13694965.cms)
RELIANCE POWER, SHELL TO BUILD LNG TERMINAL
NEW DELHI: A consortium of Anil Ambani-controlled Reliance Power and energy major Shell will build a terminal off the Andhra Pradesh coast to import 5 million tonne a year of liquefied natural gas (LNG) from 2014. The consortium will build a floating terminal, which can be set up quickly. It will be located near RIL’s D-6 block. A sharp fall in output from the block has hit several power plants in the region. The terminal will help customers on the east coast who built plants in anticipation of gas supply from the RIL block. “We are pleased to have reached an agreement with Reliance and KakinadaSeaPortsto implement the LNG terminal in AP,” Royal Dutch Shell global head of LNG De la Rey Venter said in a statement. Several power projects in the region with a combined capacity of 8,000 MW urgently need natural gas. These include Reliance Power’s 2,400 MW Samalkot unit, and others being built by GMR Energy, GVK Power and Lanco Infratech. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/reliance-power-shell-to-build-lng-terminal/articleshow/13694693.cms)
ONGC VIDESH LTD MULLS OPTIONS OF STAYING PUT IN CUBA
NEW DELHI: ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), is evaluating options of staying put in Cubaafter its Spanish partner Repsol YPF failed to find an oil and gas in an offshore well. “There were two prospects identified for drilling. It is true that one has turned out to be dry. The partners will now have to evaluate if the second prospect has to be drilled,” a company official said. Repsol, OVL and Statoil of Norway – the third partner in a grouping of six deepsea exploration block in Cuba, would meet shortly to evaluate results of the Jaguey-1 exploration well. “If Repsol decides to exit from the block, OVL management will take a call separately if the company needs to stay put considering we have other deepsea block in Cuba,” he said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/ongc-videsh-ltd-mulls-options-of-staying-put-in-cuba/articleshow/13692545.cms)
BHARAT FORGE’S DERISKING PLAN PAYING OFF
MUMBAI: Four years ago, auto-parts maker Bharat Forge’s chairman Baba Kalyani was brooding over the company’s future as the European debt crisis shrank his order book and some carmakers cancelled contracts. To add to his woes, his plants in India, Europe and the USwere running at half their capacity. The strategy to stay closer to customers, both in Europe and the US, had turned into a dilemma. But on Monday, Kalyani, 63, looked confident as he announced fiscal 2012 results backed by a transformation of his company from an auto-component supplier to diesel engines maker in 2008 to a diversified supplier catering to sectors like power and oil & gas exploration. Bharat Forge’s business is derisked from cyclicality and does not depend on a single component. The non-automotive business contributes 39% to the total revenues of R6,368 crore, reaping benefits of $100 million it invested over four years. The new business will be the key growth driver and 47% of the revenues will come from exports of primarily non-automotive products. (For details log on to : http://www.financialexpress.com/news/bharat-forges-derisking-plan-paying-off/956416/0)
ONGC TARGETS SIX-FOLD RISE IN FOREIGN PRODUCTION
MUMBAI: State-run Oil and Natural Gas Corporation (ONGC), through the Perspective Plan 2030, has set ambitious long-term targets. In 18 years, ONGC would seek to double its exploration and production growth, triple its revenues and earnings before interest, taxes, depreciation, and amortisation, and quadruple its market capital. It also plans a six-fold rise in international exploration and production (E&P).To achieve this, ONGC plans to invest Rs 11,00,000 crore by 2030. “An enabling factor to achieve these goals would be focus on foreign E&P, with a target of 60 million tonnes of oil equivalent (mtoe) a year, against the current nine mtoe. Other focus areas are alliances for developing new types of hydrocarbon resources and exploration for over 450 mtoe of yet-to-find domestic hydrocarbons,” Chairman and Managing Director Sudhir Vasudeva had said at a meeting of analysts earlier this week. (For details log on to : http://www.business-standard.com/india/news/ongc-targets-six-fold-rise-in-foreign-production/475997/)
GMR INFRA PLANS TO MONETISE OLD ROAD PROJECTS TO FUND EXPANSION
BANGALORE: GMR Infrastructure Ltd plans to monetise few old road projects and focus more on big highway projects this fiscal. Mr Arun Kumar Sharma, CEO, GMR Highways, said “Going forward, we are planning to explore big highway projects as yield is better. We are looking at monetising few old road projects to fund our expansion.” “We are evaluating them and we are not in hurry to do it,” he added. The company’s highways business portfolio consists of six operating assets (three toll and three annuity) with total of 1,684 lane km , three projects (two toll and one annuity) under construction with a total of 1,294 lane km and another toll project of 3,330 lane km under development for which financial closure was achieved on May 24. The company has won a bid for six laning of 555.5-km Kishangarh-Ahmedabad highway project. The project achieved financial closure on May 24. The operating annuity projects continue to register healthy revenue and profit. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-corporate/article3477808.ece)
FIPB STARTS CLEARING INVESTMENTS IN DRUG SECTOR AGAIN
NEW DELHI: The Foreign Investment Promotion Board (FIPB) has resumed clearing investment proposals in Indian drug companies, a move that will revive deal flow in the Rs 62,000 crore domestic pharma sector. The board has cleared four proposals of foreign financial investors, but again deferred a decision on stake buys by multinational drug companies, extending uncertainty over new rules to check rising cases of promoters of domestic drug companies selling out to foreign players. At its meeting on May 9, the FIPB cleared Plethico Pharmaceuticals’ proposal to raise Rs 490 crore by selling 22% stake through the foreign currency convertible bonds (FCCB) route and Ankur Drugs’ plans to raise Rs 40 crore by selling shares to overseas Indians. The board had earlier deferred a decision on both saying that the new rules on foreign direct investment in the sector were yet to be finalised. The government also allowed foreign investors to pick additional stake in Sun Pharma Advanced Research, the R&D arm of Sun Pharmaceutical which is raising about Rs 200 crore through a rights issue. Clearance was also given to Mauritius-based Mozart Ltd’s proposal to raise Rs 300 crore by inducting another foreign investor in the company. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/healthcare/biotech/pharmaceuticals/fipb-starts-clearing-investments-in-drug-sector-again/articleshow/13695862.cms)
AMBANI OF THE GULF BETS BIG ON INDIAN MARKET
NEW DELHI: With a house on the top floor of Dubai’s Burj Khalifa, the world’s tallest building, Bahrain-based India-born billionaire Ravi Pillai is planning big-buck investments across the construction, hospitality, real estate and healthcare sectors in India. Often referred to as the ‘Ambani of the Gulf’, his investment partners and he are looking at putting serious money in sectors that interest him. In what could be a coincidence, the group is in talks with Reliance Industries for taking up construction work at a petrochemical plant in Jamnagar, Pillai said. “If all the resources are utilised properly, Indiacan be the number one country in the world. To develop any country, there is a need for good leadership and good team work,” Pillai, chairman and CEO of the RP Group, said in a chat with Business Standard today. He is part of a visiting business delegation from Bahrain. The RP Group has business interests in construction, healthcare, travel and tourism and education sectors, with a annual turnover of $3 billion and a workforce of 65,000 people. Pillai, among the biggest employers for Indians in the Gulf, said, “Investors want guaranteed results.” He added, “I can bring up to $5 billion investments to India, along with my investment partners, who are keen on this market.” (For details log on to : http://www.business-standard.com/india/news/ambanithe-gulf-bets-bigindian-market/475988/)
GDP GROWTH SHOCKS AT 5.3 PER CENT
NEW DELHI: In what came as a shock to even the most pessimistic, India’s economy expanded at just 5.3% during the last quarter of 2011-12, the slowest pace since the corresponding quarter of 2002-03, as manufacturing contracted and agricultural growth plateaued. With a decline in growth for the fourth straight quarter, GDP growth for the full year was dragged down to a nine-year low of 6.5%. The dismal economic data gave further credence to talk of stagflation and increased the threat to the country’s investment-grade sovereign rating. A continuing sluggishness in consumption demand and a decline in the investment rate to below 30% of GDP underscored the urgency of comprehensive reforms to pep up growth, with analysts calling it a make-or-break situation for the economy. Policymakers too expressed dismay at the poor data released by the Central Statistics Office on Thursday, but sought to find comfort from certain positives — a slight turnaround in the investment growth rate and a heartening 4.3% growth in mining output in Q4, bucking the trend of negative growth rates reported in the previous three quarters. (For details log on to : http://www.financialexpress.com/news/gdp-growth-shocks-at-5.3/956519/)
IRAN REMAINS INDIA’S IMPORTANT SOURCE OF CRUDE OIL, SAYS KRISHNA
NEW DELHI: In the backdrop of USpressure to reduce oil imports from Iran, Indiaon Thursday said unilateral sanctions should not impact its “legitimate trade interests”with Iran. After talks with visiting Iranian foreign minister Ali Akbar Salehi, external affairs minister S M Krishna made it clear that Iranremained India’s important source for oil given the growing domestic demand. Asked about the USsanctions on Iranand its affect on trade, Krishna said Indiahas always abided by the United Nations Security Council resolutions on the Iranissue. “As far as other sanctions, those decided unilaterally or regionally, we are aware of such measures. In a globalised world, these actions can have an impact on the markets,” he said. (For details log on to : http://www.financialexpress.com/news/iran-remains-indias-important-source-of-crude-oil-says-krishna/956512/)
CVC CALLS FOR CBI PROBE INTO MISUSE OF COAL BLOCKS
NEW DELHI: The Central Vigilance Commission (CVC) has recommended a Central Bureau of Investigation (CBI) probe into the misuse of coal blocks allocated to some companies, government sources said. Details of the CBI probe were sketchy. A top government source said the agency would probe a complaint against four or five companies in Jharkhand and Chhattisgarh that allegedly profiteered by selling coal in the open market from blocks meant for captive use. Another source, however, gave a conflicting version and said the CBI would probe the process of allocation of blocks between 2006 and 2009. BJP members Prakash Javadekar and Hansraj Ahir had earlier sought a probe into coal blocks allotted between 2006 and 2009 to 141 companies. The spokesperson for the CBI did not respond to phone calls and text messages from ET. (For details log on to : http://economictimes.indiatimes.com/news/politics/nation/cvc-calls-for-cbi-probe-into-misuse-of-coal-blocks/articleshow/13694608.cms)
CABINET CLEARS NEW TELECOM POLICY
NEW DELHI: The Union Cabinet on Thursday approved the National Telecom Policy 2012 that aims to do away with roaming charges, introduce a pan-India mobile permit that will enable mobile phone firms to offer all communication services, allow operators to share and trade spectrum and facilitate consolidation in the sector. Telecom Minister Kapil Sibal said the Cabinet had made five changes to the new rules he had unveiled in October last year before clearing it. The key change is that the new policy states that spectrum will refarmed, a move that has been strongly opposed by incumbent GSM operators. But the policy does not spell out details on refarming, which involves redistribution of spectrum in the 900 MHz band largely held by incumbents, and substituting it with frequencies in the 1,800 MHz. “Conditions of refarming, issues on spectrum pricing, participation by operators in the auction and other issues will be decided by the Empowered Group of Ministers,” a top telecom ministry official said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/telecom/cabinet-clears-new-telecom-policy-no-timeframe-for-free-roaming-nationwide-mnp/articleshow/13695040.cms)
INDIA INC READY TO SHIFT TO OTHER SIDE OF THE DOT ON WWW
MUMBAI: By this time next year, internet domain names ending with .tata, .reliance, .bharti, .SBI or even .Mahindra will be a reality. The Internet Corporation for Assigned Names and Numbers (ICANN), which recently closed the process for its top-level domain programme, has received 28 applications from 15 Indian corporate houses. ICANN, which received about 2,000 applications from the world, said late last night that it would reveal the new internet addresses on June 13 and begin evaluating these names only by July 12. The evaluation process is expected to go on for six to seven months. While confirming the group had applied for a domain name, a Tata Sons spokesperson said, “We believe it can help increase global brand visibility, enhancement of both internal and external communication, as “.tata” can become the focal point of the Tata Group’s internet presence for both internal and external users and it provides us with complete control over second-level registration and use.” Officials from the State Bank of Indiasaid they had applied for the .sbi and .statebank domain names. (For details log on to : http://www.business-standard.com/india/news/india-inc-ready-to-shift-to-other-sidethe-dotwww/475967/)
CORE SECTORS GROW JUST 2.2 PER CENT IN APRIL
NEW DELHI: Reflecting the continued slowdown in economic activity, the eight infrastructure sectors grew a mere 2.2 per cent in April, against 4.2 per cent in the same month last year. A contraction in the output of all the three oil sector components—crude oil, natural gas and refining—along with that of fertilisers pulled down growth. The eight core sectors, which have a weightage of 37.9 per cent in the index of industrial production (IIP), include coal, electricity, cement and steel, all of which saw year-on-year expansion in April. The growth of the eight core sectors in April was the same as that in March, the figure for which was revised to 2.2 per cent from the earlier estimate of two per cent. For financial year 2011-12, growth was revised to 4.4 per cent, against the earlier figure of 4.3 per cent. In 2010-11, the eight core sector industries grew 6.6 per cent. Fertilisers, which account for 1.25 per cent of the IIP, registered contraction of 9.3 per cent in April, against 1.3 per cent contraction a year earlier. (For details log on to : http://www.business-standard.com/india/news/core-sectors-grow-just-22-in-april/475981/)
INDIA TO BE $2-TRILLION ECONOMY BY FY13-END?
NEW DELHI: Indiamay turn into a $2-trillion economy by the end of this financial year, provided the rupee remains below 50.79 against the dollar during this period. The government has projected India’s gross domestic product (GDP) for 2012-13 at Rs 101 lakh crore, against Rs 88 lakh crore in 2011-12—a growth of 14.7 per cent. In 2011-12, when the rupee stood at an average of 47.95 against the dollar, the size of the economy was $1.84 trillion at current prices (including indirect taxes). A growth of 14.7 per cent would mean the economy would expand to $2.11 trillion. The catch, however, is the rupee stood at 47.95 against the dollar in 2011-12, while its average exchange rate against the dollar so far this financial year is 53.24. At this rate, by the end of 2012-13, Indiawould be a $1.9-trillion economy. Any further depreciation in the rupee would further reduce the size of the economy in dollar terms. On Thursday, the rupee fell to a record low of 56.52 against the dollar. It has depreciated 14 per cent from its high this year, exerting pressure on the trade and current accounts. (For details log on to : http://www.business-standard.com/india/news/india-to-be-2-trn-economy-by-fy13-end/475983/)
INDUSTRY CAPTAINS DEMAND ECONOMIC REVIVAL PACKAGE
NEW DELHI/MUMBAI: Stung by the gross domestic product (GDP) growth slowing to a nine-year low of 6.5 per cent in 2011-12, industry on Thursday demanded a revival package to put the country’s economy back on higher growth path. “A comprehensive ‘Economic Revival Package’ has to be announced at the earliest,” Confederation of Indian Industry Director General Chandrajit Banerjee said. Demanding bold actions from the government and the Reserve Bank of India (RBI) exclusively aimed at salvaging the economy, the chamber expressed hope the political leadership, across party lines, would converge and their actions would be “swift and decisive”. Adi Godrej, chairman, Godrej Group, said the message was clear: “We have to work doubly hard to revive growth. For that a number of things have to be done: The reforms process should be given top priority, subsidies should be cut and foreign direct investment (FDI) in various sectors should be allowed. Above all, politics must not be allowed to come in the way of all this,” he added. (For details log on to : http://www.business-standard.com/india/news/industry-captains-demand-economic-revival-package/475982/
MILLIONAIRE HOUSEHOLDS IN INDIA SWELL AMID SLOWDOWN
MUMBAI: Even as India’s once red-hot economy is showing signs of a slowdown, the number of millionaire households in Asia’s third-largest economy is growing at a rapid pace. The number of millionaire households in Indiajumped nearly 21 per cent to 162,000 in 2011 from 134,000 in 2010, according to The Boston Consulting Group’s (BCG) global wealth report. Ultra-high-net-worth households, those having more than $100 million (Rs 560 crore) in private financial wealth, in Indiaincreased 15.35 per cent to 278 in 2011 from 241 in 2010. The sharp increase in millionaire households in Indiacomes at a time when the economy’s growth is faltering. The country’s gross domestic product (GDP) grew 5.3 per cent in the January – March quarter from a year-ago period, lowest in the last nine years. (For details log on to : http://www.business-standard.com/india/news/millionaire-households-in-india-swell-amid-slowdown/475978/)
TELCOS OPPOSE DOT GOING BACK TO TRAI FOR 10-YR SPECTRUM VALIDITY
MUMBAI: Newer telecom operators and dual technology entities are opposing the department of telecommunications (DoT)’s decision to ask the Telecom Regulatory Authority of India (Trai) to give its view on whether the price of spectrum being offered in the coming 2G auction should be valid for 10 years instead of 20 years. Executives in the Association of Unified Telecom Service Providers of India (AUSPI), which represents dual technology operators offering both CDMA and GSM modes, say such a move will almost bar those wishing to enter the business and make the auction unviable. “Bharti Airtel took six to seven years to break even and it was operating in a much less competitive market. Today, it takes an operator eight to nine years to break even. But you are saying that now you have done the hard work, you have to pay a higher amount for spectrum. No one will come,” said a senior executive of AUSPI. While newer telecom operators refused to comment on the issue officially , executives say they this will jeopardise fresh investment in the sector. “No new operator would like to invest so much money for spectrum only for a 10-year period. It is not a viable preposition.Who will give us money?” says a top executive of a new operator, which has been thinking of bidding in the 2G auction. (For details log on to : http://www.business-standard.com/india/news/telcos-oppose-dot-going-back-to-trai-for-10-yr-spectrum-validity/475989/)
AFTER GO, NO-GO CLASSIFICATION, INVIOLATE AREA HAUNTS INDUSTRY
NEW DELHI: After a long hiatus, the ministry of environment and forests (MoEF) is back in action, taking strong measures to protect its stance on various issues pertaining to environment and forest clearances. It has decided to introduce a new categorisation declaring a portion of mineral bearing areas as ‘inviolate’ for undertaking any mining activity. This will make the reprieve to firms from the suspension of the go-no-go norm temporary. The ministry has finalised the modalities to launch the new categorisation that is once again expected to impact a series of existing and forthcoming projects of the power, steel and cement sectors. “We have defined the parameters for the inviolate areas based on the protected area status, crop diversity, biodiversity richness and the number of species there. We have developed the criteria for the inviolate areas as the group of ministers (GoM) on coal had asked us to,” said a senior ministry official. (For details log on to: http://www.financialexpress.com/news/after-go-nogo-classification-inviolate-area-haunts-industry/956283/)
COST AUDIT REPORTS TO COME UNDER THE AMBIT OF XBRL
NEW DELHI: After successfully implementing the new financial reporting format for submitting balance sheets across companies last year, the government has now, issued a circular to bring in cost audit reports of companies under the ambit of XBRL to bring in greater transparency and accurate data handling into internal processes. According to the circular issued this month by the Ministry of Corporate Affairs (MCA), all cost auditors and companies will have to file cost audit and compliance reports for 2011-12 onwards using the eXtensible Business Reporting Language (XBRL) format starting 30 June 2012. XBRL is a global standard for easy exchange of business information between different government departments and regulators under which financials are filed in a XBRL syntax as an .xml file instead of uploading the records in .doc or pdf format. (For details log on to : http://economictimes.indiatimes.com/news/economy/finance/cost-audit-reports-to-come-under-the-ambit-of-xbrl/articleshow/13686803.cms)
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