The boards of Satyam Computer Services Ltd and Tech Mahindra Ltd, IT services providers of the Mahindra group, approved the merger of two companies, according to TV reports. The exchange ratio for the merger was pegged at 2:17 ratio i.e. 2 shares of Tech Mahindra will be given for 17 shares of Mahindra Satyam. After merger 204 million equities will be transferred to trust.
Shareholders will get one share of Tech Mahindra for 8.5 shares of Satyam, the companies said.
The merger between technology outsourcing firms Mahindra Satyam and Tech Mahindra will lead to the constitution of a new management structure to guide the combined entity, two sources close to the development told ET.
CP Gurnani, who has been credited largely for Satyam’s profitability post the takeover by Tech Mahindra will continue to lead the amalgamated firm as its chief executive officer. Vineet Nayyar, who mentored the top leadership through transition as Chairman, will assume a non-executive role once the company stabilizes, absolving himself of overlooking the day to day operations of the company. Sanjay Anand, a Tech Mahindra strong hand will be chief financial officer.
Employees will be permitted to shift across verticals and services after a minimum service period of 18 to 24 months.
Mahindra Satyam is likely to hire a firm to advise the combined entity on operational issues and matters pertaining to strategy and human resources.
Shares of Tech Mahindra surged over 3% on Wednesday. At 10:15 a.m., shares of Tech Mahindra Ltd were trading 3.5% higher at Rs 671.05. The stock has hit a high of Rs 680 and a low of Rs 649.40.
Commenting on the merger Anand G Mahindra, Chairman, Tech Mahindra said “This merger will help propel the combined entity into the top tier of Indian software and services companies, achieving the group’s key objective of being in a leadership role in each of our focus business areas.”
Vineet Nayyar, Vice Chairman and Managing Director of Tech Mahindra and Chairman of Mahindra Satyam added “This merger is a key part of our strategy to deliver industry leading performance.”
Billionaire Anand Mahindra purchased Satyam in a government-sponsored sale in 2009 after the founder of the Hyderabad-based software services provider admitted to one of the largest accounting frauds in India.
Mahindra is looking to create a consolidated IT services powerhouse by merging Satyam and Tech Mahindra, which provide software services to clients mostly in the United States and Europe.
Key highlights of the merger
> On a pro-forma basis, the Mahindra Group will own 26.3% in the combined entity, British Telecom will own 12.8%, 10.4% will be held as treasury stock, 34.4% to be held by the public shareholders of Mahindra Satyam and the balance 16.1% will be held by the public shareholders of Tech Mahindra.
> Tech Mahindra will issue 10.34 crore new shares, thereby increasing its outstanding shares to 23.08 crore and its equity capital to Rs 230.8 crore.
> The merger will result in the creation of a new offshore services leader with revenues of approximately US$2.4bn in revenues, approximately 75,000+ work force and 350+ clients, across 54 countries.
UST GLOBAL BUYS ANDARE
CHENNAI: California-headquartered IT solutions provider UST Global has acquired Andare, a company engaged in developing mobile solutions for large enterprise CRM applications, for an undisclosed sum. The acquisition will help UST Global, which has a significant presence in India, offer its clients a range of new products that are based on Andare’s iDispatch platform. “With the acquisition of Andare’s iDispatch technology, we will be able to offer our clients unmatched enterprise mobile solutions to help enable major productivity gains in field service operations, and leverage the product platform to launch other enterprise mobile products” a release quoted Sajan Pillai, Chief Executive Officer, UST Global, as saying. (For details log on to : http://www.thehindu.com/todays-paper/tp-business/article3018541.ece)
IN INDIA, M&A IS NOT A FOCUS AREA: BRUNO LAFONT
Lafarge, the world’s largest building materials company, is saddled with high debt and is going through a global restructuring. Its production has been hit in Europeamidst the euro zone crisis, resulting in layoffs and shutdowns. For its Global Chairman and CEO, Bruno Lafont, these are challenging times in which he has initiated a global divestment exercise. But Indiais still a growth market, he told Business Standard. Edited excerpts: In the middle of a big slowdown in Europe and massive drop in production, how strategic are emerging markets like Indiabecoming? Very. We will continue to expand our business in India. In a period of 15 years, that we have been in India, we have an 8 million tonne capacity. In both our cement business and the concrete and aggregate business, we see huge potential in India. (For details log on to : http://www.business-standard.com/india/news/in-india-ma-is-notfocus-area-bruno-lafont/468507/)
AUSTRALIA‘S NEW MINING LAW TO IMPACT ACQUISITIONS
MUMBAI/AHMEDABAD/NEW DELHI: The Australian government’s move to impose 30 per cent tax on coal mining and iron ore profits might not affect any Indian investment in that country immediately, but could have an impact on Indian companies, including state-run mining major Coal India Limited (CIL), which are scouting for assets Down Under. The country passed a legislation for a mining tax called the mineral resource rent tax (MRRT) that will impact the prosperous mining sector of the country. But recent Indian investments like Adani group’s Linc Energy, Lanco Infratech’s acquisition of Griffin Coal and GVK’s Hancock might not bear the brunt of this tax for years to come. Gujarat NRE Coke, NMDC and Hindalco, too, have assets in the country. The law is meant to tax major mining companies and their profits, but many Indian coal mine investments are new and are making no profit. Also, many of these are in the capital expenditure and investment stage. (For details log on to : http://www.business-standard.com/india/news/australias-new-mining-law-to-impact-acquisitions/468489/)
EVERSTONE CAPITAL IN TALKS WITH 2 AUTO-PART COMPANIES FOR MINORITY STAKE
Mumbai: Private equity fund Everstone Capital is in talks with auto-component makers Supreme Treves and Craftsman Automation to purchase a minority stake, two people familiar with the development said. “The matter is between us and them (Everstone Capital) and I have nothing else to comment,” said KD Hiranandani, head of finance for Mumbai-based Supreme Treves, which makes interior components for cars. “They (Everstone Capital) have certainly visited our site but nothing has been finalised,” said K Gomatheswaran, whole time director at Craftsman Automation, a Coimbatore-based auto-component maker. (For details log on to : http://www.financialexpress.com/news/everstone-capital-in-talks-with-2-autopart-cos-for-minority-stake/926244/)
BIG CBS NETWORKS INKS DISTRIBUTION PACT WITH DISH TV
NEW DELHI: BIG CBS Networks, a joint venture of Reliance Broadcast Network and CBS Studios International, today said it has signed a distribution pact with direct-to- home company Dish TV for English general entertainment channel BIG CBS Prime. The move would expand reach of BIG CBS Prime to an audience base of 12.5 million subscribers, taking its total reach to 42.5 million homes, BIG CBS Networks said in a statement. The financial details, however, were not disclosed. “We are proud to offer BIG CBS Prime to our 12.5 million subscribers…we hope that our alliance will mutually benefit each other,” Dish TV Chief Operating Officer Salil Kapoor said. BIG CBS Prime is a premium entertainment Channel and offers content like Hawaii5-0, Survivor, The Jerry Springer Show, The 4400, Galileo Extreme and home grown shows like BIG Style Icons and Made to Order. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/media/entertainment/big-cbs-networks-inks-distribution-pact-with-dish-tv/articleshow/12342428.cms)
PVR CINEMAS PARTNERS WITH SCRABBLE ENTERTAINMENT TO GO 100% DIGITAL
PUNE: PVR Cinemas will have all its screens converted to digital projection by the end of this month. It has tied up with Scabble Entertainment, a Mumbai-based digital cinema system supplier, that will convert 73 of PVR’s 162 operational screens to digital in the next fortnight. Digital cinema is a technology by which movies are screened using digital projection unlike the traditional system where a beam of light is passed through physical cellulose prints. It allows greater security and safety for the content, when films are screened digitally. Physical prints are more likely to be stolen and leaked to pirates. Digital cinema is transferred through either satellite downloads or in copy-proof hard disks. The company supplies 2K digital systems, where 2K refers to images having 2048 pixels of horizontal resolution. The conversion of 73 screens will cost Rs 21 crore and all the future properties will be digital. The size of the entire partnership for digital conversion until December 2012 would be approximately Rs 66 Crore, a company statement said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/media/entertainment/pvr-cinemas-partners-with-scrabble-entertainment-to-go-100-digital/articleshow/12341731.cms)
BHARTI WALMART TO RAISE RS 500 CR FROM BANKS
MUMBAI/NEW DELHI: Bharti Walmart, a joint venture (JV) between Sunil Bharti Mittal’s Bharti Enterprises and the world’s largest retailer, Walmart, plans to raise Rs 500 crore from global banking majors such as Citigroup, JP Morgan Chase, Deutsche Bank and BNP Paribas, to fund its expansion plans, according to sources in the know. It had earlier said it planned to set up 10 to 12 wholesale cash and carry centres in 2012, which would generate employment for 5,000 people. According to estimates, each such centre requires an investment of Rs 50-60 crore. At present, Bharti Walmart has 17 stores across the country. A company spokesperson confirmed talks were on. “The money is being raised for investing in building of an efficient back-end infrastructure and for our Best Price Modern Wholesale Cash and Carry store roll-out programme,” he said. (For details log on to : http://www.business-standard.com/india/news/bharti-walmart-to-raise-rs-500-crbanks/468502/)
COMING FROM SONY: SPORTS CHANNEL NAMED SIX
MUMBAI: The much-awaited launch of sports channel from Multi-Screen Media (MSM), which runs Sony Television, finally seems to be taking shape. The channel will be called Six. According to three independent sources, the network was serious about getting a pure-play sports channel in its bouquet, even since the success of Indian Premier League (IPL). It is now evaluating the final contours to bid for the acquisition of Board of Control for Cricket in India’s (BCCI) global media rights. The broadcaster is believed to have elevated Nitesh Kriplani as business head of the upcoming channel. At present, he is the senior vice-president of MSM for business development and syndication. The creative duties for the channel has been given to Euro RSCG. (For details log on to : http://www.business-standard.com/india/news/comingsony-sports-channel-named-six/468504/)
NTPC TO INVEST 20% LESS IN FY13
NEW DELHI: At an investment size of Rs 20,995 crore, the country’s largest power producer, NTPC, would invest about 20 per cent less in 2012-13, compared to 2011-12, when it was estimated to spend around Rs 26,400 crore. The investment next year would be for adding new capacity of about 4,000 Mw. On the other hand, the largest transmission company, Power Grid Corporation of India (PGCIL), would invest 13 per cent more at Rs 20,000 crore in the next financial year, from Rs 17,700 crore in the current one. The company is expected to invest Rs 1 lakh crore during the 12th Plan to increase the inter-regional transmission capacity from the current 28,000 Mw to 65,000 Mw. The investment is double of what was fixed for the 11th Plan ending March 31. According to the Budget documents, NTPC’s internal resource mobilisation would be Rs 20,995 crore in 2012-13. Commenting on the decrease in spending, NTPC said the difference was based on nearest calculation. “There is no change in our expansion plans. We will add about 4,000 MW in the next financial year. The capital expenditure for the 12th plan has been fixed at Rs 2.19 lakh crore,” said a company executive. Some of the projects that will be commissioned in the next financial year include Mauda (2x500Mw) in Nagpur, Maharashtra, and Bongaigon in Assam(3x250Mw). (For details log on to : http://www.business-standard.com/india/news/ntpc-to-invest-20-less-in-fy13/468490/)
M&M LOOKS AT ORGANIC FOOD BIZ FORAY
MUMBAI: In an effort to expand its presence in the agriculture sector, tractor and utility vehicle market leader Mahindra & Mahindra (M&M) is exploring ways to get into the Rs 1,500-crore organic farming market. The company has appointed a leading market research company in Indiato carry out an in-depth research on the segment, according to sources. The company has been operating in the agriculture space through its subsidiary company, Mahindra Shubhlabh Services (where it is engaged in procuring grapes), in the Nashik belt of Maharashtra. The company has the option of foraying into the organic food space through Mahindra Shubhlabh Services. M&M had recently carried out a high court-approved restructuring exercise with one of its agri-focussed subsidiaries, allowing it to segregate operations. The company merged the non-fruit business of Mahindra Shubhlabh Services into itself, leaving the subsidiary to exclusively focus on the fruit business. (For details log on to : http://www.business-standard.com/india/news/mm-looks-at-organic-food-biz-foray/468534/)
BHARAT DYNAMICS IN EXPANSION MODE
CHENNAI/HYDERABAD: Hyderabad-based public sector undertaking Bharat Dynamics Limited (BDL) is ready with proposals worth Rs 34,000 crore during the 12th Five-Year Plan and 13th Five-Year Plan. These will result in the development of the areas as well as provide employment to the people, according to Union minister of state for defence M M Pallam Raju. “Jobs in the defence establishments will be provided through nationwide competitive exams. Therefore, engineering colleges need to provide training to their students to compete in the exams,” he said. Speaking at the foundation stone laying ceremony for the surface-to-air missile project organised by BDL here on Sunday, the minister hoped that BDL would achieve a turnover of $1 billion (approximately Rs 5,000 crore) in the next four to five years. “Missile units are being set up in Medak, Visakhapatnamand Ibrahimpatnam. The production of missiles will begin once the acceptancy tests are completed by the Army, Navy and Air Force at various levels. Cooperation is being taken from two countries for technology transfer,” Pallam Raju said. (For details log on to : http://www.business-standard.com/india/news/bharat-dynamics-in-expansion-mode/468415/)
INVESTMENT FLAT FOR STAR PSUs, TOO
Sectoral giants to keep capex unchanged due to high interest rates, slowdown
NEW DELHI: At a time when the government is hard pressed to push economic growth, investment growth by its leading listed companies will be flat in 2012-13, as against a 35 per cent increase in the current year. Analysis of combined investment outlay by six sector leaders — Oil and Natural Gas Corporation, Coal India, NTPC, Indian Oil Corporation, Power Grid and Steel Authority of India — point to a slowing of investment. All these fund expansion from internal resources. In 2011-12, their combined investment towards capital expenditure projects is estimated at Rs 111,359 crore, according to the revised estimates, implying an increase of 35 per cent over 2010-11. However, the Budget estimate for investment by these companies, at Rs 110,094 crore for 2012-13, is a marginal drop over the current year’s revised estimate. Budget estimates are presented by the government to Parliament on behalf of its companies, usually before the beginning of the financial year, in the form of the Expenditure Budget. The numbers are revised in the subsequent budget, which also gives the acutal spending of the year earlier. (For details log on to : http://www.business-standard.com/india/news/investment-flat-for-star-psus-too/468488/)
WALT DISNEY MAY OPEN OWN OUTLETS IN INDIA
NEW DELHI: With government allowing up to 100% FDI in single-brand retail, the market buzz is ripe about Walt Disney charting the Indiaroute with plans of setting up wholly-owned merchandise outlets. Sources said Walt Disney has plans to set up stores in five cities under its brand name ‘Disnep’ which will be retailing its full range of merchandise and apparel for kids, youth and adults. Disnep outlets are present across Europe and the US. According to sources in the retail industry, the American marquee brand has conducted a recce in the Indian market ahead of its prospective entry. However, Alannah Hall-Smith, a spokesperson from Disney (US) in an email said, “The Walt Disney Company Indiahas no immediate plans for Disney Stores in India.” (For details log on to : http://www.financialexpress.com/news/walt-disney-may-open-own-outlets-in-india/926251/)
GITANJALI GEMS, L CAPITAL REOPEN INVESTMENT TALKS
NEW DELHI: Listed jewellery firm Gitanjali Gems has revived talks with L Capital, the private equity arm of the world’s largest luxury group LVMH, for a strategic investment. The two were in negotiations a year ago but talks had not progressed over the structure of the business. In the last one year, the company has been working on restructuring its businesses, which is close to completion and sources in both firms said they have reopened negotiations for an investment, which could be as high as $100 million. “The restructuring is being done to enhance shareholder value and also enable a strategic partner to come in,” said a person close to the development, who did not wish to be named. The restructuring of its Indian subsidiaries, in which it plans to bring in a strategic partner, has been completed. A senior executive at Gitanjali Gems confirmed that the talks were on but did not divulge any more detail. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fashion-/-cosmetics-/-jewellery/gitanjali-gems-l-capital-reopen-investment-talks/articleshow/12347433.cms)
POLITICS PUTS BRAKES ON FDI IN MULTI-BRAND RETAIL: SHARMA
NEW DELHI: Referring to the withholding of the Cabinet decision on allowing 51 per cent foreign direct investment (FDI) in multi-brand retail, Union Commerce and Industry Minister Anand Sharma on Tuesday said the issue had been dragged into partisan politics, something that undermines the investor confidence. Speaking at the round table on “Ensuring strong growth in the post crisis global economy”, organised on the occasion of IMF chief Christine Lagarde’s visit to India, Mr. Sharma said: “We have been trying to create the consensus. We got the Cabinet decision both on single-brand and multi-brand retail but the issues got dragged into partisan politics which undermines investor confidence. “We had the consensus of the stakeholders but the political consensus is always important. My urging to others is that let the States have the right to freedom for those who don’t want to go in for FDI in multi-brand retail. At the same time, Indiadesperately needs to create an integrated value chain to deal with the huge issue of post-harvest losses of up to 40 per cent. (For details log on to : http://www.thehindu.com/todays-paper/tp-business/article3018554.ece)
FDI UP BY 92% IN JANUARY TO $ 2 BILLION
NEW DELHI: Indiareceived $ two billion foreign direct investment in January, showing an annual growth of 92 per cent and taking cumulative inflows to $ 26.19 billion for April-January period of the current fiscal. In January 2011, the country received foreign direct investment (FDI) worth $ 1.04 billion. Experts feel if reforms are pushed, there is much more potential for attracting increased foreign investment. “There is an urgent need for strong reforms like 100 per cent FDI in sectors like multi-brand retail and insurance. There is a need to boost investor confidence. $ 2 billion in month is not a big number,” Ficci Secretary General Rajiv Kumar said. The sectors which received large foreign FDI inflows during the 10-month period this fiscal are: services ($ 4.83 billion), pharmaceuticals ($ 3.20 billion), telecommunication ($ 1.99 billion), construction ($ 2.23 billion), power ($ 1.56 billion) and metallurgical industries ($ 1.65 billion). (For details log on to : http://economictimes.indiatimes.com/news/economy/indicators/fdi-up-by-92-in-january-to-2-billion/articleshow/12342904.cms)
NATIONAL PHARMA PRICING POLICY MAY BE DROPPED
NEW DELHI: The department of pharmaceuticals has decided to abandon its controversial “industry-friendly” proposal to cap retail prices of essential medicines at the average price of the three best-selling brands and stick with the cost of production as the parameter. “The thinking of the department, evolved after considering stakeholders’ feedback, is to drop the market-based pricing model and go for the cost-based mechanism,” a senior chemicals and fertilizers ministry official told ET. The department, under the chemicals and fertilisers ministry, had last October sought views on its draft National Pharmaceutical Pricing Policy that proposes to cap the prices of 348 essential medicines and their formulations at the average price of the three best-selling brands. While the industry had welcomed the draft, others had objected saying it would lead to a rise in prices because the top three brands would usually be the more expensive ones that are most aggressively marketed. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/healthcare/biotech/pharmaceuticals/national-pharma-pricing-policy-may-be-dropped-dop-to-continue-with-production-cost-based-model/articleshow/12347463.cms)
IN STITCHING A COMPLEX OIL-FOR-FOOD DEAL, INDIA SETS ABOUT PLACATING IRAN
NEW DELHI: Indiais finally plunging into the oil politics of the Gulf and West Asia. It sent a team of senior officials from the commerce ministry to Iranaround a fortnight earlier, to clinch an oil-for-food deal. And, is beginning to woo the Sunni oil kingdoms in the region, led by none other than Saudi Arabia. Arvind Mehta, joint secretary in the ministry of commerce and as many as 70 members of the government-backed Federation of Indian Export Organisations (FIEO) met their counterparts in Teheran in an attempt to clinch a $1billion deal to sell rice, wheat, tea and pharmaceuticals to Iran, so as to partially offset India’s huge purchases of Iranian crude, of $12 bn annually. At 12 per cent, Iranis only second to Saudi Arabia, India’s largest source of its energy needs. It is why the wooing of Saudi Arabiais also in substantial flow in Delhithese days. And, major plans are afoot in Delhito also receive the Emir of Qatar, Hamad bin Khalifa Al-Thani, whose country is already a large source of oil and gas, as well as the fellow-sheikhs of Omanand the United Arab Emirates. (For details log on to : http://www.business-standard.com/india/news/in-stitchingcomplex-oil-for-food-deal-india-sets-about-placating-iran/468480/)
MORE VOTING RIGHTS TO INDIA, CHINA: CHRISTINE LAGARDE
NEW DELHI: The International Monetary Fund is keen to implement quota reforms that will give more voting rights to economic powers like Indiaand China, managing director Christine Lagarde has said. “Change is in the air,” Lagarde said at an event organized by IMF and the Indian Council for Research on International Economic Relations in Delhi. “I will certainly be a strong advocate of that.” The multilateral agency’s board of governors had in 2010 approved a set of quota reforms, which include a shift of over 6% voting rights from overrepresented to under- represented members. Indiahas a voting share of 2.34% at IMF. “Both Indiaand Chinahave already ratified the quotas (voting rights) to increase their representation in IMF,” Lagarde told a news conference later in the day. “I know they will be keen to rally support around the organisation to have the requisite number of country votes to implement the reforms.” (For details log on to : http://economictimes.indiatimes.com/news/international-business/more-voting-rights-to-india-china-christine-lagarde/articleshow/12349072.cms)
BRICS MEET WILL ADDRESS MISTRUST, SAYS CHINA
BEIJING: Top Chinese officials said on Tuesday that working with Indiaunder the BRICS (Brazil, Russia, India, Chinaand South Africa) umbrella would help address long-persisting mistrust between the neighbours, adding that they expected specific bilateral outcomes from President Hu Jintao’s visit to New Delhinext week for the fourth summit between the fast-rising emerging economies. The New Delhi summit, said Assistant Foreign Minister Ma Zhaoxu, was “a very important platform” to enhance trust which, he said was of “an important value” to the now-annual coming together of the five nations. Mr. Hu, who will hold talks with Prime Minister Manmohan Singh along the sidelines of the March 28 and 29 summit, is expected to officially launch the marking of 2012 as the year of friendship and cooperation between Indiaand China. His talks with Dr. Singh will go over several thorny bilateral issues. (For details log on to : http://www.thehindu.com/todays-paper/tp-international/article3018569.ece)
PETROPRODUCTS TRADE TALKS WITH PAKISTAN ON FRIDAY
NEW DELHI: Seeking to expand the area of cooperation and take the economic engagement to a new level, the Petroleum Secretaries of India and Pakistanare scheduled to hold bilateral talks in New Delhion March 23. A high-level delegation, led by Pakistan’s Petroleum and Natural Resources Secretary Mohammad Ejaz, will be in New Delhifrom March 23 to 25 to hold talks on ways to facilitate trade in petroleum products and petrochemicals between the two nations. Both the sides are also likely to decide on putting in place a new conduit, mostly the pipeline method, for transportation of these products. Officials in the Petroleum Ministry said that Pakistanwas learnt to have already given its go-ahead for transportation of petrochemicals through the land route laden in trucks. However, the Indian side, particularly the oil companies, which had been pushing for opening of the land route for transportation of petrochemicals, is yet to respond to the situation positively. (For details log on to : http://www.thehindu.com/todays-paper/tp-business/article3018537.ece)
RIL DEMAND FOR GAS PRICE HIKE DRAWS FLAK
NEW DELHI: Opposing the demand of Reliance Industries Limited (RIL) for an upward revision of KG-D6 gas price, the Association of Power Producers (APP) has warned that such a move would only push up electricity price by 50 paise per unit for every dollar increase in gas price. In a representation to Prime Minister Manmohan Singh, and the Petroleum and Natural Gas Minister, Jaipal Reddy, the APP, which also includes Reliance Power, Tata Power, Lanco Infratech and the Adani group, said in a letter that no consideration should be given for increasing the price of natural gas from the current rate of $4.2 per million British thermal unit (mBtu). RIL had been arguing, during the last few months, that the price of gas should be increased, a demand that has been rejected time and again by the Petroleum Ministry. The revision in gas price is due in 2014. (For details log on to : http://www.thehindu.com/todays-paper/tp-business/article3018884.ece)
DRIVE YOUR DREAM PETROL CAR AS PRICES DIP IN SECOND-HAND MARKET
MUMBAI: A series of rises in petrol prices and improved demand for diesel models has led to a free fall in rates charged for petrol-powered sedans and SUVs in the used car market. With fuel costs hitting all-time high, buyers are opting for comparatively more fuel-efficient diesel models instead, whose fuel is also 56 per cent cheaper, compared to petrol in Mumbai. In markets like Mumbai and Delhi, petrol-driven sedans, especially in the premium range, such as those sold in the Rs 6-24 lakh price bracket in the new car market, are the worst hit with a fall in price being 25-30 per cent than their regular price. (For details log on to : http://www.business-standard.com/india/news/drive-your-dream-petrol-car-as-prices-dip-in-second-hand-market/468508/)
BOLLYWOOD TAKES ON IPL-5 WITH BIG-BUDGET RELEASES
MUMBAI: This season, Bollywood is ready to take on the Indian Premier League googly. After seeing some kind of cricket fatigue, Bollywood lined up a string of big-budget releases, with close to Rs 200-250 crore riding on these. The first to release is Sajid Nadiadwala’s Housefull 2, a sequel to the 2010 successful comedy flick, in April. The movie has been acquired by Eros International. Others to release are Vidhu Vinod Chopra-Rajkumar Hirani’s Ferrari Ki Sawaari; Priyadarshan-directed Tezz, starring Ajay Devgan; Mukesh Bhatt-Emraan Hashmi’s Jannat 2; Yash Raj Films’s Ishaqzaade; Viacom 18 Motion Picture’s action thriller Department, starring Amitabh Bachchan and Sanjay Dutt; and Vikram Bhatt’s 3D film, Dangerous Ishhq. All these are in the range of Rs 35-60 crore. “The release of big-budget movies during IPL this year is a conscious call, beating the trend of the last four years. With team India’s poor performance in the last few tournaments and the dip in TV ratings, producers are hopeful the movies will do well,” said Taran Adarsh, film trade analyst. (For details log on to : http://www.business-standard.com/india/news/bollywood-takesipl-5big-budget-releases/468498/)
SOFTWARE AS ‘ROYALTY’ SET TO HIT TECHNOLOGY COMPANIES HARD
BANGALORE/MUMBAI: It’s not Vodafone alone. Many companies in several sectors will bear the brunt of the Budget proposal to amend tax laws with retrospective effect. The information technology industry is learning it the hard way. The Budget proposal to retrospectively amend ‘royalty’ from 1976 will force many Indian companies to pay tax on past purchases of computer software. Any payment towards packaged software would amount to royalty, according to the amendment. The IT industry is already embroiled in several instances of litigation with the tax authorities, both in high courts and the Supreme Court, in cases where income from the sale of software or royalty has been taxed. But, with Budget 2012-13 defining ‘royalty’ as any ‘right for use’ or ‘right to use’, a computer software (including granting of a licence), irrespective of the medium through which such right is transferred, a lot changes. (For details log on to : http://www.business-standard.com/india/news/software-as-royalty-set-to-hit-technology-companies-hard/468483/)
IMF PEGS INDIA’S GDP GROWTH FOR 2012-13 AT 7%
NEW DELHI: International Monetary Fund (IMF) Managing Director Christine Lagarde on Tuesday said Indiawas poised to grow at seven per cent in 2012-2013, while Chinawould grow 8.5 per cent. She lauded India’s efforts towards taking fiscal consolidation measures and reforming the tax code. “Our forecast for growth in Chinaare very significant percentages applied to expanding economies,” Lagarde, who is visiting Indiafor the first time as IMF chief, told reporters here. “Clearly, developing economies are growing at a fast pace. It is a little less than what we were used to but it is plenty, given that the demand in a country like Chinahas clearly reduced…. In India, the fact that there will be support for capital investments, there will be an asset into developing infrastructure, is critical in our view to unleash the potential for growth that this country has.” (For details log on to : http://www.business-standard.com/india/news/imf-pegs-indias-gdp-growth-for-2012-13-at-7/468484/)
GOVT DEFENDS POVERTY ESTIMATES
NEW DELHI: Faced with criticism from opposition parties and civil society on its poverty estimates, the Planning Commission on Tuesday defended its calculations, albeit pointing to “serious” discrepancy in data on consumption expenditure. It, however, said high economic growth rates were not trickling to the bottom 15 per cent of the population fast enough and inequalities had increased, though “marginally”. Refuting allegations the Commission has lowered the poverty line to exaggerate the figures of persons over the line, Planning Commission Deputy Chairman Montek Singh Ahluwalia said those analysing the figures have missed the point that poverty line was given for 2009-10 in the latest estimates, while affidavit submitted to the Supreme Court for poverty line was for June 2011. Besides, the affidavit extrapolated 2004-05 consumption expenditure survey to arrive at June 2011 figure on the basis of inflation numbers as 2009-10 survey was not available then. (For details log on to : http://www.business-standard.com/india/news/govt-defends-poverty-estimates/468513/)
INDIA INC TO PAY LOWER DIVIDEND FOR 2011-12
MUMBAI: The aggregate dividend payout by the corporate sector is likely to be lower in financial year 2011-12 than the Rs 85,690 crore paid in the previous year. There are, at least, three good reasons for this belief. First, the aggregate net profit of 1,461 dividend-paying companies has declined five per cent in the first nine months of the current year. Second, 622 companies may prune their dividend due to a significantly high 26 per cent decline in net profit. Third, as many as 158 companies will be out of the dividend list because of net loss in the first nine months of 2011-12. So, only 681 companies may go for higher dividends owing to a strong 26 per cent rise in net profit in the first nine months of the current financial year. Says Kamlesh Kotak, head – equity research, Asian Markets Securities: “With global uncertainty and tight domestic liquidity, along with declining profitability, most companies will prefer to hoard cash and may adopt a conservative approach as regards dividend payout.” (For details log on to : http://www.business-standard.com/india/news/india-inc-to-pay-lower-dividend-for-2011-12/468466/)
CABLE OPERATORS DISTORT SIGNALS USING JAMMERS, DTH COMPANIES CRY FOUL
NEW DELHI: Rivalry between cable operators and DTH companies has come to the fore with growing instances of DTH jammers being used in parts of Mumbai and Delhi NCR to distort DTH signals. DTH firms like Tata Sky, Dish TV, Reliance Big TV, Videocon D2H and Airtel Digital TV have detected fresh cases of DTH jammers causing disruption of services in Mumbai. The DTH Operators Association of India (DOAOI), which represents all DTH companies, has described the use of jammers as a threat to the national spectrum. In a strong worded letter sent to the department of telecommunications (DoT), Mumbai Police, and other security agencies, the DOAOI said, “This illegal activity has serious ramifications for the security communications as this can be used to disturb the RF spectrum.” (For details log on to : http://www.financialexpress.com/news/cable-operators-distort-signals-using-jammers-dth-companies-cry-foul/926229/)
HEALTHCARE CHAINS EYE CAPITAL AS DEMAND SOARS
MUMBAI: Healthcare chains are looking to raise money to grow by building and buying assets as demand-supply gap widens in the sector. At least five chains — Sterling Hospitals, DM Healthcare, Sahyadri Group, Global Hospitals Group and Columbia Asia — are planning to grow outside home base. “Many second-rung hospitals are planning greenfieldprojects, including in tier-II cities with population below a million, for which they need to raise money,” said a Mumbai-based investment banker. “Pune-based Sahyadri is looking to raise funds for acquisitions, while rivals GlobalHospitalsand Columbia Asia are keen to expand.” His firm does not comment on specific companies’ plans. (For details log on to : http://www.financialexpress.com/news/healthcare-chains-eye-capital-as-demand-soars/926240/)
FMCG COMPANIES UNLIKELY TO PASS ON DUTY HIKE TO CONSUMERS
The finance minister’s Budget for 2012 seems modest, but with a lot of pragmatic thoughts given to infrastructure and agriculture sectors. It focuses more on equitable support to the sectors which have been impacted by slow growth in the recent past. Focus on boosting core sectors such as infrastructure, power, aviation and agriculture is surely a positive move. We welcome the government’s plan to start the National Mission on Food Processing this year and would actually like to see this take shape very soon. The current state of farming and wastage farmers face on their crops and fruits every year is a matter of grave concern. On the one hand, a lot needs to be done to grow processing of fruits in India, which currently stands at just 3% of the produce. On the other hand, the mission can greatly help in restoring the fast-dwindling large-sized farms. Worldwide, better technology and infrastructure have seen fruit processing to gather over 25% of farm produce. We hope the mission will help in improve the situation in India. (For details log on to : http://www.financialexpress.com/news/fmcg-cos-unlikely-to-pass-on-duty-hike-to-consumers/926276/)
OFFSHORING TO INDIA WILL END IN 8-10 YEARS: HACKETT REPORT
NEW DELHI: Offshoring of jobs to Indiawill begin to decline starting 2014, and will reach the end of its lifecycle in eight years, according to US-based strategic advisory and research firm The Hackett Group released at the Nasscom Global In-House Centers ( GIC) Conclave being held here. According to The Hackett Group, the traditional model of US and European companies moving finance, IT, and other business services jobs offshore will reach the end of its lifecycle over the next 8-10 years, and US and European companies will simply run out of jobs which can be moved offshore to locations like India. The Hackett Group’s offshoring research, examined 4,700 companies with annual revenue over $1 billion and headquartered in the USand Europe. It found that by 2016, a total of 2.3 million jobs in finance, IT, procurement and HR will have moved offshore. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/jobs/offshoring-to-india-will-end-in-8-10-years-hackett-report/articleshow/12347350.cms)
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