MUMBAI: US private equity firm Warburg Pincus is in an advanced stage of negotiation to acquire Kishore Biyani-controlled Future Group’s 56% stake in non-banking finance firm Future Capital Holdings.
The $40-billion buyout firm is doing the second round of due diligence of Future Capital and has hired the law firm AZB & Partners for the job.
“Warburg Pincus has sought clarity on certain issues… If these issues are resolved, the deal is expected to be inked at a valuation of 170 a share,” said an investment banker close to the transaction.
The scrip closed at 140.65 on Thursday, up 2.65%.
Warburg joins the long line of investors, including Hyderabad-based Deccan Chronicle Holdings (DCH) and other PE funds that had a look at the books of Future Capital.
“But there has been some progress with Warburg, even though Deccan is not out of the race. The deal may be priced at around 800 crore,” said a source familiar with the development.
V Vaidyanathan, MD of Future Capital, declined to comment while Warburg Pincus India co-head Niten Malhan did not respond to a text message on Wednesday. A deal like this will help the global private equity firm to build a financial services business in India. It has invested as much as $40 billion across 650 companies globally.
Sometime ago, DCH had signed an MoU to acquire promoters’ stake in Future Capital, but the deal was stuck due to lack of funds.
But subsequently, DCH has managed to raise bridge loans and is very much in the final reckoning, the investment banker said. DCH promoters did not reply to e-mail queries.
“It’s a toss up between Warburg and DCH. Valuation plays a key role in the final decision,” he added. DCH has also offered 170-180 per share to acquire the Mumbai-based firm. The deal is expected to be finalised soon.
Future Capital was set up by Kishore Biyani and Sameer Sain, formerly of Goldman Sachs. Later, the two parted ways with Sain heading a private equity company Everstone Capital while the financial services business was consolidated under Future Capital.
The stake sale process of Future Capital Holdings, which started more than a year ago and initially spearheaded by Morgan Stanley, evoked interest from many private equity firms. Baring India and Ajay Relan-controlled CX Partners had also made some preliminary discussions.
Morgan Stanley’s mandate got completed in March this year and a promoter of a Mumbai-based family-owned investment banking firm is the main advisor named for the transaction.
Future Capital has already reported profit after tax of 66 crore for the nine months ended December 2011, as it sharpened focus on retail lending. It has an equity capital of 64.8 crore. Originally incorporated as a private firm in 2005, the Future Group changed the nature of the firm to Future Capital with effect from December 2006.
YBRANT DIGITAL TO BUY 3 E-PLATFORMS FROM EXPERIAN FOR R930 CRORE
HYDERABAD: Hyderabad-based digital marketing company Ybrant Digital on Thursday announced plans to acquire businesses from the US-based information services company Experian for $175 million (about R930 crore). Ybrant has entered into an agreement to purchase Experian’s online platforms including PriceGrabber, LowerMyBills and ClassesUSA.com. While PriceGrabber is Experian’s price comparison shopping business that powers Yahoo and MSN shopping, LowerMyBills.com is a platform that connects people looking for home loans, credit cards, insurance and other services and ClassesUSA.com is an higher-education portal. With this acquisition, Ybrant expects to double its current revenues. “By adding these established brands to Ybrant, we will offer interesting new products and a world-class lead generation platform,” Suresh Reddy, chairman and chief executive officer, Ybrant Digital, said. (For details log on to : http://www.financialexpress.com/news/ybrant-to-buy-3-eplatforms-from-experian-for-r930-cr/947959/)
IFC TO BUY STAKE IN SUNEDISON
CHENNAI: International Finance Corp. (IFC), the private sector investment arm of World Bank group, has agreed to buy 15% each in two units of SunEdison Llc, a global provider of solar energy services, for $55 million (around Rs.290 crore). The investment will be made in Singapore-based SunEdison Energy Holdings Pvt. Ltd and the Netherlands-based SunEdison Energy Holdings BV, which will go into growth and development of solar power projects in south Asia, South-East Asia and sub-Saharan Africa. SunEdison develops, finances, installs and operates solar power plants. IFC will initially invest $14.5 million and the remaining $40.5 million will be made available after certain conditions are met to support the growth, development and construction of the company’s solar power projects. (For details log on to : http://www.livemint.com/2012/05/10221931/IFC-to-buy-stake-in-SunEdison.html?atype=tp)
JM FINANCIAL BANKS ON TRUST, IDEA AND SOLUTIONS TO CLOSE BIRLA-BIYANI DEAL
MUMBAI: The recent silver streaks in the wavy, thick black mop belie his boyish features, but it lends an air of sobriety and gravitas. If Vishal Kampani is stepping into the big shoes of his father— the intrepid and sagacious investment banking warhorse Nimesh— then a bit of grey hair surely comes handy while bringing two Indian business promoters or entrepreneurs to a discussion table. It’s tough to say if that made Biyani call on him last December to strategise on different business consolidation options and deleveraging the Future Group balance sheet, but four months, several brainstorming and a savvy structuring later, Vishal Kampani has managed to stitch together the most fashionable deal in the marquee Indian retail landscape. So last week when Kumar Mangalam Birla inked the agreement to buy Biyani’s Pantaloons Retail format, it also marked the return of Vishal Kampani in the adrenaline-pumped, testosterone-driven deal street after a hiatus of five years. (For details log on to : http://www.business-standard.com/india/news/people-will-seepowerjm-network-innext-5-7-years-vishal-kampani/473962/)
DLF FORMS TEAM TO WEIGH NON-CORE ASSET SALE
NEW DELHI: DLF, the largest real estate company has, with the aim of cutting its big debt load, recently set up a core team of five to six people to focus on the process of sale of non-core assets, a company official said. DLF is targeting to raise Rs 5,000-6,000 crore this financial year from the sale of non-core assets. In 2011-12, it had managed to raise around Rs 1,620 crore from non-core divestments as of December 2011 and in 2010-11, around Rs 1,110 crore. The company had set a medium-term goal of raising Rs 7,500 crore, of which Rs 6,000 crore could be raised by March 2013, according to the latest presentation to analysts. As of December 2011, it had debt of Rs 22,758 crore. The debt-equity ratio of 0.8:1 compares reasonably well with most healthy companies, chief financial officer Ashok Tyagi had told Business Standard earlier. (For details log on to : http://www.business-standard.com/india/news/dlf-forms-team-to-weigh-non-core-asset-sale/474066/)
ESSAR PORTS LIKELY TO SELL STAKE TO PORT OF ANTWERP
MUMBAI: Ruia-family promoted Essar Ports is likely to sign a stake sale deal with Portof Antwerp, one of the largest ports in Europe, in the next two months, said Essar Ports MD Rajiv Agarwal. The company, which operates four port facilities at Hazira, Salaya,Vadinar and Paradip, will also increase its presence in container terminal business in Indiaas it looks to expand. “Talks are on at the moment and we are likely to see it conclude in the next two months. Portof Antwerpis looking to invest in Indiaand they see potential in us and we think it worthwhile for us,” Agarwal said. He said the amount would come in as fresh investments and is not related to lowering promoter holding to 75% from the 83% to meet a recent norm from capital market regulator Sebi. A person close to the development said Portof Antwerpis likely to invest about $25-50 million for a less than 10% stake in Essar Ports. (For details log on to: http://economictimes.indiatimes.com/news/news-by-industry/transportation/shipping-/-transport/essar-ports-likely-to-sell-stake-to-port-of-antwerp/articleshow/13089383.cms)
DUTCH RETAILER SPAR INTERNATIONAL TO END TIES WITH MAX HYPERMARKETS
BANGALORE: Dutch retailer Spar International and Dubai-based Landmark Group’s Max Hypermarkets have decided to part ways in Indiaby the end of this year after the two developed differences over expansion strategy. While Spar was keen on partnering multiple national and regional retailers to expand in the country, Max Hypermarkets wanted a strategic investor for the business, Dr Gordon Campbell, managing director of the 31-billion euro (approx 2 lakh crore) Spar International, said. The companies will now pursue separate growth plans in the country, they said in a joint statement. Max Hypermarkets operates 13 Spar Hypermarkets across Karnataka, Maharashtra, Andhra Pradesh, New Delhiand the national capital region under a licence agreement signed in 2007. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/dutch-retailer-spar-international-to-end-ties-with-max-hypermarkets/articleshow/13088566.cms)
C-WET STARTS NEW WIND ASSESSMENT PROJECT
NEW DELHI: Centre for Wind Energy Technology (C-Wet), an autonomous R&D institution under the renewable energy ministry, has launched another phase of its wind assessment project. This phase of the project will measure the potential of wind energy at a height of 100 meters in 75 locations and at 120 meters height in 4 locations. “The technology of megawatt class wind turbine has been changing all over the world. Anticipating taller towers with larger diameter rotors in the Indian market, we have now extended our assessment at greater heights in different areas to harness the potential of wind energy with the latest technology in India,” said Dr S Gomathinayagam, executive director, C-Wet. This phase will also look for land availability through Geographical Information System along with a ‘land-use land-cover’ map, indicating the type of land cover which provides easy access to the wind power producers. It will also mark suitable land areas that are available for wind farming, using geographical instruments and applications like ‘Google maps’. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/power/c-wet-starts-new-wind-assessment-project/articleshow/13087837.cms)
IT ENTREPRENEUR JERRY RAO GOES DEEPER INTO BUDGET HOUSING
MUMBAI: Value & Budget Housing Corporation (VBHC), promoted by former Citibankers Jerry (Jaithirth) Rao and P S Jayakumar, plans to launch six budget housing projects in the country by the end of this year. It is looking at two projects for the Mumbai area, two in the National Capital Region and one each in Bangaloreand Chennai, said Rao. “The success of our project in Bangalorehas given us confidence to launch more such projects,” Rao, earlier the chairman of Mphasis, told Business Standard. In its maiden project in Bangalore, the company has sold 2,000 units so far. Although he refused to disclose investment figures, he said the company would look at getting funds from private equity investors at the project and company level. Housing finance major HDFC and The Carlyle Group are major investors in the company. (For details log on to : http://www.business-standard.com/india/news/it-entrepreneur-jerry-rao-goes-deeper-into-budget-housing-/474061/)
MOOLCHAND HEALTHCARE RAISES RS 100 CRORE FROM SEQUOIA CAPITAL
BANGALORE: Delhi-based Moolchand Healthcare will invest Rs 500 crore to acquire existing hospitals and develop new greenfieldones. The expansion will be funded from a private equity infusion of Rs 100 crore from Sequoia Capital, with the balance coming from internal accruals and debt. “We are planning to be among the country’s largest multi-speciality healthcare providers,” said Shravan Talwar, chief executive officer of Moolchand Healthcare, which runs one multi-specialty hospital in Delhi. The company will also add on new verticals such as diagnostics and dialysis centres and fertility assistance services and expand services in smaller towns and cities. Talwar and his team honed in on the multispecialty model as a growing segment in India, as people grapple with multiple medical conditions as life-spans increase. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/healthcare/biotech/healthcare/moolchand-healthcare-raises-rs-100-crore-from-sequoia-capital/articleshow/13088291.cms)
MURUGAPPA GROUP UNVEILS RS 1,000 CRORE CAPEX PLAN
CHENNAI: Murugappa Group said it plans to make a capital expenditure of Rs 1,000 crore in the the current fiscal and reach the Rs 35,000-crore turnover mark by 2013-14. The company plans to make a capital expenditure of Rs 1,000 crore for the financial year 2012-13, a part of which would be made towards completion of projects initiated in the previous year, Group Chairman A Vellayan told reporters here while announcing 2011-12 results. He added that the company has set a target of reaching Rs 35,000 crore turnover mark by 2013-14, with a compounded annual growth rate of 28 per cent. He said the company would adopt a cautious approach hoping to grow “three times of the country’s GDP”. “We hope to grow by three times of the GDP”, he said. The city-headquartered company reported a 31 per cent increase in turnover to Rs 22,314 crore for the year ending March 31, 2012 as against Rs 17,051 crore turnover in the previous fiscal, Vellayan said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/murugappa-group-unveils-rs-1000-crore-capex-plan/articleshow/13085212.cms)
INDIA TO GROW AT 7.5% IN 2012-13, SAYS UN REPORT
NEW DELHI/MUMBAI: Indiais projected to see a faster growth of 7.5% this fiscal on the back of higher savings and investment rates, even as most of the Asia-Pacific economies are likely to expand at a slower pace, says a UN report. “The Indian economy’s strong fundamentals, namely high saving and investment rates and rapidly expanding labour force and middle class will ensure a steady economic performance… We expect it to expand by about 7.5% in 2012-13,” UNESCAP chief economist Nagesh Kumar said. The growth estimate in the current fiscal is higher than the estimated 6.9% growth in the last fiscal year. The Indian government has projected the economy to expand by 7.6% in the current fiscal. The UNESCAP report, however, said that weaknesses of major developed economies pose a major threat to the growth in the Asia-Pacific region, which could come down to 6.5% in 2012, from 7% in 2011. (For details log on to : http://www.financialexpress.com/news/india-to-grow-at-7.5-in-201213-says-un-report/947887/)
FSAs OR NOT, COAL MINISTRY WANTS UNINTERRUPTED SUPPLY FOR POWER COMPANIES
NEW DELHI: In what may come as a relief for power project developers, the coal ministry has directed state-owned coal companies to ensure uninterrupted fuel supply to plants commissioned till March 31, 2012, as well as those to be commissioned during fiscal 2012-13 even if they fail to sign fuel supply agreements (FSAs). The coal supply to these power projects would be maintained by coal companies under the MoU route till the time fuel user and supplier companies are ready to sign the FSAs. The move is expected to benefit about 18,000 MW of power projects of a host of companies, including NTPC, Balco, Adani, GMR and DVC, that have recently been commissioned or are in advanced stage of commissioning. There was uncertainty over the supply of coal to these projects as Coal India (CIL) had decided to offer fuel to plants only through the FSA route as directed by the committee of secretaries (CoS). As per the directions of CoS, CIL is currently in the process of signing FSAs for projects commissioned till December 31, 2011. FSAs for other projects are expected to come up for consideration only later but power companies fear that this delay could make their project remain idle even after commissioning. (For details log on to : http://www.financialexpress.com/news/fsas-or-not-coal-min-wants-uninterrupted-supply-for-power-cos/947925/)
DIVIDEND POLICY OF 44 CPSEs COST EXCHEQUER Rs 8,773 CRORE: CAG
NEW DELHI: The reluctance of the state-owned companies to declare dividends as per the direction of the government has cost the exchequer R8,773 crore in 2010-11, says a CAG report. “Forty four companies (including eight listed companies and excluding 74 government companies and corporations, which have not declared dividend) did not comply with the government directive to pay minimum dividend of either on equity or on post tax profit while declaring dividend. “The total shortfall on this account was R8,772.65 crore in 2010-11,” the report tabled in Parliament on Thursday said. As per the guidelines, all- profit-making companies that were essentially commercial enterprises would declare a minimum dividend of 20% either on equity or on post-tax profit, whatever was higher. (For details log on to : http://www.financialexpress.com/news/dividend-policy-of-44-cpses-cost-exchequer-r8-773-cr-cag/947944/)
SPOUSES MAY GET EQUAL PIE OF PAYMENT FOR LAND ACQUISITION
NEW DELHI: A high-level panel associated with the Planing Commission has recommended that compensation in cases of land acquisition for public purposes be shared equally between spouses. It has also proposed a public land bank with local government bodies as arbitrators for economical cultivation of crops. These and other suggestions of the committee headed by Bina Agarwal looking into the state of “distressed and women farmers” could find their way into the 12th Plan approach paper, yet to be approved by the National Development Council (NDC). All compensation for land acquisition, whether in cash, land or shares, must be distributed equally between both spouses, the panel said, in sync with its mandate to recommend measures to promote gender justice. (For details log on to : http://www.financialexpress.com/news/spouses-may-get-equal-pie-of-payment-for-land-acquisition/948041/)
COAL FIRMS TO SUPPLY FUEL TO POWER PLANTS VIA MOU ROUTE
NEW DELHI: The government has directed coal companies to supply fuel to power plants that have been commissioned this year through the MoU route till issues related to fuel supply pacts are resolved. The latest directive would benefit as much as 8,800 MW of electricity generation capacity that has come up in the first three months of 2012, sources said. “The Ministry of Coal has issued a directive to coal companies to supply coal to power plants commissioned till March 31, 2012 as well as those to be commissioned during 2012-13 through the MOU route as the FSAs are getting delayed,” the Power Ministry said in a release today. “With this directive, the commissioned plants would be able to generate power without facing disruption of coal supply,” it added. (For details log on to : http://www.business-standard.com/india/news/coal-firms-to-supply-fuel-to-power-plants-via-mou-route/164741/on)
NTPC ANNUAL PROFIT RISES 5 PER CENT
NEW DELHI: Country’s largest power producer NTPC today posted nearly five per cent rise in consolidated net profit at Rs 9,814.66 crore in the year ended March 2012, even as fuel costs surged during the same period. The state-run company had a consolidated net profit of Rs 9,348.23 crore in the year ended March 2011. In the last financial year, total income from operations jumped to Rs 65,893.68 crore from Rs 59,505.38 crore in the year-ago period, the company said in a statement. NTPC’s reported higher annual profit despite its fuel cost, on consolidated basis, soaring about 19 per cent to Rs 43,302.66 crore in the last fiscal. The entity incurred fuel expenses to the tune of Rs 36,414.35 crore in the year ended March 2011. (For details log on to : http://www.financialexpress.com/news/ntpc-annual-profit-rises-5-per-cent/947824/)
POWER COMPANIES TO GET COAL BLOCKS WITHOUT BIDDING
NEW DELHI: Notwithstanding the CAG stance favouring the auction route for allocation of natural resources, power companies such as NTPC, Tata Power, Rpower and Jindal Power might get another set of captive coal blocks without having to go through the bidding process. The new rule on coal block auctions finalised by the coal ministry proposes to carve out a portion of the country’s coal reserves for the power sector that would be offered to companies through state-run corporations. Those companies that have been awarded a power project on the basis of tariff-based competitive bidding would be eligible for this exclusive allocation, official sources said. Tariff-based bidding has been made mandatory for all power projects awarded after January 2011. “This is good development and would help companies to offer lowest electricity tariff for consumers,” said an official of a private sector power company asking not to be named as he was not aware of the changes in the regulations. (For details log on to : http://www.financialexpress.com/news/power-cos-to-get-coal-blocks-without-bidding/947903/)
INDIA LIKELY TO WITHDRAW FROM SOUTH CHINA SEA
NEW DELHI: Indiais likely to withdraw from an oil block in the South China Seaafter hydrocarbons did not show up in an exploratory well, said government sources here on Thursday. Officials have conveyed to Vietnamplans to terminate operations on commercial considerations, said the sources who knew about the talks. The block has been at the centre of much diplomatic bad blood among China, Vietnamand Indiathat included demarches, summons and affirmations of sovereignty over the same patch of sea. The sources said the move to shut operations, that should relieve Beijing which was locked in another maritime dispute in the same sea with the Philippines, had been conveyed to South Block and the Union Petroleum Ministry but a decision would be considered final only when the State-owned Oil and Natural Gas Commission Videsh Limited (OVL) approached PetroVietnam for permission to stop operations. That stage had not been reached, they said, while Indian officials said they were not sure whether OVL had written to the Indian mission in Hanoiand asked it to formally convey the request to Vietnam. (For details log on to : http://www.thehindu.com/todays-paper/article3406682.ece)
TRADE DEFICIT AT 7-MONTH LOW ON WEAK IMPORTS
NEW DELHI: India’ s trade gap narrowed to a seven-month low in April on weaker imports of gold, silver and petroleum, offering some respite to policymakers struggling to contain the burgeoning current account deficit. The commerce department reported on Thursday that trade deficit narrowed to $13.4 billion in April from $13.9 billion in the previous month. Although merchandise exports rose a modest 3.2% from a year earlier to $24.5 billion, reflecting lacklustre demand from the West, import growth decelerated 3.8% to $37.9 billion mainly because of a sharp slide in imports of gold and silver. A slowdown in petroleum imports also helped keep the overall import growth under check. “If the trade deficit stays at around $13 billion (a month) for the rest of the year, we are looking at a figure of $156 billion for the fiscal, which is much lower than last year’s $185 billion,” commerce secretary Rahul Khullar said. (For details log on to : http://economictimes.indiatimes.com/news/economy/foreign-trade/trade-deficit-at-7-month-low-on-weak-imports/articleshow/13087877.cms)
AT LEAST MONSOON ISN’T PARALYSED! RAINS ARRIVE JUNE
NEW DELHI: The monsoon is likely to hit the southern tip of the country on time in the first week of June, said India’s top weather department official on Thursday, a week before the official forecast, lifting hopes of better farm output for the third successive year and a chance to rein in food inflation. “It will hit Kerala in the first week of June with an error window of 2-3 days,” said India Meteorological Department director general LS Rathore. However, the second half of the monsoon season could be marred by emergence of the El Nino weather mechanism, Rathore said. In 2009, the El Nino turned rains patchy and led to a drought. Monsoon, vital for farm output and economic growth, irrigate about 60% of India’s farmland. Farming accounts for 14% of the nearly $2-trillion economy and supports the livelihood of 58 million people. Indiais the world’s second-biggest producer of rice, wheat, sugar and cotton, and also one of the largest consumers. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/et-cetera/rains-likely-to-arrive-in-june-meteorological-departments-chief-says-ei-nino-may-affect-showers/articleshow/13087370.cms)
AIR INDIA SEEKS CONTEMPT PROCEEDINGS AGAINST PILOTS
NEW DELHI/MUMBAI: The Air India management moved a petition in the Supreme Court, seeking the initiation of criminal contempt proceedings against agitating pilots for allegedly obstructing the implementation of the court’s order on the training of pilots for Dreamliner aircraft. It simultaneously sacked nine more pilots who did not report to duty on the third day of the agitation. That took the number of pilots sacked to 46. The agitation is slowly but surely impacting passengers. Twenty three flights, including 11 domestic, of the airline’s 410 daily flights got cancelled on Thursday. Air India, which operates 120 international flights daily, has already lost over Rs 15 crore in revenues during the first two days. The number is rising with more flight cancellations. Bracing itself for a long battle with the pilots, the airline had stopped taking bookings for international flights for five days. That has now been extended till May 15 and the airline has also waived off penalties on refund, cancellations, date change and rebooking for passengers booked to travel up to May 14. More than 260 pilots have not reported for work in the past three days. That has upset the airline’s schedules at a time when it had just got Cabinet clearance for a Rs 30,000-crore bailout package over a period of nine years. (For details log on to : http://www.business-standard.com/india/news/air-india-seeks-contempt-proceedings-against-pilots/474058/)
INFOSYS DENIES COMMENT ON VEMURI QUITTING
BANGALORE/MUMBAI: The reported resignation of Ashok Vemuri, board member and head of Americas, and global head of manufacturing and engineering at Infosys, the country’s second largest information technology services company, was just a rumour said an Infosys spokesperson. Industry sources said Vemuri, considered a potential chief executive officer (CEO), might have put in his papers. But it could not be confirmed or whether Infosys had accepted it. Sukanya Ghosh, communications and marketing head, told Business Standard the company did not want to comment on rumours. Attempts to get in touch with top management did not elicit a response. CEO S D Shibulal and co-chairman S Gopalakrishnancould not be reached as they were travelling. Chief financial officer V Balakrishnan did not respond to calls or messages on his mobile phone. Calls to Vemuri were not answered. (For details log on to : http://www.business-standard.com/india/news/infosys-denies-commentvemuri-quitting-/474056/)
IT’S RUSH HOUR FOR ENGLISH MOVIES ON SMALL SCREEN
NEW DELHI: The market for English movie channels is booming. Over the past few years, the total number of English movie channels has doubled from five to ten. Now, Indians are spending more time watching English films. Ajay Trigunayat, CEO, English entertainment channels, Times Television Network, uses TAM Media Research data to illustrate this. He reckons that going by the growth in viewership over last year or so, against 45 million people watching English movies for 42 minutes a week, the number has gone to 56 million watching those for 55 minutes each. And, this growth comes not just from the eight metros. “This category is growing at 30 per cent even outside of the metros. We are on the cusp of something fantastic,” says Sunder Aaron, executive vice-president and business head, Pix (part of Sony Entertainment network). New players such as Movies Now and Warner Movies, the spread of digitisation and the clutter on television are driving this growth. The result of this market expansion benefits everyone. Advertising spends on the genre grew 25 per cent to hit an estimated Rs 250 crore in 2011. Add pay revenues to these and the category inches to Rs 400 crore — just over one per cent of the Rs 33,000-crore television business. (For details log onto: http://www.business-standard.com/india/news/its-rush-hour-for-english-moviessmall-screen/473993/)
HIGH EXCISE DUTY DENTS MEDIUM, HEAVY COMMERCIAL VEHICLE SALES
NEW DELHI: Hit by a hike in excise duty, the sales of medium and heavy commercial vehicles (M&HCVs) declined by 11.60 per cent last month — to 19,914 units. While the M&HCVs used for passenger transportation grew by 32.81 per cent to 3,724 units in April, the sales of goods carriers dropped by 17.92 per cent during the period. The M&HCV sales during the corresponding period last year had grown marginally by 0.70 per cent to 22,528 units. Overall, volumes in the CV segment increased by a moderate 4.37 per cent to 56,257 units in April driven by demand for light commercial vehicles (LCVs). LCVs account for two-thirds of overall commercial vehicle sales. Market leader Tata Motors’ volumes slipped by 9.62 per cent to 29,692 units. The Society of Indian Automobile Manufacturers (SIAM) attributed the moderation in the growth in the CV segment to “sluggish sales” of medium and heavy commercial vehicles. “This is largely on account of the higher excise duty that considerably raised the prices of commercial vehicles,” according to Vishnu Mathur, SIAM’s director-general. “Consumers further postponed purchases expecting a reduction in excise duty, which happened a couple of days ago.” (For details log on to : http://www.business-standard.com/india/news/high-excise-duty-dents-medium-heavy-commercial-vehicle-sales/474055/)
CII, GOVERNMENT TO JOINTLY LAUNCH COMPANY FOR PROMOTING R&D
NEW DELHI: Fourteen years ago on May 11, as Indiatested three nuclear devices at Pokhran, the world closed its doors on the country with economic sanctions. The day, now called Technology Day to mark the anniversary of the tests, will see the government launching a company, under a public-private partnership between the Confederation of Indian Industry (CII) and the Department of Science and Technology, to attract the world’s leading technologies and promote innovation in the country. The joint venture will be called the Global Innovation and Technology Alliance (Gita). It will have an equity of 51 per cent by CII, while the Technology Development Board of the Department of Science and Technology will have 49 per cent. The project has been running on a pilot-basis since 2007-08. Under the scheme, future government funds allocated for R&D and technology will be assigned to Gita to manage the use of the money. To promote R&D, Gita will disburse funds to industry in the form of loans, equity or grants. It will provide a global networking platform for government, industry and academia. (For details log on to : http://www.business-standard.com/india/news/cii-govt-to-jointly-launch-company-for-promoting-rd/474039/)
FUEL SELLERS CREAK UNDER R10K-CRORE INTEREST BURDEN
MUMBAI: Selling fuel below cost is driving state-owned oil marketing companies (OMCs) to the brink as it shrinks profits, boosts interest payments and constrains borrowing room to expand or explore new business. Indian Oil Corporation (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) will pay 80% more in interest of roughly R10,000 crore this financial year, denting profits. The companies had to borrow more this fiscal as their under-recoveries or losses incurred on selling fuel below cost ballooned to a record R1.4 lakh crore, and the Centre, battling a high fiscal deficit, delayed compensation in cash. HPCL borrowed R30,000 crore this fiscal to meet working capital requirements and paid an interest of R2,000 crore amid rising rates. “During the fiscal, interest rates have been high, with the RBI raising key rates to counter inflation,” said HPCL director (finance) B Mukherjee. HPCL is waiting for compensation. “We are confident the government will work out a formula to compensate for the under-recoveries we incurred.” (For details log on to: http://www.financialexpress.com/news/fuel-sellers-creak-under-r10kcr-interest-burden/948040/)
EXPORTS UP 3.2 PER CENT TO $24.5 BILLION IN APRIL
NEW DELHI: India’s exports grew just 3.2% in the first month of the current fiscal to $24.5 billion, reinforcing fears that during the year a slackening demand from key markets could pull down exports much more strongly than last year. However, a deceleration in import growth — 3.8% to $37.9 billion — kept the trade deficit for the month at $13.4 billion, the lowest in last 12 months. India had managed to slightly exceed its export target for last fiscal by registering exports of $303 billion as the exporters increasingly targeted newer markets to offset the demand slump in the US and Europe. But the export growth has slipped considerably since November and in March, a negative growth (-5.7%) was reported. “The (data) is telling you that there are serious demand problem and constraints (in the western markets),” commerce secretary Rahul Khullar said. (For details log on to : http://www.financialexpress.com/news/exports-up-3.2-to-24.5-billion-in-apr/947874/)
DRUG PRICE CUT BY CIPLA BREACH OF PATENT RIGHTS: BAYER
BERLIN: German pharma major Bayer has charged that Indian generic drugmaker Cipla had breached its patent rights by slashing the price of a generic version of its patent-protected cancer drug Nexavar last week. Bayer Pharma has not given its consent to Cipla to launch its generic Sorafenib (sold under the brand name Nexavar) and the company’s decision to cut the price of the life-extending kidney and liver cancer drug “is a clear patent infringement”, a Bayer spokesperson said. Bayer holds the patent for Nexavar till 2020 and it will “vigorously defend its patent within the available legal framework”, the spokesperson said. Cipla had slashed the prices by up to 76% of its generic drugs, used in treating cancers of the brain, lung and kidney. The price of Soranib used for treating kidney cancer was cut by 76% to R1,710 “for a month’s therapy”, from R6,990, Cipla had said in a statement. (For details log on to : http://www.financialexpress.com/news/drug-price-cut-by-cipla-breach-of-patent-rights-bayer/947950/)
CONSUMER GOODS COMPANIES TO BITE PRICE BULLET AGAIN
KOLKATA | MUMBAI: Prices of consumer products such as televisions, digital cameras and personal computers are set to increase once again next month, while carmakers and mobile phone makers are under pressure to follow suit due to the rupee’s free fall. The rupee hit a record closing low of Rs 53.86 against the US dollar on Wednesday and, although it recovered sharply to close at Rs 53.43 on Thursday, market watchers expect the Indian currency to slip to Rs 55-56 levels within weeks. In two months, the currency has fallen almost 10%, from Rs 49 to around Rs 53.5. Companies like Samsung, Panasonic, Akai, BlackBerry, Canon, Dell and Acer said they are evaluating price increases of up to 6% across products because most of them have priced their products at Rs 51 against dollar. “The fresh round of rupee devaluation is causing very high anxiety amongst all consumer goods companies,” says Alok Bharadwaj, senior VP at Canon India. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/cons-products/durables/falling-rupee-consumer-goods-companies-like-samsung-panasonic-akai-blackberry-to-bite-price-bullet-again/articleshow/13088425.cms)
CHINA ORDERS BIG FOUR AUDIT FIRMS TO RESTRUCTURE
BEIJING: The world’s top four accounting firms will have to bring in Chinese citizens to run their operations in Chinaand end the dominance of foreign partners under new rules announced by the finance ministry on Thursday. The Big Four auditors — Deloitte Touche Tohmatsu, PricewaterhouseCoopers, Ernst & Young and KPMG — must start to convert their practices this August and comply with all the new rules by the end of 2017. The rules require them to “localise” their operations so that they are led by Chinese citizens and dominated by accountants holding China’s accountancy qualifications. The changes come at a difficult time for the Big Four, grappling with the fall-out from a string of accounting scandals at Chinese companies listed in the USthat has left investors questioning the quality of auditing in China. (For details log on to : http://www.business-standard.com/india/news/china-orders-big-four-audit-firms-to-restructure/474045/)
EDUCATIONAL INSTITUTIONS SET TO FOLLOW ICAI NORMS
NEW DELHI: Higher education institutes in the country will soon have to report their financial information in a standard and uniform format set by the Institute of Chartered Accountants of India. As per the format, the institutes will now have to disclose their balance sheet and the income and expenditure account. The new system is a shift from the present cash basis of accounting to accrual-based system. While the balance sheet will include sources and applications of funds along with liabilities and assets, the income and expenditure statement would reflect the academic receipts, grants and donations. With education being a not for profit activity, the ministry of human resource development (MHRD) wants to enforce these standards in order to check how much profit the educational institutes are making. (For details log on to : http://www.financialexpress.com/news/educational-institutions-set-to-follow-icai-norms/947941/)
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