business news from dec7 to jan 15

8/14/2019 Business News from Dec7 to Jan 15

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Name: - Gaurav Suvarna

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F.Y.B.M.S-B



Business News

Of

Monday,

December 7



Tarapur nuclear station shaken by

theft attempt

On Monday, December 7, 2009

TAPS says contract workers at the power plant tried to smuggle out

computers containing vital information; the incident is shocking as

facility has been on the terror radar for a while.

The Tarapur Atomic Power Station – which has since long been on the

radar of terrorist organisations – has been shaken by a security breach.

Two contract workers managed to steal two computers from the site,

and even got them past the first security point of the nuclear plant,

which is guarded by over 300 Central Industrial Security Force (CISF)personnel.

The accused, Prashant More and Amit Shelke, were nabbed when they

failed to give a satisfactory reply at the second security post.

More and Shelke worked for Sharma Engineering, a company that has

been awarded a maintenance contract for the piping in the core area of

the 320 Mw thermal power plant.

On November 1, the two allegedly stole the computers from the

company's warehouse inside the TAPS Complex. They tried to smugglethem out of the premises of the III and IV unit in the early hours.

'After stealing the computers, they hid them in the kitchen for a few

hours. Around 1.30 am, they tried to smuggle them out in a security

van,' said CISF commandant Swarn Das.

'They managed to clear the security at the first gate, but could not

provide a satisfactory reply to the security personnel on the second

gate. We informed the station director, U Ramamurty, who asked us to

file a complaint and arrest More and Shelke,' he added.

Ramamurty said the incident was shocking, as it involved national

security. 'An independent inquiry is being conducted by the Nuclear

Power Corporation of India Ltd to find out what information was stored

on the hard disks of the computers that were stolen,' he said.

Tarapur Police Station's Senior Police Inspector Sriram Mullewar

claimed he was in Nagpur and directed us to his subordinate, Assistant

Police Inspector R F Naik, who said a case has been registered against

the duo under Section 379 (theft) of the Indian Penal Code and they

were released on bail pending inquiry.



'We will add sections when we get further information from the TAPS

authorities,' he said. The incident has prompted authorities at the

nuclear power facility to run a stringent check on all contract workers,

who have access to the core area of the plant for maintenance

purposes"

Courtesy: - Mumbai Mirror

After Braving Recession, HotelIndustry Calls For Delicensing.


The hospitality industry in India has been one of the first sectors to

recover from the global economic slowdown. Hotels, in metros across

the country, have witnessed an increase in occupancy since September,

with Mumbai hotels recording occupancy as high as 65%. With a

complete recovery expected in 2010, hoteliers now want the hotel

industry to be delicensed for further growth.

“There are about 104 licenses required to set up a hotel in Maharashtra

and it takes up to 2 years to obtain the licenses. This increases the cost

of the project,” Suresh Talera, president, Hotel and Restaurant

Association of Western India (HRWAI), said. “We plan to request the

government to reduce unnecessary licenses and to implement a singlewindow system.”

According to hoteliers, the whole process of acquiring licenses

increases thecost of a project by 10-15%. Most hoteliers, however, are

optimistic of the business picking up with the number of foreign

tourists and corporate travellers likely to increase. Some hoteliers are

so confident of the occupancy increasing that they have even set up

business ventures in unexplored tourist destinations.



“In order to increase the stock of hotel rooms, the government has to

increase Floor Space Index (FSI) to 5 in all existing hotels across

Maharashtra,” Talera said. The hospitality industry was one of the

worst hit sectors due to the slowdown, the H1N1 epidemic and the

26/11 terror attacks. The industry saw a 50% drop in occupancy in

2008-09 peak season. “Once normalcy in business conditions isrestored, there would be a shortage of 1,60,000 rooms,” Talera said.

Courtesy: - D N A Mumbai

Copenhagen Climate Change

Summit


At the inauguration of the United Nations summit,

Intergovernmental Panel on Climate Change (IPCC) chief RajendraPachauri dismissed allegations by skeptics that the climate

change data were exaggerated, stressing that the panel was

'transparent and objective'.

This came as a response to recent leak by global- warming

skeptics of a partial exchange of e-mails between scientists in the

IPCC. E-mails from the University of East Anglia in England which

were posted on blogs suggest that climate change effects should

be exaggerated.

"Given the wide ranging nature of (climate) change that is likely

to be taken in hand some naturally find it inconvenient to accept

its inevitability. The recent incidents of stealing the e-mails of

scientists at the University of East Anglia shows that some would

go to the extent of carrying out illegal acts perhaps in an attempt

to discredit the IPCC," Pachauri said.

"The internal consistency from multiple lines of evidence strongly

supports the work of the scientific community, including those

individuals singled out in these e-mail exchanges, many of whom



have dedicated their time and effort to develop these findings,"

he added.

"The IPCC assessment process is designed to ensure

consideration of all relevant scientific information from

established journals with robust peer review processes, or from

other sources which have undergone robust and independent

peer review," Pachauri assured.

The controversy which broke out ahead of the UN summit was

seen as a campaign to disrupt the summit.

The chief of the Intergovernmental Panel on Climate Change R.K.

Pachauri has mentioned that there are more chances that a deal

will be finalised at the Copenhagen climate change summit, which

is slated to take place from December 7. He said the major

triggers for the hope are the announcements made by the US and

China. India will have to face more pressure and hence needs to

quantify the steps it was taking to reduce global warming.

Courtesy: - D N A Mumbai

Business News



Of

Tuesday,

December 8

11 New Expressways Ahead

On Tuesday, December 8, 2009

This is just a short term plan for the next decade. It is not easy to plan

for next 30-40 years at this stage as India is very dynamic.

However, officials of the District and Town Planning (DTP) department

of Haryana said that 242.55 acres of the total land acquired from 14

villages, have suddenly come under dispute because of existing

buildings on it, mostly homes.

An official at the DTP department said a litigation on this stretch is also

pending in the Punjab and Haryana High Court and possession can only

start after the court gives its decision.



District Town Planner Madhusmita Moitra said: “There is a stay order

on dispossession. The land has been acquired but the Haryana Urban

Development Authority (HUDA) cannot take possession of the

demarcated area till the court’s final decision.”

There is also the question of compensation to landowners. Officialrecords show property owners in 10 villages of the 14 have been given

compensation. The DTP official said: “Villages like Pawala Khasroorpur,

Chauma, Gurgaon village and Kherki Dhaula are still waiting. Though

the land has been acquired, these sprawling constructions remain the

problem.”

Once DTP gets possession of the entire 618.5 acres needed for the

road, the estate officer of HUDA will begin issuing tenders. DTP’s

superintendent engineer Pankaj Kumra said: “There will be a toll plaza

on this road as well like the other two on NH-8 at the Delhi-Gurgaon

border and Kherki Dhaula.” He, however, would not set a deadline for

the finish, given the problems in land acquisition.

India, on the other hand, has just started growing fast and it cannot

correctly guess its medium/long term requirements as of now. Even

DMRC, which is considered a gem in India, could not correctly guess its

train requirements as it is expanding so fast and has no prior

experience to see how much extra passengers will travel after opening

a particular length of line. By time, it will also gain experience.

As India will grow and will get richer year by year, the targets will keepon increasing. By 2030 we might be building 50 km of expressways each

day, who knows !!

Courtesy: - D N A Money

Mahindra Navistar to Make Buses


Mahindra & Mahindra (M&M) is all set to get into the high-end trucksand buses range with its US based joint venture (JV) partner



Navistar. The company says that it is the perfect time to make launches

as the economy is bouncing back.

India’s largest sports-utility vehicle maker will make and sell engines

under a separate venture called Mahindra Navistar Engines. “We plan

to start exporting engines after a year. The truck exports would followshortly,” Rakesh Kalra, managing director of Mahindra Navistar

Automotives, said.

Mahindra Navisar Engines on Monday unveiled the Maxxforce 7.2 litre

diesel engine which will power the M&M line up of CVs and buses.

Initially the engines will be used for the CV range followed by other

applications like marine products.

M&M and Navistar JV go way back in 2005. Now we see the productscoming out at the Auto Expo. We can expect a whole host of engines

and trucks coming out. The first one to be launched will be 25 tonnagetrucks. M&M will launch higher end tonnage trucks up to 49 tonne.These products will be manufactured at its Chakan plant, where thecompany is setting up engine manufacturing facility. This will have aninitial capacity if 40,000 units a year.

These products have envisaged an investment of about Rs 1,200 croreodd out of which Rs 1,000 crore has already been invested. Theremaining amount of Rs 200 crore will come in the next 18 months. Thecompany has already got 50% of its total investments at Chakan, whichis about Rs 4,000 crore odd. Hence, they have been able to mange Rs2,000 crore of funds. This is essentially been done by the consortium of

banks and the long-term debt that the company has taken.The company will also be launching and rolling out its busses.

However, it will take one and a half year for it. As far as the exportplans are concerned, it will be eventually exported. They will go aheadwith a brand new M&M Navistar JV format. They will appoint about 40odd dealers.




Panasonic’s Billion-$ Aim”s to

Double Sales In 2 Years


Tokyo: Japan’s Panasonic Corp said it will target double-digit overseas

sales growth in each of the next three business years, giving a glimpse

of the business plan it is due to issue early next year.

Driving overseas sales is important for Panasonic as it counts on the

domestic market, where the population is shrinking and ageing, for

more than half of its overall revenues.

The maker of Viera TVs and Lumix digital cameras also said it plans to

start white goods production in Europe and India, in a move to cuttransportation costs and cater to local consumer taste.

Panasonic is aiming for annual sales growth of 15-20% in emerging

markets of Brazil, Russia, India and China -- the so-called Bric nations --

plus Vietnam over the three years, Panasonic senior managing director

Hitoshi Otsuki told Reuters.

Besides the Bric countries and Vietnam, where it earned ¥420 billion

($4.8 billion) in sales in the year to March 2009, Panasonic also targets

Mexico, Indonesia, Nigeria, Turkey and the Balkan states including

Serbia as high-priority markets.

The company will aim for 30% annual sales growth in those nations for

the three financial years from next April by offering electronic products

designed and priced in a bid to spur demand among middle-class

consumers there, Otsuki said.

“We need to achieve 20 to 30% growth in emerging markets.

Otherwise, double-digit sales growth in overseas markets would be out

of reach,” Otsuki said in an interview on Thursday.

Panasonic, the world’s No.4 flat TV maker behind Samsung ElectronicsCo Ltd, LG Electronics Inc and Sony Corp, does not give its sales figures

for Mexico, Indonesia, Nigeria, Turkey and the Balkan states.

It is set to unveil a new business strategy in January.




Business NewsOf

Wednesday,December 9



Only 25% 3G money likely this year

On Wednesday , December 9 , 2009

Sources said telecom and IT minister A Raja has conveyed this point to

finance minister Pranab Mukherjee, too. The proposal has been referred

to the ministry of law as well for vetting the legal implications. Faced

with a steep fiscal deficit; the Centre is keen on holding the auction

process this financial year. The government is targeting Rs 30,000-

35,000 crore from the auction. The Union Budget presented earlier thisyear had kept a provision of raising Rs25,000 crore from 3G auction.

As the defence ministry would vacate 3G spectrum to be allocated to

telcos in phases, a DoT proposal talks of taking only the bid deposit this

financial year. The remaining amount can be paid by the winning

telecom operators at the time of "actual assignment of spectrum," it

says. Bid deposit is 25% of the actual bid amount, the note states.

The DoT note points out that the notice inviting applications (NIA),

which was scheduled for December 8, would get delayed by about 2-3

weeks. "However, the auction would be completed and money duereceived in financial year 2009-10 itself," it adds.

Meanwhile, DoT officially announced on Tuesday that the government is

in the process of finalising the details to be included in the NIA which

are being fine-tuned. "The NIA will therefore be issued shortly," it said.Courtesy: - D N A Money



Intel Readies For WiMax Boom In

2010


Lighter and more efficient netbooks, cheap handheld internet devices,smart phones running computer chips — Intel's plans for India in the

New Year are as challenging as they are exciting.

The company said its target of connecting nearly half of India's total

population online by 2012 is well within reach, thanks to the upcoming

WiMax auction.

Intel is betting big on wireless broadband technologies such as WiMax

to push PC penetration in infrastructure-challenged countries like India.

It has worked extensively behind the scenes to set up a policy

framework to herald wireless broadband service in India — the fastest

growing wireless market in the world.

In the absence of such regulation, Intel has had to stand by and watch

as mobile phone manufacturers and service providers reaped the

wireless boom. Intel is yet to establish its presence in handheld

devices.

It, however, expects 2010 to change all that. The WiMax launch is

expected to give a much-needed boost to the PC sales by making

broadband connections ubiquitous. As for addressing the mobile

market, the company will also launch more efficient versions of its

Atom processor, including one targeted at smart phones. The launch of

the new variant — based on the more efficient 32 nanometer

technology instead of the current 45 nanometer one — is expected to

happen in the first half of the year.




Uninor Applies Long Distance

Calling


Uninor is a joint venture between Norway's Telenor and real estate firm

Unitech. The company last week launched its GSM service across seven

circles. Meanwhile, Telenor, which holds 49% in Uninor, has received

government approval to raise its stake to 67.25%. The Norwegian

operator is already present in several Asian countries, including

Pakistan, Malaysia and Thailand. Recently, Australian communications

major, Telstra, sought government permission to enter India to provide

ISP (internet service provider), NLD and ILD services. Telstra'sproposal

is also with the FIPB.

The ILD and NLD licencees in India include foreign players like BT

Global, AT&T, Vodafone, Verizon and SingTel Global. To promote growthof NLD service, the entry fee for new licence was recently reduced from

Rs100 crore to Rs2.5 crore. The annual licence fee for NLD licences was

slashed from 15% to 6% of adjusted gross revenue (AGR). As for ILD

service, the entry fee was reduced from Rs25 crore to Rs2.5 crore. And

the annual licence fee was decreased from 15% to 6% of AGR.




Business News

Of

Thursday,

December 10



Satyam will pay $70 million toUpaid, settle spat

On Thursday, December 10 , 2009

Satyam Computer Services Ltd. has agreed to settle all outstandinglitigation with Upaid Systems Ltd. for $70 million, bringing an end to

Upaid's claims that the troubled Indian outsourcing giant committed

fraud in assigning intellectual property rights it did not own to the U.K.-

based mobile payments company.

After threatening to impact the future Satyam Computer Services (yes,

that's still the company's name on the Bombay Stock Exchange despite

being publicly "branded" Mahindra Satyam), the mobile technology

company Upaid has settled its dispute with the fraud-hit company for

$70 million.Upaid, which is based out of British Virgin Islands, had filed a forgery

and fraud case against Satyam and its erstwhile management headed

by disgraced founder B Ramalinga Raju, claiming $1 billion in damages.

However, since taking over the management of Satyam, Tech Mahindra

was in dialogue with Upaid for an out-of-court settlement.

Satyam would pay the agreed $70 million in two parts — $45 million

immediately and the balance within 12 months. The agreement also

makes it an obligation on part of Upaid to offer perpetual royalty free

patents on the products to Satyam.

Sources tracking the development were not willing to give any credence

to perpetual and royalty-free rights for the technology that is available

with Upaid.

"The technology was sought after way back in 2002. One has to wait

and watch how much revenues Satyam would be able to generate on

this seven-year old technology," a source said.

Upaid was once a customer of Satyam seeking the software company's

services for developing a specific technology for pre-paid mobile

services.

Upaid had paid about $10 million to Satyam and a part of the payment

was also done




Bajaj Auto divides business into

four core brands

On Thur sday, December 10 , 2009

Bajaj Auto has divided the company's two- and three-wheeler

businesses into four core brands to enhance focus and devise a clear

future strategy.

Not only has Bajaj decided to exit the scooter segment completely, it

has also decided to use the 'Boxer' brand for low-cost motorcycles

which are being manufactured in China and exported to various

countries in Africa and Brazil.

Then, the 'Bajaj' brand would be largely used in India for various

commuter and sports bikes and the KTM brand would house premium

motorcycles. Commercial vehicles would no longer have the 'Bajaj' tag

and be brought under a new brand name called 'Re'.

"Traditionally, 'Re' was put on our three-wheelers to denote a rear

engine vehicle. We have now decided to badge all commercial vehicle

products under 'Re', in line with what a lot of global companies do. This



will give a distinct brand identity to CVs...Toyota brands cars as Toyota

but trucks as Hino, we want to adopt a similar branding strategy.

citing low sales of its lone model 'Krystal' and the need to focus

exclusively on motorcycles. Coming to domestic bike sales, he also

admitted that Discover and Pulsar brand umbrellas would be used todrive the company's sales. So does this mean the 'Platina' and 'XCD'

platforms are being phased out? Bikes on both these platforms are only

being used for exports.


Railways to set up infra planning

panel


The ministry is also setting up a public-private partnership

implementation cell to be headed by railway board chairman S S

Khurana. The high-powered committee will be headed by Shri Prakash,

member (traffic), who is set to retire by the end of this month.



"The committee will identify business opportunities and assist the

ministry of railways in implementing and developing new strategies to

improve market shares in existing business segments," said an internal

rail ministry circular.

According to the circular, "it will suggest strategic directions forimmediate (next year) and long term (up to 2020) periods in terms of

infrastructure, technology.

The committee will also assist the railways in speedy implementation of

the dedicated freight corridor project and advise the ministry on the

implementation of public-private partnership projects.

As per ministry officials, the tenure of the committee will be for a

period of two years from the date of the chairman taking charge. The

terms and conditions to be applied to the chairman and members of the

committee will follow soon.

One of its key recommendations of late has been the setting up of auto

hubs.


Business News



Of

Friday,

December 11

FTAs could hurt farmers, too

On Friday, December 11 , 2009

The government should come up with concrete measures to assist

small-scale farmers, who are likely to be adversely affected by bilateral

free-trade agreements. Otherwise they will be forced to go out of

business. This is the view of a Commerce Ministry official who has been

involved in several bilateral trade negotiations.



Pawin Talerngsri, director for Agriculture and Environment at the

Department of Trade Negotiations, says in a research paper that

although farm output accounts for a small proportion of the nation's

gross domestic product, the sector employs a majority of people. The

sector also provides a safety net for blue-collar workers when they areunemployed, he says.

However, the farm sector is likely to be adversely impacted by the

emergence of bilateral trade agreements, he warns. The government

has inked a number of bilateral trade deals, among them FTAs with

Australia, New Zealand and Japan. The government also signed an

"early-harvest" agreement with China to open up the two markets for

fruit and vegetable products.

The agreements lead to the end of trade barriers such as tariffs, quotasand sanitary requirements. The details of each trade product and each

FTA vary according to the result of negotiations. Pawin categorises

farmers into three groups.

First, large-scale farmers who are exporters are likely to benefit from

FTA agreements by expanding overseas; but they are few. Second are

progressive farmers who aim to develop their procedures to sell their

products overseas and may contract with buyers for products at

guaranteed prices and fulfil conditions such as greenhouses and limited

fertiliser.

They are few but could grow and indirectly benefit from FTAs. Third, the

majority of Thai farmers are small-time with low funding and small

areas dependent on weather and geography, growing for their own

consumption and selling the surplus for cash; they are likely to suffer

from FTAs.


Cairn India rejigs holding structure


The company said early indications from the seismic studies in its Sri

Lankan offshore block have been encouraging. As a result, it started

the in-depth, three-dimensional seismic study on Thursday of its '2007-

01-001' block in the Gulf of Mannar, between Tamil Nadu and Sri Lanka.



The 3D study of the block, held through a wholly-owned subsidiary, will

be completed by April, process of data will be done by November and

drilling will start in April 2010.

It said some of the patterns identified from the preliminary studies

have shown similarity to those found in Cauvery basin, a site wherehydrocarbon deposits have been confirmed. The area of the block is

3000 sq km in deep water ranging from 400 metres in the east to about

1900 metres towards the west.

"While there are no well drilled in the block, a sparse 7km x 15km 2D

seismic grid data was available. These data have been interpreted,

based on which some possibilities of hydrocarbon plays have been

recognised, using the analogy of the contiguous Cauvery basin. Several

leads have been identified based on this regional 2D seismic

interpretation," the company said in a statement.

"While there are no guarantees of success when exploring a frontier

area such as the Mannar Basin, the block is under-explored and we are

encouraged by the studies we have conducted to date," it said.

The company's parent, Scotland-based Cairn Energy, recently

announced that it will not spin off its exploration subsidiary Capricorn

Energy as it was found to be in the "best interests of the shareholders

to retain Capricorn (and the potential upside presented by the new

acreage in Greenland) as part of the Group."

As a result, earlier this month, it bought back the 10% interest it had

sold in Capricorn to the Dutch group SHV two years ago.

Capricorn and Cairn India are the two primary asset-holding companies

of Cairn Energy. While Cairn India has mostly confined itself to Indian

assets, Capricorn, too, has some assets in the Himalayan region,

besides other parts of the world, including Bangladesh and Nepal. The

company has increasingly hinted that its next big find, after Rajasthan,

is likely to come from Capricorn's Greenland blocks.




Infosys to form US arm for govt

biz


Infosys Technologies Ltd, India's second largest software exporter, is in

the process of setting up a subsidiary in the US to focus on government

orders there, and will start hiring local talent for leadership roles soon,

chief executive officer V Balakrishnan said on Thursday.

"Government spending is happening in the US. They're talking about

creating infrastructure on the healthcare side. Many states are

spending a lot of money on infrastructure. We don't want to miss the

opportunity." However, he said it was too early to talk about how many

employees would be hired for the US arm.

In 2009, the US government has reportedly spent at least $70 billion on

information technology, and more and more Indian companies are

eyeing a share of the budgets that the federal and state governments

have set aside for 2010.

"The environment continues to be challenging. The comfort level of the

consumers has slightly gone up, but they're also very cautious, because

they're not very clear whether the growth is going to be sustainable."

However, the better comfort level is seen translated into timelybudgets and a higher share for offshoring. "Next year's budgets could

get finalised on time, maybe January-February timeframe. And the

budgets could be either flat or slightly down. Even if the budgets come

down, the offshore share will increase, that is the indication clients are

giving us."

With recovery likely to take a while, and client budgets remaining flat,

pricing is also expected to remain at current levels in the near future.

"Pricing environment has stabilised now. But we'll still see some

negative pricing because of all the concessions we gave in the past.Pricing will not go up in a hurry, it'll take time."

Balakrishnan said the US market has begun to recover but Europe

continues to struggle.




Business News

Of

Saturday,

December 12



Samsung bets big on touchscreens

for larger pieOn Saturday, December 12 , 2009

The current size of the handsets market in India is pegged at 8-9 million

units per month.

The Korean major is betting big on its touchscreen range, in which it is

the market leader. According to Ranjit Yadav, director, mobile and IT,

the thrust, however, will be across five segments -- essential,

multimedia, touchscreen, messaging and business.

"If we are looking for a higher market share, then the growth has to be

across all segments. Though touchscreen phones see higher

realisations, handsets priced below Rs 3,000 are the real volumedrivers. This segment comprises 70% of the market while the balance

30% is contributed by handsets priced above Rs 3,000."

Taking into account the landscape of highly-connected individuals in a

population profile where 60% are under 30 years, Samsung has created

a new handset segment -- messaging.

With the national launch of two Corby models -- Corby Plus and Corby

Pro -- in Kolkata on Wednesday, the company seeks to exploit this

space effectively.India has around 9-10 million users on social

networking sites like Orkut and Facebook and Yadav is upbeat that this

figure can only head northward.

"The user base for social networking sites and messaging is growing at

50% per annum. So we see a huge potential for our multimedia and

touchscreen phones. We expect almost 80% of internet users to access

the Net through their handsets," Yadav added.

The two Corby models are message-centric phones for heavy texters,

enabled through the finger-friendly QWERTY slide-out keypad (similar

to the ones on a PC or laptop). The Corby Plus is priced at Rs 10,050and Corby Pro at Rs 13,900.

Samsung has a 32% share in touchscreen handsets in volume terms.

The total touchscreen market in India grew to 1.8 million units from

800,000-900,000 in the previous calendar year.

The company launched 43 models across categories in 2009, of which

14 are in the touchscreen space and more such phones, especially for

messaging, are on the anvil.




Electronic mart booms, sans local

producersOn Saturday, December 12 , 2009

An industry taskforce set up by the government to suggest ways of

supporting the IT, BPO and electronics industry has warned the

domestic electronic industry could miss India's white goods boom in the

absence of a significant shift in government policy.

The taskforce, set up four months ago, warned that poor infrastructure

and high taxes have already restricted the Indian electronics industry

to just $20 billion (Rs 92,000 crore) despite the local market reaching a

size of $45 billion. As a result, $25 billion (55.6%) of electronic goods

were imported into the country.

"The rapid growth in demand... clubbed with the slow rate of increase

in domestic production, has resulted in an increasing demand-supply

gap... This is fuelling imports, increasing the outflow of foreign

exchange," the taskforce, headed by HCL Infosystems' chairman Ajai

Chowdhry, warned in its report to IT minister A Raja on Friday.

IT and ITeS exports are expected to touch $82 billion by 2014, and $175

billion by 2020. The domestic market, estimated at $12.4 billion, is

likely to touch $23 billion by 2014, according to the taskforce.

At $1.6 trillion, the electronic industry is nearly 4.4 times the size of the

world oil, petrol and mineral industry and is both the biggest and the

fastest growing. It is expected to reach $2 trillion by 2014, when the

Indian market is expected to touch $125 billion.




Russians set to corner N-plantorders

On Saturday, December 12 , 2009

New Delhi: Even though it was the US that was responsible for lifting of

the 45-nation Nuclear Suppliers Group's ban on India, US companies

aren't quite in favour when it comes to placing orders for nuclear power

plants, mainly because of their expensive quotations.

"US nuclear plant costs are double the cost of indigenous

manufacturers and they should source their material from Indian

companies to make technology affordable," Rakesh Nath, chairman,

Central Electricity Authority said on the sidelines of a CII conference.

He hinted at Russian firms' chances of bagging most of the orders,

saying they were quoting reasonable prices.

Prime Minister Manmohan Singh signed an agreement on cooperation

for peaceful use of atomic energy with Russia in Moscow last week. A

delegation of over 50 US companies recently visited the country to

explore opportunities of selling nuclear power equipment. These



Tata Steel in Rs 5K cr equity planOn Monday, December 1 4 , 2009

Post dilution, firm will raise another Rs 5,000 cr via debt Tata Steel is in

talks with international investors to raise at least Rs 5,000 crore

through equity and an .....

Fuel-efficient power plants policy on anvil

Half the new power plants in 12th Plan may use supercritical equipment

Coinciding with the Copenhagen negotiations on greenhouse emission

cuts, the Planning C .....

DLF board may clear DAL merger Tuesday

DLF board may clear DAL merger Tuesday Realtor will keep it as an arm

for later listing in SingaporeDLF Ltd, the largest real-estate developer

in the country by market capitalisation, is set to merge D .....

Lyondell ignores RIL’s offer, files rescue plan

• Plan comes up for judge’s consideration on Tuesday• Approval will

make it tough for RIL to acquire firm .....

Wind mill sale this month



DLF, which was in talks with Brussels-based GDF Suez Energy

International and Akuo Energy International for selling its wind mill

business, is set to seal the deal by the month .....

Parsvnath to mobilise Rs 242 crore PE funds

Parsvnath to mobilise Rs 242 crore PE fundsParsvnath Developers is

looking to raise Rs 242 crore by the March-end by diluting more stake

to private equity (PE) investors at the project level, a seni

General Motors to create new CV brand


Fuel-efficient power plants policy

on anvil

On Monday, December 1 4 , 2009

New Delhi: Coinciding with the Copenhagen negotiations on greenhouse

emission cuts, the Planning Commission and the Union power ministry

are working on a policy for efficient use of coal in power generation.

The policy is expected to specify measures to have 50% of new power

capacity based on supercritical power equipment during the 12th Plan

(2012-17).Supercritical power equipment have a higher fuel efficiency

rate of 38-40%, compared with 28-30% in the case of subcritical plants.

Recently, the environment ministry had announced that by the year

2020, India would cut carbon emission intensity by 20-25%.According to

a report by the Central Electricity Authority, the apex power sector

planning body, 50 out of 81 thermal power plants in India had stocks of



less than 7 days of consumption in September. This is the highest

number of plants having stocks below the critical level in recent times.

"While subcritical power plants take up to 35 months for

commissioning, the supercritical plants take at least 45-50 months. This

reduces the rate of return for the private power producers," Kuljit

Singh, partner, Ernst & Young, said.

Even though Indian manufacturers like Bharat Heavy Electricals Ltd are

developing supercritical power plants, it is the Chinese and Korean

companies that have secured the maximum orders till date for such

plants in India. "Chinese companies are better placed to secure orders

from Indian power producers because of their cost benefits," Singh

said.


DLF board may clear DAL merger

Tuesday

On Monday, December 1 4 , 2009

New Delhi: DLF Ltd, the largest real-estate developer in the country by

market capitalisation, is set to merge DLF Assets Ltd (DAL), a company

held by promoters Kushal Pal Singh and Rajeev Singh, and make it a

subsidiary to synergise the businesses, an official familiar with the

process said. Currently, DAL is a separate legal entity.



Stage Two of the plan is a listing of DAL on the Singapore real estate

investment trust market next year.

DLF is likely to convert Rs 2,800 crore of receivables from DAL into

equity and, along with a share-swap agreement between another of its

subsidiaries and DAL, take a controlling stake in the entity.

Making DAL a subsidiary would boost DLF's rental income. It also allows

DLF to tap a fund source -- discounting its lease rentals -- to reduce

debt.

DAL currently has 6.5 million sq ft of commercial space which earn

lease at an average Rs 55-60 per square feet. It expects to have 8

million sq ft of leaseable assets in the next 12 months and a total 13

million square feet over the next two years.

DLF's committee of independent directors has appointed Citibank, Ernst

& Young and Grant Thornton as advisors to the proposed deal.

The valuation could not be immediately ascertained but sources said

swap is the likely favoured route as DLF is reeling under high debt

burden and lower demand, especially in the commercial property

segment.




Business News

Of

Tuesday,

December 15

Intel's new Atom chips in JanuaryOn Tuesday , December 1 5 , 2009



New Delhi: Intel has, for the first time, confirmed that its first upgrade

to the low-cost Atom chip will be commercially available from next

month.

Speculation has been rife that Intel plans to unveil the new line-up of

Atom at the Consumer Electronics Show (CES) at Las Vegas on January

11, but the company had not confirmed the launch date.

Product upgrade dates are usually held close to their chests by

manufacturers so as not to disrupt the current market by encouraging

consumers to postpone their buys till after the upgrades are released.

"New netbook and notebook platforms... will be commercially available

in January," Rama Shukla, vice-president of Intel's mobility group, said

at an event to unveil Intel's Wimax strategy in New Delhi.

The Atom processor, estimated to cost around $40 to bulk-buyers, or a

fourth of normal chips, has become wildly popular across the world,

including in price-sensitive countries like India. The new range of chips

are eagerly awaited as they integrate graphics and memory controllers

onto the main processor die, reducing power consumption, heat

emission and chip-manufacturing costs. For consumers, it translates

into longer battery-life and quiet, fanless netbooks.

According to estimates, the current mainstream Atom processor and

associated chips consume around 9 watts of power, while the new

design is likely to reduce it to 4-5 watts.

While Atom as a platform was initially designed for netbooks or low-

cost notebooks, Intel soon released a more demanding version meant



for cheap desktops. Shukla also demonstrated a sub-Rs 15,000 LCD-

desktop, based on Atom, with Wimax connectivity built-in, made by HCL

Infosystems.


Ranbaxy sure of monetising

Flomax, Lipitor, NexiumOn Tuesday, December 15 , 2009

Firm can get over $3.5 bn in just exclusivity sales of the 3 drugs in next

5 years

Ranbaxy Laboratories may soon get over the splitting headache it has

had since failing to capitalise on the first to file (FTF) opportunity for

GSK's migraine drug Imitrex a year ago.

The Gurgaon-based drugmaker, owned by Japan's Daiichi Sankyo, is

confident of monetising three other billion-dollar opportunities coming

right up —- Flomax, Lipitor and Nexium.

The company has the FTF status on all the three drugs, which gives it

six-month sales exclusivity on each in the US. In other words, it would

be the only company marketing the generic versions of these drugs

during this period, other than the respective innovator company.

"We are confident about cashing in on these opportunities, like we did

with Valtrex in November," a top official said.

Valtrex (valacyclovir hydrochloride) is the $1.3 billion innovator drug of

GlaxoSmithKline used in treatment of herpes. With the launch of its



generic version in the US, analysts expect sales of $160-200 million for

Ranbaxy during the exclusivity period.

The US is a key market for Ranbaxy, and accounted for about 24% of its

sales last fiscal.

Flomax, Lipitor and Nexium are the innovator drugs of Yamanouchi

(now a part of Astellas Pharma), Pfizer, and AstraZeneca, respectively.

As per IMS Health estimates, the drugs recorded sales of $1.2 billion,

$13.65 billion and $7.8 billion, respectively in 2008.


Abu Dhabi throws Dubai a lifeline,

terms uncertain

On Tuesday, December 15 , 2009

The surprise rescue enables Dubai World to repay a $4.1 billion Islamicbond its property developer unit Nakheel was due to honor on Monday.

The cost of insuring Dubai's debt against default fell sharply on thenews, and the stock market in the glitzy emirate rose 10.4 percent, itsbiggest one-day gain in 14 months.

Shares in Abu Dhabi, Saudi Arabia and Qatar also recovered on relief animmediate crisis had been averted.

Dubai World rocked global markets on November 25 when it askedcreditors for a standstill on $26 billion in debt mainly linked to its twoproperty firms, Nakheel and Limitless World.

The bailout marked a spectacular double policy shift. Dubai last monthdeclined responsibility for Dubai World's debts, and conservative AbuDhabi, which produces 90 percent of the United Arab Emirates' oilexports, had given no hint that it would ride to the flamboyant businesshub's rescue.

However, credit ratings agency Fitch Ratings said Abu Dhabi's supportwas only "a tactical step to permit an orderly restructuring of obligations within Dubai to continue."



A Dubai government statement said the remaining $5.9 billion not usedto pay the Nakheel bondholders would support Dubai World until theend of April next year.

But the conglomerate at the center of a $26 billion debt storm stillneeds creditors to agree a standstill, and a massive restructuring, inorder to get financial support to cover working capital and interestexpenses.

Statements from Nakheel and the Dubai government indicated theNakheel bondholders would be paid unconditionally. However a Dubaigovernment source made clear other lenders would only receiveinterest payments if they agreed to the debt standstill.

Analysts said the emirate's troubles were far from over. Theyquestioned a statement by a Dubai government source that there wereno conditions on the loan beyond the debt standstill.

"We've still got $35 billion due in bonds, loans and repayment over thenext couple of years, so this is only one thing," said Saud Masud atUBS. "The big question is how are they are going to do this next step?"

Loans worth a total $3.7 billion to DW unit Limitless World and to BorseDubai, 60 percent owned by state-owned Investment Corp. of Dubai, falldue before the April timeline.

Separately, a Japanese government study showed the Dubaigovernment and affiliated firms owe non-financial Japanese companiesroughly $7.5 billion in credit that had not been collected as of October

31.


Business News



Of

Wednesday,

December 16

DB Corp IPO biggest in nearly 2 yrsOn Wednesday , December 16 , 2009

Mumbai: The DB Corp Ltd public issue has turned out to be the biggestblockbuster to hit the Indian stock markets in two years.

Launched by the most successful Indian-language media company interms of reach and profitability, it was subscribed 39.54 times,according to data from the National Stock Exchange.

This is the highest subscription an IPO has garnered since January2008, when the Reliance Power issue saw 73.04 times subscription.

The next big issue happened 20 months later, when the Oil India IPOgot subscribed 30.82 times in September this year.

DB Corp's QIB portion alone was subscribed 68.52 times, while the highnetworth investor subscriptions stood at 25.87 times.



Goldman Sachs, the world's largest investment bank, sought 7 timesthe number of shares available in the QIB category through a singleapplication for Rs 1,000 crore.

"This has been a different kind of IPO, coming after a slew of powercompany issues. The promoters have a tremendous track record andthe pricing was also a win-win," said Vallabh Bhansali, chairman, EnamSecurities, and lead banker to the issue.

What was interesting was retail investors, who have been wary of IPOsin recent times, were heavy buyers.

The retail portion of the issue was subscribed 3.42 times, the highestfor any major issue this year -- discounting a Rs 45 crore IPO byThinkSoft in September, which saw 4.3 times retail subscription.

The major issue that saw largest retail participation, apart from DB

Corp this year, was NHPC, which subscribed 3.87 times in that categoryin August.

"It is after a long time that we have seen such a subscription in theretail segment. It clearly shows that if you leave something on thetable, retail investors will participate," said Hitesh Agarwal, head of research at Angel Broking.

"We can see 10-15% listing gains so retail investors who put in themoney would not be disappointed," said Deven Choksey, CEO of KRChoksey Securities.

Previously anchor investors were also bullish on the issue. Thecompany had raised Rs. 69.355 crore through an allotment of equityshares to total of 9 anchor investors at higher end of the price band.

Fidelity International, IDFC, BNP Paribas, ICICI Prudential LifeInsurance, Reliance Capital, Nomura, Government of SingaporeInvestment Corporation were some of the big anchor investors in theissue.


India's policies a potential disasterin the makingOn Wednesday , December 16 , 2009

Mumbai: Elephant In The Room is a series of articles that will goad thereader to pay attention to some obvious wrongs -- or rights --happening in financial markets. Why elephant? Fifty years after thephrase was first used, it remains a cogent description of someone indenial: seeing, but not believing. As we all know now, these wrongs (orrights), if treated in time, can save (or make) investors pots of money.If not....



The attempt is to provoke thought; and the writers, from deep withinthe markets, who are worried sick or want to tell the world the greatthings that are in store. They shall remain unknown for complianceissues, because their jobs don't always let them tell it like it is. Ergo,they shall let the steam out in DNA. Happy reading.

Equities are up over 70% calendar 2009 till date, the rupee hasappreciated against the US dollar, and bond yields are resilient.

The market in its myopia is looking at the Reserve Bank of India-createdliquidity, government's expansionary fiscal policies and a globaleconomic recovery brought about by expansionary policies of majorgovernments and central banks.

India has reduced taxes, increased wages and provided for higherexpenditure to bring the economy back to a potential 9% growth path.

The fact that a 9% GDP growth came with a bubble bust has gonecompletely unheeded.

The Pay Commission revision implemented last year has meantgovernment employees receiving more pay for being less productive.The labour policy of the government for a 9% growth is hire more andno productivity targets.

When countries like Ireland are forced to cut public sector pay andreduce public sector workforce to bring down a fiscal deficit which issimilar to India's, India is just going the opposite way.

The government recently approved a higher spending of Rs 30,000crores. The reasons were higher food, agriculture and fuel subsidies.The government is reeling under the impact of complete inaction onagriculture over the boom years of the 2000's. Food price inflation is at20% levels and the government from their noises are completelyclueless in reigning in food prices.

Their solution?To increase the minimum support price (MSP) to farmers.The higher MSP translates into a higher cash inflow into the mostunproductive sector of the economy, which, unfortunately, is not taxed.

The agriculturists are spending the cash resulting in more demand forscarce goods but how long can this be sustained is what one need's toask.

A higher MSP will add to inflation, not necessarily result in higher foodproduction and is difficult to roll back.




Isro voices concern over broadbandspectrum


New Delhi: Here's a new spin to the telecom spectrum story that mayaffect the forthcoming broadband wireless access auction.

Indian Space Research Organisation (Isro) wants to ensure protectionfor mobile satellite and broadcasting satellite services, before thespectrum band for broadband wireless access (BWA) is finalised.

In a letter to Telecom Regulatory Authority of India (Trai) secretary RK Arnold, Isro scientific secretary A Bhaskaranarayana has written thatthe Department of Space (DoS) has in principle identified two slots of 20 MHz each for the possible use by BWA players.

However, "the DoS has informed the Department of Telecommunications (DoT) that use of these two 20 MHz slots by BWAwill be subject to ensuring protection to the mobile satellite servicesand broadcasting satellite services in the spectrum bands adjacent tothe proposed BWA spectrum bands," the Isro official's letter added.

The DoS and Isro concern is over allotment of BWA spectrum in 2535-2555 MHz and 2635-2655 MHz bands.

According to Isro, the Wimax characteristics, as defined currently, willaffect the sensitive mobile satellite and broadcasting satellite services"due to out-of-band emission".

An expert committee, comprising representatives of DoT, DoS, andWimax Forum, is deliberating on the issue.

"Depending on the results of these deliberations, necessary technicalmeasures to be implemented need to be finalised," Isro said. Thequantum of spectrum to be available for BWA or Wimax will depend onthese deliberations.

Some of the other bands (for instance 3.4-3.6 GHz), proposed for BWA,have been rejected by the Department of Space as well.

Isro has pointed out that since many spectrum bands are used forseveral sensitive services and some of the bands may have specificissues, "applicability of the auction model to all bands cannot begeneralised".

DoT has scheduled auction of spectrum for 3G services on January 14and 15, 2010.

Bidding for BWA spectrum is set for two days after the conclusion of 3Gauction.

However, the auction process is likely to be delayed over spectrum-related issues.




Business News

Of

Thursday,

December 17



Airtel eyes Warid Telecom in B'desh;close to deal


Updated on Thursday, December 31, 2009, 00:24 IST Tags:Airtel, WaridTelecom, BangladeshDhaka: Telecom giant Bharti Airtel is close to clinching a deal to

acquire 70 per cent stake in Warid Telecom, a local mobile company inBangladesh owned by Abu Dhabi Group, with top officials from bothcompanies meeting here to "brainstorm a consensus", a media reportsaid today.

"A memorandum of understanding (MoU) could be signed between thecompanies during the visit," an official at Warid Telecom was quoted assaying by the Daily Star.

Bharti Airtel has placed a USD 300-million initial investment planbefore the Bangladesh Telecommunication Regulatory Commission(BTRC), which will be implemented after signing the deal, the papersaid.

The nod of BTRC has been sought by Bharti Airtel in a letter to buy thestake in Bangladesh operations of Warid Telecom.

The MoU is the primary step before signing the final deal between thecompanies to share confidential business strategies.

According to the newspaper, the regulatory authority has asked forsome documents, including Airtel's investment plan in Bangladesh andboard of director's approval from both the companies regarding the

deal.

"The BTRC has asked the companies to submit these documents beforesigning the deal," BTRC Chairman Zia Ahmed said, the paper reported.

Bharti Enterprises Chairman and Group CEO Sunil Bharti Mittal metBangladesh Telecom Minister Rajiuddin Ahmed Raju yesterday.

Airtel is going to invest in Bangladesh, Sunil Kanti Bosh, secretary of telecommunication ministry, said adding that the company also looksfor providing telecom services between India and Bangladesh ataffordable cost.



Warid made its Bangladesh debut as the sixth mobile operator in May2007 and has roped in 2.79 million subscribers until October.

Several companies like SingTel, Vodafone and Etisalat had also

approached Warid to form a partnership in Bangladesh, the Daily Star

said.

Courtesy: - Times Of India

US accuses Intel of stiflingcompetition


The US government accused Intel Corp. of illegally using its market power to stifle competition onWednesday, just a month after the computer chip giant reached a 1.25-billion-dollar settlement withrival Advanced Micro Devices.

"Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly,"Richard Feinstein, director of the Federal Trade Commission's Bureau of Competition, said inannouncing the FTC complaint against Intel.

"It's been running roughshod over the principles of fair play and the laws protecting competition on themerits," Feinstein said.

"The Commission's action today seeks to remedy the damage that Intel has done to competition,innovation, and, ultimately, the American consumer," he added.

The FTC suit comes almost exactly a month after Intel, the world's biggest computer chipmaker,agreed to pay AMD to settle the long-running legal dispute between the two chipmakers on antitrustand patent issues.

The attorney general of New York state filed an antitrust lawsuit against Intel in November alleging thechip giant had engaged in illegal practices to dominate the market.

Intel senior vice president and general counsel Doug Melamed said settlement talks stalled when theFTC "insisted on unprecedented remedies" that would have made it "impossible for Intel to conductbusiness."

"The FTC's rush to file this case will cost taxpayers tens of millions of dollars to litigate issues that theFTC has not fully investigated," he said.

The FTC is seeking an order from an FTC administrative law judge that would prevent Intel from"using threats, bundled prices, or other offers to encourage exclusive deals, hamper competition, or unfairly manipulate (chip) prices."

The FTC said Intel's anticompetitive tactics were designed to put the brakes on superior rival productsthat threatened its monopoly in the market for central processing unit (CPU) microchips, the "brains"of computers.

"Over the last decade, this strategy has succeeded in maintaining the Intel monopoly at the expenseof consumers," the FTC statement said.



The FTC accused Intel of using "threats and rewards" with major computer makers such as Dell,Hewlett-Packard and IBM to coerce them not to buy chips produced by rival companies.

Intel also allegedly "secretly redesigned key software, known as a compiler, in a way that deliberatelystunted the performance of competitors' CPU chips," the FTC said.

Nvidia welcomed the FTC's suit. "We applaud today's action by the US Federal Trade Commission," itsaid. "We are particularly pleased to see scrutiny being placed on Intel's behavior toward GPUs,which have become an increasingly important part of the PC industry."

Intel last year also challenged an 18-million-dollar fine imposed by South Korea's antitrust watchdog.

Intel shares shed 2.12 percent in New York to close at 19.38 dollars. AMD gained 3.74 percent toclose at 9.15 dollars while Nvidia gained 8.05 percent to finish at 16.91 dollars.


Rajaratnam, Chiesi indicted in UShedge fund fraud


New York: A US grand jury on Tuesday indicted Galleon hedge fund founder Raj Rajaratnam and co-defendant Danielle Chiesi on charges of securities fraud and conspiracy in an insider trading caseinvolving employees of some of America’s best-known companies.

The indictment in Manhattan federal court, two months after the pair were charged along with othersin a coast-to-coast probe on October 16, lists 17 counts of conspiracy to commit securities fraud andsecurities fraud. Sri Lankan-born Rajaratnam and Chiesi, who worked with New Castle LLC hedgefund, are the only indictments returned so far in the case, which expanded in November to include 20people facing criminal and civil charges.

The billionaire Rajaratnam, a US citizen who is free on $100 million bail, is the most prominent figurein what US prosecutors described as the biggest hedge fund insider trading case ever. Thegovernment said investigators used wire taps, tactics historically used in organised crime probes, togather evidence. Rajaratnam’s lawyer has consistently said he would fight charges. “Rajaratnam is

innocent and looks forward to his day in court when a jury of his fellow citizens will examine andevaluate all of the evidence,” Rajaratnam’s lawyer, John Dowd, said in a statement.

Chiesi’s lawyer Alan Kaufman said the indictment did not contain any new allegations from thosemade in October when she was arrested on insider trading charges.”We intend to appear in court,plead not guilty and we will vigorously fight the case,” Kaufman said. The two accused were expectedto appear in Manhattan federal court on Monday, their lawyers and the office of the US Attorney said.Most of the accused had expertise in tech stocks, and the allegations included passing insideinformation on earnings announcements, takeovers and contracts on 10 firms, generating more than$30 million in illegal profits, according to prosecutors.

They alleged that Rajaratnam and Chiesi made $20.8 million in illegal profits. Six traders or lawyers

have pleaded guilty to charges in the investigation, which ensnared employees of IBM Corp,

McKinsey & Co management and former lawyers of the Ropes & Gray law firm.




Business NewsOf

Friday,December 18



Intel chips in with thank you bonus


The most important innovator that has had the biggest impact on the

development of the digital age is the Intel Corporation. This innovatoris what eventually made the personal computer industry possible. It is

what also made all theories up until this point into reality. Charles

Babbage had almost everything he needed except for one thing.

Unfortunately, technology was not advanced enough in his time for the

things that he dreamed up, and he needed something that could

process his programming fast enough. Sadly it would be years and

years until technology was able to catch up with his ideas.

The Intelmicroprocessor chip 8080 was a revolutionary invention that

has supported the computer industry since its inception. Not only was

this Intel chip remarkable for its time but it is still astounding today aswell. This Intel chip today is not the Intelchip that it was when it was

first release. The 8080 is the basis of all Intel chip models since.

Improvements have been able to be made to make these chipsfaster,

stronger, and smaller but still capable of holding more and more in it.

According to Intel co-founder Gordon E. Moore, “there is a long-term

trend in the history of computing hardware, in which the number of

transistors that can be placed inexpensively on an integrated circuit

has doubled approximately every two years.” He subsequently named

this action Moore’s Law. To sum up very simply, the chips that

the Intel Corporation has manufactured will be able to consistentlygrow infinitely in capacity. Pretty much the whole personal computer



industry has the Intel chip to thank for its success. Without it Personal

computers would not be able to process any of the information or its

programming. Besides the personal computer industry, the personal

electronics industry has grown because of the Intel Corporation as well.


Gulf moves closer to single

currency


KUWAIT CITY (AP) - Kuwait's finance minister says a monetary pactbetween Gulf Arab nations has gone into effect, a move that brings thenations closer to the so-far elusive goal of a unified currency.The official KUNA news agency quoted Mustafa al-Shimali as sayingTuesday that central bank governors from the six Gulf CooperationCouncil countries would set a timetable to set up a regional centralbank with an ultimate aim of setting up a unified Gulf currency.

The development came as leaders of Saudi Arabia, Kuwait, Bahrain,Qatar, Oman and the United Arab Emirates were poised to wrap up atwo-day summit in Kuwait.



GCC nations have been working toward greater integration, but the

plan for a unified currency suffered a blow when the UAE and Oman

said they would not join.


RNRL is being cheeky with SC andgovt: RIL


New Delhi: Firing on all cylinders against Anil Ambani's RNRL on the lastlap of arguments in the gas dispute case, Mukesh Ambani's RIL onThursday accused younger brother Anil of getting cheeky with the

Supreme Court and the Centre by producing confidential letters,mouthing blatant lies and reneging on its stand.

RIL's counsel Harish Salve said the consistent stand of RNRL throughits representative Venkatarao Ponada was that the gas supplyagreement between RIL and RNRL had to be based on the May 12, 2005,draft agreement between RIL and NTPC.

Salve said the May 12 draft agreement as well as the subsequentones between RIL and NTPC had all specifically mentioned that the offerto supply gas to the PSU at $2.34 per mmbtu was subject to"government approval".

"Once RNRL found that it was on a sticky wicket over the May 12,

2005 draft, it produced a confidential letter written by NTPC chairmanto the government saying government approval was not a pre-



condition. How did they get this letter? They proudly say that they havetheir contacts. I think they are getting a little cheeky with the SupremeCourt and the government," he said.

Moreover, he said RNRL had resorted to blatant lies before the courtby submitting that the May 12, 2005 document was not on recordbefore the high court. "I have argued before the HC and had clearlycited the May 12 document," Salve said, adding, "It's all getting a littlecheeky and serious."

The NTPC chairman's letter in 2009 was not a contemporarydocument to be relied on for the purpose of deciding the disputehinging on the provisions of scheme of demerger, he said.

It is the NTPC draft of May 12, 2005, which RNRL had understood tobe a contemporaneous document that could be relied on and it shouldnot be allowed to renege on its stand at this late stage of the dispute,Salve said.

Attempting to drive home that the Gas Supply Master Agreement(GSMA) between RIL-RNRL was a valid document, Salve said if RNRL

thought that it was being influenced by the Gas Utilisation Policy (GUP)of the Centre, then the Anil Ambani firm was free to challenge the GUPin court.


Business News



Of

Saturday,

December 19

ONGC finds new oil reserve: ReportOn Saturday, December 19 , 2009

MUMBAI: Oil and Natural Gas Corp has found traces of a new oil reservein Gujarat that could raise its onshore oil production by 20 per cent, theBusiness Standard reported on Monday, citing anonymous companysources.

The new hydrocarbon structure is likely to produce at least 1 milliontonnes per annum (mmtpa) of oil, the paper said. This is just under half



the oil production of 2.2 mmtpa from the company's existing fieldlocated in the same area, it said.

"This could be the largest onshore oil find for ONGC in the last onedecade. The area has the potential of producing 1 mmtpa oil and canpossibly even go up to 2 mmtpa,' the report quoted an unidentifiedONGC official as saying.

ONGC officials were not immediately available for comment.Courtesy: - Times Of India

Sun Pharma tells Taro shareholdersto oust board


Japan’s top pharma comes callingSun Pharma’s net dips 11% on USsalesEU anti-trust raid on Ranbaxy France unitMumbai: Ahead of the annual meeting of shareholders of TaroPharmaceuticals on December 31, Mumbai-based Sun Pharma hasasked the shareholders of the Israeli company not to re-elect thepresent directors to the Taro board. Taro Pharma has been warding off a takeover bid by the Indian company ever since a proposed $454-million merger deal was called off in 2008. Both companies have suedeach other in Tel Aviv and New York.

Sun’s response comes a week after Taro appealed to shareholders tovote for the current management and warned them they could face thesame fate of Sun’s subsidiary Caraco Pharmaceutical Labs, if the Indian

firm succeeds in its takeover bid. Caraco had to discontinue productionof drugs at its Michigan plant after FDA raids early this year.



But in his letter, Dilip Shanghvi, CMD, Sun Pharma, has dismissed suchconcerns. Instead, he has come down heavily on Barrie Levitt, chairmanof the drug firm, for his comments against Sun Pharma. Alleging thatTaro did not have reliable numbers for seven years (it has not producedaudited financial results between 2006 and 2008), Shanghvi said themanagement team and the directors continue with the company,despite it being driven almost to bankruptcy.

After the merger deal fell through, Sun Pharma is trying to acquire amajority in Taro through a tender offer. It has already acquired 36% inthe company. Last week, Templeton Asset Management Ltd, which hadsupported Levitt in Taro's battle against Sun, decided to withdraw fromTaro's appeal against Sun filed with the Israel Supreme Court.Templeton owns a 10% stake in Taro.

Shanghvi's letter alleged that "company money and resources are being

blatantly used to protect the interests of the same management teamwho also happen to be a mere 11% owner". On Caraco, he said swiftactions were taken to address the FDA scrutiny. "It is a fact that Caracohas had serious problems. However, the board took swift actions. Whilethe FDA related developments are a negative, these haven’t been takenlightly by the board of directors of Caraco," Shanghvi said.

He also noted that "six years ago, Taro was 1.5 times more valuablethan Sun. Today, Sun is 17 times more valuable than Taro," Shanghvisaid. "In these past six years, Taro’s share price has decreased 86%,resulting in the loss of $1.6 billion of shareholder value. This representsa direct loss of $1.4 billion to shareholders outside...


New emission norms may missdeadline


NEW DELHI: Will the new emission norms miss the April 2010 deadline?Automobile industry body Society of Indian Automobile Manufacturers(Siam) is upset over the non-assurance by oil companies on supply of requisite-quality fuel and has requested the government to look at

delaying the deadline for the new emission norms.



Pawan Goenka, president of Siam, who also heads the four-wheelerbusiness of domestic auto major Mahindra & Mahindra, told TOI thatvehicle makers were concerned due to uncertainty over the supply of cleaner fuel and wanted a clear picture. "Else please do not implementthe new norms and delay them. Auto industry should be informed inadvance if there is any deferment so that we can make the requiredadjustments to our programmes as well," Goenka said.

Siam has written to the ministry of road transport and highways on thematter. "If some change has to be made to the schedule, please decideon it as early as possible," Goenka said, adding that a low-quality fuelcould damage after-treatment devices.

The auto industry's concerns appear valid as the government hadannounced last-minute deferments to the schedule during the lastswitch in 2005, when 11 cities were moved to Bharat Stage III (BSIII)and the rest of the country to BSII norms. More than half a dozen states

were kept out of the new norms due to shortage of adequate fuel,forcing vehicle makers to supply them with vehicles fitted withtechnology that had been discontinued.

As per the schedule for the new emission norms, the eleven big citiesswitch over to BSIV norms from April, and the rest of the country willmove up to BSIII. While oil companies are believed to be prepared tosupply BSIV-level fuel in the designated cities, the problem lies inswitching from BSII to BSIII across the country. It is believed that therecould be problem in supplies to the north-eastern region, parts of southlike Kerala and even parts of Bihar and Uttar Pradesh, primarily due toinadequate production and also because of logistical reasons.

Goenka said just as the auto industry was prepared to meet the newemission norms, it would be difficult for it to move back to previous-generation engines in case government decided to delay at places atthe last minute.




Business News

Of

Monday,

December 21

On Esops, only tax name changesOn Monday, December 21 , 2009

Though these guidelines have been issued on Friday, the precursor to this move was laid down inBudget 2009.

Readers may remember that the Budget had discontinued fringe benefit tax (FBT).All these items of benefits were (prior to the Budget) taxable as FBT. Now that FBT no longer applies,the earlier perquisite-based taxation has been brought in. So in a sense this is not a new move but arevert to the earlier system of taxation.



Employee stock options (ESOPs) is another significant employer-granted benefit that too is subject tothe above FBT /perquisite-based taxation system.

In fact, it almost seems as if the authorities cannot quite make up their minds as to how they wish totax shares given to employees by their employers on a concessional basis. Having been subject tovarious changes in their valuation norms, the following is the latest position:

The perk tax will be the difference between the fair market value (FMV) of the shares on the date of exercise of the options less the exercise price. And the story does not end here.

Upon sale, capital gains tax will also be payable. Capital gains will be calculated on the differencebetween the sale price of the shares as reduced by the aforementioned FMV.Also note that this new law shall apply only in cases where the allotment or transfer of shares is madeon or after April 1, 2009. In other words, if allotment is made prior to that date, the same continues toattract FBT.

So, what is important is not the date of announcement or date of grant or date of vesting or date of exercising the option but the date of allotment or transfer of shares/securities to employees.

If shares are allotted or transferred on or after April 1, 2009, the same will be taxed as perquisite inemployees' hands. This is even applicable if the option is vested with the employee or the option isgranted or exercised before April 1, 2009.

Incidentally, date of allotment here means the date on which the board of directors pass thenecessary resolution for making the allotment.

Actually, this dual-layered taxing of Esops is not new. Till 1999-2000, they were being taxed similarly,only the first stage, instead of being taxed as FBT in the employer's hands was being taxed as aperquisite in the hands of the employee.

This also gives rise to a practical difficulty. The first stage, i.e., the difference between the market

value and the exercise price -- is only a notional profit -- the employee has not sold the shares yet to

realise it. However, paying tax needed cold cash. The numbers in the example are small for ease of

understanding, however, imagine if Sanjay had been granted 5,000 shares instead of 10. The perk

value (notional profit) in such a case would work out to Rs 25 lakh and Sanjay would need to cough

up a tax of Rs7.72 lakh -- on income not yet earned. This resulted in the employee needing to sell the

shares immediately, just to pay tax, and the entire raison d'etre of getting allotted stock options to

participate in the growth of the company stands defeated


IT biggies slash subcontracting toprotect margins

On Monday, December 21 , 2009

During the heydays, large software firms used to subcontract part of their contracts to smaller vendors-- either due to capacity constraints, unavailability of skills or merely to reduce the cost of their project.

Neeraj Gupta, general manager -public, education and healthcare - Dell India Pvt Ltd, said: "It(subcontracting) is coming down. There are people (large IT firms) who have been reducing theamount of subcontracting".



IT analysts at UBS Investment Research note that lower "out-contracting" is one of the ways largesoftware players are safeguarding margins.

"Margins have been protected through aggressive subcontractor reductions and incrementalrestructuring," said the UBS analyst team led by Jason Kupferberg in a December 7 report.

Analysts said such a move will impact the businesses of medium and smaller IT players. These aredependent on bigger players for business as they cannot bid for large deals by themselves.

Mahesh Shastry, senior vice-president and head of global operations of TTL (travel, tourism andlogistics), Sonata Software Ltd, said his company has seen a drop in subcontracting work.

"It (subcontracting work) has come down. We have been doing some work for product vendors andsoftware developers. (Now), they (bigger product and service vendors) are getting lesser work doneoutside".

According to him, tumbling pricing is forcing larger companies like IBM, Accenture, Tata ConsultancyServices and others to execute most of the project on their own.

"They (bigger players) are now thinking -- do we need subcontractors when we can do it inhouse. It(lower subcontracting) helps them improve utilisation and they also do not have to share profits withsubcontractors," said Shastry.

Chandramouli C S, director, advisory services, Zinnov Management Consulting, said one of thereasons larger tech firms were subletting lesser work was because the volumes have come down.

"Earlier (prior to 2008), volumes were very high while their capacity (number of skilled people) waslower. With volumes having come down drastically in the last one and half year, a large part of theproject is done within the company".

Chandramouli said the requirement for getting work done from smaller vendors has also come downbecause most software MNCs have scaled up their delivery centres in India. "Now, it is easier for them to ramp up (their workforce) in India than rope in some other vendor for an element of the

contract".

Subhash Dhar, member executive council and group head, sales and marketing, Infosys, said hiscompany follows a policy of subcontracting only as a last resort. "We like to have control over qualitythe (of delivery to customers) so we do most of the project inhouse. We subcontract only whenspecific skills are not available".

Dhar does not see any major change in his company's current policy on subcontracting in the near future..


DoT, Defence at odds overspectrum ownership

On Monday, December 21 , 2009



Although the ministry of defence is arguing that only 10 MHz that it has released recently is availablefor the proposed 3G (third generation) telecom auction, DoT is of the view that much more spectrumcan be put up for bidding.

According to DoT, the 10 MHz spectrum released by defence is in addition to the spectrum that isalready available for 3G auction, and MoD is contesting that.

DoT records, "reconciled with the ministry of defence"as of 2007, show that a chunk of the pan-India60 MHz spectrum can be auctioned in many circles across the country.This issue is expected to come up all over again at the meeting of the empowered group of ministers(EGoM) headed by finance minister Pranab Mukherjee on Monday.

The number of 3G slots that can be put up for auction, scheduled to begin on January 14, 2010, isexpected to be sorted out at the EGoM meeting.

The most recent buzz has been that most circles in India would have three 3G slots for auction, whilea couple of circles would have only two 3G slots. But DoT is likely to give its own list of 3G spectrumavailability to the EGoM.

As per the list, among the metros, Chennai has the maximum 3G spectrum at 60 MHz, followed byKolkata at 50 MHz, Mumbai at 30 MHz and Delhi with the least at 15 MHz. In effect, that meansChennai could possibly auction as many as a dozen 3G slots, including one for Bharat Sanchar Nigam Ltd (BSNL), Kolkata could accommodate 11 bidders (including BSNL), Mumbai 6 players(including MTNL) and Delhi only 3 telcos (including MTNL).

Apart from Chennai (and Tamil Nadu), 60 MHz of 3G spectrum is available for auction in some other circles also -- Andhra Pradesh, Karnataka, Kerala and Orissa. In Madhya Pradesh and Haryana, 40MHz of 3G spectrum is available.

Among others, Punjab has 35 MHz of 3G spectrum, Maharashtra and Bihar have 30 MHz each,Jammu & Kashmir, Assam and Uttar Pradesh (East) 25 MHz each, UP (West) and Himachal Pradesh20 Mhz each, Gujarat 15 MHz, West Bengal 10 MHz, North-East 5 MHz and Rajasthan none at all.

The government is targeting between Rs30,000 crore and Rs35,000 crore from the proposed 3G and

Wimax auction. This revenue will help the government bridge the steep fiscal deficit.

The reserve price for pan-India 3G spectrum has been fixed at Rs3,500 crore, while that for Wimax atRs1,750 crore.

But, depending on the number of 3G slots available for auction across the country, the reserve pricemay have to be altered. Also, winners in the process of auction may be allowed to pay in parts for the3G spectrum, depending on when airwaves are actually released.




Business News

Of

Tuesday,

December 22

After 2 years, airlines flying intoprofit zone




And if the current trend continues through this month -- December -- then this quarter may see manylocal airlines breaking even or even making a small profit.

Sanjay Aggarwal, chief executive officer (CEO) of SpiceJet, said given the robust demand, his airlineis expecting to record profits in this quarter.

"If the current demand trend persists then we will break even. Hopefully, we may even make somemoney in the current quarter," he said.

The budget airline had posted a loss of around Rs 18 crore in the December quarter last year due tothe slump in domestic demand with the global economic meltdown.

Bigger rivals Kingfisher Airlines and Jet Airways had lost Rs 626 crore and Rs 236 crore respectivelyin the same quarter last year.

Going by Jet's performance in terms of load factor and yield till now, analysts said the Naresh Goyal-owned airline may also be able to achieve breakeven in the third quarter of this fiscal.

Anand Kumar and S Arun, analysts with Bank of America Merrill Lynch, said a good December willenable Jet to break even in the third quarter itself.

"Jet is expected to post strong passenger growth numbers and yields in December on the back of theongoing holiday season. This should enable Jet to break even for the first time in the last sevenquarters," Kumar and Arun wrote in a note on Monday.

The two said the airline's focus on its low-cost arm Jet Konnect and route rationalisation have helpedit to post strongest passenger growth in last three years.

Last month, the airline's passenger traffic growth of 33% was higher than the industry growth of 29.8%.

Jet's domestic yields have also jumped 20% in the ongoing quarter over the last quarter. Kumar andArun expect it to be strong in the coming period also.

"We expect yields to remain firm on the back of curtailed supply. We expect domestic yields to rise by10% to Rs6.22 per revenue passenger kilometre in FY11 (as against earlier estimate of 8.5% rise indomestic yields)."


3G auction on time, 4 slots / circlefor private companies




New Delhi: The bidding process for 3G (third generation) telecom services will proceed as per schedule and up to four private players in each circle can offer 3G services, a meeting of theempowered group of ministers (EGoM) headed by finance minister Pranab Mukherjee is learnt tohave decided on Monday.

Although the government may stick to the auction timeline (perhaps with a slight delay), there is still a

question mark over when the exchequer would get the 3G revenue. Since the spectrum required for operating 3G services would be available only around August 2010, telcos may not want to pay in fulltill they are actually allocated airwaves.

As per the existing calendar of the department of telecommunications (DoT), 3G auction is scheduledto start on January 14, 2010.

The UPA government is keen to hold 3G auctions this financial year as it is targeting to raise Rs30,000-35,000 crore from the process to help bridge the fiscal deficit. But, if the auction revenuedoesn't come this financial year, the government's math will go wrong as it has officially budgeted Rs25,000 crore from 3G and Wimax bids by March 31, 2010.

Asked if the winning bidders would be required to pay in full immediately after the auction, a senior DoT official told this newspaper, "Those details would be available in the notice inviting applications."

"Let the ministry finalise the minutes of the EGoM meeting first," another official said.

Sources in the government said there was no certainty the entire bid money can be raised thisfinancial year itself.

As the defence ministry was talking of vacating 3G spectrum in phases, a DoT proposal talks of takingonly the bid deposit this financial year.

The remaining amount can be paid by the winning telecom operators at the time of "actualassignment of spectrum", it says. Bid deposit is 25% of the actual bid amount, the note states.

The EGoM decision, that 3G auction is on schedule, came on the date which was supposed to have

been the deadline for the industry for submitting applications for participating in the 3G process.

Communications minister A Raja, a member at the EGoM, told the media after the high-poweredmeeting, that 3G auction would be on schedule and that four slots in each circle would be put up for auction. This is besides one slot reserved across circles for the state-owned telcos BSNL or MTNL.According to Raja, all the 3G spectrum would be allocated simultaneously to the winning biddersaround August 2010, when the defence forces vacate the same.


Small is (extremely) big for all at AutoExpo 2010




Much like any big-ticket fashion show, the Expo has traditionally had at least one mega unveiling eachtime to keep interest levels high. In 2008, the showstopper was the Tata Nano.

Beginning January 5, this Indian motorshow will boast of many global launches. Perhaps for the firsttime anywhere in the world, Toyota Kirloskar Motor will unveil a product outside Japan when itshowcases the small car specially built for India and other BRIC markets. Though production will

begin only by the end of 2010, this car is expected to be showcased in both, hatchback and sedanversions.

Ditto for Honda Siel Cars. It will also premiere the concept model of a new small car that has beendeveloped keeping the Indian market in mind.

Volkswagen AG, which has perhaps become the world's largest car maker after acquiring Porsche, isexpected to launch the 'Polo' compact which may also have a sedan version on display.

General Motors India is unveiling its mini car 'Beat' and Ford India will launch the 'Figo' compact at theseven-day motoring extravaganza.

India's largest car maker, Maruti Suzuki India, is expected to showcase the first completelyindigenously made small car though it would be launched much later in 2012.Then, there is growing buzz that variants of the Tata Nano (perhaps the diesel and environmentallyfriendly versions) will also be on display but this could not be confirmed.

Hyundai Motor India is expected to unveil the 'Santa Fe' SUV, 'i30' and 'i40' whereas Japanese major Nissan is expected to bring in its small car 'Micra' in an Indianised version.

This mad scramble to get on to the small-car bandwagon has been long in the making. Most globaloriginal equipment manufacturers (OEMs) operating in India have had a small car on the drawingboard for two-three years now.

But is this the right time to go "small"? Many industry watchers point towards indication from thegovernment over imminent excise duty increase and a renewed clamour for changing the verydefinition of a small car -- both these actions could raise small car prices.

But this doesn't seem to worry global OEMs, who are keen to corner some market share in the smallcar segment in one of the world's fastest growing automobile markets.




Business News

Of

Wednesday,

December 23

IBM snares first total outsourcing

contract in the media space

On Wednesday, December 23 , 2009

New Delhi: With the global economic slowdown breathing down its neck, IBM on Tuesday announcedits biggest step so far into the Indian media and entertainment industry.Two-year-old top-tier cable operator Digicable has outsourced its entire IT operations to IBM in whatis billed as the first full-scale IT outsourcing deal in the Indian media and entertainment industry.

The deal, with an "initial outlay" of $83 million (Rs 380 crore) will see the US firm takeover andmanage cable feed provider's IT backbone, including billing, provisioning, authentication, content



management etc. Cable feed operators or MSOs are in the business of accumulating TV channelfeeds from different satellites, packaging them and then retransmitting them to smaller cableoperators through trunk cables.

IBM, which has so far counted only telecom operators among its full IT outsourcing clients, said itexpects more such deals to come through as the Indian cable industry tries desperately to fend off an

invasion by the direct-to-home service providers. For example, Digicable, headed by industry veteranJagjit Singh Kohli, has around 8 million subscribers despite being one of the largest multi-systemoperators in the country. In comparison, the largest DTH operator, Dish TV already has close to 7million subscribers.

"We are talking with other such players as well," said K S Raghunandan, director for solutions andbusiness development at IBM South Asia.

Raghunandan said IBM, which manages the IT backbone of a large part of India's communicationnetworks, had set up a specialised media-oriented outsourcing unit in India two years ago. It won aseries a of contract since the beginning of the year, including from DTH operators Sun Direct and TataSky, the Hindu group and Star group, but were all short of total IT outsourcing.

According to Kohli of Digicable, the MSO will emerge as the most advanced by the end of the year asit launches a series of value-added services based on IBM's support. The list includes high definitionTV, internet on TV, video on demand etc. "DTH has certainly made a big impact [on our business] andwe will be meeting the challenge with these new services," he said.

He also said that the firm will increase the number of channels to 500 in two months in the Mumbaimarket. Kohli also said the company is likely to shift its service to the recently approved Headend-in-the-Sky architecture. Under the new format, it will replace its 96 head-ends or feed-collection centreswith a single, satellite-based aggregator which will pump all the channels directly to the local cableoperator. This will make it possible for the company to expand service to small cable operators acrossthe country, instead of being confined to the surroundings of its 96 on-the-groundaggregation centres. The centres will however remain as nodes for supporting its value-addedservices which cannot be supplied through satellites.


Hindustan Construction Company ties up

Rs1000 crore for Dhule project


Mumbai: Hindustan Construction Company (HCC) has tied up funds for its Rs1,415crore build-operate-transfer (BOT)-toll highway project. "We signed the final



documents with the banks last Friday (December 18)," chief financial officer PraveenSood said.

The 96.5km stretch on national highway (NH)-3 will extend from the Maharashtra-Madhya Pradesh border to Dhule in Maharashtra. A consortium of 12 financialinstitutions led by Punjab National Bank will be lending Rs1,065 crore for the project.The consortium includes Bank of Baroda, Allahabad Bank. Corporation Bank, OrientalBank of Commerce, State Bank of India and Indian Infrastructure Finance Company.According to Sood, the average interest rate on the loan is about 11% and therepayment period is 15 years.

Sood had told DNA Money in September the company was close to tying-up funds for the project. HCC bagged the four/six-laning project along with UK-based John LaingInvestment and Ahmedabad-based Sadbhav Engineering in January. The partners'economic interest in the project is 37%, 36% and 27%, respectively.

The project has a concession period of 18 years including the construction period of 30 months. "We did not wait for the closure to begin the initial work on the project.

The actual construction will start in a week," Sood said. HCC has two other BOT roadprojects, of which the annuity project in Andhra Pradesh was completed earlier thisyear. The other one, a Rs 340 crore toll project in Badarpur near New Delhi, will becompleted next December.b"We have not bid for any more projects, but will soon doso," Sood said.


Reliance Industries drills into a gasgusher in D3, too


"We are encouraged by the results of this well which will certainlyfurther improve the prospectivity of the block," said YogeshwarSharma, chief operating officer of Hardy Oil, RIL's partner which holds10% share in the block.

The total prospective gas in D3 is estimated by the duo at 9.5 trillioncubic feet, just short of the 11 trillion ascertained in the twocommercialised discoveries in the currently producing D6.



RIL has three blocks in the Krishna Godavari basin -- D3, D6 and D9,admeasuring tens of thousands of square kilometres.

Sharma had, two weeks ago, told delegates at the Global EnergyConference that the KG blocks are now at the cusp of a new round of drilling activity.

The first two wells dug in D3 nearly two years ago had found gas, butsince then there had been no further news from either D3 or D9.

Sharma also said RIL and Hardy are targeting a "high impactexploration activity" in the KG Basin in the coming year and hope tobegin to look at appraisal and timetable for commercialising thediscoveries in D3.

RIL will start plans to commercialise and monetise D3 as soon as the

proven reserves cross 1 trillion cubic feet.

The company is currently amalgamating discoveries to ensure that theyhave sufficient volumes to make it commercial and is expected to tie itin with its existing supply line from D6 to the Andhra coast.

RIL has already become the biggest producer of natural gas afterstarting production from two discoveries in the D6 field.

It has also found extensive gas in the nearby Mahanadi basin. However,

the company has been unable to go ahead with the commercialisation

of the discovery as the government is yet to approve its developmentplans submitted two years ago.




Business News

Of

Thursday,

December 24

'Bing alternative to a search box'On Thursday, December 24 , 2009

How is your search business doing?Our competitor Google is in a dominant position. If I think about my jobor what we have to do, we have to come up with some super-innovativesolution to attract the customers.

What is the status of Bing in India?We are offering pilots of some of our innovative features. One of themis to offer landmark-based routing. In India, people travel or locate

addresses by using landmarks.

How long will it take to incorporate all this in the Indian version?



None of these features is inaccessible to the Indian user. But thecontent for the Indian market will have to be developed. At some level,it has begun. But some of the language-specific features are still beingworked out. It is not that Bing is not usable today. We are working onthat. That is the reason we still have a beta tag. One day, we willremove that tag, may be sometime next year. We are actively trying toget users to use the service in India.

Any mobile platform plans with it?One of the interesting features is our launch of Bing on the iPhone. Weare now Number 4 on application downloads. We are bringing maps,search news and MSN all into one experience. Some of the featuresavailable on a PC search become more acute in mobile. We are taking adifferent approach for mobile users.

Google definitely has a lead, but the Yahoo deal is significant for bothMicrosoft and Yahoo. The deal provides one market place. An advertiser

gets 30% reach between Yahoo and us in the US market. This is a verysignificant number. It will bring more advertisement and more revenueper search for us. We are looking at closing the deal and gettingregulatory approvals.

When will the deal with Yahoo close?It is likely to happen in the first quarter of the next calendar yearbetween the department of justice in the US and the European Unionand other government agencies. So, once the deal closes, we will startgetting that market place converged and it will have a good impact onboth Yahoo and us. But, there will still be some gap. Our approach willbe to stay put and persist with it.

What is the deal with them?As part of this deal, Yahoo will use us as their search provider and adplatform for the paid search; it is more like a migration from theircurrent system. They will still maintain their front-end experience. Butall that is available on Bing will be available to Yahoo users too.

How is it applicable in India?In India, Yahoo has an ad-business for search. It will in turn become a

part of the Microsoft platform. Every advertiser in India will have two

options -- Google and Microsoft-Yahoo.


Signals mixed on exporter sopsOn Thursday, December 24 , 2009



Anand Sharma, minister of commerce and industry, said thegovernment has identified poorly performing segments within theexport sector for further fiscal incentives while commerce secretaryRahul Khullar hypothesised about the possibility of the existing sopsbeing withdrawn for healthier industries.

"We have identified some of the affected sectors and will recommend[to the ministry of finance] for some incentives," Sharma said at afunction to launch 'Invest India', a joint venture between thegovernment of India and industry body Ficci.

The sops, contained in the foreign trade policy announced in August,included extension of income-tax holiday for exporters by one year,continuance of duty refund scheme till December 2010, a hike in theincentives available under the focus market scheme and inclusion of anumber of engineering goods and electronic items in the scheme.

The scheme, announced three years ago, provides for governmentsupport in promoting exports of certain goods to certain marketsidentified for them.

Commerce secretary Rahul Khullar, however, hinted that thegovernment may soon start looking at withdrawing some of the sops,particularly for the sectors that are back into the growth path.

Meanwhile, finance minister Pranab Mukherjee said the economicstimulus package is unlikely to be amended till the Budget in February.

"Some sectors have recovered over the period and fared pretty well inNovember. I think we could look at withdrawing the subsidies to somesectors," Khullar said on Wednesday, giving details of the sector-wiseperformance of exports in November.

Exports grew 18.2% in November compared to the corresponding monthlast year.

However, for the current financial year, exports are down by 22%, at$104.2 billion.

Sectors which showed positive growth in November included petroleum

products (83.6%), iron ore (47.2%), gems and jewellery (40.4%), marineproducts (27.3%), leather goods (16.2%) and spices (13.5%).Courtesy: - D N A Money



Gammon will begin NH3 tolling bymonth-end

On Thursday, December 24 , 2009Mumbai: Gammon Infrastructure Projects will start tolling on a part of its 100-km highway stretch on national highway (NH)-3, betweenMumbai and Nashik, by the end of this month, managing directorParvez Umrigar said.

"The first phase of the tolling will be for the 50 km at the Nashik-end of the highway. "We hope to begin the second phase of tolling at Kalyanby March," Umrigar said.

The Rs 753-crore project, which is a 80:20 joint venture betweenGammon and Ahmedabad-based Sadbhav Engineering, was awardedover four years back. It was then the biggest contract offered by theNational Highways Authority of India (NHAI).

The project has a concession period of 20 years, including theconstruction period of three years. Umrigar said it had also been one of the first projects where the NHAI allowed partial tolling. A highwaydeveloper needs to have completed at least 50 km to be able to toll.

While Umrigar did not divulge the expected toll revenues per day, hesaid there would be 30,000-40,000 passenger car units (PCUs) everyday.

PCU is used to measure the traffic on a highway. A truck, for instance,is considered equivalent to two PCUs and bigger vehicles will beassigned larger PCUs.

While group company Gammon India is the engineering, procurement &construction (EPC) contractor for the project, operation & maintenanceis to be handled by Gammon Infra itself.

Gammon Infra has seven other highway projects, of which four are fullyoperational. It also has three ports, two hydropower plants and 15biomass projects of 10 megawatt (mw each in Haryana & Punjab andone of 30 mw in Maharashtra.




Business NewsOf

Friday,December 25



Conditional nod to Jet's QIP issueOn Friday, December 25 , 2009New Delhi / Mumbai: The Cabinet Committee on Economic Affairs (CCEA)

on Thursday gave its approval to the proposal of Jet Airways seekingpermission to raise $400 million or Rs 1,900 crore through a qualifiedinstitutional placement (QIP) issue.

Though this would enable the airline to raise much needed cash,questions over foreign direct investment (FDI) guideline violationsthrough this route remain unanswered.

A Jet spokeswoman declined to comment, saying the company hasreceived nothing in writing from the government till now.

Another senior official, who did not want to be named, said thecompany had not yet decided how much stake would be offloaded toraise the money.

"The QIP is expected to achieve a price of Rs 350-400 per share," theperson said.In its current form, Jet's proposal involves issue of fresh shares todomestic and foreign institutional investors (FIIs) and this move couldraise FDI in the airline beyond the permitted 49% cap for scheduled airtransport services.

Officials in the ministry of civil aviation said the approval is conditionalto Jet adhering to the 49% cap within the next three years.

They have also put a condition that Jet's promoter Naresh Goyal shouldnot sell off his stake in the airline under the guise of a QIP issue; norshould the controlling structure get altered.

The airline's control must remain in the hands of existing promoterseven after the issue of fresh shares to foreign investors.

As per Jet's proposal, promoter holding would fall to 42% from the

current 80% after the QIP issue is completed.

Promoter here denotes Tail Winds Ltd, which is 100% owned by Goyaland was incorporated in the Isle of Man.

After the issue, new shareholders under the QIP offering (includingdomestic and foreign FIIs) will hold 48% equity in Jet Airways, which willissue them over 79 million fresh shares. The stake of 'other outsideshareholders' will fall to 10% from 20% after the issue.

In its application, Jet had justified a QIP issue, saying this is thequickest way of raising funds in the current environment.



"Tata Motors has asked us to take bank loans after which they wouldreimburse the principal and interest amount," the vendor said.

Singur vendors had earlier rejected Tatas' offer to bear up to 75% of losses incurred by vendors, free of cost shipment of machinery fromSingur to Sanand, and allotment of land on easy terms, including along-term lease.

Instead, Nano component vendors sought full compensation in cash andnot through loans or any other financial instrument.

Tata Motors had announced it is pulling out the Rs 1,500 crore Nanoproject from Singur in October last year following violent protests overland acquisition.

Around 60 vendors had intended to set up their units at the Singur site.

The vendors include Caparo Engineering, Bosch Chassis Systems,Gabriel, Lumax Industries, Kinetic Engineering, JBM Auto, Rasandik Engineering, Rico Engineering, TI Metal Forming, Sona Koyo SteeringSystems Ltd, Exide, Subros, Beher, Rucha Engineers Pvt Ltd, andTataRyerson.


Steelmakers rush to hike rates as demand,costs rise

On Friday, December 25 , 2009New Delhi, New Delhi: Steel Authority of India Ltd has increased prices of long products by Rs2,000 a tonne, reflecting a "jump" in demand for these products in the past two weeks, a

company official said.

Rival Tata Steel has also increased prices by a similar margin, an official said.SAIL has also raised prices of flat products by Rs 700 a tonne, following an increase in pricesin China and many other global markets.

What's more, another round of price increase -- up to 4% -- is due a week later, a rare exercisein the steel market, where prices are reviewed at the start of a month.Long product prices have risen after a long hiatus that began with the onset of the monsoonseason, which typically brings down construction activity.

"Long products demand has been jumping," the SAIL official said, but cautioned it was stillnot time to celebrate. "Most of the buying is speculative. There is not much fundamental

change," he said.



Saturday,

December 26

Lyondell creditor deal, new plan to be

weighed next year On Saturday, December 26 , 2009New Delhi: A US judge said on Friday that he will hear arguments from Lyondell Chemical Co'screditors in February about the validity of a settlement of their $22 billion lawsuit against the banksand advisors who put together Lyondell's leveraged buyout in 2007.

Earlier this week, just days ahead of a scheduled trial on the creditors' lawsuit, Lyondellsaid it hadarrived at a settlement with most of its secured creditors on its plan to exit bankruptcy.

According to Lyondell's media statement on Thursday, creditors who together held debt of $18 billionout of its total debt of around $28 billion, had reached an agreement.

Under its new agreement with secured creditors, it will issue shares in the post-bankruptcy company

to the creditors, it said. It, therefore, has modified its original plan of reorganistion, which would haveseen its former owners end up with a substantial part of the post-bankruptcy company.

Unlike its earlier plan, under the new one, secured creditors who settled with the company will getshares in return for their entire $18 billion worth of debt.

"[The plan] documents have been revised to reflect the agreement reached with substantial holders of the senior and bridge debt to convert approximately $18 billion of senior and bridge debt into commonequity under the Plan and the allocation of such equity in the reorganised LyondellBasell between theholders of such debt if the Plan is confirmed," the company said in a press release.

The new deal does not have the support of a section of creditors and is primarily between thecompany and the creditors who supplied it will temporary (bridge) and long-term loans at the time of

its formation in late 2007.



Unsecured creditors, who stand to lose most of their claims under the company's plan of reorganisation, are particularly unhappy.

The creditors committee had earlier taken the bridge lenders and others to Court in a separatelitigation, alleging that they were instrumental in the formation and the subsequent failure of LyondellBasell through a highly leveraged merger in 2007.

They sued the lenders and advisers, including Citigroup Deutsche Bank AG and Goldman SachsGroup Inc, contending that the buyout of Lyondell by Basell left the company doomed to fail becauseit had "unreasonably small capital" to support the debt from the merger.

The judge Robert Gerber said that Lyondell's creditors could seek documents about whether thesettlement was "collusive" and he would expect to hold a hearing around February. Gerber said hewould do whatever was in the best interests of the bankruptcy estate.

Reliance's chances will depend on whether the judge finds the settlement announced by the companywith a large section of creditors to be fair or not.

If it finds that the settlement is collusive, the judge is likely to disapprove of the current re-organisationplan suggested by the company.

Under the current plan, Reliance is unlikely to be able to acquire the company at an agreeablevaluation.

However, if the judge finds the new plan "collusive" and partial, he may ask for alternate rescue plans

which is likely to create an opportunity for the Mukesh Ambani firm.


Document writers put out of work,

practicallyOn Saturday, December 26 , 2009No other person can frame documents, offer advice or provide any service on matters that mayultimately end up as the subject of litigation in a court, including framing an agreement, deed, contractetc.

The decision, delivered in a case on foreign companies offering such quasi-legal services, is likely toupset the current system of framing contracts and deeds, etc in the country as it is often done by non-advocates.

Currently, for example, title deeds of land can be prepared by non-advocates also, as long as theyhave passed the qualifying exam to be a "licensed document writer."

The ruling will also force all foreign legal services firms to wind up their operations in India as foreignfirms are unable to register with the Bar Council in India as the latter accepts on Indian entities as itsmembers.

"There is no reason to hold that in India the practice in non-litigious matters is unregulated," ruled theBombay High Court bench comprising chief justice Swatanter Kumar and justice JP Devadhar.

It is not the case in India that "a law firm or an individual engaged in non litigious matters, that is,drafting documents or giving opinion or rendering any other legal assistance are answerable to none,"the two observed.

The government of India had objected to the position that only advocates can prepare legally-validdocuments or offer advice, pointing out that its bureaucrats will be crippled if such a restriction wasimposed.



The court, however, seemed to make a distinction between making documents for own use andcreating it for third parties as a service.

"A bureaucrat drafting documents or giving opinion is answerable to his superiors, whereas, a law firmor an individual engaged in non-litigious matters, that is, drafting documents or giving opinion or rendering any other legal assistance are answerable to none," the judgement noted.

The judgment came on a 14-year-old petition filed by the Mumbai-based Lawyers' Collective, a non-profit organisation representing advocates and law students.

The Collective wanted the court to ban foreign law firms from offering quasi-legal services such asadvising on corporate transactions and mergers, framing contracts etc..

Under the current law, only advocates registered with any of the Bar Councils in the country areallowed to represent clients in a Court or similar body.

However, since the Bar Council membership is open only to Indians and Indian firms, foreign firmshave confined themselves to the so-called non-litigious activities - framing documents, advice etc.

As India became more and more globalised and Indian firms started getting into multinationaltransactions, the non-litigious practice has grown into a lucrative, multi-million dollar business.

Senior Supreme Court lawyer and general secretary of the Bar Association of India, Lalit Bhasinwelcomed the judgement. Bhasin, who has opposed the entry of foreign law firms, advised them andthe government against appealing against the ruling.


In volatility, India's bested peersOn Saturday, December 26 , 2009

Mumbai: In the olden days, rites of passage into adulthood included a test of courage such as huntinglions or wrestling crocodiles.

Today, young people could well try their mettle in the stock market. A more ferocious adversary therenever was.

Indeed, going by data from the Securities and Exchange Board of India, India has been the mostvolatile among major global markets over the past year. The data, which examines the averagedifference between the highs and the lows of key indices over the last 12 months, puts India ahead of even crises-ridden US and UK markets in terms of volatility.

Volatility is a measure of how much the price of traded securities fluctuate. The more volatile aninstrument, the more risk it is said to carry.

The benchmark index of the Bombay Stock Exchange showed an average daily volatility of 2.48% inthe 12 months starting November 2008. This was only slightly lower than the 2.79% recorded for calendar year 2008, indicating that a recovering market can swing just as wildly as one in the grip of bears.

Most other major developing markets fared better on the volatility count. China had a volatility of 2.11%, while Brazil recorded 2.4%, Mexico 1.98%, South Africa 1.95% and Malaysia 0.92%.

Among the developed markets, the Hong Kong HSI had the highest volatility at 2.39%. The US,France and Japan had volatility in excess of 2%; Singapore was at 1.88%; UK at 1.81% and Australiaat 1.57%.

Things were more stable prior to the meltdown --- 2005 was the least volatile at 1.08%; 2006 recorded1.63% and 2007 weighed in at 1.54%.

Market experts believe the volatility will remain, even when there are upmoves.




3G licence auction may be postponed toFebruary

On Tuesday, December 29 , 2009New Delhi: Bidders for 3G licences can holiday in peace as the government is set to pushthe auction date by about a month, a source in the know said.

As against the scheduled date of January 14, 2010, the Department of Telecommunications(DoT) is learnt to have zeroed in on mid-February for 3G auction now.

Recently, after a meeting of the empowered group of ministers (EGoM) on vacation of

spectrum by defence Forces andallocation of airwaves to telcos for 3G service,communications minister A Raja had said that the bidding process was on schedule.3G auction timelines have been deferred several times already over non-availability of spectrum and differences within the industry over a host of issues linked to the biddingprocess.

Although the notice inviting tender for 3G and Wimax auction was supposed to have beenout on December 8, the government is believed to be revising the date to January 7 or 8.Similarly, the deadline for submitting 3G and Wimax applications is expected to be shifted tothe last week of January, as against December 21 earlier.

The EGoM, headed by finance minister Pranab Mukherjee, is learnt to have decided that the

3G and Wimax auction would be on schedule, and that four slots will be put up for bidding in



each circle, besides the slot reserved for BSNL/MTNL. Spectrum for 3G services would beallocated in August next.

The UPA government is keen to hold 3G auctions this financial year as it is targeting to raiseRs 30,000 crore to Rs 35,000 crore from the process.

This would help the country bridge its steep fiscal deficit. But, winners in 3G auction may beasked to pay only 25% of the total amount at the time of bidding and the remaining 75%after getting spectrum in August.

The Union Cabinet recently approved a Rs 9,000 crore proposal of DoT for building an opticfibre network for defence.

The alternate network will take some more months to be completed, and therefore thereluctance of the Defence Ministry to vacate 3G spectrum immediately.

The reserve price for pan-India 3G spectrum has been fixed at Rs 3,500 crore, while that for Wimax at Rs1,750 crore.

3G services refer to fast download of internet data on the mobile phone.Courtesy: - D N A Money

Japanese PM visit rescues $90 billionDelhi-Mumbai corridor

On Tuesday, December 29 , 2009The much-hyped Delhi-Mumbai industrial corridor (DMIC) has got a fresh lease of life after JapanesePrime Minister Yukio Hatoyama's delegation signed agreements to pump in $75 million into theproject to start off planning and preparatory activities.

The Indian government has already promised an equivalent amount (Rs 330 crore) as its share of the$150 million project management fund.

The project, to be built on both sides of the upcoming Delhi-Mumbai dedicated rail (freight) corridor,envisages converting 24 such locations into hi-tech residential and industrial hubs.

According to the plan, the government-promoted DMIC Development Corporation would carry out allthe planning and preparatory work, including securing all government clearances for each project. Theprojects would then be handed over to specially floated companies which would then carry out the

project through a mix of public and private fund raising. The initial investment by the DMICDevelopment Corp in planning and getting approvals will be recovered at the time of selling thespecial purpose company and used for the next project.

Monday's deal with the Japan Bank for International Cooperation enables DMIC Development Corp toset up the initial project management fund, which will be used to plan each project, get the approvalsand hold the bidding process.

The total loan from JBIC will be disbursed over a period of around 3.5 years, during which the projectdevelopment fund will assume the targeted size of $150 million.India had initially wanted to start off with a $250 million fund on the ground that of the total $90 billionestimate, around $2.5-3 billion would have to be spent on planning and preparation.

"The full-scale development can happen only by 2017 when the dedicated freight corridor is ready,since the industries are dependent on it for raw materials and moving finished goods. But we don't



want to wait till then, so we have identified certain early bird projects which are not full-scale cityprojects, but more like smaller industrial complexes," he said.

The full plan includes building from scratch a series of 'eco friendly' industrial cities along the corridor at a cost of Rs 3.6 lakh crore using both public and private resources. "The idea is not to repeat any of the mistakes we have made in putting up our cities. We will use the state of the art technology to

create cities of the future. Every industrial unit, for example, will get just a single bill for their water,power and sanitation facilities," Kant added.

Among the six initial sites identified for development are Dadri-Noida-Ghaziabad in UP, Manesar-Bawal in Haryana, Khushkhera-Bhiwadi-Neemrana in Rajasthan, Pitampura-Dhar-Mhow in MadhyaPradesh and Bharuch-Dahej in Gujarat.

Going by initial indications, the projects are likely to see huge participation from Japanese companies.For example, in the planned Neemrana III industrial unit, 19 major Japanese companies havecommitted to start manufacturing operations. These include Mitsubishi Chemicals, Daikin Air Conditioners and Nissin Brakes.

Recent years have seen investments from Japan, a country with ageing population and declininggrowth rate, to India increase, reaching almost the same level as the country's investments into Chinain 2008. But then, Japanese investments into both China and India declined by about a third this year due to the effects of the economic slowdown.

The corridor project envisages a strategic alliance between Japanese companies and Singaporeandevelopers to develop industrial infrastructure and bases in India.


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Wednesday,

December 30

Compensation for IPO scam victims

mootedOn Wednesday, December 30 , 2009

Mumbai: The committee set up by the market regulator to probe the scam in initial public offers (IPOs)that hit the market between 2003 and 2005 had recommended monetary compensation for theaffected investors.

The Securities and Exchange Board of India (Sebi) had set up the committee under the leadership of Justice D P Wadhwa, a former judge of the Supreme Court, in 2007.The report of the committee, which was submitted in 2007, has now been made public by the marketregulator.

The scam involved a number of key operators, led by Roopalben Panchal, cornering shares meant for

the retail investor by using fake demat accounts.

In all, there were 21 issues in which retail participants were denied fair allotment. These included theissues of Tata Consultancy Services, Jet Airways, Patni, National Thermal Power Corporation andYes Bank.

All the 21 IPOs were oversubscribed and offered listing gains. In fact, Dishman Pharma & ChemicalLtd, which was issued at Rs 175, offered a 209.28% gain, with the closing price on listing day at Rs541.25.

The total amount cornered through the scam is said to have been around Rs 95.69 crore.

The regulator had banned 24 key operators and 82 financiers in connection with the scam vide an

order dated April 27, 2006. The Wadhwa committee had suggested using the funds frozen in their accounts to compensate the victims. "The Committee, therefore, recommends that subject to due



process all the shares available in the frozen demat accounts of operators and financiers be utilisedfor reallocation," it said in the report.The value of holdings in the frozen demat accounts works out to Rs 147.85 crore, and the balance inthe frozen bank accounts to Rs 1.21 crore.

According to the report, investors who should have got allotment but didn't, or got less than they

should have, should be compensated. Totally unsuccessful applicants are to be compensated fromthe frozen shares till they each receive the minimum amount allotted to the lowest category in theIPO. The leftover is to be given to partly successful applicants in the firm and drawal of lotscategories, respectively.

The panel conceded, however, that its recommendations may not be immediately enforceable as theexact quantum of unjust gains and number of deprived applicants could only be determined after theconclusion of investigations, which were still underway. "Therefore, the recommendations of thisCommittee are stated as principles and based upon facts as they currently stand," it said.

The committee had received two extensions, the last of which is mentioned in the report as up toDecember 20, 2007. It was submitted to Sebi on December 12, 2007.The regulator has not said if any of these recommendations has yet been implemented by it.

An accompanying statement merely says it will continue its efforts in disgorging unlawful gains. "Sebihas been successful in disgorging a part of the gains that such entities have made. It intends tocontinue its efforts to disgorge further sums in future on completing the legal/consent proceedingscurrently in progress," reads the statement.


Dollar or yen, carry on tradingOn Wednesday, December 30 , 2009

Mumbai: Yen carry may be back before long, what with the dollar expected to gain strength in the

latter half of 2010 as the US economy improves.

This, experts would have us believe, is good augury for India. With Indian equities expected tocontinue giving robust returns, this will ensure the foreign institutional investors (FIIs) continue pouringmoney into the country.

FIIs have been the main reason for the upsurge in local equity markets in recent times, with netpurchases of $17.126 billion equity in 2009.

This compares with net outflows of $11.97 billion in 2008 and net inflows of $17.65 billion in 2007.

"Inflows into Indian equity markets would continue in coming year because of cheap money.Emerging markets like India are kind of financial supermarkets, which offer better returns for your

money. Despite the dollar strengthening, carry trade would continue, may be in yen," says D DSharma, vice-president - research, Anand Rathi.

Carry trade, where one borrows money in a particular currency at a lower rate to invest into assetsthat give higher returns, has been in vogue for a long time. The yen carry trade, which started in 2004,had grown to around $1 trillion before dollar carry trade took over following the 2007 global crisis.

Experts feel the dollar will remain weak for some more time as there are still issues related to highunemployment rates in the US.

"We may see another year with FII inflows of $15-20 billion. The current strength in US dollar seemsto be a short-term recovery," says Vikas Khemani, executive vice-president & co-head, institutionalequities at Edelweiss Capital.

Interest rates in Japan, on the other hand, are expected to remain low for a considerably longer period. This could make the yen a more attractive carry trade currency than the dollar.



"With the exception of the Bank of Japan, we are likely to see effective tightening of monetary policiesin most major economies during 2010. We expect the Fed to start hiking the fed funds rate inSeptember 2010," Christian Broda, Piero Ghezzi and Nick Verdi of Barclays Capital wrote in a reporttitled Global outlook December 2009. The trio expects monetary tightening in Japan to happensomewhere in the second quarter of 2012.

"Focus would soon shift from dollar carry trade back to yen carry trade. Yen has started depreciatingagainst dollar after its recent high. Also, Japanese economy has not revived as fast as US recoveryhas been," said Siddarth Bhamre, fund manager-derivatives at Angel Broking.

The yen appreciated to a two-decade high of 86.38 against the dollar on November 30, 2009.However following Bank of Japan's decision to expand its monetary easing policy on December 1, thecurrency has fallen back to 91.47 levels against the dollar.

Though yen is widely expected to remain strong versus the dollar amidst volatility throughout theMarch quarter, experts see the dollar strengthening over the course of the year.

Barclays Capital, for one, has an end-2010 forecast for dollar/yen at 100.

Marketmen believe India would remain the preferred destination on account of its robust consumptionstory.

"Corrections this year have been small and short, while recovery has been quite fast for markets. Thishas prompted the long-term foreign funds to remain invested because of the strong Indian growthstory," said Sharma.


Competition heats up for Bajaj ricksOn Wednesday, December 30 , 2009

Mumbai: Bajaj Auto, which enjoys a virtual monopoly in the three-wheeler passenger carrier space, is

witnessing competition from players such TVS and Piaggio.

While TVS has its autorickshaw King, Piaggio will introduce new models by the next month. TataMotors, too, is launching its passenger carrier, Pelican. However, product details remain unclear.

Bajaj has a 58% market share in the passenger carrier segment and TVS, its only competitor, isaiming to raise its market share to 50% in three years from the 9% at present.

HS Goindi, president (marketing), TVS Motor Company, said, "We think it's possible to achieve thissort of a market share especially after we launched our four-stroke model three months back."

But despite the increasing competition, TVS is confident that the split of market share will be betweenBajaj and TVS King.

TVS already has presence in two-stroke and four-stroke segments in petrol, LPG and CNG variantsand is also considering launch of a diesel variant for semi-urban and rural segments.

While TVS has its strategy in place, experts believe it will not be easy for the company to gain such alarge pie of the market considering that it sells only about 1,000 Kings a month while Bajaj does closeto 14,000 a month.

TVS has presence in only 9 states with about 80 dealerships and plans to increase the number to 150in the next six months. On the other hand, Bajaj has a pan-India presence with 150 dealer networksand the company plans to increase its sales points by almost 75 annually. Currently, it has close to500 sales points.

Trying to squeeze some market for itself is Piaggio, which is already present in the three wheeler

passenger market with a diesel product.



Ravi Chopra, managing director, Piaggio said that by next month the company will introduce its newproduct in petrol and LPG/CNG variant, which is currently on trials. "To begin with, we are looking at15-20% market share. We are also looking at gaining a substantial chunk in the overseas marketwhich has a size of around 1.5 lakh units annually," Chopra said.

Piaggio sells around 15,000 units in the three-wheeler category (cargo and passenger) and has a

38% market share in the passenger market segment in the diesel category, according to Chopra.

Both TVS and Piaggio are confident that their three-wheelers will get permits for passenger carriersas there is a large market available.

Chopra said the permit issue is not the thing to worry about. "If Bajaj and TVS can get it, so can we,"he said.

Meantime, Bajaj Auto is prepared to take on the increasing competition and will be launching the newproducts by the last quarter of this fiscal in diesel, petrol and LPG/CNG variants.

Ramesh Maheshwari, chief operating officer (commercial vehicles), Bajaj Auto, said, "We will distanceourselves from the competition by offering superior products and thus, stay ahead of the curve. Moreplayers are entering this segment as they have understood the importance of being present in the lastmile transportation segment, which will always remain the in-thing and has been showing growth.""The private public carrier segment will only expand, hence an increased interest from various other players. Our strategy is clear- that of being the leader in the segment despite the fierce competition,"he said.


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Thursday,

December 31

17 ports under PPP coming upOn Thursday, December 31, 2009

New Delhi: The Union shipping ministry has identified 17 projects to be executed on public-private partnership, or the so-called PPP, basis.

Earlier in September this year, the ministry had dropped 15 port development projects plannedunder the ambitious National Maritime Development Programme (NMDP), and then taken upanother eight that were to be funded by the government.

“Seventeen new projects have been identified in place of projects that were dropped earlier.However, investment and capacity creation are not affected even though the total number of projects to be implemented have come down to 48 from 54,” said a top shipping ministryofficial, who did not wish to be identified.

According to ministry data, the 54 projects were to be implemented with an investment of Rs28,655 crore, accounting for a capacity addition of 340 million tonnes.

“Now we are looking at an investment of Rs 30,028 crore for capacity creation of 390 milliontonnes through these 48 projects,” the official said.



The ministry dropped 7 out of the 15 projects due to lack of feasibility, while eight have beenpostponed to the next financial year’s plan.

In all, the government is planning 276 projects under NMDP. Of this, 47 have been completed,while 27 are under construction.NMDP had envisaged investments worth Rs 55,000 crore to boost the port infrastructure at

twelve major ports of the country by 2012.These essentially focussed on dredging, enhancement of port capacity, and berthdevelopment on PPP basis.

These twelve major ports account for 75% of the country’s maritime cargo.

Meanwhile, the government has awarded the contract for development of general cargo berthin Vishakapatnam for Rs 261 crore, and for a liquid cargo berth.


Energy rating: Car cos get 3 yr respiteOn Thursday, December 31, 2009

New Delhi: The automobile manufacturers can rest in peace, for at least three years. Energy-efficiency star ratings are not likely to be made mandatory from 2011, as proposed earlier.

The Bureau of Energy Efficiency (BEE) is of the view that the industry may need more time toadapt to its energy labeling for passenger cars.

The government has been trying to implement the energy efficiency rating for vehicles for thelast few years, but has been unsuccessful owing to resistance from the industry.

However, after the government announced emission intensity cut targets of 20-25% on the eveof climate change summit in Copenhagen, BEE proposed introducing star ratings in themarket on a voluntary basis from January 2010, and subsequently making it mandatory from2011.

“We are facing resistance from the car manufacturers. After we introduce our star ratings for cars in January 2010, and the consumer demand for fuel efficient cars go up, I am sure car manufacturers will switch on their own to fuel-efficient cars. This process will take at leastthree years,” said Ajay Mathur, Director General, BEE.



When BEE, a statutory body that falls under the Ministry of Power, announced its plans toissue star ratings to cars on the basis of their fuel efficiency, there was much resistance fromthe auto sector.

“The country is already gearing towards moving to Bharat Stage (BS) III norms from January 1,

2010, with eleven major cities including metros even moving to BS IV. The road and transportministry is of the view that at a time when there are already so many energy efficiency ratingswaiting in the pipeline, introduction of another type of fuel efficiency rating will create aproblem.


Samsonite's Tainwala to buy stake in

Planet RetailOn Thursday, December 31, 2009Mumbai: Ramesh Tainwala, president - Greater Asia, Samsonite Asia Ltd, is looking to acquire amajor stake in Planet Retail Holdings Ltd.

Tainwala, who holds 40% stake in Samsonite, is looking to foray into the fashion and lifestyle retailbusiness through Planet Retail.Planet Retail is the exclusive franchisee for international fashion and lifestyle brands such as TheBody Shop, Debenhams, Next, Guess, and Accessorize.

“I have interest in Planet Retail. It is one of the biggest retail players in India and in the right spot. Iknow VP (VP Sharma, promoter of Planet Retail) for long and it will be a marriage in my ownindividual capacity,” Tainwala told reporters in Mumbai on Wednesday.



The partnership, the nature of which Tainwala refused to divulge, will befinalised by the end of January.

Planet Retail earlier had a joint venture with Pantaloon Retail (India) Ltd for sports and apparelbusiness.However, the JV was discontinued and the format Planet Sports, which it operated, is now under

Pantaloon Retail as a wholly owned subsidiary Courtesy: - D N A Money

Business News

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Friday, January

1

After best show in 18 yrs, Sensex faces 'ltdupside'

On Frid ay, January 1, 20 10

The Satyam scandal may have given 2009 an inauspicious start, but the global recovery andabundant liquidity have driven the Sensex to post its best yearly returns since 1991. And,



experts believe the domestic market is likely to build on the recovery in the new year, albeit ina more sober manner.

The Sensex has risen 7817.5 points or 81.03% since December 31, 2008. This is the best returnsince December 1991, when the Sensex rose 82.09%. This is also the third-best year for theindex ever — 1985 (93.98%) was the only other year that gave better returns.

The metal index was the best performer in the year, rising 233.68%. Second on the list was theauto sector, which gained 204.16%.


Processed-food makers clock big salesdecline

On Friday, January 1, 20 10Consumption of ketchups, chips, noodles, soups, jams and coffee declined between Januaryand October 2009, data from IMRB international, the market research firm, show.The reason, experts say, may be price inflation elsewhere such as in vegetables and cereals,which has reduced purchasing power.Consumers across India have been focusing on buying only the essentials and holding back

on discretionary spends, IMRB said.



Consumption of purees is down 23%, pasta 9%, ketchups 7%, jams 6%, soups 3% andchyawanprash 53%, data from 119 urban towns for January-October 2009 show, comparedwith the same period last year.In over 600 rural markets, milkfood and milk-based drinks' consumption is down 13%, butter and cheese 9%, coffee 8% and noodles 3%."The slowdown has been mainly in the "affluent segments" such as ready-to-eat foods, ready-

to-cook mixes, purees and pastes, sauce and ketchups, as the upper socio economic classes(SECs) seem to be decreasing the consumption of such stuff," said Sunil Desai, researchdirector, IMRB International."There has been a decline in consumption of categories that consumers do not treat importantin the purchase basket. A household can do without ready-to-eat foods and mixes, whereasatta, dal, oil, butter — they are necessities," Desai said.He sees a deceleration in food inflation and return of purchasing power by mid-2010. "Therewould be a decline on additional or non-essential thing...


NIIT sees IT training business surgeOn Friday, January 1, 20 10

New Delhi: NIIT Ltd, the computer education firm, is expecting its IT training businessto pick up in 2010 after almost a year of muted growth as job prospects improve in thesector.

The IT training business is expected to do well in geographies such as Nigeria,Vietnam, China, Thailand, Indonesia and Malaysia as US and Europe continue to reel

under recession, according to a company official.

The NIIT spokesperson was not immediately available for comment.

The company earns nearly 40% of its revenues from the corporate training segment,where it provides learning solutions, e-learning and content development solutions tocompanies.

The company did experience some improvements in its IT training business in thethird quarter but it failed to translate into business growth.

Despite a pick-up in hiring by IT companies, growth in its IT training business remains

dependent on internationalbusiness as the domestic business is still lagging behind.



Also, NIIT implemented school learning solutions in 3,500 schools in the first half of the fiscal but the school business remains dependent on the less-profitablegovernment contracts.The company is expecting momentum in the March quarter as it expects to get a fair share of the current school pipeline.NIIT is exploring opportunities in public-private partnerships in model schools andskills enhancement.

It is also expecting recruitments in the private and public sector banks to pick up inthe coming quarters and contribute to the revenue growth of its new businesssegment.

The company has approved raising Rs 230 crore through qualified institutionalplacements (QIP) for pursuing growth opportunities in the current and newbusinesses as well as the emerging opportunities in the education and trainingsector.

The funds were scheduled to be raised in October but have been pushed ahead to2010.

The QIP issue would result in stake dilution of about 16%.

Double click an English word for Macmillan Dictionary definitionCourtesy: - D N A Money

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Saturday,

January 2

Year of China, but not in good senseOn Satur day, January 2 , 20 10

If China doesn’t budge on exchange rates, it will face a tidal wave of protectionismIt’sthe season when pundits traditionally make predictions about the year ahead .....10-year gilt yield seen touching 8.5% this year

St sees benchmark trading at 8-8.25% for most of the yearThe bond market expectsyields to appreciate sooner than anticipated. Given rising inflation and .....



January this year. The government also confirmed its earlier statement that exportshave jumped around 20% in November, with the new numbers showing an increase of 18.2%.

However, all numbers, whether of imports or exports, continue to be considerablylower than what they were during early and mid 2008.

For example, exports were in the $15-20 billion per month range before the recessionbegan in October last year. Even as November posted an exports growth, the totalwas just $13.2 billion.

Imports too have a long way to go before they catch up with last year’s numbers. For example, non-oil imports, which peaked at $16.5 billion in November, typically rangedbetween $16 billion and $22 billion during the second half of 2008.

The decline in imports has also favourably impacted India’s balance of tradenumbers. Trade deficit for the current financial year is down 35% to $66 billion against$100 billion during the same period last year.


10-year gilt yield seen touching 8.5% thisyear

On Saturday, January 2, 20 10Mumbai: The bond market expects yields to appreciate sooner than anticipated.

Given rising inflation and interest rate expectations, 10-year yields are expected to bein the 8-8.25% band for most of this year, may be even touching 8.5%, said players.

Yield on the 10-year 6.35%, 2020 paper closed Friday at 7.57%.“We are anticipating a hike of 100 to 125 basis points (100 basis points make apercentage point) in the reverse repo and repo rate in 2010. Besides, the cash reserveratio (CRR) may be hiked by 150 basis points this year,” said Shubhada Rao, chief economist at Yes Bank.

The reverse repo and repo rates are currently at 3.25% and 4.75%, respectively, whileCRR is at 5%.

Rao sees a hike of 50-75 basis points in the interest rates in the April monetary policyof the Reserve Bank of India.Government borrowings for next fiscal is also not expected to come down

significantly from Rs 4.5 lakh crore in the current fiscal.



Monday,

January 4

Good Q3, but earnings upgrade over?On Mon day, January 4, 2010

Mumbai: It’ll look good, in part due to good sales and profit growth and in part due toa generous base effect.

That’s the refrain on the street on the results for the quarter ended December 31,2009.

Base effect, because the December 2008 quarter was one of the worst in recent times,as the world was being torn apart by the financial crisis and credit and demand hadfrozen.

Since then, there has been considerable improvement in the domestic businessenvironment, and exponentially so in the last 9 months.

This, analysts say, will be reflected in the corporate results that’ll start to come outthis week.

Dhiraj Sachdev, vice-president and fund manager at HSBC Asset Management, bets

the quarter would be comfortably better than the one seen last year.



NTPC has earmarked a capital expenditure of Rs 60,000 crore for the current planperiod.

NTPC’s current generation capacity is over 30,000 mw and it plans to scale this up to50,000 mw by the end of the XIth Five-Year Plan in 2012.

These include projects at Dadri, Mouda, Jhajjar, Vindhyachal, Sipat, Rihand, Simhadri,Barh and Korba, which are under construction and would be commissioned by then.

NTPC had, through its initial public offering in 2004, raised around Rs 5,300 crore. Thegovernment had then divested 5% stake in the company, while another 10% freshequity was raised.

The company’s FPO was postponed in 2008 due to the global financial crisis, whichhurt valuations.

NTPC also plans to enter the nuclear and renewable energy space.


A 20k mw producer in the works, sansUMPP

On Mon day, January 4, 2010Mumbai: When Adani Power went public a couple of months ago, its management hadcommitted itself to producing 4,620 mw of power at Mundra and 1,980 mw at Tiroda inMaharashtra.

The power plant in Mundra would thus become the world’s third-largest coal-based

power plant at a single location.

The prospectus did mention the intention to produce 3,300 mw at Dahej in Gujarat,but did not provide any detail.

However, less than six months after the issue closed, Adani Power has finalised itsplans for generating 10,560 mw of power generation capacity, without recourse to anyadditional capital for now.

The first of two units of 330 mw is already operational, and the second is likely tobegin generating power within a month from now.

Work on two other units of 330 mw each is underway, and all the four units areexpected to be in operation by the third quarter of 2010.



Work on five other units of 660 mw (super-critical units, which allow for huge savingsin coal consumption) should be up and running by the end of the financial year 2010-11.

A lot of the power generated at Mundra will go to meet the requirements of the portand of the SEZ (and the units located there).

But that is only part of the story. During the past six months, Adani Power hasexecuted power purchase agreements (PPAs) with several state governments

This has persuaded Adani Power to set up power plants in locations other thanMundra as well.

What is even more significant is that none of the power generation capacities havebeen through the UMPPs (ultra-mega power projects of 4000 mw each) route offeredby the central government.

Adani has opted instead to adopt a route where licensing is not involved, where thecompany takes up the risk of setting up the plant and obtaining clearances, and canoffer the most competitive power tariffs to the purchasing parties.

And if sources within the company are to be believed, plans are already being workedout to generate another 10,000 mw of power by 2017.

If these plans get finalised, the Adani group could become one of the very few privateplayers in the country to be generating 20,000 mw of power.


Business News

Of



Tuesday,

January 5

RIL share sale foxes St againOn Tues day, January 5, 2010

Reliance Industries (RIL) says it has Rs 23,000 crore cash in hand.

And, published numbers say its cost of debt stands at a stunningly low 5.4% in thefirst half.

Equally-rated, or AAA companies, pay at least twice that rate in India.

Despite such favourable tailwind, RIL continues to sell treasury stock, leavinganalysts scratching their heads as to the gameplan.

What gives?

On its part, RIL has not volunteered any information.

In all, it raised Rs 2,680 crore by selling 2.59 crore treasury-stock shares, the secondtime it has done so in four months, in a deal managed by Citigroup and MorganStanley.



The Life Insurance Corporation bought 2.5 crore of these, tantamount to 0.79% stake.As of September 30, LIC held 6.07% stake in RIL. After Monday’s deal, its stake standsat 6.86%.RIL merely said the shares were sold at Rs 1,035 each, a discount of around 5% to themarket price, in a statement on Monday.

The company has now mopped up Rs 5,868 crore through the two sales.

RIL’s net debt (total debt minus cash in hand) has kept on increasing, Kotak said.

For example, the company reported a total net debt of Rs 28,900 crore at the end of fiscal 2009.

The net debt figure rose to Rs 51,700 crore at the start of the first half of the currentfiscal.

The Kotak report said that during the first half, RIL generated free cash flows of Rs4,600 crore, which doesn’t seem to have impacted the net debt of the company.

RIL said net debt at the end of the first half stood at Rs 51,900 crore.

Taking the free cash flows, the capex and cash profit as reported by the company,there is a net debt difference of Rs 4,800 crore that’s unexplained, the Kotak reportsaid.

Kotak also pointed out that the cost of servicing debt seemed extremely lowcompared with the size of the debt, at around 5.4%.During the first half of current fiscal, RIL spent only Rs 1,680 crore as interest whilemaintaining average debt of Rs 62,403 crore.“We continue to be positively surprised by RIL’s low interest cost,” the Kotak report

said.

RIL did not respond to an email from DNA seeking comments on the Kotak report.Courtesy: - D N A Money

Infrastructure players brace for order boom

On Tues day, January 5, 2010Mumbai: Construction companies see their order books swelling substantially fromhere, given the improvement in the economy and the government’s thrust on

infrastructure.

The year gone by was a mixed bag for these players. Order-booking was quitelukewarm in the first half of the year, but started picking up in the latter half.

Hyderabad-based Gayatri Projects bagged irrigation projects in Andhra Pradeshworth about Rs 3,000 crore last year, but little else. The company’s managing director,T V Sandeep Reddy, attributes this to the fact that there was little activity last year except on the irrigation front.

“But this year we expect to bag about Rs 4,000 crore of non-irrigation orders,” hesaid.

Gayatri Projects currently has projects worth Rs 6,000 crore.



Among the sectors these firms are betting on are highways and power.

There were few takers for most of the National Highways Authority of India’s projectslast year and the body is set to fall short of awarding the targeted 126 projectscovering nearly 12,000 km before March. But, things are looking up.

After taking charge as the minister for road transport & highways, Kamal Nath set atarget of building 20 km a day and awarding Rs 1 lakh crore worth of projects in a year

E Sudhir Reddy, chairman & managing director, IVRCL Infrastructures & Projects,expects a huge jump in the number of road projects to be awarded. “There will beenough orders for all infrastructure firms. We can increase our existing backlog of Rs21,000 crore if we want, but we have to maintain it at this level for a while,” he said.

Power seems to be the other focus area for construction companies. New Delhi-basedEra Infra Engineering and Shriram EPC are among the firms that plan to start biddingfor balance of plant contracts this year.

Urban infrastructure could also provide a boost to infrastructure firms. “There is hugepotential in water contracts, but things are moving quite slow there,” said ParvezUmrigar, MD, Gammon Infrastructure Projects.

Ahluwalia Contracts, whose forte is urban infrastructure, expects a 30% jump in order inflows. Chief executive officer Arun Sahai said government projects were happening,but the real impetus would have to come from real estate.

Meanwhile, irrigation projects could take a backseat, given the tense politicalsituation in Andhra Pradesh. The state is by far the most active in the irrigation space.“I don’t see many irrigation contracts now in Andhra Pradesh,” Sandeep Reddy said.With order-booking in most sectors not a concern, firms are not worried about

execution and the availability of funds. They are now able to access both term andworking capital funds at about 10-11% per annum. “Moreover, execution has never been a problem for our companies,” said Reddy.


In a quick about-turn, NCDs go out of

favour On Tues day, January 5, 2010Mumbai: How quickly things change on Finance Street.

In August-September last year, L&T Finance and Shriram Transport Finance — alongwith Tata Capital in February — raised about Rs 3,500 crore through non-convertibledebentures (NCDs).

Rising corporate bond yields — which force issuers to pay higher interest rate — isanother deterrent.

“We may not see another retail issue of NCDs in 2010 considering the way yields are

moving. Today banks and financial institutions can extend a line of credit at much



cheaper rates as they are flush with funds,” said Ashish Agarwal, executive director at New Delhi-based AK Capital, an intermediary.

Corporate bond yields have gone up by as much as 25 basis points since earlyDecember, said Agarwal. Companies find the institutional route far cheaper.

“Today institutional funding is almost 100 basis points cheaper compared with lastyear,” said Ramanathan K, chief investment officer at ING Investment Management.

Issuing NCDs would mean offering a higher coupon to attract investors and there arealso other costs of services involved in taking the retail route, said Ramanathan.

JP Associates, the infrastructure major, and Dewan Housing Finance, the mortgagelender, recently shelved their retail NCD plans due to these factors.

Kapil Wadhawan, chairman and managing director of Dewan Housing, said thecompany will now raise money through the institutional route.

“We will look at the retail route only when the situation is favourable,” he said.

Tata Capital, L&T Finance and Shriram Transport Finance had tapped the retailsegment as banks and mutual funds, among the biggest investors in corporatebonds, stayed away owing to the record government borrowing of Rs 4.5 lakh crorefor the current fiscal and uncertainty over yields.

Also, retail investors had found the coupon rates on them - around 9.5% to 11.25%pre-tax for three to five years —- attractive as deposit rates had dropped and theshare market was volatile.Which begs the question, did L&T Finance and Shriram Transport pay too much byhitting the markets three months early?


Business News



Of

Wednesday,

January 6

Bharti gets Dhaka OK for Warid buyOn Wednes day, January 6, 2010

New Delhi: Bangladesh authorities, including the country’s telecom regulator, aremoving swiftly to enable a deal between India’s largest telecom company bysubscriber numbers, Bharti Airtel, and Dhaka-based Warid Telecom International.

India’s official response to the proposed transaction is not known yet, thoughsources say Warid’s operations in Pakistan could be a possible regulatory hurdle.

Bharti’s earlier attempt to forge a deal, with South Africa’s MTN, is said to have failedover regulatory issues.

News reports originating in Dhaka on Tuesday quoted the chairman of the

Bangladesh Telecommunication Regulatory Commission, Zia Ahmed, as sayingapproval had been granted to Bharti for investing in Warid’s assets.



The regulator has permitted Bharti to initially invest $300 million in Warid, which iscontrolled by UAE-based Abu Dhabi Group.It is believed that Bharti wants to buy around 70% in Warid, which could require aninvestment of between $900 million and $1 billion.

Sources close to Warid had recently said the deal with Bharti could be closed as earlyas mid-January.

Going by reports, Bharti Airtel has been given 30 days to submit a detailed investmentplan to the Bangladesh telecom regulator for the proposed deal.

However, Bharti refused to comment.

Officials at Warid also did not talk on the deal.

Only last month, Bharti Enterprises group deputy CEO Akhil Gupta had told reporterson the sidelines of an event, “We have been always interested in expanding in the

Saarc countries and that includes Bangladesh.”

At that point, to a specific query on Warid, a Bharti spokesperson had said, “We keepevaluating international expansion opportunities from time to time. However, at thispoint, we do not have anything definite to share.”

On December 19, barely two months after the proposed $24-billion deal betweenBharti and MTN had failed, Dhaka’s Daily Star newspaper reported that Abu DhabiGroup had sought approval from the Bangladesh Telecommunications RegulatoryCommission for the Indian telco to pick up a stake in Warid.

Warid Telecom is a joint venture between Abu Dhabi Group and SingTel, which is also

a foreign partner of Bharti Airtel. Warid is currently operational in Bangladesh andPakistan, and is set to start operations in Uganda and Congo.

As of end-November, Bharti Airtel had over 116 million subscribers in India.Courtesy: - D N A Money

Maruti targets 50% output hike by 2015On Wednes day, January 6, 2010

New Delhi: Maruti Suzuki India plans to increase vehicle output by half a million unitsbetween now and 2015 in a bid to maintain market share.

One of every two cars sold in India carries the Maruti badge — at present, thecompany is able to produce a million units on an annualised basis by stretchingproduction capacity of about 0.9 million. By 2015, the Indian market is expected toreach the three million mark.



“When the market is three million units, we will have to make and sell 1.5 millionvehicles in order to keep our market share (50%) intact,” Maruti Suzuki managingdirector Shinzo Nakanishi said.

Nakanishi said he hoped to add capacity of another three lakh units between now and2015. “By adding about 3 lakh units at Manesar and through increased efficiencies,we should be able to produce 1.5 million units by 2015”.

Nakanishi declined to provide the investment needed for this capacity expansionexercise, saying a final decision on capex would be taken at the company’s boardmeeting scheduled for later this month.

But on the exports front, Maruti does not seem to be too ambitious. It plans to close2009-10 with 1.3-1.4 lakh units in exports, of which about 45,000 should be on accountof the contract manufacturing order from Nissan.

Nakanishi warned that the Nissan order could dwindle in 2010 and Maruti may not belooking at any substantial export growth till 2015.

On reducing vehicle cost, Nakanishi said there was a constant endeavour to do so,specifically for the ‘Alto’, which is Maruti’s most selling model. He said vendors havebeen asked to look at ways of reducing costs, but declined to confirm the launch of a“cost down” Alto later this year to replace the M800.

The M800 has to be phased out of 11 top cities after tougher emission norms kick in.

He also pointed out that if escalation in raw material costs, forex fluctuations andother pressures continued in the next year, any improvement in overall margins wasunlikely.


Cos shied away from creative

accounting after Satyamgate

On Wednes day, January 6, 2010Mumbai: The year after the Satyam Computer Services fiasco came to

light, corporates were less inclined to indulge in ‘creative accounting’.

However, in 2010, investors are advised to be careful because euphoric

market conditions

“This could be because of companies and auditors taking fright

following the Satyam scam. Also, in a bear market fiscal like 2009 when



all the stocks were hammered globally, corporates’ incentive to game

the accounting rules was muted,” Mukherjea told DNA.

The phenomenon extends beyond the listed space.

Arpinder Singh, executive director of KPMG who looks at forensicaccounting, said it is difficult to comment on where frauds occur more

as a large number of frauds do not get reported in the public media.

“Our cases could involve investigating the claims of whistleblower, or a

parent company scrutinising a subsidiary or a new CEO who wishes to

arrest problems proactively before they get bigger,” Singh said.

Mukherjea and Buddhadev resorted to financial manipulation checks for

revenue, expense and cash pilferage — three most common ways of

manipulating accounts.

The study focused on the consolidated financial statements of BSE 500

companies for fiscal 2008 and 2009 to arrive at the conclusion.

Corporates continued to resort to accounting trick of extracting cash

from the company through overinvoicing in fiscal 2009.

While cash flows from operating activities as a percentage of operating

profits, which reflects revenue recognition, showed great improvement

in the year, the only alarming finding was the fact that other expenses

continue to rise as a percentage of revenues (despite Ebidta declining

by 6% and despite revenues rising by 21%).

This raises concerns about the company using ‘low visibility line items’

to massage earnings and extract cash from the company’s books, they

said.

The sectors where creative accounting was the most popular were

housing (which includes firms related to real estate, construction and

cement), healthcare and capital goods (which includes firms in

construction, power T&D and materials).

Information technology was replaced by healthcare with other twosectors remaining same.




Business News

Of

Thursday,

January 7



ABG Shipyard acquires 15% in GreatOffshore

On Thurs day, January 7, 2010MUMBAI: ABG Shipyard has acquired a 15.20% stake in Great Offshore through itsopen offer after having pulled out of the race for the latter at aIndustry observers say that ABG Shipyard now has little interest in Great Offshoreand it would sell its stake to Bharati or offload it in the open market at the right price.ABG Shipyard had made an open offer for 33% stake in Great Offshore at Rs 520 ashare and has shelled out Rs 280 crore for the 15.20% stake.

When contacted by TOI, ABG Shipyard's CFO Dhananjay Datar declined to commenton company's future course of action. ‘‘We haven't taken a call on our investment in

Great Offshore,'' he said. Some analysts said ABG Shipyard may ask for a seat on theboard of Great Offshore by virtue of its holding. Datar refused to comment on this too.Mehul Savla of RippleWave Equity, an investment banking and advisory firm, said thatany investor with a holding of over 10% can get a representation on the board of company.

ABG sold almost its entire stake of 8.27% in the market after rival Bharati Shipyardraised its open offer price for Great Offshore to Rs 590. Bharati holds about 43% stakein Great Offshore following the open offer. Though its open offer was for a 20% stakein Great Offshore, the company got 27%. However, according to the rules, Bharaticannot accept the entire 27% and the acceptance ratio will be calculated on a pro ratabasis.

Market observers explained ABG cornering the 15.20% stake by saying that sinceBharati's open offer had a 20% cap as against ABG's 33%, the chances of acceptanceby the latter were higher. Also, investors took the benefit of arbitrage between GreatOffshore's market price and ABG's offer price of Rs 520. On Wednesday, shares of Great Offshore closed at Rs 466 on NSE.


China overtakes US in auto salesOn Thurs day, January 7, 2010



If January is any indication of how the rest of 2009 will go, Ford had better get out itsbegging plate, Chrysler should hand over its keys to Fiat and GM should startplanning its funeral.

Although the entire industry is shuddering - the market decline by 37.1 percent to656,976 vehicles, representing the fewest vehicles sold in a month since December 1981 - Chrysler, Ford and GM took the hardest hits. Ford fared "best", tumbling 41.6percent, followed by GM, limping in with a 48.9 percent decline. Chrysler's sales arefree-falling: it moved 55 percent fewer vehicles this January than it did last year,suffering its second straight month of 50 percent sales losses.

January's annual selling rate of 9.8 million vehicles represents a 15th straight monthof declines and the lowest rate seen since August 1982. The Japanese big three,Toyota, Honda and Nissan, weren't spared any of the carnage those facts indicate:their sales declined 32 percent, 28 percent and 30 percent respectively. Bob Carter,vice president of Toyota Motor Sales, said the month unfolded as anticipated.

"There were no surprises in January for the industry and the segments," he said.

"The market turned out the way we anticipated." Toyota doesn't expect the market torebound until the second half of the year. In 2008, January had the highest annualsales rate, at 15.6 million. By December, it had declined to 10.4 million; total saleschecked in at 13.2 million last year. If 2009 mimics 2008's trends, the U.S. automotiveindustry is in for one heckuva ride.

Hyundai-Kia and Subaru were the only two automakers to post sales increases. After Hyundai introduced its Assurance Program, which allows customers who lose their jobs within a year of purchase to return their vehicles at no cost, sales increased 12.5percent. Hyundai posted a 9 percent sales increase over last year. Subaru, one of aselect few automakers that posted a profit last year, saw its sales jump 8 percent.

Ford sales analyst George Pipas said the biggest reason for the incredibly low salesrate last month was a massive decline in fleet sales. He estimates that industry fleetsales were down an average of 65 percent or more from a year ago. Ford said sales toindividual customers declined only 27 percent, compared to a 90 percent loss inrental company sales.

The quickly contracting U.S. auto market instigated another record as well: China'sauto sales are expected to surpass U.S. auto sales for the first time ever. Althoughofficial data is not yet available, analysts in China are estimating sales of about790,000 units. Some argue the numbers aren't directly comparable because China'smarket includes a larger chunk of commercial trucks and buses. China leapfroggedJapan in 2006 to become the world's 2nd biggest auto market.

China's auto sales are estimated to have fallen from a record of 860,000 units lastJanuary by about 8 percent. In the same time period last year, over 1 million vehicleswere sold in the U.S.




Business News

Of Friday, January

8



3G auction likely to be pushed to

September

On Friday, January 8, 2010

New Delhi: The much awaited 3G (third generation) telecom spectrum auction will notbe conducted this financial year and may be pushed to August-September, going bythe recommendation of the law ministry.

The decision would hit the finance ministry’s math on bridging the fiscal deficit—itwas targeting to raise Rs 35,000 crore from the 3G and BWA (broadband wirelessaccess) auction by March 31.

The delay comes despite an empowered group of ministers headed by financeminister Pranab Mukherjee brainstorming several times recently, and prime minister’s

advisor Sam Pitroda being brought in to settle the spectrum issue.

The Department of Telec-ommunications (DoT) has finalised the 3G NIA (noticeinviting application) draft, which was sent to the law ministry for vetting.

Although no official announcement has been made by DoT or any other governmentagency on deferring the 3G auction beyond this financial year, it is learnt that the lawministry has cited “serious legal challenges” in the bidding process if spectrumcannot be made available till September.

As per the DoT plan, 3G auction was scheduled for mid-February, but spectrum for starting the service would have been allocated only around August-September.

According to legal experts, including in the law ministry, telecom service providerscannot be expected to pay for spectrum without a firm commitment from the defenceforces on vacation of airwaves, which would be subsequently allocated to telcos.

DNA had reported in its edition dated January 11 and 12 that there were strongindications of the 3G auction being deferred beyond the current financial year.

Many telecom service providers are opposed to a 3G auction this fiscal as either theyare focused on expanding their 2G services, or are yet to recover from the impact of the global economic meltdown. Recently, the CDMA (code division multiple access)lobby had demanded auction of EVDO (evolution data optimized) spectrum along withthat for 3G and BWA (broadband wireless access).

All that may have been taken into consideration before the government decision todefer the 3G auction.

DoT secretary PJ Thomas told this paper, “I have no information on this (3G auctiongetting deferred)”. Another government official who did not want to be namedquipped, “Is 3G that important? As long as we have a good 2G service, we should bethankful.”


Centre may free petrol prices next month




New Delhi: The government is likely to free petrol prices next month and partiallyincrease diesel prices after considering the recommendations of the Kirit S Parikhcommittee report, a senior government official said on Friday.

The official said former Planning Commission member Parikh, who is heading theexpert group on sustainable pricing of petroleum products, is likely to submit thereport next week.

“The committee is expected to suggest a complete decontrol of auto fuel prices, butthe government is likely to free only petrol prices and partially increase diesel prices.The decision is likely to be taken closer to the Budget,” the official said.

The government is likely to present the Budget for 2010-11 on February 26.

“A full decontrol of diesel prices could lead to spike in inflation, which is already amajor headache for the government. Differential diesel pricing for industrial andautomotive sectors can be looked at,” the official said.

However, industry watchers feel such dual pricing cannot work in India as over 50%of the diesel sold to industrial customers is for government companies. “Therefore,freeing diesel prices for industrial customers would again lead to inflation rise,” saidan official with an oil retailing company.

Food articles inflation rose to 17.40% in the week to January 16.From 16.81% in the preceding week. The government official said prices of cookingfuels like kerosene and liquefied petroleum gas are likely to be kept unchanged for now.

State-owned fuel retailers are currently incurring gross revenue loss of Rs 4.56 per litre on petrol, Rs 3.22 on diesel, Rs 16.43 on kerosene and Rs 279 on every 14.2-kg

cylinder of cooking gas.“There is a strong demand from the retailers—both public and private—for freeingautomobile fuel prices,” said an oil ministry official.

The three state-owned retailers—Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd andHindustan Petroleum Corp Ltd—are estimated to incur total revenue loss of aroundRs 43000 crore on sale of petrol, diesel, kerosene and LPG during the currentfinancial year to March.

The government official said upstream companies—Oil and Natural Gas Corp Ltd, OilIndia Ltd, and GAIL (India) Ltd may be asked to share “a portion” of the losses oncooking fuels.

So far, these companies had to bear only the burden of revenue losses on automobilefuels. NW18




Business News

Of Saturday,

January 9



Whirlpool aims to treble AC pie

On Satur day, January 9, 2010

Kolkata: Whirlpool of India is betting on air-conditioners (ACs) as its growth enginefor the next 3-4 years.

The consumer durable goods maker feels that ACs will overtake refrigerators as thelargest home appliance category in India in 2010.

The Indian subsidiary of the US-based Whirlpool Corp has drafted a long-termstrategy to take its current 5% market share in ACs to 15% by 2012. Its immediatetarget is to treble its AC sales to three lakh units by end 2010.

It is launching 35 models in the 1-2 tonne capacity to achieve the target. These ACswill have energy saving ratings of three and above.

Shantanu Das Gupta, vice-president, corporate affairs and strategy, Asia South,Whirlpool of India, said that though refrigerators comprise the largest chunk in homeappliances at five million units per annum, the category has been growing at asluggish 10-12% per annum.

Air-conditioners, on the other hand, are set to notch 3.2 million unit sales by 2010-endfrom the current 2.2 million units per annum.“So, we are expecting about 33% jump in the growth rate in ACs,” Das Gupta toldDNA.

For marketing back-up, Whirlpool will expand its footprint beyond the metros andmini-metros and has earmarked around Rs 10 crore for marketing, up six-fold.

Further, it plans to rope in around 1,500 dealers in more than 200 cities by 2010-end“to ensure a smooth purchase and ownership experience for customers,” Das Guptasaid.

If required the company may set up an AC manufacturing unit in India, Das Gupta

said, adding “these are speculative notions at present”. ACs contribute around 7-8%

to the turnover at Whirlpool of India.




Tata Steel, Nippon JV to kick off by 2012


Mumbai: Tata Steel will soon form a joint venture with Nippon Steel, the world’ssecond-largest steelmaker, to produce and sell high-tensile auto-grade steel in India.Tata Steel will hold 51% stake in the venture, which will be formed by the end of the2012 financial year.

“The companies will continue to discuss the terms and conditions concerning the JV,and aim to sign a definitive agreement by June 2010 and start operation before March2013,” Nippon Steel said in a statement.

The financial details of the deal weren’t available.

Nippon said, tentatively, the JV will set up a continuous annealing and processing line(CAPL) with a capacity of 6 lakh tonne per year. Moreover, Tata Steel will have alicence to use Nippon’s technology to produce and sell high-tensile steel toautomakers in India.

International automakers like Honda, General Motors and Hyundai Motors currentlyimport steel for making automobiles. With this JV, Tata Steel hopes to discourage theautomakers from importing the special steel and, instead, buy from Tata.

Nippon has been providing technical assistance to Tata Steelsince 2000 in the cold-rolling division of the Jamshedpur steel plant. “Bothcompanies will also continue to discuss further possible collaborations in other fieldssuch as automotive galvanised sheets and up-stream processes,” Nippon said.

Tata Steel is the third Indian steelmaker after JSW Steel andBhushan Steel to join hands with Japanese steelmakers for

auto-grade steel. JSW Steel and JFE Steel, Japan, had signed a similar deal in

November last year. Bhushan Steel, a Delhi-based cold-roller has also announced

plans to join hands with Sumitomo Metals for a technical tie-up.


GMR to assemble planes next


The manufacturing activity would be confined to smaller aircraft initially. “We arelooking assembling these small aircraft first,” Devagunam said.



GHIAL is setting up an aerospace special economic zone across 250 acres at thesprawling 5,500-acre airport complex.

In fact, the European company is working on this deal as part of itsoffset obligation for defence contracts bagged in India.

The GMR group is planning to convert this aircraft major into an anchor client at themanufacturing hub at the SEZ.

“We are talking to one more aircraft company. But, the European company would bethe first to come and hopefully it would be the first with which we would be signing adeal,” he said.

The investments and size of the activity are yet to be determined.In fact, the SEZ is one of the plans GMR has to monetise the property it has at theinternational airport.

The company is also at an advanced stage of setting up a maintenance, repair andoverhaul (MRO) facility at the airport. The company has formed a joint venture for theMRO with a Malaysian partner and Jet Airways too has picked up stake in the jointventure.

“Jet will immediately start using the MRO. In addition, we have also almost sealed adeal with SpiceJet. This company is currently flying its aircraft to Malaysia for maintenance. Once the MRO at Hyderabad is ready, SpiceJet will start using thefacility.

Though we have two immediate clients to make use of the MRO, we are talking toseveral more airlines and we would be able to get significant capacity utilisation once

it is up and running,” Devagunam said.

The MRO facility, which is likely to be the first among the SEZ-based facilities tobecome operational, would start its operations in the first quarter of the next financialyear.

Additionally, GHIAL is also in the process of setting up a logistics hub at the SEZ. Thelogistics hub would primarily support the aircraft maintenance functions.

“Currently, it is taking 24 to 48 hours for certain spares to become available to theairlines during the maintenance of their fleet. The logistics hub would focus onreducing the time to two to three hours. We are currently talking to several

component suppliers. Once the plans are finalised, the facility would support theupcoming MRO,” Devagunam said.




Business News

Of

Monday,

January 11



Nissan India inaugurates its corporate

office in Chennai

On Mon day, January 11 , 2010

Chennai (Nov. 16, 2009): Nissan Motor India Pvt. Ltd. (NMIPL) today inaugurated itsCorporate Office at T Nagar, Chennai, at the hands of Mr. Kiminobu Tokuyama,Managing Director and CEO, Nissan Motor India Private Ltd (NMIPL). Also presentwere colleagues and officials from the Renault Nissan Automotive India Private Ltd

(RNAIPL), Renault Nissan Technology and Business Centre India Private Ltd(RNTBCI) and partners.

Mr. Kiminobu Tokuyama, Managing Director and CEO, NMIPL said, “Today marks yetanother significant milestone for us at Nissan, as we move to our new corporate officein Chennai. We have come to India to become a major player and Chennai will play animportant and strategic role in our Indian operations as we gear up for the start of production of our locally made Global Compact Car in May 2010.”

The office, which is located in the heart of the Chennai city, will act as the nodal hub

for Nissan’s operations in India. Spread across an area of 10,000 square feet, the

facility will house the 56 employees of NMIPL, which is expected to almost double up

to over 100 employees by next year. The office is fully furnished with state-of-artinteriors with open work-stations thus promoting a culture of openness and friendly

working environment. The office will house the functions of Programmes

Management, Corporate Planning, Communications, Finance, Human Resources,

After Sales and Exports team. The Mumbai office will act as the regional office with

key members of product planning team and homologation of NMIPL and sales and

marketing team of Hover Automotive India Private Ltd, which is the strategic alliance

partner for NMIPL in India.




Cigarette, paper lift ITC net 27%

On Mon day, January 11, 2010

Reels in Rs 1144 crITC Ltd, Asia’s second-largest tobacco company by market value,posted a record quarterly profit as cigarette sales rose and its paper.Gas powers St-beating Q3 numbers from RILBottomline up 16% to Rs 4008 crReliance Industries (RIL) reported its first profitincrease in more than a year as higher natural gas sales outweighed.Real subscribers just half of what’s claimed by telcos

Top management of Bharti Airtel including Manoj Kohli, Sanjay Kapoor, and ManikJhangiani spoke to the media on Friday after the company declared.HC curbs ministry on L&T road dealThe Delhi High Court has restrained the road transport ministry from withdrawing ahighway project awarded to Larsen & Toubro in Coimbatore, Tamil Nadu.For IT cos, clients loosen purse strings, and how!TPI index indicates tech spending jumped 47% sequentially in Q4 of 2009 to $25billion;NMDC reviewing iron-ore pricing calculus

Existing contract ends on March 31, 2010National Mineral Development Corporation

(NMDC)


National Mineral Development Corporation

reviewing iron-ore pricing calculus



Business News

Of

Tuesday,

January 12



Lyondell/equity rejig/what?

On Tues day, January 12, 2010

On Monday, the shares were sold at Rs1,050 each, or 5% below market price, tofive

unnamed investors in a deal an-chored by Swiss investment bank UBS.The RIL stock

closed 1.85% down at Rs1,081.55. That’s after plunging as much as8.71% to Rs 1,066

from the day’s high ofRs 1,184.70.RIL continued to maintain silenceover the purpose

of the fund-raising, butthere are two schools of thought here.One is that the money is

for the much-touted bid to buy the Luxembourg-head-quartered LyondellBasell

Industries.The second is about balance-sheet re-structuring. But this thesis gets

scup-pered because UBS country head Man-isha Girotra told Reuters Monday’s

salewas the last for a while.There are other information gaps, too.If money is indeedbeing raised for Lyon-dell, it would imply RIL is sure of the ac-quisition.That would

mean it has alreadythrashed out a deal to be part the Euro-pean petrochemicals

major’s ‘plan of re-organisation’.So far, there’s no confirmation fromLyondell on

this.“It is a bit puzzling to see RIL raisefunds at such a breakneck speed. But thefact

that they have done so a day beforethe court takes up the matter is sugges-tive of a

deal with Lyondell,” said aMumbai-based stock analyst not wishingto be named


Infosys revenue seen up, margin down


For the December quarter, analysts are predicting volumes to



retain positive momentum across all IT players with an estimated growth of 1-3%.

However, they expect Infosys to do exceptionally well with the highest sequential

growth.

“We expect the top three Indian IT companies to return to QoQ (quarter-on-quarter)

revenue growth of 3-5-4.2% (in US dollar terms). Infosys should deliver the highest

QoQ growth in the (December) quarter,” analysts Bhuvnesh Singh and Sunil Tirumalai

of Credit Suisse wrote in a report dated January 4.

Kotak Securities analysts Kawaljeet Saluja, Rohit Chordia and

Vineet Thodge expect the second-largest software exporter to outperform the upper

end of its revenue guidance by 3%, riding on a better-than-expected ramp-up in deals

in the banking, financial services and insurance vertical and a conservative guidance.

“We expect Infosys to report a sequential revenue growth of 4.1% versus guidance of

0-1%,” Saluja, Chordia and Thodge wrote in a report dated December 31.

However, analysts don’t expect the tech company’s revenue growth to be backed by

higher margins.

Kotak’s Saluja, Chordia and Thodge estimate Infosys’ operating margin to decline by

130 basis points due to these two factors. They expect rivals Tata Consultancy

Services and Wipro to take a smaller hit on margins at 60% and 40%, respectively.

Diviya Nagarajan, analyst with UBS, also believes the salary hike of 2-8% offered by

Infosys in October could crimp its margins by 200-250 bps.


ITC set to enter deo, talcum space


Mumbai: Diversified company ITC Ltd is likely to launch three new products

categories in the personal care space this year, starting with talcum powder, sources

close to the development told DNA Money.



Although it is not certain whether ITC will launch the talcum powder under an existing

brand or an altogether new brand, it will leverage the entry to get a leeway into

subsequent categories — deodorants and skin creams.

Nazeeb Arif, vice-president and chief of corporate communications, ITC Ltd, said that

though the company was foraying into newer categories, he would not like to give

guidance on future launches and strategies. “We are not present in the suggested

(talcum powder, skin care, deodorants) categories so far,” Arif said.

ITC’s move to enter newer categories and expand the personal care portfolio (that

currently has three brands Fiama Di Wills, Vivel and Superia across shampoos,

conditioners, and toilet soaps) is a logical one, said sector analyst Anand Shah of

Angel Broking Ltd.

But there already are many giants to fight. “Skincare is a difficult market to penetrate

and it already has players such as Dabur, Emami and others. ITC will need really good

products, strategy and perseverance,” Shah said.

ITC is currently present in the premium perfume space. The mass-end deodorant

category is fast growing and the market is estimated to be worth Rs 400 crore. The

category is dominated by Hindustan Unilever’s Axe and Rexona and Paras Pharma’sSet Wet. Others players like Henkel, CavinKare and Elder HealthCare sell the Fa, Spinz

and Fuel range, respectively.

ITC’s move to gain market share in skincare space is likely to spell bad news for

already beleaguered rival and personal care leader Hindustan Unilever Ltd (HUL). HUL

has brands such as Ponds, Fair & Lovely and Vaseline in skincare and is fighting

market-share loss to regional and national players.




Business News

Of

Wednesday,

January 13

3G delayed as EGoM fails to fix auction

date & modalities

On Wednes day, January 13, 2010

New Delhi: Auction of 3G (third generation) telecom spectrum is set for yet another

delay, with sources saying it could be pushed beyond this financial year.



The Empowered Group of Ministers (EGoM) headed by finance minister Pranab

Mukherjee met in the capital on Tuesday to resolve some of the thorny issues, but the

meeting remained inconclusive on 3G dates, number of slots for telcos and payment

modalities.

Currently, the thinking within the finance ministry is that spectrum should get its

worthwhile value. “It’s not a distress sale,” a ministry official recently said on the 3G

auction. Spectrum is a ‘scarce’ resource and the government should try to maximise

its revenue from the 3G auction, the official said.

If the DoT proposal of only three private slots for 3G across circles is accepted, the

government would get that much less in spectrum money. The government, faced

with a steep fiscal deficit (at 6.8% of the GDP), wants to maximise revenue from 3G

auction.

It is believed that the government would rather delay the 3G spectrum auction than

hold it in a hurry and get a low price for the scarce and premium resource.

As of now, the government is targeting revenue worth Rs 30,000-35,000 crore from the

bidding process.


Tata Metaliks will also set up Karnataka

plant

On Wednes day, January 13, 2010

Tata Metaliks, a subsidiary, plans to set up a 3 million tonne per annum integrated

steel plant in the state next.



“The plant will come up in Haveri district with an investment of Rs 6,100 crore. The

project was cleared in September 2009 and the state government has taken all the

steps for its smooth implementation,” a senior official in the Karnataka industries and

commerce department said.

Sanjay Choudhry, spokesperson for Tata Steel, concurred. “The empowered

committee has given its nod for the land,” Choudhry said.

Another company official said Tata Steel’s priority is the Orissa project.

In Orissa, the steelmaker is building the plant on 2,000 acres.

Karnataka government sources said the state is also planning to set up a steel

complex in Bellary district on 50,000 acres.

It will have shared infrastructure for all steel plants in the vicinity.

“This will include common railway lines, water connections and iron ore mines,” said

an official close to the development.




Business News

Of

Thursday,

January 14



GTL Infra to buy Aircel towers for USD

1.8bnOn Thur s day, January 1 4 , 2010

Indian telecoms tower firm GTL Infrastructure has agreed to buy the tower assets of

Aircel for about Rs 8,500 crore (USD 1.8 billion), three sources with direct knowledge

of the deal told Reuters on Wednesday.

GTL Infrastructure will buy 17,500 telecom towers owned by Aircel, a unit of

Malaysia's Maxis Communications.

The deal is expected to be announced on Thursday, said the sources who did not

wish to be named as they were not authorised to speak to the media.


Massive frauds in individual mediclaims

On Thurs day, January 14, 2010

Surprisingly, the frauds reported have not occurred in group mediclaim covers, where

a corporate or a large group of people is covered under a single policy, but in

individual policies.

“We have just seen the revelations by a study of 2,500 individual policies in a stretchof Gujarat state. The results came as an utter surprise. Out of these, 800 claims were



fit for repudiation (denial in lay terms) and 20-odd hospitals were below the standard,”

M Ramadoss, chairman of New India Assurance, said at the Ficci Conference on

Insurance in Mumbai.

The revelation attains significance in the context of the high losses being incurred by

the public sector general insurance companies in the health business. The overall

claims ratio stands at a whopping 106%, which means for every Rs 100 collected as

premium, the insurers are paying Rs 106 as claims to policyholders.

Ramadoss said he didn’t expect it to be so high in individual claims.

Insurance companies have long maintained that losses in group covers are higher.

“We are enthused to investigate more and more. There is a case for saving money,”

said Ramadoss.

After Gujarat, claims in other states too may be surveyed by third party administrators

(TPAs), which act as the link between an insurance company, hospitals and the

policyholder in settling insurance claims.

Insurance company officials attending the conference did not divulge the names of

the TPAs conducting the studies.


Three National Highways Authoritynegative-grant projects attain financial

closure

On Thurs day, January 14, 2010

Larsen & Toubro (L&T) has tied up funds for its Rs 940-crore Pimpalgaon-Nashik-

Gonde project in Maharashtra. Soma Enterprises has also finalised a deal for the Rs

795-crore Kishangarh-Beawar project. Hindustan Construction Company (HCC), too,



Business News

Of

Friday, January

15

Oil firms may get Rs 12,000-cr

compensation from Finance Ministry



On Friday, January 1 5 , 2010

The Finance Ministry has in-principle agreed to provide cash subsidy to the tune of

about Rs 12,000 crore to State-owned oil marketing companies (OMCs) to compensate

their losses on sale of domestic LPG and kerosene during 2009-10. This would most

likely be treated as a one-time package for the entire 2009-10. The cash subsidy islikely to be allocated to the Petroleum Ministry through the supplementary demand for

grants in the upcoming Budget session, it is learnt.

Indian Oil, HPCL and BPCL are the likely beneficiaries of the cash subsidy. However,

the Rs 12,000-crore cash subsidy is much lower than the Rs 31,700-crore

compensation sought by the Petroleum Ministry for 2009-10.

For 2009-10, the under-recoveries on auto fuels are being fully compensated throughdiscounts from upstream companies — ONGC, OIL and GAIL.

The under-recoveries on sales of kerosene and LPG are to be compensated by the

Government through bonds or in cash.

The Finance Ministry had earlier indicated that it was not in favour of issuing special

bonds to the OMCs and would rather prefer cash support through the Budget. The oil

bonds issued were hitherto treated as off-Budget liabilities and not counted towards

fiscal deficit


Bankers ask RBI to hold rates


Mumbai: Ahead of the Reserve Bank of India’s (RBI) policy review on 29 January,

bankers asked the central bank to hold rates. Any hike in interest rate would result in

a further slump in credit growth, which is now at 13.66%.



They also asked for special relaxations for extending loans to infrastructure projects

so that they don’t have to suffer from asset-liability mismatches.

Banks give long-term loans for projects, but have deposits of comparatively shorter

durations.

According to two bankers who attended the meeting, banks also want exemption from

capital charges on a special refinance facility they are seeking to finance

infrastructure projects.

“We have asked for fine-tuning take-out financing norms of the IIFCL (India

Infrastructure Finance Co. Ltd). We don’t want to incur CRR (cash reserve ratio) andSLR (statutory liquidity ratio) charges while taking take-out financing. RBI would be

taking up this issue with IIFCL,” said a public sector banker, who did not want to be

named.

Banks also asked for relaxation of capital charges when issuing bonds. They also

sought relaxation on savings account interest rates. From April, banks have to pay

interest on savings accounts daily.


SBI plans to set up 6 lakh 'point of sale'

terminals in two year


Mumbai: State Bank of India (SBI) plans to install 6 lakh point of sale (PoS) terminals,

where shoppers make payments by swiping their credit, debit or pre-paid cards,

across the country.

There are 4.5 lakh PoS terminals in the country at present, of which only a handful

belong to SBI.

business news from dec7 to jan 15

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