Corporate Radar

Hindalco posts impressive Q1; Net up by 21%

2011-08-12T21:47:00.000-07:00

Hindalco announces Q1 FY 2011-2012 results

		Vs. Q1 FY11
Revenues	Rs. 6,031 crore	16% Ç
EBITDA	Rs. 1,045 crore	16% Ç
Net Profit	Rs. 644 crore	21% Ç

EBITDA crosses Rs. 1,000 crore mark for second consecutive quarter

Standalone Financial Highlights (unaudited)

(In Rs. crore)	Quarter	Quarter
	ended	ended
	30-Jun-11	30-Jun-10
Net sales and operating revenues	6,031	5,178
Other Income	178	69
EBITDA	1,045	901
Depreciation and impairment	175	169
Interest and financing charges	67	59
Profit before tax	803	673
Provision for taxes	159	139
Net profit	644	534
EPS (Basic) (Rs.)	3.36	2.79

Hindalco Industries Ltd, an Aditya Birla Group company, today announced its unaudited financial results for the first quarter ended June 30, 2011. Its performance in the quarter has been significantly better than the comparable quarter in the previous year.

Net sales at Rs. 6,031 crore in Q1FY12 were up 16% despite flat volumes, mainly on the back of higher LME.

The adverse impact of strong inflationary pressures largely in energy products and rupee appreciation were mitigated by improved operating efficiencies in both its Copper and Aluminium businesses. Higher value-added by-product credit and TcRc in the Copper Business also contributed towards sustaining the Company’s performance.

Other Income was higher by Rs. 109 crore driven by improved treasury yield and an enhanced corpus, consequent to return of capital from Novelis. Other Income is inclusive of Rs. 69 crore received as dividend from Aditya Birla Minerals Ltd, the Company’s Australian subsidiary.

EBITDA exceeded Rs. 1,000 crore, despite steep input cost escalations. Better realization, higher other income and improved operating efficiencies fuelled this rise.

Profit before tax at Rs 803 crore, registered a 19% growth. Net profit after tax stood at Rs. 644 crore up 21% over that of Rs. 534 crore in Q1FY11.

Strategic Initiatives

The existing joint venture [JV] agreement with Almex Inc. USA (Almex) in relation to Hindalco-Almex Aerospace Limited [HAAL], a subsidiary of the Company, has been terminated with effect from 10^th August, 2011 and the Company has acquired 8,011,000 out of 13,011,000 equity shares held by Almex in HAAL.

Business Segment Results

Of the Rs. 6,031 crore revenue, Aluminium Business contributed Rs. 2,093 crore Vs. Rs. 1,867 crore in Q1FY11. EBIT at Rs. 599 crore was up 8% Vs. Q1FY11. The results would have been better, but for the increased input costs (especially coal) and an appreciating rupee.

In the Copper Business, revenues for the quarter were higher at Rs. 3,940 crore, a rise of 19% from Rs 3,314 crore in Q1FY11, mainly on account of higher copper LME and by-product realisation. The benefits of the marked improvement in operational efficiencies and higher TcRc were partially offset by higher energy cost and bi-annual shutdown. Despite the spike in energy cost, EBIT at Rs. 145 crore was 17 % higher over the corresponding quarter of the previous year.

Operations Review

Aluminium
Alumina production was lower at Renukoot, due to constrained bauxite availability. Metal Production has been maintained at 140 Kt level; Higher production from the new pots at Hirakud is expected from Q2FY12 onwards.

Flat Rolled Product (FRP) production was lower due to the sluggishness in the market. Production of Extruded products was affected as operations at Alupuram, Kerala continued to be hampered, following the lock-out declared on February 22, 2011.

Production – MT	Q1FY12	Q1FY11
Alumina	334,587	341,419
Aluminium Metal	140,387	140,061
Flat Rolled Product	49,544	51,373
Extrusions	7,321	9,617

Copper
Copper production was lower on account of the bi-annual shut down at one of the smelters at Dahej. The Smelter is back in operation from July ’11. CCR production fell in line with market conditions.

Production – MT	Q1FY12	Q1FY11
Copper Cathodes	73,192	76,309
CC Rods : Own	33,701	40,708

Expansion Projects

Brownfield

Hirakud Smelter Expansion: The Smelter expansion at Hirakud from 155 KTPA to 161 KTPA was completed in Q4 FY11. A further expansion from 161 KTPA to 213 KTPA, along with a 100 MW Captive Power Plant [CPP] will be commissioned in early 2012.

The next phase of expansion of the Smelter from the proposed 213 KTPA to 360 KTPA, with a corresponding increase in CPP capacity from 467.5 MW to 967.5 MW is under evaluation. The environmental clearance is in place.

Hirakud Flat Rolled Products [FRP] Project: This project is underway with the transfer of all the critical equipments for FRP production from the Novelis plant at Rogerstone, UK to Hirakud. In addition, orders have also been placed for related and balancing equipment.

The erection of the Cold Rolling Mill has started at the site. Almost 50% of the structural fabrication and erection is complete. The project will enable the Company produce a wide range of superior engineering products, including can-body stock, for both domestic and export markets. The project is slated for completion towards end-2011. Around 3,000 people are working at the site.

Belgaum Special Alumina: A feasibility study on the Specials Plant expansion from 189 KTPA to 301 KTPA, with a coal based co-generation power plant, along with natural gas firing for its rotary kilns, is currently on.

Greenfield

An overview of the projects is as indicated below:

* MoEF approval for 3 mio-tonne/annum

** MoEF approval for 325 KTPA and 750 MW CPP

*** MoEF approval for 260 KTPA and 600 MW CPP

+ The process of seeking approvals is in progress

Of late, the uncertainty in the regulatory environment has impacted the progress of some of these projects and has posed challenges with respect to the commissioning of these projects as per schedule.

These Greenfield projects are located in remote places, devoid of adequate infrastructure, which needs to be developed. The execution gets impacted by local factors that may not be conducive to planned progress. The Company is building necessary infrastructure to support the execution of the projects, to sustain commercial operations, when these are commissioned.

While the critical long lead equipment for UAIL, Mahan and Aditya Smelters have been tied up and committed, severe inflationary pressure is being witnessed, triggered by the increase in commodity and fuel prices, for ongoing civil and other related activities.

Developments During the Quarter

Mahan Coal: The Forest Advisory Committee of the Ministry of Environment and Forest (MoEF) has recommended that the forest diversion proposal for Mahan Coal block be rejected. However the Minister has referred the matter to a Group of Ministers (GoM) which has been constituted for the purpose of deciding on forest clearance for coal blocks, including that for Mahan. The issue of Mahan Coal block is likely to be discussed in the next meeting of the GoM.

The company has already made detailed representations and is hopeful of a favourable disposition by GoM, considering the merits of the case and the investments already made.

To meet the coal requirements during the interim period, the Company has made an application for tapering linkages which are being considered by the authorities. The company is also exploring open market purchase and imports to meet the shortfall, if any, until a satisfactory resolution of the matter.

Given the changes that may be involved in the approval and coal sourcing pattern, the scope and cost of the project may undergo some modifications.

Mahan Aluminium Project: This 359 KTPA Aluminium Smelter, along with 900 MW CPP, is coming up in Bargawan, Madhya Pradesh.

Contractors have mobilised about 17,000 people at the site. Engineering for the project is complete and installation of major equipment for both the Smelter and the CPP is going on full swing at site.

Civil foundation, fabrication and erection of structures have progressed substantially at both the Smelter and the CPP. The progress is in line for commissioning of 1^st set of pots and two units of CPP. The first metal from the project is, expected to be available by end 2011.

Utkal Alumina International Ltd. (UAIL): The construction of the alumina refinery, along with a 90 MW captive co-generation plant is on track at UAIL, a 100% subsidiary of the Company. The output from UAIL would feed alumina to the Mahan and the Aditya Smelters. Contractors have mobilised more than 9,000 people at the site. The erection of major equipment like boilers, evaporators and turbines is in full swing.

The project progress is broadly on scheduled lines. As indicated earlier, some of the major contractors who have not delivered in line with their commitments are being replaced. The performances of the other contractors are being closely monitored.

Despite overruns in cost, the project capital cost continues to be favourably benchmarked with the capital cost of other comparable global projects.

The operating cost of this project will continue to be in the lowest cost quartile of the global cost of production and will be value accretive.

Aditya Aluminium: Stage II forest clearance in the Aditya Smelter and Power Plant has been received. It is expected that first metal will start flowing by early 2013.

Industry Outlook

Following the deepening of sovereign debt crisis in Europe and the downgrade of US sovereign rating recently, macroeconomic risks have accentuated. Setting of risk aversion into financial markets can potentially have an adverse impact on investment flows into commodities and therefore, on prices of aluminium and copper on the London Metal Exchange (LME).

Aluminium

Global aluminium consumption in Q1FY12 showed a robust growth of 9% vis-a-vis Q1FY11. There has been an increasing demand from all the major economies. China had a double digit growth due to high demand from construction, electrical and packaging sectors. The global demand trend, however, could be vulnerable in the coming quarters due to macroeconomic headwinds.

In India, most aluminium consuming sectors reflect a steady performance, though there has been some slowdown compared to the strong growth trend witnessed last year.

Aluminium prices averaged USD 2,600/t for Q1FY12, the highest since Q2FY09. This increase is attributable to the hardening of cost structures, inventories locked up in warehouses, and investor interest in aluminium. While the cost push and warehouse deals could continue to provide support to prices, downside macro risks mentioned earlier, need to be watched out.

Copper

Even though medium-term demand prospects for copper remain bright – globally as well as in India, its consumption is witnessing some deceleration on account of high relative copper prices and concerns over the strength of the global recovery in some economies.

Concentrates market had eased up since late 2010, following maintenance shutdowns / disruptions in major smelters. The market has begun to tighten again following strikes at some of the major mines, delays in anticipated mine projects and decline in ore grades. The spot TcRc have corrected from their peaks seen about a quarter ago. Going forward, concentrates market balance will depend upon the resolution of mine supply issues and ramp up of new projects. Hindalco is unlikely to be affected by any adverse movements in the concentrate market as the Company is adequately covered for supplies during remaining FY12.

Company Outlook

The environment in both the businesses has become very challenging due to volatile LME, spiralling energy and other costs and non-availability of coal. The regulatory uncertainty is compounding the concern.

The long term prospect of aluminium and copper consumption in India and globally augur well for the Company. Capacity expansions under implementation will enable the Company in achieving its vision of being a premium metals major, global in size and reach.

‘Green Man’ Lalitkumar Jain heads CREDAI; Embarks on ‘Mission transparency’ in realty

2011-03-11T22:21:00.000-08:00

NEW DELHI: Civil engineer-turned multi-project developer Mr Lalitkumar Jain, nicknamed as the “Green man of Pune” for his eco-friendly nature, who has been elected as the President of Confederation of Real Estate Developers’ Associations (CREDAI) has vowed to take up the issue of transparency in real estate deals.

Mr Jain, commenting on his plans for CREDAI, said the developer community as such has been facing several problems relating to transparency in transactions.

“We at CREDAI have planned to tackle with this problem head-on and ensure customer delight in our transactions. We are also keen to ensure that the customer relationship management gets a new meaning in real estate, for real,” he said.

Mr Jain, Chairman and Managing Director of Kumar Urban Development Limited (KUL) was earlier the Vice President of CREDAI (West) and his election as the national President marks a new high in his nearly 3-decade long experience as a developer.

A people’s man that he is, Mr Jain took active part in organizing the developer community. In fact, he was the youngest Secretary and President of the Promoters Builders Association of Poona (PBAP). He, along with Mr JiendraThakkar, has also played a stellar role in creating and developing the Federation of Promoters Builders Associations of Maharashtra.

Mr Jain has been associated with CREDAI right from its inception. As the first convener of CREDAI national convention in Vigyan Bhawan he is also credited for mobilizing the largest number of developers on one platform. He has been the Vice President of CREDAI twice and has significantly contributed to the organsiation’s activities and representations on policy and legal issues.

He started his career at the age of 17 years as a supervisor in a Pune company and contributed to the firm making handsome profits. Restless to perform, Lalitkumar joined his father Late Shri Kesarimalji Kamdar‘s business Kumar &Co and mastered legal knowledge and the government policies.

With his Company Motto - “We Build Trust” - he practices what he preaches. Small wonder his business grew manifold and Kumar Builders quickly became synonymous with quality real estate of Pune. In 1999, his family saw partition and Lallitkumar started with development of 35,000 sq ft and within five years he delivered 1.4 million sq ft.

He has carved a niche for himself in Pune construction with more than 100 projects and 14,000 tenements, setting a new benchmark in trustworthiness. Apart from residential complexes, he developed IT Buildings, Retail Malls, IT Park and gated communities.

Kumar Builders has recently been rechristened as Kumar Urban development Limited to give it a new identity to change with the changing times. KUL has so far developed 70 million sq ft with 9million sq ft of city centre projects, with focus on Pune and Mumbai.

Bangaluru, Hyederabad and Nagpur are on KUL’s radar for the near future. Its current projects range from redevelopment projects to SEZ.

KUL can also be credited for being the largest single contributor to the City’s greenery drive. Each year, KUL donates about 10,000 saplings to the civic bodies, besides developing public gardens. The environment park called “Nakshtra Udyan” stands testimony to the fact that greenery is a way of life at KUL.

Presenting environment friendly projects, KUL is one of the first developers to have received the coveted ISO 14001 certification under 2004 guidelines, globally

The company, under Mr Jain’s leadership, has been hounoured with the National Shrusti Award for contribution to environment as it was the first developer company to adhere to PMC’s environment norms. It has also won “CNBC CREDAI AWARD” for Best Commercial Building Systems, City Scapes’ “Future City Award”, “Amacus” Best Developer Award, “Best Regional Developer Award” by Realty Plus. KUL is rated as one of the top 10 developers of INDIA by Construction World Magazine in 2009.

A meritorious student right from his 1^st Standard, Mr Jain has shown keen interest in education and sports. For well over decade, he has been running a unique project called “Adarsha Vidya Mandir Yojana” designed to ensure an overall growth of students by adopting schools especially in backward rural areas around Pune.

Now, he is all set to major role at the national level taking up passionately the cause of developers and their stake holders – the customers.

You are wrong, Sahara tells SEBI

2010-11-27T02:44:00.000-08:00

Sahara India this rebuttal to SEBI order banning two of its group companies and promoters from raising funds.

Though as an institution, SEBI is a highly responsible and one of the respectable regulators of the Country, but certain individuals occupying their office, act with malice and biased approach which serve no public good and earn only a bad name.

Registrar of companies under Ministry of Company Affairs officially and lawfully had allowed the unlisted companies Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) to issue Optionally Fully Convertible Debentures, based on our Red Herring Prospectus fully complying with the provisions of Companies Act 1956 (the Act) keeping in view the latest provisions of first proviso to Sec. 67(3) of the Act.

Unfortunately some officers bearing the grudges against the Sahara India Pariwar, repeatedly not fulfilling there vested legal demands, have even gone to the extent of uploading the order on website; and not supplying it directly to the company. This is but obvious to whimsically hit the company and disturb its well wishers and investors from associating with it.

SEBI in the past fought with Insurance Regulatory and Development Authority (IRDA) and now giving us direction to stop issuing Bonds (OFCDs) which has been permitted by Ministry of Company Affairs (MCA) without consulting a word even with the actual regulator MCA.

Note : Media has also wrongly interpreted and stated that in M/s. Sahara Prime City Limited IPO has been rejected by SEBI.

SEBI had been seeking informations from us about OFCDs. We all the time wrote back that this matter is not definitely under SEBI’s jurisdiction. We should not become the victim of cross fire between two Government regulators SEBI and MCA.

We submitted to SEBI the legal opinion that this OFCD is definitely not the matter of SEBI, it is not their jurisdiction. This opinion has clearly been submitted in SEBI given by five legal luminaries namely Shri A.M. Ahmadi, Former Chief Justice of India; Shri C. Achuthan, Former Presiding Officer, Securities Appellate Tribunal, Mumbai; Shri S.P. Kurdukar, Former Judge, Supreme Court of India; Shri A.K. Manmadhan, Advocate, High Court of Bombay and Shri U.P. Mathur, (Former Secretary Company Law Board & former Director of Inspection & Investigation in the Department of Company Affairs), Advocate & Corporate Law Consultant.

Not only this the SEBI has also shown total disrespect to the orders passed by Hon’ble High Court of Bombay in the matter of Kalpana Bhandari and Others vs Securities and Exchange Board of India and others 2004 (1) BomCR 663, 2005 125 CompCas 804 Bom in which it has given that “SEBI has powers (i) in case of listed public companies and (ii) in case of those public companies which intend to get their securities listed on any recognised stock exchange in India. In other words SEBI does not have power in relation to the issue and transfer of securities and non-payment of dividend under the various provisions referred to in section 55-A for the companies other than listed public companies and the public companies which intend to get their securities listed on any recognised stock exchange in India. Such power is vested in the Central Government”.

Note: Sahara companies in question are neither listed nor intend to be listed.

SEBI is doing all these irresponsible acts based on some baseless (anonymous also) complaints. We repeatedly asked SEBI for the name and address of complainant which they so wrongfully refused to inform us. Recently the main complaint case against us has been totally rejected by Government of Madhya Pradesh. We some times face these complaint problems from very greedy people who try to extort large sum from us which we never have entertained or allowed.

SEBI in its order has cited various information it collected through MCA website vindicates the stand of the company that the information required as per the Act have been supplied to proper regulator, i.e., MCA. Further, when company had appealed SEBI to wait till receiving the directions of MCA and no undue long time had elapsed, the action of SEBI looks to be taken in haste with bias. The reasons look apparent but we have no written basis to mention here. It is apparent that SEBI has for best reasons known to it, totally ignored all legal opinions and Hon’ble High Court Judgement.

SEBI’s very important reaction was that we are not supplying them all the information that they are asking for. We wonder why they asked these information from us and why not from MCA? You please go through the part of our detailed last letter of 30th September 2010 to SEBI that clearly says why we have not sent them the information.

“Once again our humble request to you is to take all information from Ministry of Corporate Affairs (MCA) who are the regulators in this matter. There may be jurisdictional problems amongst Regulators like it happened between SEBI and IRDA recently, still the Business and Industry like us should not be put as party in cross fire, as it is happening with us, hence please do not make our company as disobedient company in the eyes of its Regulator, i.e., MCA. When information was taken on our deposit mobilization (RNBC) activities of our Group Company from RBI why not to take information on Bonds (OFCD) from MCA.

Inside information from SEBI’s internal people says that if we give all the information ourselves to SEBI, SEBI would take action against Sahara through Media to disturb Sahara establishments. If SEBI takes all information from MCA they won’t be able to act against Sahara. Of course, SEBI knows this is wrong and arbitrary action which will not stand in legal trial but SEBI will create Media trial to destabilize Sahara. The above is substantiated with the fact that SEBI is not taking the information from MCA and is insisting to get it from the Company. Kindly take the information from MCA.

We do not want to blame SEBI which is definitely a highly respected institution and we genuinely respect SEBI as institution. Yes, there are sometimes such individuals who go unreasonable and baselessly biased and create unnecessary problems. We are definitely pained.

We are an orgnaisation where 9 lac families are earning their bread and butter. Please do not disturb us unreasonably, unnecessarily. Please support on merit and bless us.”

In the past also similar biased act of regulator we have experienced, so we were very apprehensive and after this biased order our apprehension has now come right.

SEBI has talked about 4 to 7 thousand crores which we have received through OFCDs etc. Out of confusing so many newspapers etc. had mentioned about Rs. 20000 plus 20000 crores etc. SO..

..One Should Know About Sahara’s Financials (Provisional as on 30th June 2010)

Group Liability Statement

Net Outstanding liability with accrued interest of Public Deposits plus Unsecured loan from Banks plus Money from close Associates plus Advances against various projects plus Life insurance Policy Holders Fund plus Money in Mutual Fund. (Book Value Rs 34,328 Crores)

Group Assets Statement

Liquid Investment, Cash & Bank balances and Fixed Deposits etc. (Book Value – Rs. 19,390 crores), (Market Value – Rs. 19,456 crores)

Sundry Debtors, Loan and Advances, tax refundable and other current assets etc. (Book Value – Rs. 7,629 crores), (Market Value – Rs. 7,629 crores)

Land, construction Work in progress, Finished Stock and Fixed Assets etc. (Book Value – Rs. 27,949 crores), (Market Value – Rs. 82,139 crores)

Total Group Assets (Book Value – Rs. 54,968crores), (Market Value – Rs. 1,09,224 crores)

Note: The above statement is prepared on the basis of provisional Balance Sheet a on 31/03/2010 or 30/06/2010 of Sahara Flagship Group Companies.

WE ARE ABSOLUTELY AND RELIGIOUSLY LAW ABIDING ORGANISATION NOT BECAUSE WE FEAR LAW BUT WE RESPECT LAW OF THE LAND.

NOW WE SHALL SOON APPEAL AGAINST SEBI’s ACTION AT AN APPROPRIATE FORUM.

SEBI could have approached MCA in this matter to fulfil their duties towards the masses (as they are claiming). Otherwise they would have given this order in the interest of people (so called claim by SEBI) directly to us through a letter. What was the reason of putting 34 pages in their website to make it public? Respected Readers must be understanding the intentions clearly.

So in the interest, image, goodwill of entire Sahara India Pariwar SEBI has pushed us against the wall that is why we are forced to come out with all above details.

Source : www.sahara.in
English - http://sahara.in/sebi-eng.pdf
Hindi - http://sahara.in/sebi-hindi.pdf

2010-11-27T02:21:00.001-08:00

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European telecom sector faces M&A

2010-11-04T02:08:00.000-07:00

Fitch: High M&A Risk for European Telecoms Sector

Fitch Ratings believes the Europe telecoms sector faces a high risk of M&A in the next three years, as the underlying strategic case for consolidation amongst operators is as strong as at any time since the peak of the dotcom bubble in 2000.

"The European telecoms sector has evolved in a unique way over the past 20 years reflecting the fragmented nature of its licensing and regulatory regimes," says Michael Dunning, Managing Director in Fitch's EMEA telecoms team. "As a result Europe now has too many telecoms operators relative to its population size and, with operator market shares' stagnating, further consolidation looks inevitable."

Fitch believes that the greatest chance for M&A exists in northern European countries where there is most competition. However, there are pockets of exposure in other regions such as Spain and Italy, either as a result of increased maturity of traditional product offerings and/or a lack of further growth prospects.

From a credit standpoint, cross-border acquisitions are higher risk for the acquirer as increased leverage is not usually offset by potential synergies. In-country consolidation may be less negative for the credit profile for an acquirer as there is usually scope for significant cost reductions, and reduced competitive intensity should help reduce leverage in the years after the transaction. Issuers disposing of assets should be able to enhance their credit profiles, providing that cash proceeds are used sensibly to pay down debt and not all returned to shareholders.

For all these reasons, Fitch believes that in-country consolidation is the more likely route in Europe as operators seek to align inefficient corporate structures and concentrate on markets where they can offer triple and quad-play bundled services and benefit most from the synergies on offer from rival operators.

IDBI Federal launches Wealthsurance Milestone Plan

2010-09-11T21:05:00.000-07:00

To achieve different milestones of life with full confidence
Insured Wealth Plan with 13 Investment options and 7 Insurance options

MUMBAI: IDBI Federal Life Insurance announced the launch of its new ULIP called IDBI Federal Wealthsurance™ Milestone Plan today. The Wealthsurance™ Milestone Plan is a unique Insured Wealth Plan designed to help cross different milestones in life. It enables customers to save and build wealth under the protection of Insurance to meet their financial goals.

The Wealthsurance™ Milestone Plan offers a wide range of Investment options, Insurance options and unmatched flexibility that allows customers to customize a plan suited to their needs. Customers can plan for milestones like completion of school education by a child, a marriage, acquisition of a new house or any other goal. This Plan comes with a wide range of 13 investment options and 7 insurance benefits - all packaged with a low charge structure and unmatched flexibility.

Announcing the launch, Mr G V Nageswara Rao, MD & CEO of IDBI Federal Life Insurance said: “Everyone wants to create wealth, but wealth creation does not happen by chance or accident. It needs a Plan. Wealthsurance™ Milestone Plan offers such a plan, which is very flexible and can be customised to an individual’s needs. The beauty of the Plan is that it can be insured not only against risk of death but against 17 major diseases, hospitalisation, disability, accidental injuries etc so that you can feel confident that your financial goals can be reached despite the surprises life may throw up.”

Wealthsurance™ Milestone Plan offers a comprehensive suite of investment options which are designed to meet the needs of every customer depending upon his or her risk appetite. Conservative customers can choose guaranteed return options which offer fixed, assured returns. Those who can take more risk can opt for capital protected options where the entry NAV is guaranteed and returns depend upon the market. Customers who would like to get potential high returns of equity markets in the long-term and understand the risk can opt for market linked equity options. Wealthsurance™ Milestone Plan offers a unique investment options called Asset Allocator Funds, where the company’s fund managers invest in equity or debt depending upon market conditions. This is a very useful option for customers who do not have the time or expertise to monitor equity market and shift into debt or equity based on market conditions.

IDBI Federal Wealthsurance™ Milestone Plan not only allows its policyholder to invest according to their changing risk appetite; it also provides a host of insurance benefits to protect them against uncertainties, so that they don’t have to break their investment to meet sudden financial demands and their money can keep compounding. The insurance benefits offered by the Plan include Major Diseases Benefit in which lump-sum cash amount upto Rs. 20 lakhs is paid upon diagnosis of any of 17 specified major diseases. These include heart attack, coronary bypass surgery, cancer, stroke, paralysis, coma, brain tumor, renal failure, major organ transplant etc. Another benefit is Hospital Cash Benefit in which daily cash benefit upto a maximum of Rs. 5000 per day will be paid for each day of hospitalisation, irrespective of the amount actually spent. The claim process is simple since no bills have to be submitted but only proof of hospitalisation. Other benefits offered include accidental death and disablement benefit and waiver of all future premiums upon death or disablement.

“The Plan comes with attractive tax benefits. Premium contributions are eligible for tax deduction under Sec 80C. All benefits under the Plan are tax-free under Sec 10(10D),” Mr. Rao added

Post Dost: The changing face of India Post

2009-10-10T22:49:00.000-07:00

by Alkesh Tyagi*

For over 150 years post offices have been the most visible and popular face of the Indian Government throughout the country. The concept of e-governance i.e Government at your desktop being advocated and promoted today can trace its genesis in services rendered by Post Offices, when the Postman was the only person delivering mail personally at the doorstep of the people. Now India Post is gearing up to play more comprehensive role by reorienting itself to meet the expectations of future generations.

The Indian economy has scaled new height over the last few years and is still in acceleration mode. Emergence of several significant trends such as: liberalisation and globalisation; demographic shift towards urbanisation leading to increasing internal and external migration requiring to be serviced; monetisation of the economy especially the agricultural sector giving rise to a corresponding demand for financial services by all sections of the population; and government policy to increase funding for weaker section programs has necessitated changes in postal framework.

Services
The four main areas of services offered by India Post are- Communication Services- Delivering letters, post card etc; Transportation Services- Transporting parcels, logistics etc; Financial Services- Facilitating saving bank, money order, insurance etc and Value added Services- Providing speed post service, business post, direct post etc.

Transmission and delivery of mail is India Post’s core business so far. Post Office Savings Bank is the oldest and largest banking institution in the country. Transmission of funds by postal order/money order has been the traditional way of money transfer. Since 1884 onwards Postal Life Insurance (PLI) has been providing life insurance coverage, initially to employees of P&T Department and subsequently to all Government employees. Since 1995 PLI has been extended to the rural population of the country under a new scheme Rural Postal Life Insurance (RPLI).

Responsibilities
Globalization and the deepening of market mechanism in India have brought forward the concept of self sufficiency and social service going hand in hand. India Post is committed to fulfil the Universal Service Obligation for providing basic postal service throughout the country, irrespective of terrain, at an affordable price. India Post fulfils this obligation through the largest postal network of 1, 55,035 Post Offices (as on 31.3.08) in the world. Of these 1, 25, 489 Branch Post Offices cater exclusively to rural areas.

Besides new responsibility of facilitating applications under Right to Information is being shouldered by the post offices.

New Initiatives
To meet the challenges posed by ever changing communication technology especially mobile telephony and World Wide Web, Department of Post is attempting to transform it, striking a balance between its objectives and outcomes of transformation. As the transformation is a multi dimensional process attempt is being made to change the Department at multiple levels.

In order to provide better, faster and satisfactory services to its customers, India Post is focusing on few key areas. Pick up mail facility, electronically enabled services, a dedicated freighter services, the instant money order, and many other similar initiatives have been undertaken to reorient the services for providing greater satisfaction to its customer. At the same time, for self sufficiency, India Post is exploring the role of business facilitator for other organisations.

Dedicated Freighter Service
In an effort to deliver the mail, parcel, speed post and the logistic consignments by the next day in major cities, India Post has added two more aircrafts bringing the total number to three and the process to acquire the fourth is in pipeline. These three aircrafts dedicated to carry only postal cargo touch nine cities every night making possible faster delivery in major cities and their peripheral areas.

Project Arrow
An initiative to transform India Post into a vibrant and responsive organisation is going on under the ‘Project Arrow’. Under the Project 50 Post Offices were modernized in the first phase and 450 in the second phase. Now the third phase is under process for transforming 500 post offices. Selected post offices are undergoing complete overhaul in their look and feel as well as in their core functions and operations. Systematic transformation of post offices in a phased manner will revitalise India Post.

The new logo of India Post reflects this change. The straight lines have been replaced by bold strokes retaining the ‘wings’ element. There is an element of modernity with a conscious effort to maintain an element of continuity. Red and Yellow colours used in its logo convey passion, power and commitment with a pinch of hope, joy and happiness.

IT leads Initiatives
Efforts are on to equip post offices with latest communication means. All the post offices in the country will be computerised during the current five year plan. Major 25,000 post offices have already been computerized and the remaining branch post offices will be taken care during rest of the period. This will make the delivery of information and money order faster.

Recognition
Nation Wide reach of India Post has attracted many private partners. Be it Mutual funds or money transfer business. Since 2001 DOP has been making select mutual fund product available through post offices. Five years ago UTI Mutual Fund and Department of Post joined hands to bring capital markets closer to common man in semi urban and rural areas. India Post provides penetration to the remotest corners of India making mutual fund popular.

Recognising the crucial role, India Post was facilitated on 24th September 2009 with UTI-CNBC special commendation award in the form of “Financial Advisor Awards 08-09” trophy for effectively utilizing its network to promote financial inclusion in smaller places.

An efficient and reliable communication network is the lifeline of the nation and plays a crucial role in socio-economic development and the integration of the country. For nearly a century and half the Postal System has been the main component of the communication infrastructure for the country. Given the need for a strong communication and financial infrastructure, India Post is preparing to meet both challenges and avail of the opportunities presented by current market conditions. With its efforts India Post will make social, commercial and industrial life possible in the remotest parts of India. Though, traditionally India Post have been the courier of peoples’ emotions and trust but changing with times will make India Post even more attractive and useful because of its reach and credibility.

*Deputy Director (M&C), PIB, New Delhi

Fiscal deficit projected at 6.8% of GDP

2009-07-06T02:43:00.000-07:00

The Finance Minister Pranab Mukherjee has said that the fiscal deficit as a percentage of GDP is projected at 6.8% as compared to 2.5% of the Budget Estimates for 2008-09 and 6.2% as per the provisional accounts of 2008-09.

Presenting the General Budget for 2009-10 in Lok Sabha today, Mr. Mukherjee assured that the government will address the issue in right earnest to come back the path of fiscal consolidation at the earliest as this level of deficit was a matter of concern.

The Finance Minister informed that the Budget Estimates for 2009-10 provide for a total expenditure of Rs.10,20,838 crore consisting of Rs.6,95,689 crore towards Non Plan and Rs.3,25,149 crore towards Plan expenditure. At this level the Non Plan expenditure marks an increase of 37% over BE 2008-09 whereas the Plan expenditure increases by 34%. The increase in expenditure in 2009-10 BE has been pegged at 36%. The Finance Minister pointed out that the Non Plan expenditure mainly increases on account of implementation of the 6th Pay Commission recommendations, increased food subsidy and higher interest payment arising out of the larger fiscal deficit in 2008-09.

Mukherjee provided a substantially increased Defence outlay of Rs.1,41,703 crore in the budget for 2009-10 as against Rs.1,05,600 crore in BE 2008-09. He informed the Lok Sabha that the total provision for subsidies during 2009-10 has been raised to Rs.1,11,276 crore from Rs.71,431 crore in BE 2008-09.

The Finance Minister told the Lok Sabha that the gross tax receipts are budgeted at Rs.6,41,079 crore in 2009-10 as compared to Rs.6,87,715 crore in BE 2008-09, given the possibility of economic down turned persisting in the current year. He informed that the non tax revenue receipts, is likely to be better at Rs.1,40,279 crore in the current fiscal as compared to Rs.95, 785 crore in BE 2008-09. The revenue deficit is projected at 4.8% of GDP as against 1% in BE 2008-09 on 4.6% as per provisional accounts of 2008-09.

ICSA FY 09 Revenues crosses INR 1100 Cr.

2009-04-29T06:04:00.000-07:00

Mumbai, April 29, 2009: ICSA India Ltd., which provides embedded technology solutions and Infra structure deployment services for the power sector, is pleased to announce its FY 09 results for the period ended March 31, 2009.

The Profit after Tax (PAT) for FY 09 is up by 51.40 % to Rs. 168.27 Cr. as against Rs 111.14 Cr. for FY 08.

Total Income for FY 09 stood at Rs 1113.09 Cr. as against Rs 678.55 Cr. for FY 08, a growth of 64.03 %

Basic EPS stands at Rs.37.10 per share of Rs.2/- each as compared to Rs.27.57 per share of Rs.2/- each for corresponding previous year.

The results for the Q4 FY09 show that the total income stood at Rs 287.14 Cr. as against Rs 212.03 for Q4 FY 08, registering a growth of 35.42 %

Similarly, Profit after Tax (PAT) stood at Rs 34.05 Cr. for Q4 FY09 as against Rs 37.45 Cr. for the corresponding quarter last year.

“A sound order book position to the tune of Rs 1915 Cr. and strong commitment from our clients has ensured our journey on the growth path in the transmission and distribution segment.” Mr. G Bala Reddy, CMD, ICSA India Ltd said on Wednesday following the company’s board meeting.

"We continue to come up with innovative solutions and improve our services on the Infrastructure business for the power sector. However, the year that passed by has seen significant changes in APDRP, which stands as the backbone of the power sector reforms in India. The new policies and implementation procedures of rAPDRP, coupled with the nationwide electoral process have affected the reforms in terms of cease on new project releases and prolonged execution of ongoing projects.

The overdue caused due to structural changes proposed through rAPDRP have a systemic effect on all the stakeholders in the radius with out exceptions to ICSA.”

Going forward during this financial year, while we are set to achieve the targets, revenue is expected to see a shift, since the order book has a higher contribution from infrastructure services compared to embedded technologies business group. The delayed rAPDRP have pushed the technology project cycles by almost 2 quarters which might show effect on our overall business performance. This change is likely to be visible in the quarter already in progress.

Some important highlights during the year include:

• The infrastructure business has shown a tremendous increase in the overall business mix for the quarter over the previous quarters.

• ICSA has bagged orders worth Rs. 515 crores from various clients in Q4. Infrastructure orders make up majority.

• The Raw material cost increased marginally due to the inflationary trend in major input costs during the quarter

• Manpower expenses has come down as a percentage of sales

• The effective tax rate for ICSA has reduced due to the benefits claimed by commissioning of 9.6 MW wind power facility during the year

• PAT has shown a variation from the last year due to a combined effect of increase of costs, interests and variation in tax rate and business mix.

About ICSA (India) Ltd.

ICSA (India) Ltd. provides hardware and software to power firms and electricity boards to tackle AT&C losses. Over 95% of its business comes from the power space and the rest from oil & gas, where it provides solutions for monitoring and protecting pipelines. ICSA (India) Ltd. is also in the business of infrastructure deployment services in transmission and distribution segments like erection of substations and lines. The company counts amongst its investors Goldman Sachs, Morgan Stanley and the Government of Singapore.

The company's product line includes: Intelligent Automatic Meter Reading System, Multiplexer Unit, Distribution Transformer Monitoring System, Substation Controller, Micro Remote Terminal Unit, Theft Detection Devices, and Pole Top RTU. The company has developed products suitable for power utilities in the field of Energy Management, Energy Audit, and Control applications and provides versatile Data Acquisition Systems using GSM, CDMA, and RF. ICSA makes products, which primarily detect the where, how and how much are the AT&C losses and feed the impacted institutions. Armed with the vital statistics, affected institutions take the necessary steps to plug loopholes.

ICSA enjoys first mover advantage, having begun in FY 2004. It began developing embedded solutions for identifying and minimizing AT&C losses and monitoring power consumption. Its first product was IAMR or the Intelligent Automatic Meter Reading, followed by other products such as DTMS, TDD, iCAP, etc.

ICSA is addressing a critical segment of the economy, and a pressing concern. For more details visit www.icsa-india.com.

For Further information, kindly contact

Shahab Shaikh | Account Manager
Concept Public Relations Limited
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IDBI Fortis launches Retiresurance Pension Plan

2009-04-27T06:03:00.000-07:00

• Offers a wide array of flexible investment options to ensure a comfortable paycheck during retirement
• Guaranteed loyalty additions, Tax benefits

MUMBAI: Targeting the Rs 35,000 crore pension plan market, IDBI Fortis Life Insurance today announced the launch of its innovative RetiresuranceTM Pension plan which will help its customer ensure a comfortable paycheck for themselves post retirement.

Launched only last year, IDBI Fortis Life Insurance, one of the fastest growing life insurance companies in India, has come out with WealthsuranceTM, BondsuranceTM and HomesuranceTM plans which have proved to be instant hits with its customers. With the RetiresuranceTM Pension Plan, the company aims to fulfill the needs of the current generation which may find the traditional pensions and gratuity benefits inadequate when they retire.

“With the rising costs of living and fluctuating fortunes, RetiresuranceTM Pension Plan will prove to be extremely useful after one’s retirement when one wants to continue to lead an un-restricted, happy life without having to face a cash crunch,” said Mr. G V Nageswara Rao, MD & CEO of IDBI Fortis Life Insurance.

“Earlier generations may not have had a formal retirement plan but they had relatively fewer consumption needs. It was rare to find people who had shifted through several jobs in the course of an active career. As a result, pensions and gratuities issued by their employers were deemed sufficient. Times have changed now, and in most contemporary industries, few employers provide for a life long pension,” Mr. Rao explained.

Sounding a note of caution, he said that managing finances during retirement would be extremely tough if one hasn’t planned for retirement. The best way to enjoy the good times even in your golden years would be to build your investments in advance for retirement.

The IDBI Fortis RetiresuranceTM Pension Plan allows the customer to choose the premium amount, frequency of payment and payment term, flexibility of reducing premiums within limits or adding top-up premiums as and when one wishes. It offers a wide choice of investment options to build a retirement corpus, such as equity linked funds for those with a high risk appetite and debt funds for those desiring relative stability. The customer also has the option to change his investment options from time to time and use this flexibility to take advantage of changing market conditions. The plan also offers liquidity through partial withdrawals and surrender. Furthermore, the customer also has the option to choose his vesting date (the date when one wants to start the retirement benefits) at any time between age 40 years to 75 years. All these features are with no additional cost to the customer.

IDBI Fortis RetiresuranceTM Pension Plan also boosts the investment returns for its customers through Guaranteed Loyalty Additions at the end of specific terms as an incentive for making long term investments.

Customers of this plan will enjoy tax savings under Sec 80 CCC. More over, one-third of the retirement corpus can be commuted tax free under Sec 10(10A) as well.

About IDBI Fortis:
IDBI Fortis Life Insurance Co Ltd is a joint-venture of IDBI Bank, India’s premier development and commercial bank, Federal Bank, one of India’s leading private sector banks and Fortis Insurance International, a multinational insurance giant based out of Europe. In this venture, IDBI owns 48% equity while Federal Bank and Fortis own 26% equity each. IDBI Fortis launched its first set of products across India in March 2008, after receiving the requisite approvals from the Insurance Regulatory Development Authority (IRDA). At IDBI Fortis, we endeavor to deliver products that provide value and convenience to the customer. Through a continuous process of innovation in product and service delivery we intend to deliver world-class wealth management, protection and retirement solutions to Indian customers. In just five months of inception, we became one of the fastest growing new insurance companies to garner Rs 100 Cr in premiums. The company offers its services through a vast nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. As on March 31st 2009, the company had collected more than 320 Cr in premiums, through over 85,000 policies and over Rs 2,500Cr in Sum Assured. Do visit www.idbifortis.com to know more.

About the sponsors of IDBI Fortis Life Insurance Co Ltd
IDBI Bank Ltd. continues to be, since its inception, India’s premier industrial development bank. Created in 1956 to support India’s industrial backbone, IDBI Bank has since evolved into a powerhouse of industrial and retail finance. Today, it is amongst India’s foremost commercial banks, with a wide range of innovative products and services, serving retail and corporate customers in all corners of the country from over 537 branches and more than 915 ATMs. The Bank offers its customers an extensive range of diversified services including project financing, term lending, working capital facilities, lease finance, venture capital, loan syndication, corporate advisory services and legal and technical advisory services to its corporate clients as well as mortgages and personal loans to its retail clients. As part of its development activities, IDBI Bank has been instrumental in sponsoring the development of key institutions involved in India’s financial sector – such as the Securities and Exchange Board of India (SEBI), National Stock Exchange of India Limited (NSE) and National Securities Depository Ltd. Please visit www.idbibank.com to know more.
Federal Bank is one of India’s leading private sector banks, with a dominant presence in the state of Kerala. It has a strong network of over 600 branches and 500 ATMs spread across India. The bank provides over four million retail customers with a wide variety of financial products. Federal Bank is one of the first large Indian banks to have an entirely automated and interconnected branch network. They operate on the core banking platform and are RTGS/ NEFT enabled through which the Bank offers state-of-the-art technology enabled products and services. In addition to interconnected branches and ATMs, the Bank has a wide range of services like Internet Banking, Mobile Banking, Tele Banking, Any Where Banking, debit cards, co-branded credit cards, online bill payment and call centre facilities to offer round the clock banking convenience to its customers. The Bank has been a pioneer in providing innovative technological solutions to its customers and the Bank has won several awards and recommendations. Please visit www.federalbank.co.in to know more.
Fortis is an international insurance group composed of Insurance Belgium, a leader in life and non-life insurance in Belgium distributing its insurance products through the network of Fortis Bank and independent insurance brokers and Insurance International with subsidiaries in the UK, France, Hong Kong, Luxembourg (Non-life), Germany, Turkey, Russia and Ukraine, and joint ventures in Luxembourg (Life), Portugal, China, Malaysia, Thailand and India. Please visit www.fortis.com to know more.

Sahara embarks on Rs 22,000 cr power plant plans

2009-02-10T00:27:00.000-08:00

Sahara India Power Corporation Limited, the subsidiary of Sahara India Pariwar's real estate company Sahara Prime City Limited signed Memorandum of Understanding (MOU) with the Government of Orissa for setting up a 1320 MW (2 x 660) Coal Based Thermal Power Plant in Turla Tehsil of Balangir District, Orissa at an investment of about Rs.5604 Cr.

The MoU was signed by Mr. Pradeep Jena, Commissioner Cum Secretary - Power, on behalf of the Government of Orissa and Mr. Ashok K Bhargava, Chief Advisor and Head – Sahara Power Projects, in the presence of the Hon'ble Chief Minister of Orissa, Shri Naveen Patnaik and other distinguished dignitaries and officials.

To be built on an area of 1,500 acres, the Sahara Power's Turla plant is planned to commission its first Unit of 660 MW by February 2013 while the second unit of 660 MW is expected to be commissioned within 6 to 8 months thereafter. The plant is planned to be set up through Joint Venture Participation with Power Companies from different parts of the world.

Sahara India Power Corporation Limited will develop fuel based or non conventional power plants using the latest and emerging technologies. Sahara Power will set up a 5 MW Grid Interactive Solar Photo Voltaic Power Plant in Dhenkanal District of Orissa at an estimated investment of about Rs. 125 Cr. The Company has already received an in-principle approval from the Government of Orissa through M/s Orissa Renewable Energy Development Agency (OREDA).

Sahara Power has tied up with M/s Solar Integrated Technologies Inc. (SIT) USA, as its strategic partner for supply and installation of the required plant and equipment. In addition to this, Sahara Power is also planning to set up 25 MW of Wind Power projects in Orissa through a reputed Wind Energy Company which has already set up wind masts at 7 locations. The company plans to proceed with the project once it receives data, gathered by the masts in next 6 to 9 months.

Sahara India Power Corporation Limited has also proposed to set up a 2000 MW Coal based power plants in Jharkhand and Chhattisgarh at an estimated investment of Rs. 8000 Cr. each.

On this occasion Mr. Ashok K Bhargava said, "We extend our sincere gratitude to the Government of Orissa for their kind support, cooperation extended to us at all levels of our efforts to initiate the power projects in the state. We are confident that our project will not only serve the Energy requirement of the state and the country but will also bring in all round integrated development in the region of Turla district."

Sahara India Pariwar, considered as one of the most socially responsible corporates of the country, has plans, along with the setting up of the Mega Power Plant, to contribute to the welfare of the people of the Balangir district. The group with the aim of improving the quality of life of the local populace will develop pucca roads in the projects vicinity, make provision for potable drinking water and will also set up primary health and education centre. The Power Plant and its related infrastructure shall further attract investment in the region by Corporate Houses and Entrepreneurs in the Manufacturing, Real Estate, Service Sectors etc. by setting up of establishments, amenities and facilities, including Ancillaries and SMEs.

Commenting on the signing of the MoU Mr. Sushanto Roy, Head – Infrastructure & Housing, Sahara Prime City Limited, said, "It is a moment of great pride for all of us at Sahara India Pariwar as we have joined hands to fulfill the power requirements of the nation. Power Sector also holds a huge business opportunity and we have forward integrated plans to be a major player in all the segments including power generation through conventional and renewable resources, power transmission & distribution, power trading, manufacturing of power equipments etc."

Notes to the Editor

• Sahara India Power Corporation Ltd is a 100% subsidiary of Sahara Prime City Limited, the real estate Company of Sahara India Pariwar.
• Sahara Prime City Limited has developed commercial and residential projects which includes townships, premium group housing projects, hospitals, hotels, among other projects.
• The flagship project of SPCL is 'Sahara City Homes', a chain of townships to be developed across 217 cities in India.
• The other projects of SPCL are 'Sahara Star', a luxurious 5 star Deluxe Hotel located near the Domestic Airport in Mumbai, and a 554 bedded Super Specialty, Multi-Disciplinary, Tertiary Care Sahara Hospital in Lucknow.
• Sahara Power was set up in 2001 with the aim to provide reliable and continuous power supply to 'Sahara City Homes'. Each project of Sahara City Homes will need 30 MW of dedicated power, aggregating over 6000 MW.

Banks must heed to RBI's call to cut rates

2009-01-31T23:50:00.000-08:00

by Ashok Handoo*

By not reducing any of the key rates in its third-quarter review of the monetary policy, the Reserve Bank has sent a clear signal to commercial banks that they need to reduce their lending rates and make cheaper credit available to the customers. RBI is clearly of the view that banks have yet to pass on the benefits of the previous cuts in interest rates announced by it. Obviously, the Reserve Bank is not happy with the response of the banks, particularly private and foreign banks, to the initiatives taken by it so far. It feels there is enough scope for banks to do more.

As it is, the Reserve Bank in a space of just one quarter brought down the repo rate (the rate at which RBI lends overnight funds to banks) from 9 to 5.5 percent. The reverse repot rate (the rate at which RBI accepts deposits from banks) was brought down to 4 percent, what the RBI Governor Dr. D. Subbarao described as “historically lowest level”. But as he pointed out it’s “transmission in the credit market has so far been subdued”. RBI firmly believes that it’s policy easing had allowed banks considerable room to respond more actively which has not happened. It has thus adopted a wait and watch policy for the time being, to monitor the response from the banks and give them more time.
The bankers, on the other hand, feel that they have responded to the extent possible. They argue that the average cost of funds to them is still high and lending and borrowing rates can come down only when the fund costs come down. Some even expressed disappointment at the RBI “holding back it’s activism” in reducing the key rates to make cheaper funds available to them. But by and large, bankers agree that the RBI policy is on expected lines.

Through its earlier initiatives the RBI has infused liquidity of over Rs. 4 lakh crore into the system improving the liquidity situation, significantly.

It is not that the doors for further reduction in key rates have been closed. On the contrary, the RBI has made it clear that it will respond to any adverse development. So, more cuts outside the policy can happen anytime. The current pause could only be a temporary thing.

Another message that the RBI has given is that there is a clear evidence of deeper consequences of the global downturn on the Indian economy which can lead to its further slowdown. Industrial activity, particularly in the manufacturing and the infrastructural sectors, is decelerating. The services sector too, which has been the prime engine of growth for the last several years, will slowdown mainly in construction, transport, hotels, tourism and trade sectors. . The consequences have been more pronounced after October 2008 which has led the RBI to revise its GDP growth projection for the current financial year to 7 percent against the earlier 7.7 percent. In fact the Survey conducted by the 13 professional forecasters has put it at 6.8 percent.

That is all the more reason for the banks to respond more vigorously to the rate cuts already effected.

At the same time , there are two positive factors at play. One, the inflation rate has been falling sharply for the last 10 months to 5.6 % with only a small aberration in the latest figure which is attributed to the Truckers strike during that period. The current projections are that the rate will fall further to about 3 percent by March end, though it is reflected more in the Wholesale Price Index (WPI) than in the Consumer Price Index (CPI).That is primarily because of the fall in international crude oil prices, steel and select food items. A fall in demand has also played some role in this.

The second positive factor is the expected increase in consumption demand in the days ahead, reflecting rise in basic exemption limits in tax and tax slabs, the 6th pay commission award, debt waiver to farmers, and the expenditure that would be incurred in the run up to elections in a few months from now.

All this will allow an elbow room to the government to cut the key rates further, if the situation so demands.

The RBI has also warned that the fiscal measures to boost growth and lower revenue receipts could sharply widen the fiscal deficit from the earlier estimate of 2.5 percent to 5.9 % .The combined shortfall of the centre and the state governments could come to 8.5 %, or even more.

As the Prime Minister’s Economic Advisory Council pointed out the other day, both the saving and investment rates are likely to be lower in the current fiscal. The saving rates may fall due to larger negative savings of the Government. The investment rate will be less by 2.5 percentage points compared to the previous year, due to financing constraints facing Indian enterprises.

The widening trade deficit is a matter of concern as is the moderation in capital inflows. Though the Foreign Direct Investment (FDI) has shown an increase in the current financial year the portfolio investment has recorded a substantial outflow. The institutional investors have sold about $10 billion of their investment in Indian companies to cover losses in their home markets.

With Indian economy getting more and more integrated with the world economy and the US, Europe and Japan already experiencing recession, India can not remain totally insulated. A less than optimistic sentiment in the economy is therefore quite natural. As the Prime Minster pointed out India’s economic problems would not be over in the current year and could spill over into 2009-10, but the “Government will continue its efforts for a supporting environment next year also. Both monetary and fiscal policy will have to be tailored.” The Deputy Charmin of the Planning Commission Shri Montek Singh Ahluwalia has also spoken of innovative interim measures. These include floating of tax- free bonds ‘to provide refinancing facilities to banks to encourage them to offer long term debts” to companies investing in infrastructure sectors which have long gestation periods.

It is a matter of satisfaction that everybody agrees that the Indian economy will recover earlier than the world economy, once things begin to improve. (PIB Features)

*Disclaimer : The views expressed by the author in this feature are entirely his own and do not necessarily reflect the views of PIB.

IDBI Fortis secures Title Sponsorship for India-Sri Lanka series

2009-01-23T04:00:00.000-08:00

IDBI Fortis also signs on as co-presenting broadcast sponsor on NEO Cricket

MUMBAI, January 23, 2009: Nimbus Sport has entered into an agreement with IDBI Fortis for Title Sponsorship of the India - Sri Lanka Cricket Series 2009 consisting of 5 One Day Internationals and 1 Twenty20 match.

The ODI series will be called the IDBI Fortis Wealthsurance Cup and will be followed by the IDBI Fortis Wealthsurance Twenty20.

As previously announced the television coverage of the entire Series is being produced by Nimbus Sport and in India will be broadcast on the No. 1 sports channel NEO Cricket. The event will also be broadcast worldwide and Nimbus Sport expects to make a separate announcement on Saturday January 24, 2009 revealing the broadcast partners across the world.

Announcing the sponsorship, Yannick Colaco, Executive Vice President, Nimbus Sport said, “We are delighted at the opportunity of bringing one of India’s fastest growing life insurance companies, IDBI Fortis Life Insurance into the world of cricket.”

IDBI Fortis will also be a co-presenting sponsor on NEO Cricket during the live broadcast of the Series.

G. V. Nageswara Rao, Managing Director and CEO, IDBI Fortis Life Insurance Co. Ltd. added, “Wealthsurance is an innovative and novel concept in bundling the power of investments with the protection of insurance. We hope to bring its message to the masses by associating with this Series as the Title Sponsor. With the event being broadcast on India’s No.1 sports channel, NEO Cricket, we are confident that the IDBI Fortis Wealthsurance Cup will have all of India glued to their TV screens to what will surely be a thrilling contest.”

The sporting spirit and never-say-die attitude of the most committed sportspersons is as inspiring as IDBI Fortis’ flagship product, Wealthsurance, which tirelessly strives to achieve your investment goals while staying unaffected by bad kismet that life may throw at you. This Series will showcase the spirit of two very committed and competitive teams that will aim to acquire the coveted IDBI Fortis Wealthsurance Cup.

Raju Udupa, Executive Vice President, NEO Cricket added, “IDBI Fortis is an exciting addition to NEO Cricket’s long list of high pedigree advertisers and we expect that the platform of the No. 1 sports channel combined with this high profile Series will catapult IDBI Fortis to market leadership.”

About IDBI Fortis Life Insurance Co. Ltd.

IDBI Fortis Life Insurance Co. Ltd is a joint-venture of IDBI Bank, India’s premier development and commercial bank, Federal Bank, one of India’s leading private sector banks and Fortis Insurance International, a multinational insurance giant based out of Europe.

It is one of the fastest growing new life insurance companies in the country, having launched operations in March 2008 with their innovative product ‘Wealthsurance’. The company has already launched 31 branches and plans to have a pan-India presence with a total of a 100 branches. It also sells through the more than 1000 branches of its promoter banks, IDBI Bank and Federal Bank.

About Nimbus Sport International Pte. Ltd.

Singapore headquartered, Nimbus Sport International Pte. Ltd. (100% subsidiary of Nimbus Communications Limited) is a leading full service sports management company providing end to end solutions including rights management, television production, sponsorship sales, event management and sponsor services.

Nimbus Sport currently manages various commercial rights (on long term contracts) for a number of global sports federations including the BCCI (Indian Cricket Board), Bangladesh Cricket Board, Cricket Kenya, ACC and the English Premier League (digital/new media rights).

Nimbus Sport has in the past managed the media and sponsorship rights of the ICC Cricket World Cup and other ICC events. As a globally reputed production company for live match coverage, Nimbus Sport has produced live coverage and / or managed rights in 9 of the 10 Test Cricket Playing Nations.

Oil, truck strikes fuel inflation rise

2009-01-22T04:45:00.000-08:00

The annual (year-on-year) rate of inflation in Indian economy increased to 5.6 per cent for the week ending January 10, 2009 compared to 5.2 per cent reported last week, showing a rise of 36 basis points, largely attributable to the impact of the oil and transport sector strikes.

A Finance Ministry communique points out that the increase in the inflation rate has temporarily reversed the 11-week declining trend which had set in since the last week of October 2008.

Year-on-year Inflation by Commodity groups

Commodity group-wise examination shows that inflation in the groups of primary articles and manufactured products have mirrored the rising trend seen in overall inflation in the current week.

i.In ‘primary articles’, the rate of inflation increased to 11.6 per cent, compared to 10.9 per cent reported last week. In the sub-group of ‘food articles’, inflation, which had declined to single digit in the last fortnight, rose to 11.6 per cent in the week ended January 10, 2009 as against 9.5 per cent in the previous week, largely due to higher inflation in vegetables and milk. In ‘non-food articles’, inflation continued to decline to 7.1 per cent compared to 9.6 per cent in the previous week, while inflation in ‘minerals’ rose to 41 per cent versus 40 per cent last week due to higher inflation in non-metallic minerals as limestone and felspar.

ii.In ‘fuel and power’, the rate of inflation remained steady at (-) 1.3.

iii.In ‘manufactured products’, the inflation rate increased to 5.9 per cent, compared to 5.6 per cent last week. While most sub-groups recorded stable or declining rates of inflation, the sub-groups of sugar, khandsari and gur, textiles and canned/processed fish showed increase.

For the combined food index (weight = 25.43 per cent), the year-on-year inflation in the week ended January 10, 2009 was higher at 9.5 per cent compared to 7.9 per cent last week. Inflation in cereals, pulses and fruits continue to register inflation rates ranging from 9 to 20 per cent.

Contribution of Commodity groups

Contribution of primary articles to the year-on-year inflation rate for the week ending January 10, 2009 show that this group accounted for 46.9 per cent, as against their share of 22 per cent to the WPI basket. While the contribution of the fuel and power group was (-) 5.1 per cent vis-à-vis share of 14 per cent, that of manufactured products was 58.5 per cent against a share of 64 per cent in the commodity basket.

Inflation measured by CPI

Inflation recorded by the Consumer Price Index for Agricultural Labour (CPI AL) and for Rural Labour (CPI RL) has remained steady at 11 per cent during September – December 2008.

Birla Sun Life Insurance bags micro insurance mandate from global project

2009-01-20T01:36:00.000-08:00

• BSLI to offer micro Insurance solutions to over 100,000 people
• Part of a DFID funded Asian project
• To be implemented in UP, Bihar & MP

MUMBAI: In a major development that will see Birla Sun Life Insurance making inroads into micro insurance, the company has been selected to partner a prestigious international development project for promoting a sustainable livelihood program in three states of India – Bihar, Uttar Pradesh and Madhya Pradesh.

This 4.6 million pound development project has been initiated by the UK-based Research Into Use (RIU) project and funded by Department for International Development (DFID) and spans across the next three years.

GY Associates Ltd, UK is the lead partner for this project with RIU. For the project, G Y Associates has a contractual agreement with Centre for Promoting Sustainable Livelihood (CPSL), a Patna based NGO to form 10,000 Self Help Groups (SHGs) and ICAR (Indian Council of Agricultural Research) to provide technical support to the project. CPSL has identified BSLI as a coalition partner to provide micro insurance to the SHG members.
The project will directly benefit 2,000 villages and around 10,000 Self Help Groups and over 100,000 group members. It will cover a total of 500,000 direct beneficiaries in the rural areas.

"We are extremely delighted at this unique opportunity to partner a prestigious international project and to work at the grass root level. With this New Year gift, we are positioned to begin a new era in our service. As a partner, BSLI will create awareness of the need of life insurance among the Self Help Group Members formed under the project and thus generate demand for Micro Insurance Products and make the insurance plan accessible and affordable to that segment. Our objective is to provide social and financial security to the SHG members," said Ajay Srinivasan Chief Executive, Financial Services, Aditya Birla Group.

Inflation decines to 5.9%

2009-01-09T03:25:00.000-08:00

Indian Annual rate of inflation, year-on-year, declined to 5.9 per cent for the week ending December 27, 2008 compared to 6.4 per cent reported in the previous week, showing a decline of 47 basis points, says a Finance Ministry communique.

Inflation has consistently been on the decline for three months now and stands slightly above the rate of 5.7 per cent in the week ended February 23, 2008.

Inflation by Commodity groups

Commodity group-wise examination of year-on-year inflation shows that inflation in all groups has recorded decline.

i.In ‘primary articles’, the rate of inflation decreased to 11.6 per cent, compared to 12.1 per cent reported last week. Within primary articles, inflation rate in all its three sub-groups of food and non-food articles and minerals have declined together for the first time in the current week. Inflation rate in food articles at about 10% represents a decline after 5 consecutive weeks of increase in the rate, while the inflation rate in minerals have gradually decelerated to 40 % in the current week from its peak rate of 54.5 % in October.

ii.In ‘fuel and power’, the rate of inflation has remained unchanged at (-) 0.7 per cent.

iii.In “manufactured products”, the inflation rate decreased to 6.2 per cent, compared to 6.8 per cent in the last week.

For the combined food index (weight = 25.43 per cent), the year-on-year inflation in the week ended December 27, 2008 was lower at 8.5 per cent compared to 8.8 per cent last week.

Contribution of Commodity groups

Contribution of primary articles to the year-on-year inflation rate for the week ending December 27, 2008 show that this group accounted for 44.2 per cent, as against their share of 22 per cent to the WPI basket.

Deseasonalised monthly WPI inflation

The deseasonalised overall WPI inflation show a continuing decline which began from July 2008. It has turned negative since September 2008 at (-) 3.2 per cent, (-) 9.6 per cent in October, (-) 18.1 per cent in November and (-) 13.5 per cent in December 2008. An identical pattern of decline from July 2008 and negative from September is manifest in the deseasonalised rate of inflation for manufactured products.

RBI signals another rate cut; slashes repo, CRR

2009-01-02T04:57:00.000-08:00

Signaling a further drop in interest rates, the Reserve Bank of India has announced the reduction of the repo rate under the liquidity adjustment facility (LAF) by 100 basis points from 6.5 per cent to 5.5 per cent with immediate effect.

The reverse repo rate under the LAF will also be slashed by 100 basis points from 5.0 per cent to 4.0 per cent with immediate effect.

The apex bank also announced that the cash reserve ratio (CRR) of scheduled banks will reduced by 50 basis points from 5.5 per cent to 5.0 per cent from the fortnight beginning January 17, 2009.

The RBI announcement said that the reduction in the CRR will inject additional liquidity of around Rs. 20,000 crore to the financial system.

It is expected that the reduction in the policy interest rates and the CRR will further enable banks to provide credit for productive purposes at appropriate interest rates. The Reserve Bank on its part would continue to maintain a comfortable liquidity position in the system.

Even as some public sector and private sector banks have cut lending rates in response to the Reserve Bank’s monetary policy stance, concerns over rising credit risk together with the slowing of economic activity appear to have moderated credit growth.

The Reserve Bank continues to urge banks to monitor their loan portfolio and take early action, including debt restructuring where warranted, to prevent the rise of bad assets down the road and safeguard the gains of the last several years in improving asset quality. At the same time, banks should price risk appropriately and ensure that quality enterprises continue to get funding.

The Reserve Bank appreciates that risk management is difficult even in normal circumstances; it is even more difficult in an environment of uncertainty and downturn.

The fundamentals of the indian economy continue to be strong. Once the crisis is behind us, and calm and confidence are restored in the global markets, economic activity in India would recover sharply. But a period of painful adjustment is inevitable, the Bank pointed out.

India's exports zoom to $ 163 billion -26.4% annual growth

2009-01-02T01:14:00.000-08:00

Demonstrating signs of a robust Indian economy, India’s merchandise exports increased from US $ 63.8 billion in 2003-04 to US $ 162.9billion in 2007-08 recording average annual growth rate of 26.4% during the last four years.
(Values in US $ billion)
Year Exports %Growth Imports %Growth
2003-2004 63.8 -- 78.1 --
2004-2005 83.5 30.8 111.5 42.7
2005-2006 103.1 23.4 149.2 33.8
2006-2007 126.3 22.5 185.6 24.4
2007-2008 162.9 29.0 251.4 35.5
2007-08(Apr-Nov.) (P) 99.9 153.1
2008-09(Apr-Nov.) (P) 119.3 19.4 203.6 33
Provisional
Data Source: DGCI&S, Kolkata

Steps taken by the Government to arrest deceleration of export -- (1) Excise duty reduced across the board by 4% for all products except petroleum products and those products where current rate was less than 4%; (2) Interest subvention of 2% has been provided till 31.3.2009, to the following labour intensive sectors for exports: Textiles (including Handlooms), Handicrafts, Leather, Gems & Jewellery, Marine Products and SMEs; (3) Additional funds of Rs.350 crore provided for export incentive Schemes; (4) All items of handicrafts included in Vishesh Krishi and Gram Udyog Yojana; (5) Back-up guarantee to ECGC for up to Rs.350 crore; (6) Rs1,100 crore provided to ensure full refund of claims of CST/Terminal Excise duty/ Duty drawback on deemed exports; (7) Additional funds of Rs.1400 crore provided for textile sector to clear the backlog claims of TUF; (8) Export duty on iron ore fines eliminated, and for lumps, reduced to 5%; (9) Import duty on naphtha for power sector eliminated; (10) Some pending issues relating to Service Tax refund on exports – resolved.

Special Economic Zones

SEZs have created employment for large number of unemployed rural youth. Even in the services sector, 12.5 million sq meters space is expected in the IT/ITES SEZs which as per the NASSCOM standards translates into 12.5 lakh jobs. It is, therefore, expected that establishment of SEZs would lead to fast growth of labour intensive manufacturing and services in the country. The total investment in the SEZs, as on 30th September 2008, were Rs.93507.23 crore and the total employment generated so far to 3,62,650 persons.

Out of the 531 formal approvals given till date, 174 approvals are for sector specific and multi product SEZs for manufacture of Textiles & Apparels, Leather Footwear, Automobile components, Engineering etc. which would involve labour intensive manufacturing. Exports from SEZs during the year 2007-08 was to the tune of Rs.66,638 crore with a growth of 92% over 2006-07 (overall growth of exports of 381% over past four years (2003-04). The export projection for 2008-09 is Rs.1, 25,950 crore.

Gems & Jewellery

During the year 2007-08, exports in gems & Jewellery sector were worth US $ 19,657.36 million dollars and registered growth of 23.13% as compared to the year 2006-07. During the period April-July of the current fiscal exports worth US $ 6296.14 million were effected as against US $ 6141.92 million during the corresponding period previous year.

Marine Products

Marine Products Export Development Authority had initiated following measures to sustain the export of marine products during the current year: 1. Launched a comprehensive programme to tap deep sea resources of Tuna and finalised an action plan for development of tuna fishery in the Andamans. 2. Increased thrust on diversification of culture practices and launched a new scheme for providing financial assistance for value addition. 3. Introduced for the first time in the world Organic fresh water shrimp in the international market. 4. Promoted ornamental fish breeding for export. 5. Took steps to set up six more screening laboratories in Andhra Pradesh to improve the quality of shrimp exported. 6. Undertook R&D activities for new aquaculture technologies / innovative methods for increasing the production of fin/shell fish varieties. 7. Taken steps to introduce a brand promotion scheme to promote the image of Indian Seafoods at abroad.

Anti-dumping Investigations during 2008

During the year 2008, the Directorate General of Anti Dumping has so far initiated 18 fresh anti-dumping investigations (till 8.12.2008). The products involved are Cable Ties, All Fully Drawn or Fully Oriented Yarn/Spin Draw Yarn/Flat Yarn of Polyester, Plain Medium Density Fibre Board, Power Steering Gear System, Thyionyl Chloride, Plastic Processing Machinery, Cathode ray Television Picture Tube – III, Nylon Tyre Cord Fabrics, Flax Fabrics, Ceramic tiles, Tyres Curing Presses, Radial Tyres, Pencillin – G, Phosphoric Acid, Diethyl Thio Phosphoryl Chloride, Cold Rolled Products of Stainless Steel, Hot Rolled Steel Products and Axle Beam and Steering Knuckles. The countries involved in these investigations are China PR, Thailand, Vietnam, Malaysia, New Zealand, Sri Lanka, European Union, Indonesia, Belarus, Hong Kong, Korea RP, Japan, South Africa, Taiwan, USA, Iran, Kazakhstan, Saudi Arabia, Russia, Romania, Turkey and Ukraine.

Performance of Plantation Sector

COFFEE – The Government of India has approved the Development Support Scheme for coffee sector with a total financial outlay of Rs.310 crore during the month of March 2008. An area of 47776 hectares has been brought under plantation from January to November 2008. A new scheme on Export Promotion of Coffee and the scheme on Support for Coffee Processing have been approved by the Government of India with a total financial outlay of Rs.45 crore on April 10, 2008. The total export for the period from January to November 2008 was 2,08,023 tonnes earning a foreign exchange of Rs.2,271.81 crore against 2,04,538 tonnes earning a foreign exchange of Rs.1,773.50 crore during the same period last year.

RUBBER – India is the fourth largest producer of rubber with a share of 8.3% in the world production. The rubber sector accounts for 93% of the production and 89% of the area with an average holding size of 0.5 hectare. Natural rubber export and import is expected to reach 72,000 tonnes and 80,000 tonnes respectively in 2008. The Rubber Training Centre received ISO: 2000 certificate in June 2008.

SPICES – Indian spices industry recorded an export of 4,44,250 tonnes worth over US $ 1 billion during the year 2007- 2008. It marked a quantum leap of 19 per cent in volume and 24 per cent in rupee value. Mumbai is the major hub for export of spices and has alone accounted for 39% in volume of the total spice exports during the last financial year.

TOBACCO – India earned a foreign exchange of Rs.2,022.78 crore and Rs.10,271.55 crore as excise revenue in the year 2007- 2008. The exports of tobacco and tobacco products during 2007- 2008 were valued at Rs.2022.78 crore. During April-October 2008, exports of tobacco and tobacco products were valued at Rs.1952.43 crore. During April-October 2008, unmanufactured tobacco exports were valued at Rs.1623.10 crore and exports of tobacco products were valued at Rs.329.33 crore. Going by the current trend exports of tobacco and tobacco products are expected to cross US $ 600 million during 2008- 2009.

Prospects of the Doha Round

India continues to believe in strengthening the multilateral trade rules of the WTO. The full liberalisation through the WTO secures the economic and commercial gains necessary in the goods and services sectors and modes of supply of interest to developing countries. India has reiterated the need for a serious discussion on the expectations of WTO Members regarding other issues. The developing countries want to have progress in some of these issues such as the TRIPS-CBD issue. The WTO Ministers will raise issues that they consider important and it would therefore be prudent to prepare for this so that the discussions in the Ministerial Conference can be held in a constructive environment and lead us to a successful conclusion.
Further, progress needs to be made in other areas of negotiations as well, that are of great interest to the developing countries. Our focus is on the bankable commitments from our major trading partners in areas where we have relative strengths and which would provide certainty and value to trade in Services. India has made it known that without bankable commitments from the major developed countries in Services, it may be difficult for India to agree to the modalities on Agriculture and NAMA. India needs to have clear information on the important elements which are required for completion of Services’ negotiations too.
India has been engaging constructively and actively with other fellow Member countries of the WTO towards this end. For India, it is important that the Doha Round negotiations are brought to a successful conclusion. Such a conclusion can only be possible if we are faithful to the mandate and the outcome reflects a clear balance between market opening and the development needs of the majority of the membership. India is ready to show the necessary flexibility to achieve such an outcome but the onus for movement lies largely with the developed countries.

SEBI smells ulterior motive behind forged letter to Pyramid Saimira

2008-12-23T05:53:00.000-08:00

SEBI issued the following clarification on news reports relating to Pyramid Saimira Theatre Ltd.

"It has been widely reported in the media that SEBI has vide order dated December 19, 2008, directed Mr. P S Saminathan, the CMD of Pyramid Saimira Theatre Ltd. (PSTL), to make an open offer for acquisition of shares of the Target Company (PSTL) at a price of not less than Rs. 250/-. A copy of the letter purported to have been issued by SEBI was also flashed on some TV Channels today.

"It is hereby clarified that no order or letter has been issued by SEBI to Mr. P S Saminathan on 19.12.2008. It appears that the said letter is being circulated with ulterior motives.

"SEBI is separately investigating into the matter including the origin of the letter. SEBI is also separately inquiring into the dealing in the scrip following the press report including alleged violation of SEBI (SAST) Regulations, 1997.

Mumbai

December 23, 2008"

Why the worst of times can also be the best of times

2008-12-18T04:12:00.000-08:00

What are the learnings for the Indian economy and corporates from the pngoing global financial crisis? Here is an expert view by Sudip Bandyopadhyay, Director & CEO, Reliance Money

The world has changed. After years of benign economic conditions, the four horsemen of financial apocalypse – credit crunch, recession, volatility and uncertainty – are blazing a trail across the horizon. Executives must now reassess their organisation’s agenda and communicate it clearly. If history is a guide, most will frame the current conditions as a threat and take action to protect what they have. Mitigating threats in tough markets is prudent, but companies that adopt a defensive position ignore a counter-intuitive truth: the worst of times for an economy as a whole can be the best of times for individual companies to create value.These are probably occasions when a company can create value significantly in excess of the cost of the resources required to seize an opportunity, whether by acquisition, innovative product launches, expanding in new markets or buying resources.

Golden opportunities do not come along every day, and most people think they are more likely to arise when the good times are rolling. In fact, the moment when you can transform your fortunes often emerges during the toughest times. Companies can also use difficult trading conditions to drive a hard bargain on tangible assets. Emirates purchased Airbus A380s on favourable terms one month after the September 11 attacks, at a time when many airlines were reluctant or unable to make large commitments.

A crisis marks a clean break with the past and creates an external rationale to make unpopular but necessary changes. In a downturn, investors and Boards are more forgiving of short-term earnings dips that might result from actions to improve the organisation in the long term. Kun-Hee Lee, Samsung’s chairman, for example, welcomed the currency crisis that roiled Asian markets in the late 1990s. A decade earlier, Mr Lee had initiated a set of changes to transform Samsung from a competent Korean player to a global leader. Mr Lee harnessed the energy unleashed by the external crisis to reinvigorate the internal changes.

Many companies alternate between growth binges and periods of sober cost cutting. The better approach is to maintain cost discipline throughout the economic cycle. When considering cost cuts, managers should ask themselves how the process will help to maintain cost discipline in the future. The worst of times can be the best of times to create value for leaders alert enough to spot opportunities and courageous enough to seize them

India invites Russian investment in energy

2008-12-05T03:07:00.000-08:00

NEW DELHI:Union Minister of Commerce & Industry Kamal Nath has said that there is immense possibility for joint investments between INdia and Russia in areas like banking, information technology, telecommunications, high-technology sectors, power, pharmaceuticals and textiles.

Addressing the India-Russia CEOs Council Meeting here today,Mr Kamal Nath said that India and Russia have managed to sustain strong business vibes in recent years and added that the India-Russia Forum on Trade & Investment has underscored the need for investment cooperation in a large number of sectors.

“Indian companies are quickly establishing themselves in Russia and the cumulative Indian investments in the Russian economy amounted to US $ 744.1 million as of March 31, 2008”, he said. The meeting was also attended by Shri G.K. Pillai, Commerce Secretary Ajai Shankar, Secretary (IPP) apart from CEOs from both the countries. During the occasion, the Minister also launched the IBEF Website in Russian language.

Mr Nath said there is a strong case for Russian companies to invest in India, especially in power sector, as Russia is energy rich and India's energy requirements are going to increase manifold over the next 10-15 years.

The Minister emphasised that critical sectors of the economy, like agriculture, have started a process of revival by growing at a rate of close to 4%. This growth rate is a significant contribution to inclusiveness, which is vital for India as it helps sustain domestic consumption, which will sustain our growth story in the short, medium and long term, he added.

Bilateral trade between India and Russia during 2008-09 (April-July) was to the tune of US $ 1613.56 million. Major items of export are drugs, pharmaceuticals & fine chemicals, RMG cotton including accessories, tea, coffee, tobacco un-manufactured, processed minerals, plastic & linoleum products, machinery & instruments, transport equipments, electronic goods etc. Major items of import are iron & steel, non-ferrous metals, coal, coke, newsprint, silver, synthetic & reclaimed rubber etc.

Cumulative FDI inflows from Russia till August 2008 were US $ 144 million. The top sectors that attracted FDI inflows were medical & surgical appliances, hotel & tourism, food processing industries etc.

Undue favours to new telecom players? DoT says No!

2008-11-21T02:34:00.000-08:00

Are the new entrants to telecom field being unduly favoured by the telecom Ministry?

An adage which is much older than the Indian Telegraph Act 1885 says that you cannot compare an apple with an orange. Even in telecom, an Orange (pun unintended!) has to be compared with an orange. That is what level playing field is all about, says a top telecom ministry official.

Asked to comment on the widespread allegations that certain new telecom players like Swan and Unitech have been unduly favoured as they secured spectrum on the basis of fee pegged in 2001, the official explained that the price has not yet been changed ever since deliberately.

“One has to keep in mind the government’s overall objective of growth, affordability and even penetration of wireless service in small towns and rural areas,” he said and pointed out that even TRAI does not favour any change in the fee structure and auction for spectrum.

The unchanged license fee also serves as incentive to telecom players to extend their networks to relatively low-revenue semi urban and rural areas. Otherwise, the government would have to subsidise the rural network expansion, the official said.

Even when the Cabinet decided on pricing for the fourth operators in 2003, it was based on TRAI recommendation and the same principle was applied last year when the new entrants were given licenses.

The government fully respected the telecom industry’s argument for a level playing field for all players and hence did not impose any restrictions for its growth. “This has also immensely contributed to the country emerging as the world’s fastest growth telecom market, adding over 8 million subscribers every month,” the official explained.

The country wireless subscriber base is 300 million strong today and is expected to double to 600 million mark in the next four years.

Any increase in the fee or allowing spectrum to be auctioned would in effect mean injustice to new players as it could jeopardize the tariff structures. With the telecom market witnessing immense tariff war, the new players would have been put to disadvantage visa-vis the existing players and this would have gone against the principles of level playing field, the official said.

DoT has been maintaining that the new licenses have been issued as per TRAI policy guidelines.

Inflation declines to 8.9%

2008-11-20T04:07:00.000-08:00

Annual rate of inflation, year on year as conventionally measured, declined to 8.90 per cent for the week ending November 8, 2008 compared to a rate of 8.98 per cent reported in the previous week, the Finance Ministry has reported.

The Wholesale price index in the current week declined by 0.21 per cent, from 235.5 as on November 1, 2008 to 235.0 on November 8, 2008. For the second week in a row inflation continues to be in single digit, though the significant decline of 174 basis points witnessed last week has been moderated to 8 basis points. In the previous year, on November 10, 2007 inflation at 3.20 per cent was significantly lower.

In the ‘primary articles’ group, the annual point-to-point inflation increased to 11.66 per cent, as compared to 11.01 per cent reported last week. Out of a total of 98 articles, 14 articles have shown a decline in prices in the current week as compared to November 1, 2008. These included among others, jowar, maize, ragi, tea, brinjal, black pepper, linseed, coconut fresh, papaya, rape and mustard seed, raw cotton, banana, fire clay and gypsum. A total of 55 articles have shown no increase in prices.

In the commodity group ‘fuel and power’, the rate of inflation declined further to 8.21 per cent in the current week compared to an inflation of 9.22 per cent reported in the previous week. Prices of 4 commodities declined and, for other 14 commodities, it remained unchanged. Prices of bitumen, continues to increase by 1.24 per cent in the current week.

In the case of ‘manufactured products’, rate of inflation in the current week declined marginally to 8.02 per cent, as compared to 8.06 per cent in previous week. Out of 318 commodities, a large number, 287 in all, have shown no increase in prices over the last week. For 21 commodities, there has been a decline in prices. These commodities included among others, sugar, gur, bar and rods, imported edible oils, deoiled cake, rape and mustered cake, groundnut cake and oil, rice bran oil, synthetic yarn, texturised yarn, zinc ingots, bright bars, P.V.C. resins and benzene. Only 9 products, particularly fluorescent tubes, cotton yarn and cotton cloth, bicycles, GLS lamps and mustered oil witnessed an increase in prices.

Inflation of 30 essential commodities declined marginally to 7.60 per cent as of the week ending November 8, 2008 from 7.74 per cent reported in the earlier week. There was a however, an increase in the prices of primary essential commodities including pulses such as urad, moog, gram, arhar, masoor, and cereals like wheat, rice, and bajara . There was also an increase in the prices of onions. The prices of other essential commodities moderated or declined over previous week.

The monthly deseasonalised inflation rate has been negative during September and October, suggesting a continuing moderation in WPI inflation in the coming months. For the month of October 2008, the deseasonalised inflation for primary food showed some increase, though there was significant decline in inflation rate of manufactured food. The overall monthly deseasonalised inflation in manufactured products shows a continuing decline since September 2008.

India turns Global telecom playground

2008-11-19T22:44:00.000-08:00

A Corporate Radar excluisive

Why is the Indian telecom market becoming such an active playground for foreign investors? What is the reason for such an inflow of FDI, despite the global financial crisis? Corporate Radar asked Mr. Bundeep Singh Rangar, Chairman of IndusView Advisors Ltd, for his views. IndusView advises multinational companies on business opportunities emanating from India’s fast growing economy. Mr Rangar’s response:

1. Post Etisalat etc., do you think more FDI will flow into Indian telecom?
Ans: The current dynamics of the Indian telecom market should be seen from two perspectives, which also explains the evolutionary cycle the sector has seen over the last two decades:
• A very basic realization among the masses about the need to remain connected – The first phase
• To remain connected and also harness the immense potential of the value added services and innovative applications – The second phase

While the first phase has seen the tele-density of the country jump from less than 1% in the '80s to about 30% now; the second phase is witnessing the numerous applications and value added services like music and movie clips downloads, innovative ring tones, among others.

But, that is not enough ... there is still a large population that needs to be offered the benefits of the basic communication services – that is how the target of achieving a tele-density of about 45% is set for the next five years by the government of India. The service providers – both the state owned and the private sector – would be aiming to surpass that target and garner the maximum possible chunk of that potential subscriber base.

The race among mobile telecommunication service providers translates in to a growing opportunity estimated at more than 700 million by 2012 from the current 300 million, at a CAGR of 21%.

Apart from the vanilla voice and sms services that the mobile services are widely associated with, the advent of next generation platforms like 3G and progressively 4G, will exponentially accelerate the possibilities of innovative applications that can be bundled on to the networks and delivered at the subscribers' finger tips in the hi-tech mobile handsets.

Such subscriber growth targets and evolving technology landscape calls for corresponding high capital investments which is pegged at about $73 billion over the next five years. And, a major chunk of the investment is expected to be realized through Foreign Direct Investment (FDI), particularly in the area of mobile communication.

2. Why do you think Indian telecom market is becoming so attractive for foreign players?

Ans: As mentioned above, the incumbent mobile telecommunication service providers in India currently add more than nine million subscribers a month with a potential of taking the total tally of subscribers up to 700 million in the next five years. In terms of expected revenues that translates in to overall mobile services revenues likely to be more than $37 billion by 2012 growing at a CAGR of 18%. Such growth potential in the segment offers enough incentive to overseas service providers to vie for their share of the pie. And investor friendly regulations by the government, allowing up to 74% stake holding in a domestic entity by foreign player is an icing on the cake.

The potential of a profitable exit opportunity is another reason. For instance, the stake of 26% in Tata Teleservices by Japanese telecom services provider NTT DoCoMo at $2.7 bn (Rs 12,770 crore) values Tata Teleservices at Rs 50,270 crore. Even in the current market conditions the valuations are still moving north. In early 2006, Temasek picked up a 9.9% stake in Tata Teleservices for Rs 1,500 crore valuing the company at around Rs 15,000 crore. The NTT DoCoMo deal values Tata Teleservices at more than three times that in less than three years.

3. Given current global crisis, do you think the telecom market, particularly in india, will withstand the turmoil and witness the same pattern of growth as seen in the recent times?

Ans: The recent string of investments in Indian telecom companies, including, Tata Teleservices Ltd by NTT DoCoMo, Inc; Unitech Telecom, the telecom arm of India's second largest real estate developer Unitech Ltd by Norwegian telecom firm Telenor ASA, world's seventh largest telecom service provider at $1.36 billion; and Swan Telecom, a start-up GSM telecom service company of a Mumbai-based real estate developer Dynamix Balwas Group by Dubai-based Emirates Telecommunications Corp (Etisalat) at $900 million; or, South Africa's largest telecom company MTN Group's attempts to enter the Indian market are examples of overseas companies that have exhibited confidence in the potential of the Indian market.

Communication is a necessity. The related costs of owning a handset and usage charges (tariffs) in India are among the lowest in the world. To add to that, the service providers are offering innovative tariff packages even while touching the lowest band and are willing to further lower the packages to bring new subscribers in to their fold.

Such customer friendly posture will go a long way in ensuring the market remains an active playground.

Super power flexibility must for Doha round success: India

2008-11-18T02:30:00.000-08:00

NEW DELHI:Union Minister of Commerce & Industry Kamal Nath has stated that the infrastructure development is a vital area for India’s economic growth.

During his interaction with Douglas Alexander, Secretary of State for Department of International Development, UK, here last evening, Nath emphasised that there is an excellent opportunity for UK expertise as well as investments In India. “We need to generate interests in the large number of PPP projects being explored in India”, he added. Both sides also discussed about the present global financial crisis and the impact on trade. The meeting was also attended by G.K. Pillai, Commerce Secretary apart from senior officials from both the countries.

Both sides discussed the possibilities for early conclusion of the Doha Round Negotiations of the WTO. Kamal Nath explained that India continues to believe strongly in a rule-based, transparent and fair multilateral trade regime. “One of the factors which will have an important bearing on the conclusion of the Round is whether the developed countries would be willing to show the necessary flexibility for finalizing a multilateral deal. However, India has been engaging constructively and actively with other fellow member countries of the WTO in the expectation that this would be forthcoming. A conclusion would of course depend on whether the WTO members are faithful to the mandate and the final outcome reflects a clear balance between market opening and the development needs of the majority of the membership”, he added.

Both sides agreed that there is a huge potential for bilateral trade and investment in view of shared interests and a long history of relations. It was felt that the potential area for growth in trade and investment are agri-business, healthcare, infrastructure, high-technology, legal services, accountancy services and financial services. Shri Kamal Nath informed the visiting Secretary of State that Indian healthcare industry is keen for tie-ups with the UK health insurance industry for offering healthcare facilities in India.

The cumulative foreign direct investment (FDI) inflows from the UK during 1991-2008 was to the tune of US $ 5.03 billion. The top sectors that attracted FDI from the UK were: telecommunications, fuels (power & oil refining), chemicals (other than fetillisers and services sector (financial & non-financial). The top investment areas by Indians in the UK are: software development services, pharmaceuticals, textiles and handicrafts.

The total bilateral trade between India and the UK during the year 2007-08 was US $ 12 billion (exports - $ 7 billion and imports - $ 5 billion). During 2006-07, the bilateral trade was US $ 9.8 billion (exports - $ 5.6 billion and imports - $ 4.2 billion). The main exports to UK were: readymade garments, petroleum, machinery & instruments, gems & jewellery, footwear etc. The main imports from the UK were: precious & semi-precious stones, electronic goods, silver, transport equipments, metalifers ores and metal scrap etc.

The present Indo-UK Joint Working Groups is in the sectors of hi-tech, IPR (intellectual property rights), accountancy, legal services, infrastructure, healthcare, financial services and company affairs. The 5th Meeting of the Indo-UK JETCO (Joint Economic and Trade Committee) is scheduled to be held in New Delhi on a date to be decided mutually.

Dont't run away from India, Kamal Nath tells investors

2008-11-17T04:15:00.000-08:00

NEW DELHI: Union Commerce Minister Kamal Nath today said that world would benefit tremendously from a stable, large and growing consumer market provided by India and added that this is not the time for foreign investors to give up on India.

"Foreign investors who withdraw equity investments or shelve FDI plans in India will find themselves behind the curve as our economy picks up its 9-10% pace once again," he said addressing the Plenary Session on “Securing Opportunities for Inclusive Growth in India” at the India Economic Summit here.

Kamal Nath pointed out that India’s reform process has allowed millions of poor people to cross the poverty threshold and added that there is still a lot of room for further reforms in key areas such as public private partnerships, financial sector, and taxation, among others. He said that much action remains on the agenda table for integrating further with the global economy and becoming a vital link in the international supply chain of goods and services, funds and capital, and resources and talent.

The 3-day (16-18 November) Summit is being jointly organized by the Confederation of Indian Industry (CII) and World Economic Forum.

Kamal Nath emphasised that inclusive growth ultimately depends on the productivity of the overall workforce, which in turn is dependent on its education, skill development, technical and professional education, and talent resource levels. India’s workforce numbers around 500 million people and is expected to expand by about 20 million each year for the next ten years. “But 600 million people continue to depend on agriculture as a source of livelihood. While agriculture has been expanding at close to 3% annually, there is need to move people off the land in order to enhance their productivity and increase their incomes”, he added.

Speaking about India’s engagement with the world, he said that India’s total exports in 2004-05 was at $ 83.5 billion, whereas in 2007-08, it exceeded the targets and achieved a doubling of trade to $163 billion and this year, for the period April to September export growth was 31% over the same period last year. At the same time, we continue to be a solid market for overseas goods, he underlined and added that India’s imports have gone up from $ 112 billion in 2004-05 to $ 251 billion in 2007-08 and non-oil imports increased at a rapid clip of 43%. “When we include export and import of services, our external engagement can be placed at over $ 525 billion for the past year, which adds up to more than half of GDP. This is unprecedented in India’s modern economic history”, he said

Indian Railways to pump in $62 billion for development

2008-11-15T01:58:00.000-08:00

by Harish Kunwar(Assistant Director, Press Information Bureau, New Delhi)

Over the decade, private sector participation in the railway sector has increased, though it remains limited. The public-private partnership (PPP) model is becoming increasingly popular in order to mobilize capital and improve operation and management skills. In the past, IR made several attempts to involve the private sector through works or management contracts in areas such as catering wagon ownership and leasing, and joint ventures (JVs) for rail infrastructure projects. As a result, several initiatives were taken up on a PPP basis. These included commercial utilization of railway land, private operation of container trains, catering services, warehouses and wagon procurement. A number of PPP projects are also on the anvil. These include construction of dedicated freight corridors, modernization of railway stations, manufacture of rolling stock, utilization of vacant railway land, development of railside warehouses, construction of passenger terminals and development of VSAT hubs.

It has been assessed that Indian Railways would need to spend around Rs. 2,51000 crore (US$62 billion) on various capacity enhancement measures over the next five year period. A major part of the investment would come from internally generated resources. Budgetary support to the extent feasible would also come forth. However, to meet the massive investment needed, these would need to be leveraged to mobilize adequate level extra budgetary resources. Around Rs. 1,00,000 crore is expected to come from extra budgetary resources including Public Private Partnership (PPP). PPP would, thus, play a crucial role in the attainment of the strategic goals outlined above.

Construction of DFC

It has been planned to construct a new Dedicated Freight Corridor (DFC), initially covering about 2700 route kms. equivalent to around 5000 track kilometers at an approximate cost of Rs. 28000 crore (US$6 billion) linking the ports of western India and the ports and mines of Eastern India to Delhi and Punjab. The construction of this corridor will be implemented through an SPV being created for the purpose through a mix of Engineering Procurement and Construction (EPC) and PPP methods. Ministry of Railways is in the process of selecting a global consultant to advise on the concession agreement, principles of track access charges and other financing and bidding issues. It is envisaged that innovative ideas on design, construction and maintenance of railway to achieve optimal life – cycle costs would be forthcoming through PPP especially as the work progresses on the initial two corridors and further corridors are taken up. The concessionaire could also tap additional ancillary revenue streams through commercial exploitation of and, construction of freight terminal/logistic park/ICDs etc.

World Class Railway Stations

Railway stations at metropolitan cities and important tourist centres need to be modernized to provide world-class passenger amenities and services to the large multitude of passengers using these stations. Indian Railways is planning to do so by attracting private investments in the area by leveraging the land around and airspace above the stations. The concessionaire would be expected to construct and maintain the operational and passenger areas free of cost, share the revenue earned from the real-estate created and hand over the same after the concession period. Altogether 26 stations have been identified in the first stage. These are CST Mumbai (Carnac Bunder), Pune, Howrah (Kolkata), Lucknow, New Delhi, Anand Vihar and Bijwasan at Delhi, Amritsar, Chandigarh, Varanasi, Chennai, Thiruvananthapuram, Secunderabad, Ahmedabad, Patna, Bhubaneshwar, Mathura, Agra, Gaya, Bangalore, Jaipur, Nagpur, Tirupati, Bhopal, Kanpur and Guwahati. Pre-qualification process for bidders for the pilot project for New Delhi Station has been initiated. Redevelopment of Patna, Secunderabad and Mumbai will also be taken up during the current year. Development of other stations and green field passenger terminals would also be taken up subsequently.

Commercial Utilization of Land

Indian Railways has approximately 43,000 hectares of vacant land. These are mostly alongside track in longitudinal strips, around railway stations, and in railway colonies especially in metro and other important cities/towns with potential of being used commercially to generate revenue as well as capital for modernization and capacity addition. A new body, namely Rail Land Development Authority (RLDA) has been set up under the Railway (Amendment) Act 2005 to pursue, interalia, the main objectives of generating revenue and up grading railway assets. 110 sites have already been entrusted to RLDA.

SPV for manufacturing

With sustained economic growth and the resultant demand for rail transport the requirement of rolling stock has increased manifold. The requirement of coaches/Electrical Multiple Units is projected at 22689 vehicle unit for the XI Five Year Plan The gap between the requirement and the combined capacity of the two Production Units at Integral Coach Factory, Perambur and Rail Coach Factory, Kapurthala (around 2500 per annum) is planned to be bridged by augmenting the existing capacity of these Production Units and setting up a new manufacturing unit through a JV under PPP.

Similarly, the requirement of Electric and Diesel Locomotives has been projected at 1800 each during the XI Five Year Plan i.e. 360 locos per year. The existing in – house capacity for the manufacture of these locomotives is presently 150 per annum for Electric and for Diesel. The gap between the requirement and capacity is also planned to be bridged by setting up two locomotive manufacturing units one each for diesel and electric locomotives through PPP. Possibility of PPP through long-term demand guarantee to prospective manufactures of modern wagons is also being explored.

High Speed Corridors

Pre-feasibility studies are being awarded for a few identified corridors to examine. Linking a few of our bustling metropolises with a high speed rail links to facilitate train travel over 600-1000 km within 2.5 to 4 hours. All options including PPP will be explored.

Operation of container trains and construction of Multi-modal Logistics Parks
Private operators have been allowed to manage rail-borne Container Services on Indian Railways. Concession agreement setting out the terms of such operation has been signed with 15 private operators. The scheme is also open for other operators to join. So far private operators have inducted 45 rakes and built three ICDs at Garihassru, Patli and Loni.

Policy framework to facilitate setting up of Multi-modal Logistics Parks (MLPs) in SEZs or private land with rail connectivity has been formulated. The policy also evisages utilization or surplus railway land available at suitable locations for development of MLPs and/or bulk or dedicated freight terminals.

Wagon investment Scheme

The Wagon Investment Scheme (WIS) with provisions for freight rebate and supply of guaranteed number of rakes over periods ranging from 7-15 years for various categories of wagons has been in operation for the past few years. The scheme is being replaced by a new scheme to broaden its appeal to investors providing high-capacity and special purpose wagons. A scheme to facilitate third-party leasing of wagons is also under finalization.

Port Connectivity works

Rail Vikas Nigam Limited (RVNL) has been mandated to undertake capacity augmentation works and port connectivity projects by establishing Special Purpose Vehicles (SPVs) Some of the projects taken up or under consideration of RVNL include Palanpur-Gandhidham gauge conversion project (linking Kandla and Mundhra ports to North India), Haridaspur-Paradeep New Line (linking iron ore mines of Orissa and Jharkhand to Pradeep port), Anugul-Sukinda (linking iron-ore and coal-belts of Orissa), Obulavaripalli-Krishnapatnam – New Line Project linking the Krishnapatnam port of Andhra Pradesh, Bharuch-Dahej and Surt-Hazira projects in the State of Gujarat and Penn-Rewas Port link (Maharashtra)

Catering etc.,

Indian Railway Catering and Tourism Corporation (IRCTC) has been mandated to develop catering services, budget hotels and food plazas at major stations through involvement of private entrepreneurs.

IRCTC is commissioning new Food Plazas in Railway premises with private participation. The license period for food plazas is of nine years with a provision of extension of three years. Already 53 such Food Plazas have been commissioned.

Indian Railways is also in the process of carrying out an examination of the scope of need-based ‘base kitchens’ and ‘launderettes’ with public private partnership to strengthen the infrastructure for on-board services. Call centers are also being planned under PPP by IRCTC to cater to the need for information dissemination to the railway customers.

Apart from the above projects, for which Indian Railway Catering and Tourism Corporation (IRCTC) would act as a nodal agency, Indian Railway is also planning to launch new services for the luxury tourism segment on the pattern of ‘Palace on Wheel’ in partnership with interested State Governments. (PIB Features)

Hi Manmohan, this is Obama calling....

2008-11-12T00:19:00.000-08:00

NEW DELHI: President-elect of the United States Mr. Barack Obama called the Prime Minister this morning. The Prime Minister congratulated him warmly and said that his historic victory was a source of inspiration for oppressed people all over the world.

President-elect Obama praised the Prime Minister’s contribution to the progress of India both as Minister of Finance earlier and now as Prime Minister. He said that the US-India strategic relationship was a very important partnership and that the new administration wanted to work together with India on all important global issues.

The Prime Minister said that relations between India and the United States were very good but that we could not be satisfied with the status quo. The Prime Minister conveyed his best wishes for the success of the new administration in meeting the enormous challenges that face the world and invited the President-elect and Mrs. Obama to visit India . He said that a warm welcome awaited them. The President-elect said that he wished to make an early visit to India

Indian Economy can overcome global crisis

2008-11-09T04:39:00.000-08:00

by S. Sethuraman**

India has taken an array of monetary and fiscal measures, in quick succession, to contain inflationary pressures - with the annual rate already moderating from around 13 per cent in August to 10.72 per cent by the end of October - and, more importantly, to make available adequate domestic resources to maintain growth in the face of an unprecedented international financial crisis and global economy drifting into recession.

The Reserve Bank had, within four weeks in October, lowered reserve ratios and reduced a key interest rate to provide some 250,000 crores of liquidity for banks to finance businesses and consumers. These measures, welcomed by the industry and other productive sectors, have helped to impart a sense of confidence about India‘s ability to weather the global storm.

Growth Momentum:Prime Minister Dr Manmohan Singh remains focussed on seeing that the Indian economy does not get unduly affected by the adverse developments abroad. He has appealed to the industry and the country in general to turn the crisis in the world economy into an opportunity to ensure that India comes out of the global crisis with its fundamentals unimpaired, protecting employment.

What gives confidence and strength to the Indian economy is its sound financial sector with its well-regulated and well-capitalised banking system, the sustained growth in deposit accretion and credit flows, and assured safety for depositors, the global competitiveness of its manufacturing and services, high savings and investment rates and a comfortable level of foreign exchange reserves which could be drawn to make up for any shortfalls in capital inflows.

The Finance Minister Shri P Chidambaram has urged banks to lower interest rates, in the light of the steps taken by RBI both on liquidity and interest rate, and several public sector banks have already announced plans on reducing their prime lending rates. Banks have been asked to increase credit for productive purposes and ensure credit quality. RBI has also suggested to banks to restructure the dues of small and medium enterprises on merits.

There is general expectation that inflation would continue to moderate - especially now that global prices of oil (though still volatile) and commodities have sharply declined from their high levels in the first half of 2008 - and RBI projects that the annual rate of inflation would be down to 7 per cent by March 2009. India can well maintain growth at not less than 7 to 7.5 per cent, as the Prime Minister pointed out, despite some adverse impact on trade and capital flows which all countries have begun to experience in these uncertain times. Even at 7.5 per cent, India will remain the second fastest growing economy.

Given the unsettled conditions in global markets, the Prime Minister has set up an high-powered group chaired by him to closely monitor the evolving macro-economic situation so that growth momentum is sustained at reasonable rates. A committee of senior officials would keep a day-to-day track of trends.

Monetary & Fiscal Measures: The Reserve Bank of India had vigorously moved in October to bring down the cash reserve ratio from a peak of 9 per cent to 5.5 per cent, reduce the key policy interest rate (repo) from 9 to 7.5 per cent and also the statutory liquidity ratio by one percentage point to 24 per cent of their net demand and time liabilities. These were all designed to inject massive doses of liquidity to the banking system which in any case has been recording a higher credit growth in the current year. Nevertheless, when there was some liquidity constraint experienced by money markets and the foreign exchange market also coming under demand pressures, RBI had to intervene with remedial measures.

As part of measures to minimise the adverse impact of global crisis on domestic economy, the Finance Minister has reduced certain duties to give relief to some of the affected sectors like steel and aviation. On the budgetary side, higher allocations for social sectors and rural employment and other flagship programmes should generate consumption which contributes to economy’s growth. Most corporates including in the I T sector and banks have managed to maintain profitability, though somewhat lower than expected, in the second quarter (July-September), and the recent government measures on liquidity and interest rates should help to sustain business confidence.

Monetary policy has moved away from continued tightening, in the days of inflation climbing during 2008, to a significant easing of curbs with the steady moderation in the annual rate of inflation after peaking at 12.65 per cent in August. It had since been coming down over recent weeks and stood at 10.72 per cent in the week ended October 25. While the fall in inflation rate has been facilitated by the sharp drop in global prices of oil, food and other commodities as well as domestic supply management, the oil market remains volatile. Taking crop prospects and other domestic factors into account, RBI continues its monetary policy stance of maintaining growth with price stability as well as orderly conditions in financial markets.

Macro-Economic Management: India has to summon all its abilities at macro-economic management because of the extraordinary global situation in which there is weakening of global demand and likely interruption in external capital flows. So far, there have been only ripple effects on the economy and exports in the first half of the fiscal year (April-September) have recorded a robust 35 per cent growth. But oil imports at higher prices have pushed up the import bill and trade deficit is widening. There was some ‘knock-on’ on financial markets but there is no longer any sign of liquidity tightening with the measures taken.

Many developing and leading emerging economies including China and Korea have come under strain and some of the poorer countries face risks of economic disruption because of fiscal and balance of payments difficulties. China’s growth, largely export-led hitherto, has also slowed down and it is reorienting its policies to promote greater domestic consumption with the weakening of external demand especially from USA and Europe due to recessionary conditions there. India’s exports can be maintained without loss of momentum in the latter half of the year with greater focus on products and growth markets, especially with the exchange rate which has depreciated in relation to the dollar.

While there has been an outflow of foreign portfolio investments of the order of 10 billion dollars, India continues to attract foreign direct investment which totalled an impressive 17.66 billion dollars in the first six months, April to September, compared to 7.25 billion in the corresponding period of last year. There has been some draw down on our reserves to meet imports and other payments. With its sound management and continued liberalisation, India continues to be an attractive investment destination, especially if investors have to seek avenues away from the recession-hit developed nations. (PIB Features)

*Freelance Journalist

Disclaimer : The views expressed by the author in this feature are entirely his own and do not necessarily reflect the views of PIB.

Rajnikant Patel joins Reliance Money

2008-11-07T03:06:00.000-08:00

MUMBAI: Reliance Money, part of the Reliance Anil Dhirubhai Ambani Group, has announced that Mr. Rajnikant Patel has joined the company as President – Exchange Business.

“We are very pleased with the induction of Mr. Patel in Reliance Money. We are sure that with his extensive experience of over 28 years in the financial market arena, Mr. Patel will play a critical role in our foray into the exchange space covering commodities and currencies. We are looking at both domestic and international opportunities at present,” said Mr. Sudip Bandyopadhyay, Director and CEO, Reliance Money.

Prior to joining Reliance Money, Mr. Patel was the Managing Director & CEO, Bombay Stock Exchange, where he was responsible for the corporatization and demutualization of BSE, making it a billion dollar institution.

An accomplished banker, Mr. Patel has also had a long stint with the banking regulator, Reserve Bank of India, besides being a part of MNC and PSU banks such as BNP Paribas, State Bank of Saurashtra and Bank of Maharashtra.

“I am very happy to be associated with Reliance Money, particularly for the vision, the scale and the speed of implementation. I believe there is a huge scope for an innovative, professional and committed approach in commodities, currency futures and related exchange space. I am very excited at the future possibility of value creation for all stakeholders in the financial system,” said Mr. Patel.

Mr. Patel was the longest serving Chairman of South Asian Federation of Exchanges (SAFE). He was also a member of the Working Committee of the World Federation of Exchanges (WFE). Mr. Patel has also been a part of various committees of SEBI, CII and others.

About Reliance Money
www.reliancemoney.com

Reliance Money, a part of the Reliance Anil Dhirubhai Ambani Group is a comprehensive financial services and solution provider, providing customers with access to Equity, Equity and Commodity Derivatives, Portfolio Management Services, Wealth Management Services, Mutual Funds, IPOs, Life and General Insurance and Gold Coins. Customers can also avail Loans, Credit Card, Money Transfer and Money Changing services.

The largest broking house in India with 2.7 million customers and a wide network of over 10,000 outlets and 20,000 touch points in 5,000+ locations. Reliance Money endeavors to change the way investors transact in financial markets and avails financial services. The average daily volume on the stock exchanges is Rs. 4,000 crores, representing approximately 4% of the total stock exchange volume.

Reliance Capital is one of India's leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking groups, in terms of net worth.

For details contact –
Mumbai Delhi
Tamanna Khanna Sanjiv Kumar
tamanna.khanna@relianceada.com sanjiv.k.sinha@relianceada.com
+91-9323609510 +91-9312456677
Concept Communications
B. N. Kumar
mailbnk@gmail.com
+91-9321048332

Repo rate cut, RBI warns of global recession trends

2008-11-01T01:08:00.000-07:00

MUMBAI: Announcing, further measures for Monetary and Liquidity Management, the Reserve Bank of India (RBI) today cut repo rate by 50 basis points. With this new repo rate stands at 7.5 per cent.

In its Mid-Term Review of the Annual Policy Statement for 2008-09, the Reserve Bank of India indicated that in the context of the uncertain and unsettled global situation and its indirect impact on our domestic economy and our financial markets, it would closely and continuously monitor the situation and respond swiftly and effectively to developments. In doing so, the Reserve Bank will employ both conventional and unconventional measures.

RBI noted that global financial conditions continue to remain uncertain and unsettled, and early signs of a global recession are becoming evident. These developments are being reflected in sharp declines in stock markets across the world and heightened volatility in currency movements. International money markets are yet to regain calm and confidence and return to normal functioning.

It was also indicated in the Mid-Term Review that the current challenge for the conduct of monetary policy is to strike an optimal balance between preserving financial stability, maintaining price stability and sustaining the growth momentum. Inflation, in terms of the wholesale price index (WPI), has been softening steadily since August 9, 2008 and has declined to 10.68 per cent for the week ended October 18, 2008.

Globally, pressures from commodity prices, including crude, appear to be abating. The moderation in key global commodity prices, if sustained, would further reduce inflationary pressures. On the growth front, it is important to ensure that credit requirements for productive purposes are adequately met so as to support the growth momentum of the economy, RBI said.

Domestic financial markets have been functioning normally. Prudent regulatory surveillance and effective supervision have ensured that our financial sector has been and continues to be robust. However, the global financial turmoil has had knock-on effects on our financial markets; this has reinforced the importance of focusing on preserving financial stability,

The Reserve Bank has reviewed the current and evolving macroeconomic situation and liquidity conditions in the global and domestic financial markets. Based on this review, it has decided to take the following further measures:

(i) On October 20, 2008, the Reserve Bank announced a reduction in the repo rate under the Liquidity Adjustment Facility (LAF) by 100 basis points from 9.0 to 8.0 per cent. In view of the ebbing of upside inflation risks as also to address concerns relating to the moderation in the growth momentum, it has been decided to reduce the repo rate under the LAF by 50 basis points to 7.5 per cent with effect from November 3, 2008.

(ii) The cash reserve ratio (CRR) of scheduled banks is reduced by 100 basis points from 6.5 per cent to 5.5 per cent of net demand and time liabilities (NDTL). This will be effected in two stages: by 50 basis points retrospectively with effect from the fortnight beginning October 25, and by a further 50 basis points prospectively with effect from the fortnight beginning November 8, 2008. This measure is expected to release around Rs.40,000 crore into the system.

(iii) On September 16, 2008, the Reserve Bank had announced, as a temporary and ad hoc measure, that scheduled banks could avail additional liquidity support under the LAF to the extent of up to one per cent of their NDTL and seek waiver of penal interest. It has now been decided to make this reduction permanent. Accordingly, the Statutory Liquidity Ratio (SLR) will stand reduced to 24 per cent of NDTL with effect from the fortnight beginning November 8, 2008.

(iv) In order to provide further comfort on liquidity and to impart flexibility in liquidity management to banks, it has been decided to introduce a special refinance facility under Section 17(3B) of the Reserve bank of India Act, 1934. Under this facility, all scheduled commercial banks (excluding RRBs) will be provided refinance from the Reserve Bank equivalent to up to 1.0 per cent of each bank's NDTL as on October 24, 2008 at the LAF repo rate up to a maximum period of 90 days. During this period, refinance can be flexibly drawn and repaid.

(v) On October 15, 2008 the Reserve Bank announced, purely as a temporary measure, that banks may avail of additional liquidity support exclusively for the purpose of meeting the liquidity requirements of mutual funds (MFs) to the extent of up to 0.5 per cent of their NDTL. A similar facility of liquidity support for non-banking financial companies (NBFCs) is also found to be necessary to enable them to manage their funding requirements. Accordingly, it has now been decided, on a purely temporary and ad hoc basis, subject to review, to extend this facility and allow banks to avail liquidity support under the LAF through relaxation in the maintenance of SLR to the extent of up to 1.5 per cent of their NDTL. This relaxation in SLR is to be used exclusively for the purpose of meeting the funding requirements of NBFCs and MFs. Banks can apportion the total accommodation allowed above between MFs and NBFCs flexibly as per their business needs.

(vi) As indicated in the Reserve Bank's press release of September 16, 2008, as on some previous occasions, the Reserve Bank will continue to sell foreign exchange (US dollar) through agent banks to augment supply in the domestic foreign exchange market or intervene directly to meet any demand-supply gaps. The Reserve Bank would either sell the foreign exchange directly or advise the bank concerned to buy it in the market. All the transactions by the Reserve Bank will be at the prevailing market rates and as per market practice. Entities with bulk forex requirements can approach the Reserve Bank through their banks for this purpose.

(vii) It has been decided, as a temporary measure, to permit Systemically Important Non-Deposit taking Non-Banking Financial Companies (NBFCs-ND-SI) to raise short- term foreign currency borrowings under the approval route, subject to their complying with the prudential norms on capital adequacy and exposure norms. Details in this regard have been notified separately and are available on the Reserve Bank's web site.

(viii) Under the Market Stabilisation Scheme (MSS), Government Securities (treasury bills and dated securities) have been issued to sterilise the expansionary effects of forex inflows. In the context of forex outflows in the recent period, it has been decided to conduct buy-back of MSS dated securities so as to provide another avenue for injecting liquidity of a more durable nature into the system. This will be calibrated with the market borrowing programme of the Government of India. The securities proposed to be bought back and the timing and modalities of these operations are being notified separately.

The Reserve Bank will continue to closely monitor the developments in the global and domestic financial markets and will take swift and effective action as appropriate, an official communiqué said.

R Money's Sudip on Wall Street Fin board

2008-10-30T02:43:00.000-07:00

Mumbai: Wall Street Finance today announced its un-audited financial results for the quarter ended September 30, 2008. The performance highlights are:

• Operational Review for the Quarter ended September 30, 2008

• Total income of Rs. 929.45 lakhs, against Rs. 713.78 lakhs in the corresponding period, an increase of 30.22 per cent

• Net profit of Rs. 24.67 lakhs, against Rs. 9.73 lakhs in the corresponding period, an increase of 153.55 per cent

The Company also inducted Mr. Sudip Bandyopadhyay, Director & CEO, Reliance Money,Mr. S. P. Talwar, Retired Deputy Governor, Reserve Bank of India and Mr. Rajnikant Patel,Ex-Executive Director & CEO, Bombay Stock Exchange on its Board.

"We are very pleased with this strategic tie-up with Reliance Money Express. We strongly believe that this tie-up will help us build on synergies and propel our recently launched Investment Services further,” said Mr. Areef Patel, Vice Chairman, Wall Street Finance Ltd.

“I am pleased to join the Wall Street Finance Board. We are confident that this association will capitalise on the strength of both Reliance Money Express and Wall Street Finance, paving the way for a new chapter in the financial services sector in the country,” said Mr. Bandyopadhyay, newly inducted Director of Wall Street Finance.

About Wall Street Finance Ltd.

Wall Street Finance Ltd. (WSFL) was set-up in 1986 as a Public Limited Company and is today a leader in Foreign Exchange and Money Remittance services in the country. The Company has a market capitalisation of approximately Rs. 40 crore and a 3-year dividend track record. It is the only deposit-taking NBFC (D) that also has an Authorised Dealer-II licence. This prestigious licence has been issued to the Company based on its 15-year-old track record in the field of foreign exchange as well as strict compliance policies adopted by the Company. This has now opened a large market for the Company, in the field of foreign exchange, which was earlier restricted to banks. The Company is now able to offer Outward Remittance Services for a wide range of activities. To capitalise on the huge opportunity in both Inward and Outward Remittance, WSFL is expanding its network by opening more branches across the country.

The Company is one of the principal agents of Western Union Money Transfer and operates over 3500 locations for Money Transfer. It has now got into Investment Services as a distributor of various Wealth Management Products of Reliance ADAG.

India gets set for Mumbai, Kolkata coastal floods

2008-10-29T23:55:00.000-07:00

Climate change could result in Kolkata and Mumbai being amongst the top ten port cities of the world exposed to coastal flooding in 2070, with an exposure of estimated 2.54 crores of people and assets worth US$3.85 trillion. A coastline of about 7,500 kms will be at risk in the country due to coastal flooding that may occur as a result of climate change in 2070.

This has been stated in a global study conducted by the Organization for Economic Cooperation (OECD) in 2007 on ‘Ranking Port Cities with High Exposure and Vulnerability to Climate Extremes’. The report notes that those cities with greatest population exposure to extreme sea levels also tend to be those with greatest exposure to wind damage from tropical and extra tropical cyclones. The report has attempted to estimate the exposure of the world’s large port cities to coastal flooding due to sea level rise and storm surge.

According to the projections made in the Report, The study also claims that the top ten port cities with highest exposure to wind damage are also among the top twenty port cities exposed to present-day extreme sea levels. As per the Report, the risk of impact from the exposure to coastal flooding can be reduced through a range of adaptation strategies including flood and wind protection measures, effective disaster management strategies, and land use practices

According an official release, the Indian Government, on its part, has decided to take concrete steps and measures to meet the challenge of climatic change. It has been implementing various adaptation related programmes in the process of planned economic development. Specific measures taken include coastal protection infrastructure and cyclone shelters, plantation of coastal forests and mangroves. Further, in coastal regions, restrictions have been imposed in the area between 200m and 500m of the high tide line while special restrictions have been imposed in the area up to 200 m to protect the sensitive coastal ecosystems and prevent their exploitation.

The National Action Plan on Climate Change (NAPCC) which was released on 30th June 2008 outlining the strategy to meet the challenge of Climate Change. The National Action Plan advocates a strategy that promotes, firstly, adaptation to Climate Change and secondly, further enhancement of the ecological sustainability of India’s development path. The Action Plan envisages, among many other actions, effective disaster management strategies, strengthening communication networks and disaster management facilities at all levels and protection of coastal areas through focusing on coastal protection and early warning systems.

Indian economy at point of inflexion, RBI sounds alarm bells

2008-10-24T01:38:00.000-07:00

There is increasing evidence that the US slowdown is spreading via the trade and financial channels.

MUMBAI:The reserve Bank of India today sounded alarm bells on the state of the country’s economy.

Starting that aggregate supply conditions in the Indian economy have shown resilience in the second quarter of 2008-09 in the face of a deteriorating global macroeconomic and financial environment, the Central Bank said: “There are, however, growing indications that the underlying economic cycle is turning in tune with global economic developments and that domestic economic activity is straddling a point of inflexion.”
The highlights of the overall assessment as presented in the mid-year review by RBI Governor D Subbarao are:

• Aggregate demand conditions continue to be mainly investment-driven, although some slackening which set in during the first quarter of 2008-09 appears to have become broad based.
• Reflecting the aggregate demand pressures, key monetary and banking aggregates – money supply, deposit and non-food credit growth – have been expanding during the year so far at rates that are significantly elevated relative to indicative trajectories given in the Annual Policy Statement of April 2008.
• The developments in monetary conditions resulted in a tightening of liquidity conditions in domestic financial markets through the second quarter of 2008-09.
• Signs of deterioration in the fiscal situation appear to be adding to aggregate demand pressures in the economy.
• Domestically, imported inflation pressures have been keeping headline inflation at elevated levels with considerable uncertainty as to where it will peak and when.
• Since the First Quarter Review of July 2008, global economic prospects have weakened further. The global economy is facing the deflationary effects of the financial crisis. There is increasing evidence that the US slowdown is spreading via the trade and financial channels.
• The outlook for the emerging economies remains positive, but uncertainties about their resilience to the global shocks have increased.
• The international financial system is gripped by extreme risk aversion in the wake of spectacular failures among the world's largest financial institutions, including several credited with history and tradition.
• Conditions in global financial markets have worsened with the freezing of inter-bank markets in US and Europe necessitating massive liquidity injection facilities from central banks in these economies, reduction of policy rates, recapitalisation of troubled private banks by governments, coordinated action by European governments to bail out weak banks and guaranteeing of all deposits in the banking system in many countries.
• In the overall assessment, global economic conditions have worsened and the future path of their evolution has turned highly uncertain. The broadening slowdown of economic activity in the advanced economies is beginning to impact the macroeconomic prospects of emerging economies, with those reliant on exports and on international financial markets for external financing needs likely to be the most vulnerable. Inflation remains elevated and a key risk to global economic prospects.
Details of the RBI review can be accessed at: http://rbi.org.in/scripts/Annualpolicy.aspx

Smooth landing for airlines

2008-10-22T05:08:00.001-07:00

Praful meets Deora, gets EMI breather on fuel bills

NEW DELHI:In view of the financial crisis being faced by the Indian airlines industry, the Minister for Civil Aviation, Shri Praful Patel today met the Minister for Petroleum and Natural Gas, Shri Murli Deora. Senior officials of Ministry of Civil Aviation, Ministry of Petroleum and Natural Gas, the oil PSUs and representatives of the airlines industry were also present.

It was decided at the meeting that:

• A 90 days credit period will be given by the oil companies to the airline companies up to 31 March, 2009 following which the situation will be reviewed to pay their credit.

• The airlines industry can pay their present cumulative outstanding credit in 6 monthly installments by 31 March, 2009.

• The ATF prices will be revised every 15 days to be at par with the world market prices. This is in view of the fluctuation prices of crude oil in the international market.

In view of the support extended to the airline industry by the Government and the oil PSUs, the airlines were asked to refrain from any retrenchment of staff. At the meeting it was also clarified that the national carrier Air India was not laying of any employee. The CMD, NACIL assured that the company had no plan of retrenchment of any of their employees.

The Indian airline industry representatives have expressed their satisfaction to the Minister for Petroleum and Natural Gas and Minister for Civil Aviation for their initiative in providing relief to the sector.

Smooth landing for airlines

2008-10-22T05:08:00.000-07:00

Praful meets Deora, gets EMI breather on fuel bills

NEW DELHI:In view of the financial crisis being faced by the Indian airlines industry, the Minister for Civil Aviation, Shri Praful Patel recently met the Minister for Petroleum and Natural Gas, Shri Murli Deora. Senior officials of Ministry of Civil Aviation, Ministry of Petroleum and Natural Gas, the oil PSUs and representatives of the airlines industry were also present.

It was decided at the meeting that:

• A 90 days credit period will be given by the oil companies to the airline companies up to 31 March, 2009 following which the situation will be reviewed to pay their credit.

• The airlines industry can pay their present cumulative outstanding credit in 6 monthly installments by 31 March, 2009.

• The ATF prices will be revised every 15 days to be at par with the world market prices. This is in view of the fluctuation prices of crude oil in the international market.

In view of the support extended to the airline industry by the Government and the oil PSUs, the airlines were asked to refrain from any retrenchment of staff. At the meeting it was also clarified that the national carrier Air India was not laying of any employee. The CMD, NACIL assured that the company had no plan of retrenchment of any of their employees.

The Indian airline industry representatives have expressed their satisfaction to the Minister for Petroleum and Natural Gas and Minister for Civil Aviation for their initiative in providing relief to the sector.

Indian economy resilient, says PM

2008-10-22T01:05:00.001-07:00

TOKYO: Prime Minister Dr. Manmohan Singh today said that India would emerge stronger from the current “great turbulence in the world economy”.

“The short-term outlook is somewhat cloudy but I am confident that the Indian economy has the resilience to sustain its growth momentum in the medium run. We hope to build on India’s many inherent strengths as an emerging market economy that is now ready for rapid and sustained growth,” he said addressing the Business Luncheon hosted by Nippon Keidanren in Tokyo today.

“Over the past four years, we have averaged 9% GDP growth per year. It looks like slowing down in the current year because of conditions in the global economy. But, once normalcy returns, we can and we are determined to regain the 9% growth trajectory. We have a tradition of a high rate of domestic savings averaging 35% of our GDP. This is like most Asian countries, and we also have a strong and a dynamic private sector,” he said.

Speaking on "India-Japan Economic Relations in the 21st Century", the Prime Minister said: “We meet at a time of great turbulence in the world economy. The international financial crisis, which still continues, has revealed the extra-ordinary vulnerability of the global financial system even in the industrialized world. The crisis has choked credit flows and predictably spilled over to the stock market. We have to prevent the liquidity crisis from becoming a crisis of confidence in the international monetary and financial system.”

He pointed out that the Governments and central banks of the major economies have taken strong and even innovative steps to deal with the crisis. The global nature of the crisis calls for a coordinated global response. Developing countries like India are also affected by the crisis and have to be part of the solution. “We cannot afford to risk the gains we have made in the last few years. Nor do we wish to remain vulnerable to infirmities in international surveillance, supervision and regulatory mechanisms in the future,” he said.

The government has taken several measures in India in the last few weeks to ensure adequate liquidity and confidence in our financial system. The fundamentals of Indian economy have been and continue to be strong. The country’s banking system is well capitalized. “But, we have experienced a shrinking of liquidity and we are responding by injecting additional liquidity to ensure that the rhythm of economic activity is not disrupted. The Reserve Bank of India stands ready to respond quickly to address the emerging needs of our economy,” Dr Singh said.

Anything for infra, says Indian Govt

2008-10-18T04:23:00.000-07:00

To invest whopping Rs 20,00,000 crores in current plan period

CHENNAI: Union Minister of Shipping, Road Transport and Highways,T.R. Baalu has said that the Union Government is committed to improve the infrastructure of the country to meet the growing needs of the economy.

Presiding over the signing ceremony of the Memorandum of Understanding between the Ennore Port Ltd and Nissan Motor (India) Pvt Ltd for export of Cars through Ennore Port in Chennai today, Mr Baalu said that the country’s economy is poised to take a great leap and to give the economy a big boost, Government has planned to give an impetus to infrastructure development.

He said that over Rs. 20,00,000 crore (20 lakh crore) would be invested during the five years of 11th five year plan for the infrastructure development out of a total investment of over Rs. 36,00,000 crore (36 lakh crore) which is 56.4% of the total investment.

Thiru Baalu said that the Department of Shipping has launched the National Maritime Development Policy (NMDP), which has put the port sector in India in an overdrive mode during the past 4 years. He said that the capacity of major ports stood at 384.5 million tonnes in March 2004 and it has leaped forward to 532 million tonnes as on March 2008, representing a 36% growth in capacity in the last four years. Likewise, the traffic through the major ports went up from 344.79 million tonnes in 2003-04 to 519.23 million tonnes in 2007-08, registering an impressive growth of 51%, the Minister added.

He informed that the NMDP comprises of 387 projects involving a total investment of Rs.1,00,339 crores (approximately US $ 21 billion). Out of this, Rs.55,804 crores (approximately US $ 12 billion) is for the Port sector and the balance Rs.44,535 crores (approximately US $ 9 billion) is for the Shipping and Inland Waterway Transport sectors with the target of completion by 2011-12. Thiru Baalu said that Tamil Nadu’s Gross State Domestic Product (GDP) for 2007 is estimated at Rs.2,75,000 crore which comes to 9.50% per year and which is in line with the national growth of 9.08%. He said that keeping in view the pace of development in the State in last few years, as also the glorious maritime history, a total of Rs.13,284 crores has been allocated by the Department of Shipping, Government of India to Tamil Nadu for the development of the three major ports, namely, Ennore, Chennai and Tuticorin. This translates to around 23.80% of the total NMDP investments. Of this, Ennore Port’s share at Rs.6,466 crores alone is nearly half of that for Tamil Nadu at 11.59% of the NMPD allocation for the 12 Major Ports.

Commending the performance of the Ennore Port, which is the first corporate port of the country, the Minister said that though youngest, the Port has embarked on the ambitious programme under Phase-I of the NMDP to develop various projects at an estimated cost of Rs.2,700 crore. The total investment by private partners through the BOT projects is around Rs.1100 crore and apart from this, the Ennore Port is investing Rs.300 crore in connectivity and harbour deepening projects, the Minister informed.

He also commended the Ennore Port for taking up the major initiative to facilitate export of Cars in pursuit of which, the EPL and Nissan Motor (India) have signed an MOU today. He hoped that the project would be completed on time and the export of cars would commence immediately after commissioning of the Nissan’s upcoming Car Plant at Oragadam, near Chennai.

Thiru Baalu added that Ennore Port along with Chennai Port would be a catalyst in making Chennai the Detroit of Asia by facilitating seamless exports and imports, and it would be the Engine of industrial and economic development of not only Tamil Nadu but also its hinterland in the other Southern States. (PIB)

Golden Era: Indian post offices to sell gold coins

2008-10-15T00:52:00.000-07:00

NEW DELHI:Indian Post Offices have started selling 24 carat gold coins from today.

The sale will be available in over 100 India Post outlets in Delhi, Tamil Nadu, Maharashtra and Gujarat in the pilot phase. The gold coins are in the popular denomination of half gram, one gram, 5 grams and 8 grams. The prices of these coins will be competitive based on the prevailing prices of gold.

Launching the service in Delhi, Communications and IT Minister A. Raja directed the Department of Post to take the gold coins to rural post offices so that the benefit goes to the common man. He announced that the sale will gradually extend based on public response. He said, during Phase-II of the project, Post Offices will be selling gold coins with India Post logo.

India Post has launched this pioneering venture in association with World Gold Council and Reliance Money. World Gold Council will help market the Swiss Medallions supplied by Reliance Money, making it available to Indian consumers through Post offices in a convenient and cost effective manner. The gold coins will be packed in a sealed cover with the certification from Valcambi, Switzerland. It has the benefits like internationally recognized certification, low risk of duplication, quality packaging, product standardization, numbering and assayer certificate.

Mr Raja observed that the Post office, known for its trust and reliability, will serve as an ideal location for the people to buy quality gold coins. He said, India Post will continue to maximize the network, by making the post office a one stop shop for communication, distribution and retail solutions. Mr. Raja said, the time has come for India Post to boldly venture into new services that will make the Post office as the hub for various businesses.

Gold is the latest addition to a range of retail activity that India Post has already taken up. India Post has been selling various products under Retail Post category and there is sustained growth in the revenue from these activities. Post Office sells UPSC applications and university applications, it retails Darjeeling Tea in West Bengal, it markets Aloe Vera products in Gujarat and it takes orders for distribution of Prasadams of various temples in Andhra Pradesh and Kerala. Apart from enhancing the revenue of the Department, this will enable India Post to usher in a new image of India Post as a modern and relevant organization to the public in all areas of life.

The Minister of State for Communications & IT, Mr. Jyotiraditya M. Scindia, who was the guest of honour at the launch ceremony, declared that this pilot project on the sale of gold coins would be a beginning of many more such retail services that India Post will undertake. He said, the venture reinforces India Post’s dedicated service to the ordinary Indian.

Speaking on World Gold Council’s association with India Post, Mr. Ajay Mitra, Managing Director of the Council, said, “Retailing gold through India Post is a ground-breaking initiative in the Indian investment sector and one of its kind in the world”. Mr. Sudip Bandyopadhyay, Director and CEO, Reliance Money, said, “We want to take the culture of structured investments in gold to the masses through India Post and provide gold at impeccable quality, quantity and price points”.

Anil Ambani's Reliance Money buys stake in HK exchange

2008-10-14T03:07:00.001-07:00

First Indian firm to acquire a stake in an international exchange
Becomes the second largest shareholder in HKMEx
Reliance Money to get a seat on the HKMEx board
Mumbai, October 14, 2008: Reliance Money, part of the Reliance Anil Dhirubhai Ambani Group, has acquired a 15 per cent stake in Hong Kong Mercantile Exchange (HKMEx). With this holding, Reliance Money becomes the second-largest shareholder in the commodity exchange and will have a board membership. Reliance Money is the first Indian firm to acquire a stake in an international exchange.

"Even as Asia has emerged as a key market for global commodities, the region does not have a strong commodity exchange. We believe that our deal with HKMEx will help us capitalise on the growing demand for commodities in this region," said Mr. Sudip Bandyopadhyay, Director and CEO, Reliance Money.

Reliance Money has recently received approval from the FMC and Ministry of Consumer Affairs for acquiring 10 per cent stake in domestic National Multi-Commodity Exchange of India. It plans to up this stake to 26 per cent.

"We plan to build synergies between both the exchanges thereby leveraging on the growth potential of commodity trading in India, China and the rest of Asia," added Mr. Bandyopadhyay.

HKMEx proposes to start trading in the first quarter of 2009 and will kick-start its operations by offering dollar-denominated oil contracts. It would also diversify into other commodities going forward.

Banish Fear, says Indian FM

2008-10-13T00:43:00.000-07:00

NEW DELHI, October 13, 2008: Indian Finance Minister P. Chidambaram today declared that “we must banish fear”.

Making a statement on the ongoing crisis in the financial markets, Mr Chidambaram said: We must remain confident and respond to the situation in a cool and mature manner. We must banish fear. Especially, depositors have nothing to fear because their deposits in banks are safe.”

He said: “Investors must take informed decisions. Before you sell, you must remember that for every seller there is a buyer. You must ask yourself why the buyer is buying in these times of perceived uncertainty and, therefore, ask yourself the further question whether there is a need to act in haste or in panic. In my view, there is no reason at all to act in haste or to give room for panic.”

“If all the players in the economy remain confident and take informed decisions, I have no doubt that the Indian economy will weather the current storm and emerge stronger.,” he said.

Pointing out that “this is a time of uncertainty,” he said: “Yet, even in a time of uncertainty there are some facts that cannot be – and ought not to be – ignored.”

The Indian economy continues to grow at a satisfactory rate. As recently as last week, the IMF’s research department (Mr. Oliver Blanchard) noted that “the Indian economy would continue to do well despite the impact of the global liquidity crunch.” As per projections made by the IMF, India is expected to post a GDP growth of 7.9 per cent during the current fiscal year.

The stock market indices are important indicators, but they are not the only indicators of the health of the Indian economy. The ratio of investment to GDP remains high at over 35 per cent at the end of the first quarter of 2008-09. The monsoon has been normal; the Kharif crop (especially rice and cotton) has been good; farmers are sowing their fields; and the prospects for the Rabi crop are bright. Factories continue to produce goods and the services sector is growing at a brisk rate, he said.

“Crude oil and commodity prices have declined sharply. This is expected to have a beneficial effect on inflation.

“The root cause of the present uncertainty is liquidity and not any dramatic change in the fundamentals of the economy. According to RBI figures, as on 26th September, 2008, non-food credit increased, year-on-year, by 24.8 per cent. Between April and 26th September, non-food credit grew by 7.8 per cent. Time and demand deposits with banks grew, year-on-year, by 18.8 per cent and, between April and 26th September by 7.2 per cent. I am happy that depositors continue to repose their confidence in the health of our banking system.

“Nevertheless, liquidity was found to be inadequate and, consequently, lenders were unwilling to take risks. Some lenders and investors faced redemption pressures leading to a sale of assets, especially stocks. The markets that are bearing the brunt of the problem are the capital market and the money market and, to an extent, the foreign exchange market. These problems can be overcome if adequate liquidity is infused into the system.

“Accordingly, RBI has taken measures that have infused an additional Rs.60,000 crore into the financial system. The LAF also provides liquidity and, as on 10th October, 2008, Rs.91,500 crore had been accessed by banks through the LAF window. We believe that these steps should ease the liquidity situation and the flow of credit should become smoother, relieving the pressures that had built up in the last two weeks.

“Government, RBI and SEBI have been in close consultation with each other during the weekend. I have spoken to the Governor, RBI and Chairman, SEBI several times in the last two days. We are coordinating our actions. We are watching the situation carefully and we will respond swiftly according to the needs of the situation. We are working on more measures that will infuse liquidity, make credit intermediation smoother, and increase the confidence of depositors and investors. We hope to be able to announce them shortly.

“Our banks are ready and willing to provide credit. Suitable advisories are being issued to the banks.

Over the weekend, the US, UK, Euro zone and Australian authorities have announced a number of measures to stabilize the financial system. The Australian capital market and three of the East Asian capital markets have opened on a bright note this morning. I expect that our capital market will also take its cue from these positive developments.”

India continues to be tourist destination

2008-10-11T00:32:00.001-07:00

Tourism sector in India continues to witness encouraging trends despite the fears of global economic slow down. The foreign tourist arrivals to India have touched 3.87 millions by September 2008, which is an increase of 10.4% over corresponding period of previous year. While the percentage increase in foreign tourist arrivals of 2007 over 2006 for the month of September was only 1.3%, the increase in 2008 has been as high of 9.6%, according to data available with the Press Information Bureau (PIB)

The foreign exchange earnings to India in tourism sector in rupee terms has touched 36,464 crores by September, which is a 17.8% increase over previous year for the corresponding period while the increase in 2007 over 2006 for the same period was 13.7%. Interestingly in September 2007, there was a negative growth of foreign exchange earnings over 2006. However, the trend has been reversed and there has been 21.2% increase in FE earnings in September 2008 as compared to 2007.

India continues to be a long duration and high spending destination for foreign travelers. This is quite evident from the statistics received through the UNWTO World Tourism Barometer, which indicate that the foreign exchange earnings per foreign traveler coming to India has been US $ 2112 in the year 2007, which is more than twice the foreign exchange earned per foreign traveler worldwide (which is US $ 948) as well as Asia Pacific (which is US$ 1027). In fact, most of the major Asian countries like China, Japan, Indonesia, Malaysia, Singapore and Thailand much less foreign exchange earned per foreign traveler as compared to India.

The resilience of Indian tourism sector is also evident from the fact that while the growth rate of foreign tourist arrivals worldwide has been 5% in 2008 and the average growth rate of Asia Pacific has been 6.9%, the foreign tourist arrivals to India have grown at a rate well above 10%.

Foreign Tourist Arrivals (FTAs) and Foreign Exchange Earnings (FEE) from Tourism in India during September 2008 and comparative figures of 2006 and 2007

Can India survive the global financial crisis? Yes, says World Bank

2008-10-11T00:08:00.001-07:00

Finance Minister P Chidambaram sought to draw the attention of the business community to the fact that Mr. Robert Zoellick, President, World Bank, has said that “India is in a position to weather the global financial turmoil.”

The Minster, in a statement in New Delhi on Friday, also said: “I also wish to draw attention to the statement of Mr. H. Kuroda, President, ADB that the impact on the financial sector in Asia is limited this time.
Credit is the lifeline of trade, commerce and business and, hence, it is important that credit continues to flow to all sectors of the economy. In consultation with RBI and other regulatory authorities, Government will address the liquidity and other concerns about the economy, he said..

“It is also important to maintain our confidence in the Indian economy. As the Cabinet noted on Wednesday, the fundamentals of our economy are strong and there are many indicators which affirm the sound fundamentals,” Mr Chidambaram added.

Newlook NMCE gets brand new corporate identity

2008-10-08T03:00:00.000-07:00

The new identity was unveiled by Shri. B. C. Khatua, IAS, Chairman, Forward Markets Commission

Mumbai, October 8, 2008: National Multi-Commodity Exchange of India Ltd. (NMCE), the country's first online demutualised, multi-commodity exchange, unveiled its new identity today. The new identity was unveiled by Shri. B. C. Khatua, IAS, Chairman, Forward Markets Commission

Mr. Kailash Gupta, Managing Director, NMCE and Mr. Sudip Bandyopadhyay, Director, NMCE were also present on this occasion.

The unveiling of the new identity, comes at the back of NMCE receiving approval from the Ministry of Consumer Affairs for Reliance Money’s proposed acquisition of stake in the exchange.

Mr. B.C. Khatua, while unveiling the new identity wished NMCE all the very best and stated, “The new corporate identity is not a mere change in the logo but a reflection of the inner change in approach and mindset to take upon new challenges to be a vibrant and leading Commodity Exchange of the future.”

“It was important for us to review what our members and clients think of the exchange. The objective has been to make it contemporary, forward looking and relevant. In addition to launching a new identity, we have also moved our Corporate Office to Mumbai, and are looking at recruitments at various levels to further strengthen our management,” said Mr. Kailash Gupta, Managing Director, NMCE.

The exchange’s current logo is being replaced with a new and bold looking ‘NMCE’ written in red with three red and blue arrows on its top right hand side, signifying continuous forward movement.

“With a renewed focus on growth, NMCE is aggressively looking at not only revamping the entire working of the exchange but also changing the way the exchange is looked at. We not only plan to expand our membership network and commodity base offered, but also plan to reach out to the huge investor base in the commodity space through various new schemes and tie-ups,” said Mr. Sudip Bandopadhyay, Director, NMCE.

The exchange through its new identity is defining itself as one which has a bold outlook towards the future. The colour ‘Red’ in the logo depicts dynamism and an innovative approach to continuously be on the look-out for newer opportunities in today’s ever changing business environment; while the colour ‘Blue’ which stands for depth, denotes the trust and faith of its members, clients and all other stakeholders.

NMCE is the country's first online de-mutualised, multi-commodity exchange with a nationwide reach. It not only revived futures trade electronically in the commodities in India after a gap of 41 years but also integrated the centuries old commodity market with the latest technology. NMCE has 300 members with more than 30,000 clients and is present across 14 states in India.

The launch of the new corporate identity comes at a time when the exchange is preparing to announce a series of exciting business initiatives, such as starting an agri-spot exchange and launching of currency futures amongst others. The new identity is sure to kick-off a fresh chapter not only for NMCE but also the Indian commodities markets.

About National Multi-Commodity Exchange of India
www.nmce.com

The National Multi-Commodity Exchange (NMCE) was launched on November 26, 2002 as the country's first online demutualised, multi-commodity exchange with nationwide reach. It is promoted by the country's largest warehousing corporation CWC along with NAFED - the country's apex body of marketing cooperatives, Punjab National Bank, the second largest public sector bank and the Government of Gujarat. NMCE not only revived futures trade electronically in commodities in India after a gap of 41 years, but also integrated the centuries old commodity market with the latest technology.

NMCE offers an electronic platform for futures trading in plantation, spices, food grains, non-ferrous metals, oilseeds and their derivatives and is backed by compulsory delivery based settlement to ensure transparent and fair trade practices. It is the first to introduce efficient clearing and settlement system backed by adequately capitalised corporate brokerage houses in commodities with sound and reliable transferable warehouse receipt system, using appropriate communication channels.

For further details –
Poonam Gupta NMCE +91-9825017610
B. N. Kumar Concept Communication +91-9321048332mailbnk@gmail.com

Big demand for Hindalco Rights renunciations: Trading worth Rs 450 cr

2008-10-07T02:51:00.000-07:00

• Hindalco Rights record: Rs 450 cr worth Renuniciations traded.
• Issue closes on Friday
• In every rights issue, share holders have two options - either accept the rights offer or renunciate.
• Each renunciation shows that there is a buyer.
• In case of Hindalco, the transactions show that the volume of renunciation is almost 48 million shares. This means that there is a strong demand for as many shares. Yesterday was the last day for renunciations.
• Obviously, these are the buyers who have faith in the company.
• This points also reiterates that the Hindalco Rights issue - the largest rights issue in the country - is garnering good support.
• The GDR segment is already subscribed to the extent of 99.3 per cent.
• Merchant bankers have already underwritten 40% and promoters have announced they will buy 50% of the rights issue.

You just Kan't beat Rajni!

2008-10-04T03:00:00.000-07:00

Rajni is unbeatable! The latest viral in circulation www.bosskaboss.com proves this. Check it out!

Hindalco rights gets overwhelming GDR response

2008-09-30T05:33:00.000-07:00

MUMBAI, September 30, 2008:The right offer to the company's GDR holders is subscribed to the extent of 99.30%.

The GDR entitlement was to the tune of 56.42 million shares, against which the subscriptions came in for 56.03 million shares.
• India's largest rights issue by Kumar Mangalam Birla promoted Hindalco is all set to sail through with the merchant bankers and FIs committing to subscribe.
• Market sources say the merchant bankers have committed to pick up 40% while FIs – LIC and GIC – agreed to pick up 15%. The promoters have already decided to buy 50% of the rights issue shares.
• Hindalco has come out with 525,802,403 equity hares with a face value of Re 1 each at a premium of Rs 95 per equity share.
• The issue size works out to Rs 5047.7 crores.
• Issue opened on September 22 and will close on October 10.
• The lead managers to the issue are: ABM AMRO Securities (India) Private Ltd, Citigroup Global Markets India Private Ltd, Deutsche Equities India Private Ltd, DSP Merrill Lynch, and SBI Capital Markets Ltd.
• Heavy demand of the Renunciation of the Rights – volume in excess of 14 million as of yesterday

Sahara clears confusion about NBFC

2008-09-12T23:10:00.000-07:00

Statement of Mr. Abhijet Sarckar, Head - Corporate Communications, Sahara India Pariwar -

"Sahara India Investment Corporation Limited (A NON DEPOSIT TAKING Non Banking Finance Company) has voluntarily surrendered the license to act as a NBFC. The Management has decided to carry out real estate business in the said Company.

The above Company is distinct from Sahara India Financial Corporation Limited, which is a Residuary Non Banking Company involved in the business of Para Banking that is deposit mobilisation.

This statement is issued for the reason that some news channels out of confusion have wrongly and baselessly circulated a news about our Parabanking activity. "

IDBI Fortis launches branches in Udaipur & Jaipur

2008-09-11T23:52:00.000-07:00

 Presents a suite of investment options with guaranteed returns
 National footprint to cover 100 branches with 29 in Northern India

Jaipur, September 11, 2008: IDBI Fortis Life Insurance Co Ltd, which has embarked on an aggressive drive to open 100 branches across the country during this fiscal, has formally launched their branches in Udaipur & Jaipur.

The company plans to set up 4 more branches in the Rajasthan, apart from the Udaipur branch launched yesterday and Jaipur today.

“With the changing lifestyles, more and more people want to invest their money for long term wealth building. We hope to target this segment with our unique wealth-building products that will help their money grow by protecting it from unforeseen circumstances” said Ms Mallika Vyas, Head – HR, IDBI Fortis Life Insurance Co Ltd.

The Jaipur branch is located at Bhagwan Dass Road, while the one at Udaipur is at Old Station Road.

IDBI Fortis Life Insurance is a recently launched joint-venture of IDBI, India’s premier development and commercial bank, Federal Bank, one of India’s leading private sector banks and Fortis, Europe’s banking and insurance giant.

The company launched operations in March this year, leading with their innovative concept ‘Wealthsurance’. WealthsuranceTM is a first of its kind combination of comprehensive investment choices, protected by powerful insurance options, all presented with a reasonable charge structure, making it a one stop solution to a customer’s wealth building plans. WealthsuranceTM offers investment choices such as Guaranteed Return Fund, Capital Guaranteed Fund, Monthly Interest Account, Equity Funds, Debt Funds etc. ensuring that the customer would find all his investment requirements satisfied with this one powerful product. The powerful insurance benefits of WealthsuranceTM ensure that a customer’s wealth plan is not affected by unforeseen events that may strike them.
“Rajasthan is popular not only for its rich cultural heritage and unique customs but as a business state with flourishing tourism and handicrafts industries. We at IDBI Fortis see a major opportunity in Rajasthan not only to expand our business but to harness the state’s inherent entrepreneurship skills. IDBI Fortis, one of the fastest growing insurance companies in the country, also offers employment as well as self-employment opportunities,” said Mr Murali Iyer, National Head – Agency & Alliances, IDBI Fortis Life Insurance Co Ltd.

About IDBI Fortis Life Insurance Co Ltd

IDBI Fortis Life Insurance Co Ltd, is a joint venture between three leading financial conglomerates – India’s premier development and commercial bank, IDBI, one of India’s leading private sector banks, Federal Bank and Europe’s banking and insurance giant, Fortis, each of which enjoys a significant status in their respective business segments. In this venture, IDBI owns 48% equity while Federal Bank and Fortis own 26% equity each. IDBI Fortis launched its first set of products across India in March 2008, after receiving the requisite approvals from the Insurance Regulatory Development Authority (IRDA). The company offers its services through a vast nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. At IDBI Fortis, we endeavor to deliver products that provide value and convenience to the customer. Through a continuous process of innovation in product and service delivery we intend to deliver world-class wealth management, protection and retirement solutions to Indian customers. Do visit www.idbifortis.com to know more.

Sea water turns sweet in Mumbai!

2008-09-06T02:19:00.000-07:00

Sea water turns sweet! Though irrational, this news about sweet water in the sea spread faster than forest fire and engulfed the entire city of Mumbai.

'Lord Ganesha is drinking milk!' went the frenzied rumour. In less than a couple of hours, long queues materialized at milk shops and temples across the country. It took a whole day of scientific explanation to convince spell-bound devotees that there was nothing even remotely 'divine' about this phenomenon. Yet, they stubbornly refused to see the truth..........For a complete story, Pl chk with Concept PR: http://www.conceptpr.com/

JP Morgan ropes in Morparia as India CEO from ICICI

2008-08-30T01:52:00.000-07:00

HONG KONG: J.P.Morgan Asia Pacific has announced the appointment of
Kalpana Morparia as Chief Executive Officer of the firm's Indian operations.
Ms Morparia joins J.P.Morgan from the senior management of the ICICI Group,
India's largest private sector financial services company.

Ms Morparia is vice chairman of the ICICI Group's insurance,
asset management and securities companies, and Chief Strategy and
Communications Officer. She joined the board of ICICI Bank in 2001 and held
the position of Joint Managing Director until last year, before assuming her
current role with the group.

During her 33 year career with ICICI, Ms Morparia played an
influential role in the firm's expansion. Her term at ICICI Group placed her
at the forefront of the transformational changes which have reshaped the
country's banking industry.

Mr Gaby Abdelnour, the Chairman and Chief Executive of
J.P.Morgan, Asia Pacific said he warmly welcomed the experience and knowledge
which Ms Morparia will bring to the role of CEO.

"Ms Morparia offers J.P.Morgan a tremendous opportunity to
accelerate the progress we've made in building our Indian franchise. Her
appointment is also further evidence of the importance which J.P. Morgan
places on India as a priority within the firm's global growth strategy, " he
said.

Ms Morparia said she was delighted to join J.P.Morgan, and to
have the opportunity to lead the firm's expansion in India.

"J.P. Morgan has established a strong and highly respected
franchise in India which will support plans to expand all three lines of
business-- Investment Banking, Asset Wealth

Management and Treasury and Securities Services." she said.

Ms Morparia's role will include membership of J.P.Morgan's
Asia Pacific Executive Committee and involvement in the development of
several global initiatives being led out of the firm's New York office.

2008-08-21T03:42:00.000-07:00

2008-08-21T03:23:00.001-07:00

2008-08-21T03:16:00.001-07:00

Go BlogZ

2008-08-21T03:03:00.001-07:00

eBlogzilla

2008-08-21T02:34:00.000-07:00

Blogs Root

To grow wealth, you need to protect it: IDBI Fortis

2008-08-19T05:37:00.000-07:00

BIG TALK : G.V. NAGESWARA RAO, IDBI FORTIS LIFE INSURANCE

'To grow wealth, you need to protect it'

Sanjay Kr Singh

IDBI Fortis, a life insurance joint venture between the IDBI group, Federal Bank and European banking and insurance company, Fortis, has launched a plan called Wealthsurance. In this product, both life and health insurance benefits have been packaged with a variety of investment options. Moreover, it’s a low-cost product. G.V. Nageswara Rao, managing director and chief executive officer at IDBI Fortis Life Insurance, spoke to Our Correspondent about this product and how IDBI Fortis Life aims to carve a niche for itself despite 20 other players already being in the fray.

For detailed story:

http://www.expressmoney.in/news/To-grow-wealth-you-need-to-protect-it/93455.html

NHPC gets into IPO mode

2008-08-19T05:25:00.000-07:00

NEW DELHI: NHPC Limited, a hydroelectric power generating company, has filed its Draft Red Herring Prospectus with SEBI for entering the capital market with an IPO through the book-building route. The board of state-owned hydropower generator approved the proposed Initial Public Offering (IPO) of the company on Tuesday, to raise funds for its future expansions and part finance the construction and development costs of certain of identified projects. The Public Issue of 1,67,73,74,015 equity shares comprises a fresh issue of 1,11,82,49,343 equity shares by NHPC Ltd and an offer for sale of 55,91,24,672 equity shares by the President of India acting through the Ministry of Power, Government of India.

The company, formerly known as National Hydroelectric Power Corporation Limited, has appointed SBI Capital Markets Limited, Kotak Mahindra Capital Company Limited and Enam Securities Private Limited as the lead managers for the public issue.

“We have submitted the draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) today,” said Mr.S K Garg, Chairman and Managing Director, NHPC.

NHPC Limited, a Mini Ratna (Category I) Central Government Public Sector Unit is dedicated to the planning, development and implementation of an integrated and efficient network of hydroelectric projects in India. NHPC has developed and constructed 13 hydroelectric power stations and the total installed capacity is currently 5,175MW.

Disclaimer
The Company is proposing, subject to market conditions and other considerations, a public issue of the equity shares and has filed its Draft Red Herring Prospectus with Sebi. The Draft Red Herring Prospectus is available on the website of SEBI at www.sebi.gov.in and the website of the Book Running Lead Managers at www.enam.com, www.kotak.com and www.sbicaps.com.

This press release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any equity shares, not shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.
This press release has been prepared for publication in India and may not be released in the United States. This press release does not constitute an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended or an exemption therefrom. The issuer or selling security holder has not and does not intend to register any securities under the US Securities Act of 1933, as amended, and does not intend to offer any securities to the public in the United States. The Company will not be registered under the US Investment Company Act of 1940, as amended, and investors will not be entitled to the benefits of that Act. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in these written materials, will not be accepted. Securities for sale in any jurisdiction, including the United States, and any securities described in this announcement may not be offered or sold in the United States in the absence of registration under the US Securities Act of 1933 or an exemption from registration.

Any potential investor should note that investment in equity shares involves a high degree of risk. For details, see the section titled “Risk Factors” of the Draft Red Herring Prospectus, which has been filed with the Sebi and is also available on the websites of the BRLMs are set forth above.

2008-08-19T05:00:00.001-07:00

Submit Blog Directory

2008-08-15T21:46:00.000-07:00

Enter Reliance: NMCE moves to Mumbai

2008-08-15T10:01:00.000-07:00

AHMEDABAD: National Mutui-Commodity Exchange (NMCE) of India Ltd., the country's first online demutualised, multi-commodity exchange, has announced its plans to move its Corporate Office from Ahmedabad to Mumbai.

This announcement comes at the back of Reliance Money, India’s largest financial conglomerate and distribution house, agreeing to acquire up to 26 per cent stake in NMCE, subject to approval and clearances from regulatory authorities.

“With a renewed focus on growth, NMCE is aggressively looking at expanding its membership network and commodity base offered. We plan to not only launch newer commodities, but also plan to reach out to the huge investor base in the commodity arena through various new schemes and tie-ups,” said Mr. Sudip Bandopadhyay, CEO, Reliance Money and recently inducted Director on the NMCE Board.

Besides plans to move its corporate office to Mumbai, NMCE is also looking at recruitments at various levels to further strengthen its management.

"The decision to move our Corporate Office from Ahmedabad to Mumbai is a part of our overall strategy to revamp the entire working of the exchange. Though being the country's first online demutualised, multi-commodity exchange, we have missed out by not being present in the financial capital of the country,” said Mr. Kailash Gupta, Managing Director, NMCE.

NMCE is the country's first online de-mutualised, multi-commodity exchange with nationwide reach. It not only revived futures trade electronically in the commodities in India after a gap of 41 years but also integrated the centuries old commodity market with the latest technology.

About National Multi-Commodity Exchange of India
www.nmce.com

The National Multi-Commodity Exchange (NMCE) was launched on November 26, 2002 as the country's first online demutualised, multi-commodity exchange with nationwide reach. It is promoted by the country's largest warehousing corporation CWC along with NAFED - the country's apex body of marketing cooperatives, Punjab National Bank, the second largest public sector bank and the Government of Gujarat. NMCE not only revived futures trade electronically in commodities in India after a gap of 41 years, but also integrated the centuries old commodity market with the latest technology.

NMCE offers an electronic platform for futures trading in plantation, spices, food grains, non-ferrous metals, oilseeds and their derivatives and is backed by compulsory delivery based settlement to ensure transparent and fair trade practices. It is the first to introduce efficient clearing and settlement system backed by adequately capitalised corporate brokerage houses in commodities with sound and reliable transferable warehouse receipt system, using appropriate communication channels.

For further details –

Kailash Gupta B. N. Kumar
National Multi-Commodity Exchange Concept Communication
+91-79-40086039 +91-9321048332
mailbnk@gmail.com

Puravankara takes big leap into mass housing

2008-08-15T09:56:00.000-07:00

MUMBAI: Taking a big leap into affordable premium housing and targeting the middle classes including the first time home buyer, real estate major Puravankara Projects Limited today announced the launch of its 100% owned subsidiary, Provident Housing and infrastructure Limited.

Under Phase I alone, the affordable housing project will cover Bangalore, Chennai, Hyderabad, Coimbatore, and Mysore where 64,500 homes with a total built up area of 59.80 million sq ft will be constructed over the next five years at a cost of about Rs 8,000 crores. The funding for these Phase I projects will be through construction debt and customer advances amounting to Rs 6,500 crores, with internal accruals and equity sourcing the remaining Rs 1,500 crores which will be utilized for land acquisitions.

In Phase II, Provident’s foot print will also cover cities like Delhi, Kolkata, Kochi, Jaipur, Pune and Nagpur.

The prices of Provident homes which are to be developed in a phased manner, are presently priced at Rs 10 lakhs, Rs 15 lakhs and Rs 20 lakhs and comprise of one, two and three bedroom homes.

The first three projects of Provident in Bangalore and Mysore of over 19,000 homes covering an area of 17.10 million sq ft are in the advanced stages of plan sanction with the first project in North Bangalore of 4.50 million sq ft comprising some 5,100 homes ready for launch in the next few months.

Mr Jayakar Jerome, a former IAS officer, who is credited with resurrecting the Bangalore Development Authority and taking up a slew of infrastructure projects in Bangalore City, will be the Managing Director of Provident Housing and Infrastructure Limited, while the Puravankara Group head, Mr Ravi Puravankara, will be the Chairman of the Company.

“Provident will target middle-class families and first time home buyers with the objective of meeting the ever increasing demand in this space.” said Mr Jayakar Jerome. “We will provide affordable premium homes which will cater to a largely under serviced market in the Country,” he said.

Provident has been established as an independent stand-alone entity with its own budget, offices and staff. Modern technology based methods are being used to achieve scalability at an affordable price. Provident Housing and Infrastructure Limited will function under the supervision of the Puravankara Group which is known for its premium, world class quality construction standards.
Apart from homes Provident will also develop and sell large plotted development townships for affordable housing supported by facilities like hospitals, schools and playgrounds.

With rising income levels and aspirations and the emergence of a new salaried class in the Country, the demand for homes has far out-paced supply. According an estimate, India’s housing shortage has increased from 19.4 million units in 2004 to 22.4 million in 2005-06 and this figure has since only kept rising.

The Puravankara Group with over 33 years of excellence in the upper end of the housing sector across various regions of the Country has projects in Bangalore, Chennai, Kochi, Coimbatore, Hyderabad, Mysore and Colombo. The Group also has an important presence in Dubai in the UAE and business representatives in the United Kingdom and the United States. With a land bank of over 125 million sq ft, the Group has above 20 million sq ft of residential and commercial space currently under construction. Included in this are on-going residential projects amounting to 18.30 million sq ft comprising 11,010 homes.

Battle for Zandu: Investor Group backs Emami entry

2008-08-15T09:31:00.002-07:00

A group of investors from Zandu Pharmaceutical have questioned the propriety of Zandu management in declining management partnership to Emami Limited which has bought over about 24% in the former.

The investors, under the umbrella of All Gujarat Investor Protection Trust have wholeheartedly supported the Emami claim to the management partnership in Zandu.

In a communiqué to shareholders, Mr. Hemantsingh Jhala, Chairman of All Gujarat Investor Protection Trust, said the entry of Emami into the management would definitely bring the much needed fillip to Zandu and create value for the Zandu shareholders. Just the interest evinced by Emami, has more than doubled the prices of the Zandu stock thereby benefitting all the stakeholder as well as protecting the interests of the minority shareholders.

The communique explaining the stagnancy of the Zandu brand read.

The brand Zandu is more than 100 years old, but because of various reasons has not been able to sustain the growth that is required. The growth has not been outstanding by any standards, despite tremendous opportunities. In fact, Zandu’s is a typical case of missed opportunities.The financials of both the companies speak for themselves:

· Its stand alone sales of Zandu at Rs 136.98 crs for the year ended march 2008 have grown from Rs 108.67 crs in the last nine years at a CAGR of 2.61 %.
· Its EBIDTA has grown from Rs 15.10 crs to Rs 27.33 crs at a CAGR of 6.81%, while its net profit has grown from Rs 6.04 to Rs 16.41 crs at a CAGR of 11.75 %.
· The company has not launched any new product of significant value in the last 5 years.

Emami has been growing consistently at a CAGR of 20.62% over the last nine year from Rs 108 crs to Rs 583.71 crs, EBIDTA has grown at a CAGR of 25.68% from 12.61 crs to Rs 98.68 crs, which PAT has grown at a CAGR of 28.19% from Rs 9.92 crs to Rs 92.75 crs.

Zandu clearly needs a strong tonic to grow and Emami can represent that tonic.