Why RInfra walked out of Delhi airport metro line project

Moneycontrol Bureau

Reliance Infra -led Delhi Airport Metro Express Pvt Ltd (DAMEPL) has refused to run the showcase 23-kilometres long metro rail line in the national capital from Monday citing financial non-viability.

The firm has also asked the Delhi Metro Rail Corporation (DMRC) to take over the project.

In 2011. the DMRC had built the civil structure on the line and RInfra was in charge of taking care of operations and maintenance with the concession agreement of 30 years.

A few months after the line came into existence; things went sour between both parties on grounds that DMRC's construction was faulty on the line which claimed a run time of around 18 minutes from New Delhi Railway Station to Terminal 3 of the Indira Gandhi International Airport.

The express line was even shut for a few months in 2012 due to faulty civil construction work. In October, RInfra even  sent a contract termination notice to DMRC which disputed it and the matter is still being sorted out of court.

In the meanwhile, the DMRC rectified civil construction faults related to civil construction and the line resumed operations in January this year.

But RInfra has pulled out of the project since it felt arbitration proceedings or out of court settlement is at a standstill.

However, the DMRC has accused RInfra of violating concession agreement and has also said that the firm should not have walked out at a time when arbitration proceedings with a third party on the issue were already on.
Read This:  RInfra sees 3-fold rise in infra revenue this fiscal

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Can Ford EcoSport end Mahindra's SUV dominance?

Moneycontrol Bureau

Mahindra & Mahindra has by far been the most successful sports utility vehicle maker in India. It sells nearly half of all SUVs sold in the country. Ford launched its much anticipated EcoSport earlier this week, which analysts say can be a game changer. But can it end M&M's hold on the SUV market?

The biggest advantage for Ford, analysts say, is the killer price its been launched at. EcoSport's starting price of the petrol version is Rs 5.59 lakh ex-showroom Delhi and that could tempt buyers from its rivals.

Ford has launched the EcoSport in the sub 4 metre segment in India to benefit from lower taxes. Its direct competitor here will be M&M's Quanto, which was launched in September 2012.

To be fair, M&M's UV portfolio straddles across segments and price points, right from the Quanto to the Bolero (favourite in rural markets), the Scorpio, Xylo and the premium XUV 500. It also sells the Rexton SUV from its Korean subsidiary Ssangyong's portfolio.

Ford, before the EcoSport, was selling only one SUV in India, the Endeavor. But the EcoSport could make the difference. The new EcoSport was launched in Brazil in August last year and analysts say its been selling briskly there.

Cassio Lucin, JP Morgan analyst in Brazil, says year-to-date in 2013, Ford has sold 27,000 units of the new EcoSport and it has helped Ford garner 40 percent market share in the compact SUV category and 2.5 percent market share among all passenger vehicles sold in Brazil this year.

It is launching in India on the back of strong demand shift towards the SUVs. However, the SUV segment has also started feeling the heat of the overall slowdown in the auto sector in the country. Sales have some what slowed in the last couple of months, especially due to the additional 3 percent excise duty imposed on SUVs in the Union Budget.

Sales of M&M's utility vehicles and the Verito sedan rose just 5 percent in May at 22,244 units. Last financial year, sales had grown 27 percent. With demand tapering and new players entering the market, its market share has already come down to about 48 percent from 56 percent, a year ago.

Analysts say EcoSport could see strong sales on the back of the pricing and other features loaded on the SUV.

"The new EcoSport will attract consumers as its pricing is very competitive and it offers a variety of features including, air bags, voice commands, push botton start, etc," said Umesh Karne and Manashwi Banerjee of Brics Securities.

They expect EcoSport's initial bookings to go up to 15,000-20,000 within 3-4 months.

Antique Stock Broking analysts Ashish Nigam and Saksham Kaushal feel one can't rule out EcoSport eating share from premium hatchbacks, mid-size sedans and entry-level SUVs.

"Considering that the Duster (from the weaker pedigreed Renault) manages a volume run-rate of a noteworthy 5,000/month, we believe that the EcoSport can garner retails of 8,000-10,000 per month. Ford will nibble this from M&M (Quanto), Maruti (Ertiga/DZire), Renault Duster and some entry level sedans," they said.

However, half of M&M's sales come from rural markets and there the company has little competition.

The Brics Securities analysts also feel that post the initial euphoria, EcoSport's sales are likely to stabilise at around 3,000/month.

The EcoSport generated a lot of euphoria ever since it was showcased at the Delhi auto expo last year. The company too left no stone unturned in promoting the vehicle, so much so that analysts say people have defered their vehicle purchases to wait and check it out. The pricing now has also been a cracker.

M&M has already said it is bound to lose some market share as competitiors launch new SUVs. With the EcoSport going on sale now and more players waiting to join the race, its surely a hard but interesting battle ahead.

Nachiket Kelkar
nachiket.kelkar@network18online.com

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Honda to replace power window switch of 43,000 City cars

Moneycontrol Bureau

Honda Cars India on Saturday said it will carry out a preventive part replacement of power window switch of 42,672 units of the second generation City sedan manufactured in 2007 and 2008.

Honda says the power window switch may malfunction incase water or any other liquid enters the driver side window.

The company said it is replacing the part as a preventive measure although no such problem has been reported any where in India.

Also read: Bajaj's Chakan strike continues: Co aiming at 25% output

The replacement will be carried out at Honda dealerships and customers will be contacted individually in a phased manner, it added.

The Honda City currently sold in India is not affected and doesn't require any part replacement, the company said.

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Half-Time 2013: 5 Policy Decisions That Rocked The Business World

As the year rolls into half-time, Moneycontrol.com lists the five policy decisions that impacted the common man and the corporate world during the last six months.

While most these significant decisions were announced based on reports submitted by expert committees, others were taken to stem the worsening economic situation and the ballooning trade and current deficits.

The decisions also indicate the UPA government's desperate attempt to improve its image with the general elections round the corner.

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Auto biz challenging; eye long-term profit: Mercedes-Benz

In this edition of CNBC-TV18's The Forbes India Show, Eberhard Kern, MD, Mercedes-Benz India says that the six months since he assumed charge were full of challenges such as the slump in overall auto sales and the depreciation in the rupee .

Also read: The luxury car battle: Audi's plans to stay on top

Eberhard Kern adds that fall in the value of the rupee against dollar has started to impact margins and highlights that a decision will be taken to change revise pricing by July or August.

The growth of rivals Audi and BMW do not disturb Kern who says that he remains focused on establishing a sustainable and profitable business at Mercedes-Benz India.

Below is the edited transcript of the show on CNBC-TV18

Q: Your first six months in India has been a pretty eventful — auto sales slumped to record lows, the rupee has sunk almost 9 percent in the last two months and the finance Minister paid particular attention to the luxury auto segment during the Budget. How are you faring?

A: Yes, it was quite a challenging time since I arrived in December. The past six months have not only been challenging, but fascinating as well. The tax impact was not planned and the Budget this year took us by surprise. Indian customers have to now pay more than 50 percent in taxes.

Q: How badly has the fall of rupee hurt you?

A: The euro is much more important to us than the dollar as we import most of our products, kits or parts from the euro zone. In December 2012, the euro was around 70 and we established a defensive strategy for the year after taking into consideration a probable rise of the euro to rise to 74 against the rupee. But now it is at 78-79.

This of course directly impacts our costing which involves purchasing in the euro and selling in the rupee. Our  profit margins will start to face some pressure. So far, we have been able  sustain the price level, but if the rupee continues to wobble over the next few weeks or months, we may have to re-examine our pricing as well.

Q: How long will you wait before you take a decision?

A: We will have to come to a decision latest by July-August.

Q: Your stint began when Mercedes-Benz in India lost its position at the top to rivals Audi and BMW. Was restoring the company's position one of your goals when you took over the helm in India?

A: No, there was no such goal this. Our goal is to establish a business that is sustainable and profitable and we have formulated our plans accordingly. We face competition everywhere in the world and that includes India as well. Yes, we are ambitious but we follow plans of our own.

Q: Let us talk about those plans. Will you be able to beat the competition with the launch of the A-Class?

A: We have been in this business for years. The E-Class, as you mentioned correctly, is one of our most important models today. Of the over 2,000 cars we sold in the first quarter which was 5 percent better than last year's Q1 sales, the sales of the E-Class contributed 40 percent. So it is one of our most important models.

Overall, we are the leaders in all the segments that we are present in. There are also segments in the market that we were able to develop quite successfully in the last one-to-two years such as the mid-sized luxury SUV and the small-sized luxury SUV. As we do not have any products in those segments right now, we are not able to participate in them.

Q: Why did that happen? Was it a lack of foresight or planned?

A: There are different reasons for this. In the mid-sized luxury SUV segment, we have the Mercedes-Benz GLK, but unfortunately the only model on offer is the model with the left hand drive.

We hope this will change with the successor model we plan to introduce in two year's time. Though we do not have a product in the small-sized SUV segment right now, you may recall that a few months ago at the Shanghai Motor Show we exhibited the Concept GLA.

This model had a very, very positive response in the Indian market as well. So I am quite confident that we will be able to launch this model into India in one-and-a-half year's time.

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AirAsia to start India operations later this year

Malaysian low-cost carrier AirAsia on Saturday said its Indian operations should begin later in 2013 with flights for South India and the company would also look at setting up some ancillary businesses in the country.

"Though September may be too ambitious, we are hopeful of starting Indian operations later this year with three aircraft serving South India, " AirAsia Group CEO Tony Fernandes said. The airline would expand its services to other parts of the country in the second stage, he said.

Speaking to CNBC-TV18, Tony Fernandes says that he expects fierce competition in India and adds that the low-cost carrier is not looking at Mumbai and Delhi for now. The airline is to start operations with three aircraft and will add 1 aircraft every month.

AirAsia would also look at setting up ancillary services like air travel insurance and duty-free shops in the country, said Fernandes. AirAsia has already put in place a strong leadership team for its India operations, which is a joint venture with Tatas and Telestra Tradeplace.

Former TCS chief S Ramadorai has been appointed chairman while top industry leader Ratan Tata has been named as chief adviser to the board of AirAsia India.

Besides, R Venkataraman (former executive assistant to Ratan Tata) and Bharat Vasani (chief legal counsel of the Tata Group), are among the directors on the board.

AirAsia India is a joint venture of Air Asia, Tata Sons and Arun Bhatia of Telestra Tradeplace with 49:30:21 holding. AirAsia will be represented by Tony Fernandes and Kamarudin Bin Meranu. In May, Fernandes had named Mittu Chandilya as the CEO of AirAsia India.

AirAsia is expected to bring in competitive pricing in the Indian aviation market with its "nano" airfares. These announcements had come within days after aviation minister Ajit Singh said all the issues regarding AirAsia's India applications had been resolved.

(With inputs from PTI)

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Why RInfra walked out of Delhi airport metro line project

Moneycontrol Bureau

Reliance Infra -led Delhi Airport Metro Express Pvt Ltd (DAMEPL) has refused to run the showcase 23-kilometres long metro rail line in the national capital from Monday citing financial non-viability.

The firm has also asked the Delhi Metro Rail Corporation (DMRC) to take over the project.

In 2011. the DMRC had built the civil structure on the line and RInfra was in charge of taking care of operations and maintenance with the concession agreement of 30 years.

A few months after the line came into existence; things went sour between both parties on grounds that DMRC's construction was faulty on the line which claimed a run time of around 18 minutes from New Delhi Railway Station to Terminal 3 of the Indira Gandhi International Airport.

The express line was even shut for a few months in 2012 due to faulty civil construction work. In October, RInfra even  sent a contract termination notice to DMRC which disputed it and the matter is still being sorted out of court.

In the meanwhile, the DMRC rectified civil construction faults related to civil construction and the line resumed operations in January this year.

But RInfra has pulled out of the project since it felt arbitration proceedings or out of court settlement is at a standstill.

However, the DMRC has accused RInfra of violating concession agreement and has also said that the firm should not have walked out at a time when arbitration proceedings with a third party on the issue were already on.
Read This:  RInfra sees 3-fold rise in infra revenue this fiscal

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Can Ford EcoSport end Mahindra's SUV dominance?

Moneycontrol Bureau

Mahindra & Mahindra has by far been the most successful sports utility vehicle maker in India. It sells nearly half of all SUVs sold in the country. Ford launched its much anticipated EcoSport earlier this week, which analysts say can be a game changer. But can it end M&M's hold on the SUV market?

The biggest advantage for Ford, analysts say, is the killer price its been launched at. EcoSport's starting price of the petrol version is Rs 5.59 lakh ex-showroom Delhi and that could tempt buyers from its rivals.

Ford has launched the EcoSport in the sub 4 metre segment in India to benefit from lower taxes. Its direct competitor here will be M&M's Quanto, which was launched in September 2012.

To be fair, M&M's UV portfolio straddles across segments and price points, right from the Quanto to the Bolero (favourite in rural markets), the Scorpio, Xylo and the premium XUV 500. It also sells the Rexton SUV from its Korean subsidiary Ssangyong's portfolio.

Ford, before the EcoSport, was selling only one SUV in India, the Endeavor. But the EcoSport could make the difference. The new EcoSport was launched in Brazil in August last year and analysts say its been selling briskly there.

Cassio Lucin, JP Morgan analyst in Brazil, says year-to-date in 2013, Ford has sold 27,000 units of the new EcoSport and it has helped Ford garner 40 percent market share in the compact SUV category and 2.5 percent market share among all passenger vehicles sold in Brazil this year.

It is launching in India on the back of strong demand shift towards the SUVs. However, the SUV segment has also started feeling the heat of the overall slowdown in the auto sector in the country. Sales have some what slowed in the last couple of months, especially due to the additional 3 percent excise duty imposed on SUVs in the Union Budget.

Sales of M&M's utility vehicles and the Verito sedan rose just 5 percent in May at 22,244 units. Last financial year, sales had grown 27 percent. With demand tapering and new players entering the market, its market share has already come down to about 48 percent from 56 percent, a year ago.

Analysts say EcoSport could see strong sales on the back of the pricing and other features loaded on the SUV.

"The new EcoSport will attract consumers as its pricing is very competitive and it offers a variety of features including, air bags, voice commands, push botton start, etc," said Umesh Karne and Manashwi Banerjee of Brics Securities.

They expect EcoSport's initial bookings to go up to 15,000-20,000 within 3-4 months.

Antique Stock Broking analysts Ashish Nigam and Saksham Kaushal feel one can't rule out EcoSport eating share from premium hatchbacks, mid-size sedans and entry-level SUVs.

"Considering that the Duster (from the weaker pedigreed Renault) manages a volume run-rate of a noteworthy 5,000/month, we believe that the EcoSport can garner retails of 8,000-10,000 per month. Ford will nibble this from M&M (Quanto), Maruti (Ertiga/DZire), Renault Duster and some entry level sedans," they said.

However, half of M&M's sales come from rural markets and there the company has little competition.

The Brics Securities analysts also feel that post the initial euphoria, EcoSport's sales are likely to stabilise at around 3,000/month.

The EcoSport generated a lot of euphoria ever since it was showcased at the Delhi auto expo last year. The company too left no stone unturned in promoting the vehicle, so much so that analysts say people have defered their vehicle purchases to wait and check it out. The pricing now has also been a cracker.

M&M has already said it is bound to lose some market share as competitiors launch new SUVs. With the EcoSport going on sale now and more players waiting to join the race, its surely a hard but interesting battle ahead.

Nachiket Kelkar
nachiket.kelkar@network18online.com

23.25 | 0 komentar | Read More

Honda to replace power window switch of 43,000 City cars

Moneycontrol Bureau

Honda Cars India on Saturday said it will carry out a preventive part replacement of power window switch of 42,672 units of the second generation City sedan manufactured in 2007 and 2008.

Honda says the power window switch may malfunction incase water or any other liquid enters the driver side window.

The company said it is replacing the part as a preventive measure although no such problem has been reported any where in India.

Also read: Bajaj's Chakan strike continues: Co aiming at 25% output

The replacement will be carried out at Honda dealerships and customers will be contacted individually in a phased manner, it added.

The Honda City currently sold in India is not affected and doesn't require any part replacement, the company said.

23.25 | 0 komentar | Read More

Half-Time 2013: 5 Policy Decisions That Rocked The Business World

As the year rolls into half-time, Moneycontrol.com lists the five policy decisions that impacted the common man and the corporate world during the last six months.

While most these significant decisions were announced based on reports submitted by expert committees, others were taken to stem the worsening economic situation and the ballooning trade and current deficits.

The decisions also indicate the UPA government's desperate attempt to improve its image with the general elections round the corner.

23.25 | 0 komentar | Read More

Auto biz challenging; eye long-term profit: Mercedes-Benz

In this edition of CNBC-TV18's The Forbes India Show, Eberhard Kern, MD, Mercedes-Benz India says that the six months since he assumed charge were full of challenges such as the slump in overall auto sales and the depreciation in the rupee .

Also read: The luxury car battle: Audi's plans to stay on top

Eberhard Kern adds that fall in the value of the rupee against dollar has started to impact margins and highlights that a decision will be taken to change revise pricing by July or August.

The growth of rivals Audi and BMW do not disturb Kern who says that he remains focused on establishing a sustainable and profitable business at Mercedes-Benz India.

Below is the edited transcript of the show on CNBC-TV18

Q: Your first six months in India has been a pretty eventful — auto sales slumped to record lows, the rupee has sunk almost 9 percent in the last two months and the finance Minister paid particular attention to the luxury auto segment during the Budget. How are you faring?

A: Yes, it was quite a challenging time since I arrived in December. The past six months have not only been challenging, but fascinating as well. The tax impact was not planned and the Budget this year took us by surprise. Indian customers have to now pay more than 50 percent in taxes.

Q: How badly has the fall of rupee hurt you?

A: The euro is much more important to us than the dollar as we import most of our products, kits or parts from the euro zone. In December 2012, the euro was around 70 and we established a defensive strategy for the year after taking into consideration a probable rise of the euro to rise to 74 against the rupee. But now it is at 78-79.

This of course directly impacts our costing which involves purchasing in the euro and selling in the rupee. Our  profit margins will start to face some pressure. So far, we have been able  sustain the price level, but if the rupee continues to wobble over the next few weeks or months, we may have to re-examine our pricing as well.

Q: How long will you wait before you take a decision?

A: We will have to come to a decision latest by July-August.

Q: Your stint began when Mercedes-Benz in India lost its position at the top to rivals Audi and BMW. Was restoring the company's position one of your goals when you took over the helm in India?

A: No, there was no such goal this. Our goal is to establish a business that is sustainable and profitable and we have formulated our plans accordingly. We face competition everywhere in the world and that includes India as well. Yes, we are ambitious but we follow plans of our own.

Q: Let us talk about those plans. Will you be able to beat the competition with the launch of the A-Class?

A: We have been in this business for years. The E-Class, as you mentioned correctly, is one of our most important models today. Of the over 2,000 cars we sold in the first quarter which was 5 percent better than last year's Q1 sales, the sales of the E-Class contributed 40 percent. So it is one of our most important models.

Overall, we are the leaders in all the segments that we are present in. There are also segments in the market that we were able to develop quite successfully in the last one-to-two years such as the mid-sized luxury SUV and the small-sized luxury SUV. As we do not have any products in those segments right now, we are not able to participate in them.

Q: Why did that happen? Was it a lack of foresight or planned?

A: There are different reasons for this. In the mid-sized luxury SUV segment, we have the Mercedes-Benz GLK, but unfortunately the only model on offer is the model with the left hand drive.

We hope this will change with the successor model we plan to introduce in two year's time. Though we do not have a product in the small-sized SUV segment right now, you may recall that a few months ago at the Shanghai Motor Show we exhibited the Concept GLA.

This model had a very, very positive response in the Indian market as well. So I am quite confident that we will be able to launch this model into India in one-and-a-half year's time.

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AirAsia to start India operations later this year

Malaysian low-cost carrier AirAsia on Saturday said its Indian operations should begin later in 2013 with flights for South India and the company would also look at setting up some ancillary businesses in the country.

"Though September may be too ambitious, we are hopeful of starting Indian operations later this year with three aircraft serving South India, " AirAsia Group CEO Tony Fernandes said. The airline would expand its services to other parts of the country in the second stage, he said.

Speaking to CNBC-TV18, Tony Fernandes says that he expects fierce competition in India and adds that the low-cost carrier is not looking at Mumbai and Delhi for now. The airline is to start operations with three aircraft and will add 1 aircraft every month.

AirAsia would also look at setting up ancillary services like air travel insurance and duty-free shops in the country, said Fernandes. AirAsia has already put in place a strong leadership team for its India operations, which is a joint venture with Tatas and Telestra Tradeplace.

Former TCS chief S Ramadorai has been appointed chairman while top industry leader Ratan Tata has been named as chief adviser to the board of AirAsia India.

Besides, R Venkataraman (former executive assistant to Ratan Tata) and Bharat Vasani (chief legal counsel of the Tata Group), are among the directors on the board.

AirAsia India is a joint venture of Air Asia, Tata Sons and Arun Bhatia of Telestra Tradeplace with 49:30:21 holding. AirAsia will be represented by Tony Fernandes and Kamarudin Bin Meranu. In May, Fernandes had named Mittu Chandilya as the CEO of AirAsia India.

AirAsia is expected to bring in competitive pricing in the Indian aviation market with its "nano" airfares. These announcements had come within days after aviation minister Ajit Singh said all the issues regarding AirAsia's India applications had been resolved.

(With inputs from PTI)

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Petrol price up by Rs 1.82/L; to cost Rs 76.90/L in Mumbai

Moneycontrol Bureau

Sharp depreciation in rupee has forced oil marketing companies to hike petrol price by Rs 1.82 per litre excluding VAT with effect from midnight tonight — a third successive hike this month.

Earlier on June 16, petrol price was hiked by a steep Rs 2 per litre as devaluation of rupee against US dollar made imports costlier. On June 1, the fuel price was hiked by 75 paisa, excluding VAT.

The hike, which is effective from midnight tonight, is excluding local sales tax or VAT and actual increase for consumers will be higher.

Among oil marketing companies, Indian Oil Corporation generally announces the price changes in petrol and diesel every 15 days. IOC today said that latest hike was due to further depreciation in rupee.

Revised Petrol Prices/Litre
City	Old rate	New rate
Mumbai	74.6	76.9
Delhi	66.39	68.56
Chennai	69.39	71.71
Kolkata	73.79	76.1

Surprisingly, there was no change in diesel price. Since diesel price was hiked by 50 paisa, excluding VAT, on June 1, it was expected that OMC would increase diesel prices at the end of the month. IOC however did not clarify reasons for not hiking diesel price.

Diesel prices has been hiked on five occasions since January when the government authorised state-owned oil firms to increase prices by up to 50 paisa per litre every month till entire losses on the fuel are wiped out.

IOC said the devaluation of rupee had led to widening of losses on diesel and cooking fuel.

Losses on diesel has widened to Rs 8.60 a litre from Rs 6.31 a litre at the middle of the  month. Besides, oil firms are also losing Rs 30.53 per litre on kerosene and Rs 368.5 on sale of every 14.2-kg domestic cooking gas (LPG) cylinder.

The company said at current rate IOC would end the fiscal with a total revenue loss of about Rs 63,000 crore while the industry (IOC plus other state-owned fuel marketing firms) would incur around Rs 1.18 lakh crore loss.

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Novartis AG sells 1.42 stake in Indian arm for Rs 25 cr

Drug firm Novartis India on Friday said its parent Novartis AG has offloaded 1.42 percent stake in it through open market for a consideration of over Rs 25 crore to meet market regulator Sebi guidelines.

The company's parent Novartis AG has sold 4,54,205 shares in the company for a total amount of Rs 25.45 crore, Novartis India said in a filing to BSE.

After the sale Novartis AG will have 75 percent stake in the Indian entity. As per Sebi's minimum public shareholding norms, all private sector listed companies need to have at least 25 percent public shareholding and promoters have been asked to lower their stake to 75 per cent or below by June, 2013.

To help companies comply with the new public shareholding norms, Sebi last year created two new routes -- offer for sale (OFS) and institutional placement programme (IPP). The regulator also allowed companies to use rights and bonus issue routes to enhance public holding.

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Speciality Restaurants to expand; cuts headcount

The slowing economy has been tough on the fine dining space with corporates slashing budgets and customers reducing the frequency of dining out. In this scenario, food chain operator Speciality Restaurants is looking up new options in the menu to ensure they stay on course, reports CNBC-TV18's Farah Bookwala.

Speciality Restaurants -- which runs fine dining chains Mainland china and Oh! Calcutta -- is feeling the heat as customers and corporate houses tighten their purse strings in a fragile economy.

Having had to close three loss-making restaurants in the last three months alone, Speciality now wants to ensure the present slowdown doesn't derail its long-term growth story.

Consequently, the company is taking some key steps. Being debt-free, Speciality has decided to stick to its expansion plans, with 30 new restaurants set to open by FY16, but has rationalised its staff cost by reducing employees per restaurant from 70 to 50.

Apart from its large portions, Speciality will now also serve regular portions to reduce the average price per dish and will also launch a home-delivery service in six months, which, it believes, will contribute 9 percent to its overall revenues.

Further, Speciality is also tapping the UK, Middle East and Singapore markets through the joint venture route. The company says with revenues from one overseas restaurant equalling three in India, this could be a game changer. 

Speciality is also looking to acquire a diversified food chain and the management says they are ready to invest Rs 250-300 crore for this through a mix of debt and equity.

Anjan Chatterjee, managing director, Speciality Restaurants says, "We are discussing with many players and hopefully we should have an outcome in the next 3-4 months."

Though the question does arise about management's confidence to spread its wings in these trying times.  Chatterjee says, "We've just done some research. People love Mainland China, Oh! Calcutta and Flame Grills. Its just that right now there are economic headwinds and therefore customers are less."

But even as Speciality takes long-term measures, it will raise prices by 5-7% to offset higher costs in the short term. A price hike that analysts say, although modest and much-delayed, could see footfalls drop.

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JSPL Liberia govt in talks for acquiring mine

Jindal Steel and Power (JSPL) is in talks with Liberia government to acquire the West African country's largest iron ore mine Wologisi in which China has also evinced interest.

According to industry sources, the deal could be as big as USD 2 billion but it has not been finalised yet and final outcome of talks is expected to take a few months.

They added that some senior functionaries of the Liberian government had met senior officials of the Naveen Jindal-led steelmaker in April here to take forward the deal.

However, things changed a little after China's ambassador to Liberia, late last month, announced his country's interest in exploiting the Wologisi mine located in Lofa County.

Besides, some lawmakers of Lofa County and a part of local media have also started raising voices against grant of the Wologisi mine to anyone, including JSPL, without ensuring jobs for Liberians as the country's unemployment rate is one of the highest in the world, sources said.

They further said that if the deal goes through, JSPL may also go for setting up a 150 MW or 175 MW coal-based power plant in the West African country.

When asked about company's interests in the Liberian mine, JSPL's managing director and CEO Ravi Uppal said that his firm has been negotiating with many African countries for  securing iron ore mines but nothing has been finalised yet.

"Nothing, nothing. We keep talking to many people. For iron ore mines, the search is on and we are looking at Africa at the moment but nothing has happened yet," he said. The Wologisi mine is estimated to hold several billion tonnes of iron ore reserves, though they have not yet been certified. If the deal goes through, JSPL will be the second Indian firm after Vedanta group's Sesa Goa to invest in Liberia.

Sesa Goa, in 2011, had entered Liberia by acquiring 51 percent stake in Western Cluster iron ore project which consists of three mining concessions, the Bomi, Mano and Bea. The company has plans to spend over USD 2 billion in first phase to produce 10 million tonnes of iron ore per year. For JSPL it would be the second acquisition in Africa in last one year as it had acquired CIC Energy, which has thermal  coal assets in Botswana, in September, 2012.

However, company's plans to acquire iron ore mines in the African continent has not yet succeeded. In February, JSPL had called off its talks to acquire Cameroon-focused iron ore firm Afferro Mining Inc due to low grade magnetite reserves of the African company and high costs involved in beneficiation of the ore.

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Tamil Nadu power crisis: Resurrection blueprint underway

The Tamil Nadu government has come under heavy criticism for its failure to contain the power crisis in the state.

While wind energy had provided a temporary two-month respite to citizens sweating it out in the summer heat, power cuts are now back in full force report CNBC-TV18's Poornima Murali and Archana Shukla.

Also: 9 power PSUs to donate Rs 25 cr for Uttarakhand relief

Tamil Nadu is bracing for dark days ahead; already reeling under a peak power shortage of 4000 MW,the Central Electricity Authority now expects The states deficit to increase to 5099 MW in 2013-2014.

As the combined impact of poor planning, lack of infrastructure, a bleeding state electricity board (SEB) and  non commissioning of new projects by both public and private sectors, render Tamil Nadu powerless.

Abdul Majeed, Partner, PricewaterhouseCoopers said, "It's a combination of planning and execution which has not been properly factored into. The result of which is that now we have moved from power surplus to power deficit state."

Tamil Nadu's failure to recharge its wind energy sector. Despite being the largest base for wind energy in India, the state reported a 91 per cent drop in attracting investments for the sector from Rs 7,000 crore in 2012-13 to just Rs 600 crores this year.

While wind energy had helped reduce power cuts over the last two months; infrastructure bottle necks and non-payment of dues by Tamil Nadu Electricity Board (TNEB) to wind firms meant the respite was only temporary.

"Roughly about 30% of electricity that goes into the system comes from wind but we can give more because 7000 MW with plant load factor which is very high during the high wind season, we can give about 5000-6000 MW. Rest is going waste because transmission system is not there," says Ramesh Kymal, Chairman and MD, Gamesa.

To tide over the power crisis, the state government now plans to invest over Rs 67,000 crore in various generation and transmission projects; with Rs 3410 crore investment announced this month itself. The government hopes to add 6000 MW of power in the next two years. Additionally it plans to purchase 1000 MW of power daily from the open market for the next 15 years.

It is also in the process of partially bailing out the TNEB from its massive Rs 53,000 crore debt.

However, as of now there is no immediate respite for industry and residents in the state, who are still subjected to daily power outages. According to critics solving this mess will take the government years.

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Jeep to hit Indian roads end 2013: FIAT

Italy-based Fiat group, which has tied up with US-based car maker Jeep, will launch the first model under the brand in the country during the last quarter of 2013 as a "completely built unit", a top official said on Friday.

"We will be ready in launching Jeep brand during the last quarter of this calender year.. We are aggressively working on it...,"  Fiat Group Automobiles India, president and managing director, Nagesh Basavanhalli, told reporters .

The proposed launch of Jeep was part of its - three-pronged strategy  -- focusing on products, network and brand. "We have been focusing on our three-pronged strategy. We are very proud of our products today.. The Linea has the best in class petrol engine.As part of our strategy, we will bring the Jeep at appropriate time..", he said inaugurating the company's second exclusive outlet -- Ramkay FIAT.

Noting that the group had been expanding its presence globally, he said, they have planned to have 100 dealerships by the end of this financial year.
"Today we are having about 63 active dealerships. We will get there (100 dealerships) before this year end," he said.

About the products lined up for Indian market during the next three years, he said the company had planned to launch four refreshed models under FIAT brand while four products under the Jeep and the Abarth model.

Under the Jeep brand there would be products across all the segments (compact SUV, premium SUV) he said and added that the products would be launched by 2016. The company, would initially import the Jeep models as 'completely built units' from North America and later look at increasing the localisation.

Fiat Group India has a manufacturing facility near Pune with a capacity of producing 1.60 lakh units and three lakh engines.

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Gas price hiked to $8.4; CCEA Oks Ranga panel recos

Moneycontrol Bureau

The Cabinet Committee for Economic Affairs (CCEA) on Thursday approved the proposal to hike the natural gas price to USD 8.4 per mmbtu (metric million British thermal units) from April 1, 2014, reports CNBC-TV18.

The CCEA has approved the Rangarajan committee's formula for gas pricing. The new price will apply uniformly to all producers, be it state-owned firms like Oil and Natural Gas Corp ( ONGC ) or private sector Reliance Industries . While it was previously said the new rates would apply to regulated or APM gas produced by firms like ONGC immediately, the pricing as per Rangarajan formula will come into effect from April 1, 2014, just when RIL's KGD6 formula of USD 4.2/mmBtu runs out.

CCEA further noted that Rangarajan committee's formula for gas pricing would be valid for five years and gas prices will be revised quarterly from April 1, 2014 onwards. The oil ministry in its final proposal had suggested to increase gas price to above USD 6.7 per mmBtu level from current USD 4.2 currently

The Oil Ministry's proposal to price all domestically produced natural gas as per a complex international hub and imported LNG-based formula suggested by the Rangarajan panel was listed as item number 8 on the agenda of Cabinet Committee on Economic Affairs (CCEA) meeting. 

Oil minister Veerappa Moily informed CNBC-TV18 that he and finance minister will explain CCEA's decision on gas price on Friday.

The oil ministry's note to CCEA had proposed new gas price between USD 6.76/mmBtu to USD 8.93/mmBtu in FY14. It further proposed that price should be around USD 10.29 in FY15 and should be raised to USD 10.92 in FY16.

The natural gas prices have not been increased since past three years as the oil ministry faced stiff resistance from power and fertiliser ministry. Following gas price hike fuel cost of gas based power plant is likely to double and average power cost is seen rising by 16 paise per kwh.

The Rangarajan formula uses long-term and spot liquid gas (LNG) import contracts as well as international trading benchmarks to arrive at a competitive price for India. While the Rangarajan panel had recommended revising domestic gas prices every month based, the Oil Ministry changed it to a quarterly revision.

Though the average of of the two currently comes to USD 6.775, the price of gas in April next year when these guidelines will come into effect would be around USD 8.42 and over USD 10 in the following year. This is because Petronet's deal with Qatar's RasGas (India's only functional long-term LNG contract) has a price-cap which lifts in January 2014, linking gas prices fully with crude.

(With inputs from PTI)

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MSTC chief SK Tripathi may become interim head of NMDC

MSTC Chairman and Managing Director S K Tripathi is likely to get the additional charge of heading NMDC as the Steel Ministry has decided to relieve SAIL 's C S Verma from leading the country's biggest miner, according to a source.

SAIL Chairman Verma, who has been handling the charge of heading NMDC as an interim arrangement since May 2012, also heads International Coal Venture Ltd (ICVL). "Now, Steel Ministry has decided to give Verma more time to concentrate on SAIL where  he is holding the highest post and has recommended Tripathi's name to Appointments Committee of the Cabinet (ACC) for giving him additional charge of NMDC," a source in the Ministry told PTI.

Tripathi was among 15 candidates called for an interview on May 30 for heading NMDC full-time by a Steel Ministry appointed panel, headed by Planning Commission member Arun Maira. The MSTC CMD, however, could not make the cut. The panel had  recommended the names of SAIL's Burnpur plant CEO Narendra Kothari and Bharat Coking Coal's CMD Tapas Kumar Lahiri for the same. The final approval of the ACC is still pending.

MSTC Ltd is a Mini Ratna Category-I PSU. The Steel Ministry's decision to appoint Tripathi replacing Verma on an interim basis at NMDC might be a result of the view that the final nod of ACC might take some time to arrive.

"Since, Verma is busy with SAIL and also burdened with the task of heading International Coal Venture Ltd; we thought it to be prudent to allow him to spend more time on SAIL. The steel sector is also passing through a bad time. He needs more time," the source said.

Verma, who also heads SAIL, was given additional charge of NMDC in May last year following some issues cropping up with the incumbent officiating Chairman and senior most Director on the NMDC Board, N K Nanda. NMDC is without a full-time CMD since a long time.

According to the source, Nanda was given the additional charge as Steel Minister Beni Prasad Verma did not concur with Public Enterprises Selection Board's (PESB) recommendation of M S Rana for heading NMDC in July last year. Rana at present heads Security Printing and Minting Corporation of India. Tripathi's tenure as the interim head of NMDC could be till such time the iron ore miner gets a full-time CMD.

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RBI sets measures for state discom bonds

Moneycontrol Bureau

Bonds, which will be issued by state power distribution companies (Discoms), will be valued at their current market price, if they are traded and quoted. However, they will be valued on a yield to maturity (YTM) basis with a mark-up, if bonds are not traded and quoted, the Reserve Bank of India (RBI) said in a notification on Thursday.

"As these bonds are to be acquired by banks under special circumstances and these have two distinct features: (i) issued and serviced by State discoms with the guarantee of the respective state governments during the initial period and (ii) issued and serviced by the state governments during the latter period," RBI said.

Must read: Risks to banks increased marginally: Fin Stability Report

Banks had lent an estimated around Rs 1.90 lakh crore to different state power distribution companies. Eight states have showed interest for loan restructuring. As a part of those recast packages, Discoms are supposed to issue bonds to the tune of 50 percent of their exposures to their lending banks as part of restructuring excercise.

The illiquid bonds, which will not be traded, will be priced 75 basis points higher than federal government bonds if the papers are held by the state distribution companies, but guaranteed by the state government, RBI said.

The mark-up (addition over and above) will be 100 basis points if they are not guaranteed by state governments. However, it will be 50 basis points when the bonds are held by the state governments.

Discom bonds will not have any statutory liquidity ratio status. This means, banks cannot use them to maintain mandatory 23 percent SLR. Banks need to invest in government securities to for SLR maintenance.

saikat.das@network18online.com

 

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Swiss Fin Corp sells 11.22 lakh shares of Karnataka Bank

Foreign investor Swiss Finance Corporation on Thursday offloaded 11.22 lakh shares of Karnataka Bank for around Rs 12 crore.

According to information available with stock exchanges, Swiss Finance Corporation (Mauritius) sold 11.22 lakh shares of Mangalore-based Karnataka Bank through open market transactions.

Shares were sold at an average price of Rs 108.04 valuing the transaction to Rs 12.12 crore.

As of March quarter, Swiss Finance Corporation held 30.31 lakh shares, amounting to 1.61 per cent stake, of Karnataka Bank. Earlier this week, Religare Finvest had sold 12 lakh shares of Karnataka Bank for an estimated Rs 13 crore. Religare Finvest is part of Religare Enterprises which is among the major contenders for new banking licences.

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Tata Group to bid for road projects

Jun 27, 2013, 09.04 PM IST

The Tata group is getting ready to bid for road projects that could soon be vacated by infra giants like GVK and GMR. The steel to coffee conglomerate is targeting an order book of Rs 70,000 crore in the infra space over the next five years.

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Tata Group to bid for road projects

The Tata group is getting ready to bid for road projects that could soon be vacated by infra giants like GVK and GMR. The steel to coffee conglomerate is targeting an order book of Rs 70,000 crore in the infra space over the next five years.

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Tata Group to bid for road projects

The Tata group is getting ready to bid for road projects that could soon be vacated by infra giants like GVK and GMR. The steel to coffee conglomerate is targeting an order book of Rs 70,000 crore in the infra space over the next five years.

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Cyrus Mistry's roadmap for the Tata Group's future is slowly unfolding. And the first pitstop seems to be infrastructure. The Tata group is getting ready to bid for road projects that could soon be vacated by infra giants like GVK and GMR .

The steel to coffee conglomerate is targeting an order book of Rs 70,000 crore in the infra space over the next five years. Sanjay G Ubale, MD & CEO, Tata Realty & Infra says "We have already identified two projects We are keen on bidding if GMR, GVK exit, we can explore those options."

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Gas price hike to ecourage exploration: Oil India

Jun 27, 2013, 09.48 PM IST

Commenting on the approved gas price hike by CCEA, Ananth Kumar, Oil India said," The gas price hike is slightly more than we expected". This move he says, will encourage the company to make more aggressive exploration."

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Gas price hike to ecourage exploration: Oil India

Commenting on the approved gas price hike by CCEA, Ananth Kumar, Oil India said," The gas price hike is slightly more than we expected". This move he says, will encourage the company to make more aggressive exploration."

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Gas price hike to ecourage exploration: Oil India

Commenting on the approved gas price hike by CCEA, Ananth Kumar, Oil India said," The gas price hike is slightly more than we expected". This move he says, will encourage the company to make more aggressive exploration."

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Commenting on the approved gas price hike by CCEA, TK Ananth Kumar, Oil India said," The gas price hike is slightly more than we expected". This move he says, will encourage the company to make more aggressive exploration"

The Cabinet Committee for Economic Affairs (CCEA) on Thursday approved the proposal to hike the natural gas price to USD 8.4 per mmbtu (metric million British thermal units) from April 1, 2014.

Also read: Gas price hiked to $8.4; CCEA Oks Ranga panel recos

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Oil India to raise $900 mn for Mozambique field stake buy

State-owned Oil India Ltd (OIL) today said it will raise USD 800-900 million in foreign debt to finance its share in the USD 2.5 billion acquisition of a stake in super-giant Mozambique gas field it is making with ONGC .

Oil and Natural Gas Corp (ONGC) and OIL, the nation's biggest state-run explorer, yesterday announced that they will buy Videocon Industries' 10 per cent stake in a supergiant Mozambique gas field for USD 2.5 billion. The stake will be split 60:40 between OVL, the overseas arm of ONGC, and OIL.

"We plan to go to overseas market to raise 80 to 90 per cent of our share of USD 1 billion (in the acquisition)," OIL Director (Finance) T K Ananth Kumar told reporters here. The borrowing, which will insulate the company from the volatility in the rupee-dollar exchange rate, will be a combination of external commercial borrowing and US dollar bond issue.

With rupee plummeting to a record low of 60.76 to a US dollar, outward remittance will cost more for companies. Raising debt overseas and paying for the acquisition in offshore accounts of the seller would insulate the deal from the currency  fluctuations.

"The currency variation will only have a marginal impact... to the extent of 10 per cent of the deal size that we have to pay from our reserves," he said. OIL Director (Business Development) N K Bharali said the Rovuma-1 field in the waters off the African nation, holds 35 to 65 Trillion cubic feet of gs reserves which are planned to be converted into liquid gas (LNG) for exports to nation's like India.

"First gas is planned for 2018," he said, adding that the acquisition of 10 per cent interest of Videocon is targeted to close by September 30, 2013. The deal is subject to approval of the Mozambique and Indian government, regulatory permissions and existing partners in Rovuma-1 area waiving off their pre-emption rights, he said adding that the partners in the block have one month time to decide. Bharali said besides the acquisition price, OVL-OIL will have to also pay their share of field development cost and the capital expenditure required for building plants that will turn gas into liquefied natural gas (LNG).

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Religare lures US firm for banking foray with 6.1% stake

Jun 26, 2013, 08.58 PM IST

CNBC-TV18 reports that Religare Enterprises has roped in US-based Customers Bancorp to partner in its banking foray by selling a 6.1-percent stake to Bancorp.

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Religare lures US firm for banking foray with 6.1% stake

CNBC-TV18 reports that Religare Enterprises has roped in US-based Customers Bancorp to partner in its banking foray by selling a 6.1-percent stake to Bancorp.

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Religare lures US firm for banking foray with 6.1% stake

CNBC-TV18 reports that Religare Enterprises has roped in US-based Customers Bancorp to partner in its banking foray by selling a 6.1-percent stake to Bancorp.

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Religare Enterprises is looking to boost its prospects for a banking licence. The company has roped in US-based Customers Bancorp by selling a 6.1-percent stake, reports CNBC-TV18. Customers Bancorp will pay USD 51 million for the stake.

Also Read: Magma Fincorp to apply for a banking licence

This sale of stake is part of the drive by Religare's promoters to bring their stake down to 49 percent. The RBI guidelines mandate that promoter holding in any company seeking to set up a non-operative financial holding company to apply for a banking licence, at 49 percent. The RBI has given its consent to Customers Bancorp to pick up an over 6-percent stake in Religare.

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Senate to discuss favourable Immigration Bill: NASSCOM

Amidst fury against the Immigration Reform Bill proposals that can adversely impact Indian IT companies, industry body Nasscom says that it has got assurance from the US judicial committee that a Bill which does not have the negative provisions that can adversely impact Indian IT companies will be taken up in the US Senate in a few weeks.

CNBC-TV18's Kritika Saxena spoke exclusively to Som Mittal, president, Nasscom about the changes in the Bill.

Below is the edited transcript of his interview with CNBC-TV18

Q: What are the developments on the passing of the Bill?

Mittal: What is going to get passed on this Thursday or Friday is the Senate Bill and we do not expect that to change. I think it will get passed with the negative provisions.

At the same time, the House Bill has come up which is far more positive, does not have these restrictions and does not have anything which is discriminatory to us. From Thursday, the markups will start which are amendments.

There are some attempts to include some negative provisions, but I think we have assurance that those will not come in. The House Bill that will get passed in the next few weeks should not have the same negative provisions.

So, now you have two Bills that are coming up, one with and one without these negative provisions, but still containing all the other positive provisions such as increase in H1B visas or green cards and so on which are beneficial for us.

Q: Where are the assurances that have come in wherein you have been told that the negative implications of the Bill will be removed?

Mittal: We have spoken to the judiciary committee members in the house. There is a gang of seven which is developing the Bill. So, we should be very happy with the House Bill.

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Coal India to prepay Japanese loan as rupee depreciates

Jun 26, 2013, 09.33 PM IST

Coal India had decided to prepay Rs 300-400 crore outstanding Japanese loan as the rupee crashes to above Rs 60 against US dollar.

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Coal India to prepay Japanese loan as rupee depreciates

Coal India had decided to prepay Rs 300-400 crore outstanding Japanese loan as the rupee crashes to above Rs 60 against US dollar.

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Coal India to prepay Japanese loan as rupee depreciates

Coal India had decided to prepay Rs 300-400 crore outstanding Japanese loan as the rupee crashes to above Rs 60 against US dollar.

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Coal India will prepay Rs 300-400 crore outstanding Japanese loan as the rupee crashes to above Rs 60 against US dollar.

"We have decided to prepay Japanese loan and the outstanding amount will be about Rs 300-400 crore due to forex situation," Coal India Chairman S Narsing Rao told PTI.

Asked about the World Bank loan, Rao said there is no provision for prepayment; otherwise the company would have done the same.

Also read: Signing FSA with CIL possible as early as Friday: NTPC

The outstanding loan from the World Bank would be around Rs 400-450 core. These loans were extended for development and modernisation of Coal India in the past.

CIL officials said the outstanding loan, which the company has decided to clear, was from the Japanese Exim Bank.

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Aditya Birla Nuvo enters race for banking licence

Jun 26, 2013, 09.36 PM IST

CNBC-TV18 reports that Aditya Birla Nuvo has entered the race for receiveing a banking licence after its board approved the decision to submit an application to RBI.

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Aditya Birla Nuvo enters race for banking licence

CNBC-TV18 reports that Aditya Birla Nuvo has entered the race for receiveing a banking licence after its board approved the decision to submit an application to RBI.

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Aditya Birla Nuvo enters race for banking licence

CNBC-TV18 reports that Aditya Birla Nuvo has entered the race for receiveing a banking licence after its board approved the decision to submit an application to RBI.

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I think the guidelines are very clear. I don't think they discriminate against large business houses

Kumar Mangalam Birla

Chairman

Ultratech

Aditya Birla Nuvo has entered the race for a banking licence. The board has approved the proposal of making an application to the RBI for obtaining a licence.

Also Read: Magma Fincorp to apply for a banking licence

Speaking to  CNBC-TV18, Aditya Birla Group chairman Kumar Managalam Birla said he was happy with the RBI guidelines and added that they do not discriminate against large business houses.

"No, I think the guidelines are very clear. I don't think they discriminate against large business houses. So we're very happy with the way the guidelines have been put across," he said.

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WalMart India unit head Jain leaves after 6 years

US retail giant WalMart on Wednesday said its India unit head Raj Jain has left the company and named Ramnik Narsey as interim head of the country's operations.

Also Read: RBI to issue notification on FDI liberalisation shortly

Jain is "no longer" with the company after being head of WalMart's India unit for six years, the company said in a statement.

Ramnik Narsey, senior vice-president for Walmart International, will serve as interim head, it said, without specifying why Jain left. Jain had joined the company in 2006 and was made the India head the following year.

The company, which has been facing investigations from Indian authorities over its investment in one of the business entities of its Indian partner Bharti Enterprises, said in a statement: "...effective immediately, Ramnik Narsey, senior vice president for Walmart International, will serve as interim leader for Walmart's business in India.

"He is replacing Raj Jain, who is no longer with the company."

Sources said the announcement of Jain's departure from the company was made this morning to the employees of the Indian operations by Walmart Asia president and CEO Scott Price, who had flown down from Hong Kong.

Comments from Jain could not be obtained as calls made remained unanswered.

Jain's exit comes in the backdrop of investigations by WalMart over allegations of corruption against it in foreign markets, including India. In March 2011, the US-based company had started a worldwide review of its policies, practices and internal controls for Foreign Corrupt Practices Act (FCPA) compliance.

The enforcement directorate has also been probing the Rs. 455.8 crore investment by Walmart in Cedar Support Services Ltd, a subsidiary of Bharti Ventures, for alleged "illegal" investments and flouting of FDI rules under the FEMA and Prevention of Money Laundering Act (PMLA).

Bharti Enterprises has, however, rejected the allegations that it had violated any rule in this regard. The company had said all the procedures were as per the "law of the land".

Jain had joined Walmart in 2006 and was named head  of Walmart India in 2007. During his tenure, wholesale cash-and- carry joint venture with Bharti Enterprises, back-end services and consulting businesses were established.

Narsey had joined Walmart in May 2013. Prior to this, he served as chairman and chief executive officer for Woolworths India.

"Ramnik brings significant management and leadership experience to the role," Price said, adding, "we remain optimistic about our business in India and look forward to our future in India under Ramnik's leadership."

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Bajaj Auto workers at Chakan plant go on strike

Jun 25, 2013, 07.16 PM IST

Workmen at the Chakan plant of Bajaj Auto Limited have gone on a strike, thereby affecting production following the management's refusal to allot shares to them at a discounted price.

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Bajaj Auto workers at Chakan plant go on strike

Workmen at the Chakan plant of Bajaj Auto Limited have gone on a strike, thereby affecting production following the management's refusal to allot shares to them at a discounted price.

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Bajaj Auto workers at Chakan plant go on strike

Workmen at the Chakan plant of Bajaj Auto Limited have gone on a strike, thereby affecting production following the management's refusal to allot shares to them at a discounted price.

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Bajaj Auto Ltd (BAL) today said workmen at its Chakan plant have "stopped coming" to work thereby affecting production following the management's refusal to allot them shares at discounted price.
    
The company said the workers had earlier given a notice for a stoppage of work at the plant from the morning shift of June 28.

Also read: Nevyeli staff opposes divestment, to strike from July 3
    
"The workmen have, however, stopped coming to the Chakan plant from June 25 without assigning any reason for this stoppage," BAL said in a filing to the BSE.      

The company said it had earlier received a notice from the workmen's union of its Chakan plant; Vishwa Kalyan Kamgar Sanghatana stating that they propose to call for a stoppage of work by all the workmen employed in Chakan plant from the morning shift of June 28.      

The reason for the strike was "that management had refused to concede their demand that all the workmen working in Bajaj Auto Ltd should each be given an option to subscribe to 500 equity shares of the company at a discounted price of Re 1 per share", it added.
    
Representatives of the union could not be reached immediately for the strike.
    
As on March 31, the Chakan plant of the company has an annual capcity of produce 1.2 million units of motorcycles, which include the Pulsar, Avenger, Ninja and KTM brands.

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RBI suspends external borrowings in Chinese Yuan

Jun 25, 2013, 09.09 PM IST

The Reserve Bank of India (RBI) on Tuesday discontinued the facility of external commercial borrowings (ECBs) in renminbi, the Chinese currency. Indian companies in the infrastructure sector were allowed to avail this fund raising route subject to a maximum of cap of USD one billion.

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RBI suspends external borrowings in Chinese Yuan

The Reserve Bank of India (RBI) on Tuesday discontinued the facility of external commercial borrowings (ECBs) in renminbi, the Chinese currency. Indian companies in the infrastructure sector were allowed to avail this fund raising route subject to a maximum of cap of USD one billion.

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RBI suspends external borrowings in Chinese Yuan

The Reserve Bank of India (RBI) on Tuesday discontinued the facility of external commercial borrowings (ECBs) in renminbi, the Chinese currency. Indian companies in the infrastructure sector were allowed to avail this fund raising route subject to a maximum of cap of USD one billion.

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Moneycontrol Bureau

The Reserve Bank of India (RBI) on Tuesday discontinued the facility of external commercial borrowings (ECBs) in renminbi, the Chinese currency. Indian companies in the infrastructure sector were allowed to avail this fund raising route subject to a maximum of cap of USD one billion.

"It has been observed that the facility of ECB in renminbi (RMB) had remained unused so far. Accordingly, the scheme of ECB in renminbi has been reviewed and it has been decided that this scheme may be discontinued from the date of issue of this circular," RBI said in a notification on Tuesday.

The central bank had introduced this facility on September 27, 2011. It represented business opportunities for Chinese lenders and was supposed to boost bilateral trade between China and India.  Currently, one yuan, the other name of renminbi, is equal to Rs 9.71.

According to Brinda Jagirdar, an independent economist and a former general manager (Economic Research) at the State Bank of India  (SBI), there could be political ramifications as well behind this decision as bilateral co-operations may not be growing as expected.

"Moreover, if companies continue to borrow overseas funds, it will add to current account deficit (CAD). At the time of repayments of those offshore loans, it will put pressure on India's exchange rate," she told moneycontrol.com.

"The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law," RBI said.

saikat.das@network18online.com

Tags: Reserve Bank of India , RBI, ECBs, external commercial borrowings, infrastructure s, USD , renminbi, ECB, yuan, China, India, Brinda Jagirdar, an independent economist , Saikat Das

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Bajaj launches mid-size sports bike KTM 390 Duke

Jun 25, 2013, 07.15 PM IST

The KTM 390 Duke is the second offering from the KTM portfolio as Bajaj Auto had launched the first KTM offering, KTM 200 Duke, in January 2012. The Duke is the first mid-size sports bike from the Bajaj stable.

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Bajaj launches mid-size sports bike KTM 390 Duke

The KTM 390 Duke is the second offering from the KTM portfolio as Bajaj Auto had launched the first KTM offering, KTM 200 Duke, in January 2012. The Duke is the first mid-size sports bike from the Bajaj stable.

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Bajaj launches mid-size sports bike KTM 390 Duke

The KTM 390 Duke is the second offering from the KTM portfolio as Bajaj Auto had launched the first KTM offering, KTM 200 Duke, in January 2012. The Duke is the first mid-size sports bike from the Bajaj stable.

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Bajaj Auto today launched its premium bike from the KTM platform at a price of Rs 1.8 lakh and said it expects to clock higher sales from the premium segment.

The KTM 390 Duke is the second offering from the KTM portfolio as Bajaj Auto had launched the first KTM offering, KTM 200 Duke, in January 2012. The Duke is the first mid-size sports bike from the Bajaj stable.

The premium segment accounts for 1,000 units per month and Bajaj commands nearly 75 per cent share in it. The company expects volumes to grow in double-digits with the launch, vice-president for Probiking, Amit Nandi, said at the launch.

Also read: Rajiv Bajaj lashes out at cos opposing quadricycles

Bajaj reported a 5.32 per cent fall in its motorcycle sales at 3,04,780 units in May against 3,21,922 units in the orresponding month the previous year. Its exports too declined sharply by 14.35 per cent in the month at 1,11,835 units down from 1,30,573 units.

The company has so far sold 11,000 KTM 200s since its launch, out of which 7,500 units were sold last fiscal, Bajaj Auto managing director Rajeev Bajaj said after the launch.

"The KTM 390 Duke is conceived, designed and developed at the Chakan plant. With the new offering we have created a new segment not only in the domestic market but globally as well. So, there will be no direct competition to this product," Bajaj claimed.

However, it is expected that the Duke will face competition from Yamaha R15, Honda CBR 250 and Ninja 350.

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Bet on high content, medium budget film paying off: Eros

Eros Interntaional Media 's focus on producing films high on content and medium in budget has started to pay off, says Kamal Jain, Group CFO, Eros Interntaional Media.

Also Read: Google boasts predictive powers for box office

In an interview to CNBC-TV18, Jain adds that Ranjhana was the third successful film after Vicky Donor and English Vinglish  produced by the company. Jain also highlighted that satellite and music rights to Ranjhana  were pre-licensed as a derisking strategy.

Also Read: DreamWorks Studios, Ford Motor Company announce partnership

Below is the edited transcript of the interview on CNBC-TV18

Q: How much have you already made on Ranjhana?

A: We are happy with the performance of the film at the box office. Last weekend, it raked in about Rs 31.5 crore gross worldwide. Out of that, about Rs 26.5 crore was earned in India and Rs 5 crore came from the box office overseas. The film's box office It is phenomenal given that the budget was medium and the cast is relatively new.

In the last one year, we focused on supporting films high on content, small-to-medium in budget and distributed them worldwide. After Vicky Donor, English Vinglish, Ranjhana has been a good success. On Monday, the film raked in net collections of Rs 3.85 crore in India alone.

Q: How much profit will accrue to Eros International?

A: In India, on an average gross collection of Rs 50 crore, there is a entertainment tax of 30 percent across the country. In states where the entertainment tax is not levied, the collections are a little higher. So about 75 percent of the collection is available to be apportioned between the exhibitors and distributors. As a thumb rule, about 40 percent of the gross collections is our topline.

I think the percentage apportioned to distributors and exhibitors still stands at 50 percent and in the first week you get an additional bonus of 2-2.5 percent. About 52.5 percent of collections accrue as revenue for the producers.

Q: What about the cost?

A: As far as this particular film is concerned, we pre-licensed the satellite and music rights as a derisking strategy. The film should be profitable and deliver a very high return-on-investment from a marketing and distribution perspective. 

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Companies can refinance 3G payments via ECBs till FY14: RBI

Jun 25, 2013, 09.11 PM IST

Indian companies, which were successful bidders in the 3G spectrum auctions can refinance their payments in rupee terms through external commercial borrowing (ECB) route with an extended window till March 31, 2014; the Reserve Bank of India (RBI) said in a notification on Tuesday.

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Companies can refinance 3G payments via ECBs till FY14: RBI

Indian companies, which were successful bidders in the 3G spectrum auctions can refinance their payments in rupee terms through external commercial borrowing (ECB) route with an extended window till March 31, 2014; the Reserve Bank of India (RBI) said in a notification on Tuesday.

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Companies can refinance 3G payments via ECBs till FY14: RBI

Indian companies, which were successful bidders in the 3G spectrum auctions can refinance their payments in rupee terms through external commercial borrowing (ECB) route with an extended window till March 31, 2014; the Reserve Bank of India (RBI) said in a notification on Tuesday.

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Moneycontrol Bureau

Indian companies, which were successful bidders in the 3G spectrum auctions can refinance their payments in rupee terms through external commercial borrowing (ECB) route with an extended window till March 31, 2014; the Reserve Bank of India (RBI) said in a notification on Tuesday.

Also read: RBI suspends external borrowings in Chinese Yuan

"On a review it has been decided that ECB window for financing 3G spectrum rupee loans, that are still outstanding in telecom operator's books of accounts, will be open upto March 31, 2014," the central bank said.

Earlier in January, 2010; RBI had mentioned that the payment for spectrum allocation might initially be met out of the rupee resources by the successful bidders, to be refinanced with a long term ECB, under the approval route. However, it was subject to the condition that ECB should be raised within 12 months from the date of payment of the final installment to the government.

The government had auctioned 3G spectrum for around 22 service areas wherein many big companies including Vodafone, Bharti , Reliance , Idea , Tata , Aircel and others, had bid for it. An estimated Rs 67,000 crore entered the government's coffer on account of 3G spectrum allocations.

"All other aspects of the ECB policy shall remain unchanged. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law," RBI said.

saikat.das@network18online.com

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SAT admits Alchemist plea, orders status quo till July 22

Jun 25, 2013, 09.31 PM IST

CNBC-TV18 reports that the Securities Appellate Tribunal has admitted Alchemist Infra Realty's plea against Sebi's winding-up order and directed both Sebi and Alchemist to maintain status quo till July 22.

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SAT admits Alchemist plea, orders status quo till July 22

CNBC-TV18 reports that the Securities Appellate Tribunal has admitted Alchemist Infra Realty's plea against Sebi's winding-up order and directed both Sebi and Alchemist to maintain status quo till July 22.

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SAT admits Alchemist plea, orders status quo till July 22

CNBC-TV18 reports that the Securities Appellate Tribunal has admitted Alchemist Infra Realty's plea against Sebi's winding-up order and directed both Sebi and Alchemist to maintain status quo till July 22.

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And in other developments from the Securities Appellate Tribunal (SAT), Alchemist Infra Realty saw its appeal against Sebi's winding up order being admitted, reports CNBC-TV18. The hearing has been slated for July 22.

Also Read: SAT to hear Alchemist Infra's appeal against Sebi on Tue

SAT directed both Sebi and Alchemist to maintain status quo. SAT has also directed  Alchemist Infra to furnish details of its properties, amounts raised and details of investors. Interestingly, the Alchemist Group is headed by KD Singh, the Trinamool Congress MP in the Rajya Sabha from.

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Cairn India to pump $3bn over 3 years to tap Raj oilfields

Cairn India plans to invest USD 3 billion over the next three years in finding more oil and raising output from its showpiece oilfields in Rajasthan, company chief executive P Elango said.

"We have planned for a net capital investment of USD 3 billion in a three year period from FY2014 to FY2016. We are focused on realising the full potential of our world-class Rajasthan assets through a combination of aggressive exploration and fast-track development," he said in the company's annual report.

Cairn will raise crude oil production from Rajasthan fields by as much as 23 per cent to 215,000 barrels per day by March 2014.

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"The Rajasthan block's current production is at around 175,000 bpd. We expect to exit FY-2014 with a production in the range of 200,000-215,000 bpd," he said.

The current production comes from five fields — Mangala, Bhagyam, Aishwariya, Raageshwari and Saraswati. The Mangala field, he said, is producing at plateau rates of 150,000 bpd. Aishwariya commenced production in March and is expected to ramp up to approved rate of 10,000 bpd over the next few months.

Bhagyam, the second biggest oilfield behind Mangala, is expected to ramp up to the approved rate of 40,000 bpd by the second half of current fiscal, he added. Also, the Mangala Enhanced Oil Recovery (EOR) Field Development Plan (FDP) approval is in progress and Cairn expects to start full field implementation in FY2015, which will result in greater output and a further extension of the plateau in the producing field.

"We plan to drill more than 450 wells in Rajasthan block over a three year period, a significant increase from the current rate of 25 wells drilled in FY2013," Elango said.

The wells planned include 100 exploration and appraisal (E&A) wells, while balance will be development wells to sustain and enhance production volumes.

"The E&A wells are aimed to target gross recoverable risked prospective resource of 530 million barrels of oil equivalent," Elango said.

Company chairman Navin Agarwal said the aggressive exploration and fast-track development is designed to bring new fields into production in a region where Cairn India has already discovered around 1.3 billion barrels of oil equivalent resources but has drilled only a part of its acreage.

"Exploration has been, and will continue to be, central to our growth plans," he said.

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TA Associates announces investment in Fractal Analytics

TA Associates, a leading global growth private equity firm, and Fractal Analytics, a global provider of advanced analytics to Fortune 500 companies, today announced that TA Associates has acquired a minority stake in the company for an investment of USD 25 million.

"We believe that the big data space represents a very significant opportunity as companies have understood the power of data driven decision making but are struggling to operationalize and institutionalize analytics inside their organizations," said Naveen Wadhera, Director and Country Head, TA Associates Advisory Pvt. Ltd., who will join the Fractal Analytics Board of Directors. "Fractal is one of the most respected players globally in this space and has been experiencing accelerated growth, making it the ideal company with which to partner. We look forward to working with the company's management team to further build value in Fractal."

Also read: Tata Pure Equity Fund: Invest with a horizon of 3 years  

"We chose to partner with TA Associates because of their excellent track record in helping profitable companies become outstanding businesses," said Srikanth Velamakanni, Co-Founder & CEO of Fractal Analytics. "We are passionate about helping companies leverage advanced analytics to better understand consumers, optimize pricing & marketing and compete more effectively in the marketplace. Our partnership with TA will help us fuel this passion further."

"Fractal has a top notch team of data scientists and world-class analytics solutions that continue to create tremendous business impact for leading Fortune 500 companies," said Kenneth T. Schiciano, a Managing Director at TA Associates who will join the Fractal Analytics Board of Directors. "We are delighted to back the company in its mission to institutionalize data driven decision making in corporations, and anticipate a very mutually beneficial relationship."

"Over the last two years, Fractal has seen revenues almost triple in size, making us one of the fastest growing companies in the industry," said Pranay Agrawal, Co-Founder and EVP, Fractal Analytics. "We are excited about how this partnership will help us expand our footprint and meet the growing client demand for analytics solutions. We are confident this collaboration with TA will prove beneficial to our clients and employees."

Nishith Desai Associates and Goodwin Procter LLP provided legal counsel to TA Associates. DSK Legal provided legal counsel to Fractal Analytics. Avendus Capital served as exclusive financial advisor to Fractal Analytics. TA Associates Advisory Pvt. Ltd. provided advisory services on the investment.

About Fractal Analytics

Fractal Analytics believe analytics is critical to develop a deep understanding of consumers and earn customer loyalty, and make better data-informed decisions. Leading global companies partner with Fractal Analytics to build breakthrough analytics solutions, set up analytical centers of excellence, and institutionalize data-driven decisioning. Fractal Analytics serves clients from offices in San Francisco Bay area, Greater New York area, London, Mumbai, New Delhi, Singapore and Dubai. For more information, please visit www.fractalanalytics.com.

Fractal Analytics' flagship Customer Genomics™ solution helps marketers learn complex customer behavior at an individual level. Its proprietary pattern recognition and machine learning algorithms learn from every transaction and customer interaction, including from social media, helping marketers build a complete view of individual customers across attitudinal and behavioral dimensions. In May, information technology and research advisory company Gartner named Fractal as one of the top five "Cool Vendors in Analytics, 2013."

About TA Associates

Founded in 1968, TA Associates is one of the largest and most experienced global middle-market growth private equity firms. The firm has invested in more than 425 companies around the world and has raised $18 billion in capital. With offices in Boston, Menlo Park, London, Mumbai and Hong Kong, TA Associates leads buyouts and minority recapitalizations of profitable growth companies in the technology, financial services, business services, healthcare and consumer industries. More information about TA Associates can be found at www.ta.com .

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SBI annual report: Select noteworthy points you should know

Moneycontrol Bureau

India's largest lender the State Bank of India ( SBI ) grappled to maintain its credit quality during 2012-13. Nomura Equity Research, a global brokerage firm, has identified some salient points, which will have bearings on the bank's future performance.

Meanwhile, Nomura has retained its rating at 'reduce' with a target price of Rs 1950 as against the Rs 1,998, the closing price on June 20, 2013.

"We examine SBI's FY13 annual report and analyze the following issues -relative movement in non-performing loan buckets, excess 'specific' provisions on the book, asset liability miss-match (ALM) gap, loans and deposits maturity structure, trend in priority sector lending, working capital loans and contingent liability trends," it said in a research report.

Also read: ANALYSIS: Here's how NDF factor works for rupee/dollar rate

Here's what Nomura analysts Vijay Sarathi, Abhishek Bhattacharya and Amit Nanavati pointed out :

Ageing of GNPLs: SBI has a relatively stable level of sub-standard assets in its GNPL book historically the proportion of sub-standard assets which was in the 45% area for the last three years, has now dropped marginally to 41% in FY13. This marginal increase in seasoning compares favourably with the other large PSU banks. PNB has 49.5% of its GNPL book in sub-standard assets which is an improvement over FY12 (when the proportion was 64%). BOB has actually seen a substantial spike in the proportion of sub-standard assets over the last two years 35% in FY11 to 60% in FY12 to 62% in FY13. So, outside of fresh delinquency, the probability of higher future provisioning spikes is relatively low for SBI.

Provision cover in excess of regulatory (IRAC) norms: The PSU banks have much lower excess 'specific' provisions when compared with the private banks. SBI has excess 'specific' provisions (in excess of IRAC norms) of 1.4% in FY13 compared with 12% for BOB and 4% for PNB. In contrast, the private banks like HDFC Bank carry 37% excess 'specific' provisions.

Provision cover on substandard and D1-D2 assets: We also look at what proportion of sub-standard and doubtful assets (D-1 and D-2 categories) have been covered by provisions. The rationale behind this analysis is -- since D-3 and loss categories should carry a mandated 100% provision, we analyze how much provision cover is left for substandard and D-1 & D-2 assets. SBI has a 39% provision cover for substandard, D-1 & D-2 assets compared with 44% for BOB and 38% for PNB.

Asset-liability management: SBI's ALM gap (defined as asset duration minus liability duration) improved to 4.2 months in FY13 from 8.5 months in FY12. This compares with a gap of 3.7 months for PNB and 11 months for BOB.

Priority sector lending mandate: SBI fell short of its aggregate priority sector lending mandate in FY13; priority loans comprised 36% of the previous year loans. This compares with 39.3% for BOB and 34.1% for PNB in terms of priority sector loan books.

Loan guarantees & acceptances: As a percentage of net worth, SBI's exposure to loan guarantees and other contingent liabilities comprised 314% in FY13, down from 375% in FY12. In comparison, BOB's exposure was 159% and PNB was at 243%. Most of the banks have cut back on their exposure to loan guarantees & acceptances in FY13.

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