BANGALORE: Rising attrition among project managers with experience of between three and eight years, who handle critical delivery teams for topIndia's top 10 cos to work customers, is proving to be a big worry for major IT firms like Tata Consultancy Services (TCS), Infosys and Wipro that are scrambling to cope with renewed demand for offshore outsourcing.
Until a few months ago, technology firms were busy offering salary hikes and other incentives to software engineers to retain them as demand picked up. However, some companies are now battling attrition as high as 40% among their project managers, threatening to disrupt ongoing engagements.
“Customers want commitment about retention of these project managers. At best, we can offer them 15-20% retention hikes, but what can you do when multinationals like Accenture and Cognizant are wooing them with around 40% salary hikes?” said a senior executive of a mid-tier Indian outsourcing firm, which competes with larger rivals for more business from customers such as GE.
source-Economic Times
Wednesday, June 30, 2010
Japan's SMFG to buy 4.5% stake in Kotak Mahindra Bank for $296 mn
Sumitomo Mitsui Financial Group said it has agreed to buy a 4.5 per cent stake in Kotak Mahindra Bank for $296 million, as Japan's No 3 bank stepsTop 5 stock picks up efforts to expand its overseas operations.SMFG and other major Japanese banks are seeking partnerships with local banks in Asian countries as growth prospects at home are weak, hoping this will expand their overseas customer base beyond Japanese clients working abroad.
SMFG has tie-ups with local banks in Hong Kong, South Korea, Indonesia and other Asian markets, including a 15 percent stake in Vietnam Export Import Bank.
It said it would acquire the stake in Kotak Mahindra through a private placement of new shares to be issued in August or September for about Rs 1370 crore ($296 million), pending approval by the Indian bank's shareholders and authorities.
SMFG plans to team up with Kotak Mahindra in asset management, stock brokerage and investment banking operations, it said in a statement.
Last week, Dutch financial services group ING sold its entire 3.1 percent stake in Kotak Mahindra Bank for $175 million.
Many foreign banks are looking to build up their presence in India, which is on track for economic growth this year of more than 8 percent but also limits the participation of foreign lenders in the country.
Last week, Dutch lender Rabobank moved a step closer to setting up its own banking unit in India by cutting its stake in midsize local lender Yes Bank for about $213 million, to meet regulatory requirements.
Goldman Sachs has applied for a banking licence in the country, while Australia and New Zealand Banking Group is planning a return to India after a 10-year absence, and numerous foreign banks are building up their private banking operations in India.
UK lender Standard Chartered last month raised $530 million in the first ever issue of Indian depositary receipts (IDRs), a move that was less about raising capital than about boosting its profile in India.
(Source - Economic Times)
Monday, June 21, 2010
Ashoka Buildcon plans Rs. 225 cr IPO
Ashoka Buildcon Ltd has filed a Draft Red Herring Prospectus for an Initial Public Offering of equity shares of Rs 10 each for cash at a price to be decided through a 100% Book-Building Process. The issue comprises a net issue of Rs. 225 crores to the public and a reservation of Rs. 4.50 crore for employees. The shares will be listed on the National Stock Exchange and Bombay Stock Exchange. The infrastructure company operates one of the highest numbers of toll-based BOT projects in India. It has bagged two orders from National Highways Authority of India (NHAI), collectively worth Rs. 1389 crores for construction of roads on Design, Build, Finance, Operate and Transfer in Karnataka and on Orissa-Chhattisgarh border.
The company has bagged an order worth Rs. 909 crores for the construction of four lane road from 0.00 kms to 88.00 kms on NH 6 between Sambalpur-Baragarh on the Orissa-Chattisgarh border in Orissa to be executed as BOT (Toll) project on DBFO pattern under NHDP Phase III project.
The other contract, worth Rs. 480 crores, is for a stretch of 79.36 kms for six lane road on Belgaum-Dharwad section of NH-4 from 433.000 kms to 515.000 kms on DBFOT basis.
Reliance Broadcast Network up 4pc on deal with CBS
Shares of Reliance Broadcast Network (earlier known as Reliance Media World) closed at Rs 79.10, up 4 per cent on the Bombay Stock Exchange. During the day, the scrip surged 5 per cent to hit-upper circuit at Rs 79.85.
"The stock today rallied complementing the broader market index Sensex. The market is volatile and investors may take time in making any long-tern investment in the scrip and rather will see its performance for some more time," SMC Global vice-president Rajesh Jain said.
A similar trend was seen on the NSE where it settled at Rs 79.70, up 4.87 per cent. On volume front, a total of 3.5 lakh shares of RBN changed hands on both the bourses.
Reliance Broadcast Network in a June 19 letter to the bourses had announced formation of a 50:50 joint venture with CBS Studios International, a wholly-owned subsidiary of CBS Corp, for owing and/or operating a portfolio of television channels.
The joint venture will initially broadcast English language general entertainment channels and will explore Hindi and regional language GECs in the next phase.
Source- Economic Times
IRDA to frame new guidelines on ULIPs
After winning the turf war with market watchdog SEBI on ULIPs, insurance regulator IRDA on Monday said it would frame new guidelines for these products to make them more attractive for policy holders.
"Certainly, yes," Insurance Regulatory and Development Authority (IRDA ) chairman J Hari Narayan said when asked whether the insurance regulator would unveil new guidelines for ULIPs to make them attractive for investors.
The government has ended the turf war between IRDA and SEBI, saying unit linked insurance plans (ULIPs) will be regulated by IRDA.
On Friday night, President Pratibha Patil issued the Ordinance, explaining that the life insurance business shall include any unit-linked policy or scrips or any such instruments.
The government has also constituted a high-level committee chaired by Finance Minister Pranab Mukherjee, which will sort out all issues of jurisdiction regarding hybrid products.
The committee on hybrid products will include the Finance Secretary, the Financial Services Secretary and heads of RBI, IRDA, SEBI and the Pension Fund Regulatory and Development Authority (PFRDA).
SEBI in April took the market by surprise when it banned 14 life insurance firms from issuing fresh ULIP schemes.
However, IRDA asked the life insurers to ignore the SEBI order and the matter then went to the Finance Ministry, which advised them to move the court. In the meantime, the ministry had asked them to maintain the status quo.
ULIPs account for more than 50 per cent of the life insurance business and the money collected from policy holders is invested in equities.
Source - Economic Times
"Certainly, yes," Insurance Regulatory and Development Authority (IRDA ) chairman J Hari Narayan said when asked whether the insurance regulator would unveil new guidelines for ULIPs to make them attractive for investors.
The government has ended the turf war between IRDA and SEBI, saying unit linked insurance plans (ULIPs) will be regulated by IRDA.
On Friday night, President Pratibha Patil issued the Ordinance, explaining that the life insurance business shall include any unit-linked policy or scrips or any such instruments.
The government has also constituted a high-level committee chaired by Finance Minister Pranab Mukherjee, which will sort out all issues of jurisdiction regarding hybrid products.
The committee on hybrid products will include the Finance Secretary, the Financial Services Secretary and heads of RBI, IRDA, SEBI and the Pension Fund Regulatory and Development Authority (PFRDA).
SEBI in April took the market by surprise when it banned 14 life insurance firms from issuing fresh ULIP schemes.
However, IRDA asked the life insurers to ignore the SEBI order and the matter then went to the Finance Ministry, which advised them to move the court. In the meantime, the ministry had asked them to maintain the status quo.
ULIPs account for more than 50 per cent of the life insurance business and the money collected from policy holders is invested in equities.
Source - Economic Times
American Express introduces 'Pay with Points' for cardmembers
and faster than before for its Platinum cardmembers and the Platinum Reserve credit cardmembers. Pay with Points feature allows cardmembers to instantly redeem membership rewards points for all or part of the cost of any leading airline ticket without blackout dates or restriction when booking travel through American Express Membership Travel Services.
According to Simran Kalra, vice president, product management & development, American Express, “In the past, American Express cardmembers were able to convert rewards points to frequent flyer miles with Membership Rewards partner airlines. Now in addition, with this ‘Pay with Points’ feature, our cardmembers have an option to use their membership reward points to fly on any leading airlines free of blackout dates or restrictions or memberships to Frequent Flyer programmes.”
Cardmembers can call American Express Membership Travel Services to book tickets availing of a choice of airlines to fly including leading domestic and over 50 international airlines. Cardmembers can pay for tickets by combining points with part payment on their American Express Platinum Cards as well as pay fully with the points earned.
Dhanalakshmi hikes term deposit rates
The new rate are applicable for all domestic term deposits below and including Rs 1 crore across all tenures, a press release issued said.
Deposit of up to Rs 1 crore will be offered 6.5 per cent for one-year maturity. For deposits from ranging from 366 days to two years, 7.25 per cent, above two years up to five year maturities, the bank will offer 7.50 per cent and above five years up to 10 years, 7.75 per cent, the release said.
The bank will offer a special rate of 7.75 per cent for 400 days term for deposits up to Rs 50 lakh. It has also waived off pre-payment penalty in respect of all deposit schemes that offer the sweep in sweep out facility as a product feature, it said.
It has also announced increase in the period of term under its short term, high value deposit schemes from 15 days and 30 days to 46 days and 91 days respectively.
Mumbai, Delhi account for 45 pc of total equity AUM
Mumbai and Delhi together account for about 45 per cent of the total equity mutual fund assets under management (AUM), the Boston Consulting
Group (BCG) and Computer Age Management Systems' (CAMS) report on the Equity Mutual Funds industry said.
India's mutual fund industry's average assets under management (AUM) is pegged at Rs 8,05,239-crore in June 2010.
According to the report, the concentration of equity AUM in the top cities is fast diminishing. The share of AUM beyond the top ten cities increased rapidly from about 10 per cent in March 2003 to about 26 per cent in March 2010.
Mumbai and Delhi together account for about 45 per cent of total equity AUM, and the top 30 cities account for about 90 per cent of total equity AUM, the report said.
"We believe that the Indian equity mutual funds industry is likely to continue growing rapidly for the next five to six years given many favourable factors such as under penetration, high economic growth rate, tax benefits such as equity linked savings schemes, and enhanced presence in household savings products," the report said.
"The mutual fund asset under management is expected to grow by 20-30 per cent over the next five year period, as compared to 35 per cent growth registered in last five years," BCG's Partner & Director, Alpesh Shah told reporters here.
Group (BCG) and Computer Age Management Systems' (CAMS) report on the Equity Mutual Funds industry said.
India's mutual fund industry's average assets under management (AUM) is pegged at Rs 8,05,239-crore in June 2010.
According to the report, the concentration of equity AUM in the top cities is fast diminishing. The share of AUM beyond the top ten cities increased rapidly from about 10 per cent in March 2003 to about 26 per cent in March 2010.
Mumbai and Delhi together account for about 45 per cent of total equity AUM, and the top 30 cities account for about 90 per cent of total equity AUM, the report said.
"We believe that the Indian equity mutual funds industry is likely to continue growing rapidly for the next five to six years given many favourable factors such as under penetration, high economic growth rate, tax benefits such as equity linked savings schemes, and enhanced presence in household savings products," the report said.
"The mutual fund asset under management is expected to grow by 20-30 per cent over the next five year period, as compared to 35 per cent growth registered in last five years," BCG's Partner & Director, Alpesh Shah told reporters here.
Kalanithi Maran Talks on Spice Jet Takeover
Kalanithi Maran , owner of the Sun TV empire, stunned the aviation sector by beating out well-known names in Corporate India to emerge victorious in the race to buy SpiceJet. Mr Maran, whose Sun Network is one of the dominant names in the Indian television entertainment scene, has no experience in aviation. Nor has he partnered with somebody in the aviation business to do the deal. In this interview with ET, he explains the reasons behind his interest in the sector and his plans for SpiceJet. Excerpts:
Currently, you’re running a company with perhaps one of the best profit margins in the media and entertainment space and now you’re getting into a sector where profitability is hard to come by. Why aviation? ( Watch )
I look at the opportunity, at what’s going to happen in the future. Currently, the industry carries four million passengers per month, growing at the rate of 15%. We are seeing the purchasing power percolating to smaller cities. I strongly believe that if you have affordable pricing, you can do mass transportation in India, with infrastructure and new airports also coming up.
But people are sceptical of your entry into this space without past experience or core competency.
I am the chairman of the company, not the CEO. It is the CEO who requires core competency. The chairman requires foresight. I don’t believe in industry’s perception, I believe in creating trends.
When I started satellite television, people laughed at me saying Tamil cannot be in satellite television, it’s too costly. When I started radio, they said television has come, radio is a dead business. When I started DTH, they said there are too many big players. We are now 5.5 million subscribers strong. If I’m going to follow the herd, I’ll be one among the crowd. Let me be clear. All my steps are calculated, I am not going blindly with intuition. I never wanted to do it when oil prices were at $140 per barrel.
What kind of moves can we see on the pricing front? Also, aviation is a loss-making industry. How will you ensure that SpiceJet keeps its head above water?
Right now, SpiceJet and IndiGo are the only two profitable airlines. We picked up one company that is making profits. So it disproves your theory that it’s a loss-making industry. EBITDA for SpiceJet is 19% for FY10. The aviation sector hit rock bottom two years back. Now, it can only go up. That’s how we see it. We have been studying SpiceJet only for three months. Next couple of months, we will consolidate this acquisition.
Do you see your latest venture as a financial investment? How much time will you spend on aviation from now on? Currently, all your time goes to Sun TV. How will you divide you time between aviation and entertainment?
I am not an FII. Whatever business I do, I am an active player. If I wanted to be a financial investor, I would have stayed at 10%. I am not like that. If you see what we’ve done, over a period of three years, we have brought in professionals. We have got one of the best teams for Sun, it is all professionally managed. It is a board-run company.
Do you think your timing is right?
Rather than a full-fledged carrier, we went to Spice at the right time when the promoter (Kansagra family and investor WL Ross) wanted to exit. So, the timing was right. We got 25% less than the market price, so it has to be right. The pricing that I did was the correct price. Lesser than the market price, even if you take a six months’ average. Deal was struck at Rs 47.25 per share.
But did you prefer the acquisition strategy rather than starting a new airline?
Starting from scratch is painful. Spice is a very strong brand up north. And its one of two airlines making profits. Spice has 20 aircraft and now they’ve also applied for international routes — Dhaka and Colombo.
What about your growth targets?
Spice’s current EBITDA margin is 19% and my target would be to take it to 25-30%.
How will you do that?
It will happen through better volumes. Not disruptive, it will be something constructive for my passengers. I am not competing with full-fledged carriers. At least for the next five years, I am not looking at changing the low-cost model. Worldwide, if you see, low-cost carriers are the ones doing well — RyanAir or EasyJet or SouthWest in the US. They are the ones who escaped the recession. So I am going to stick with that.
You already have Raja Vaidyanathan who helped you firm up your aviation plans. Will Spice CEO Sanjay Agarwal continue? Any management changes in the offing?
I am happy with what Spice has got. From what I have learnt, the Spice management has done a great job during the recession. They are doing well. What do you mean my own men? Anybody who is working for me is mine. Sanjay was not the promoter’s man because the ownership was fragmented. And he has done a good job. So, honestly I don’t see any changes I’m going to do with the management. Maybe, a new team will come. Maybe at the marketing level. All this will happen once I consolidate. This year itself, they have plans to take 5-6 aircraft. We may look at more (routes) in the south. Spice actually is less represented in the south.
Any immediate plans to rename the brand?
As of now, that is not going to change. Spice has a very strong name in the north.
Would you consider enhancing your current stake of 57%?
It all depends on the company’s requirements. From what I’ve seen, they don’t need funds. Internal accruals are enough. One of the reasons I picked them is that it is literally a zero-debt company.
What support mechanism do you anticipate from the government?
The industry’s main concern is the removal of the 30% tax that states levy on fuel. Worldwide, airlines are not treated as a luxury the way it is in India. Even in a continent like Europe, the major mode of transportation is aircraft. In third world countries too, in countries in Latin America, the population of aircraft and number of carriers is going up. If you start saying it’s luxury, you’re in trouble. The airline business should be thought of as a mode of transport. If I’m able to convert first-class passengers travelling in train into fliers, you’re looking at a huge potential.
Which other sectors are you looking to invest in?
I’m not going to comment on that. Right now, my focus is only on consolidation of this acquisition. Maybe towards the end of the quarter. We have some plans. Not telecom, its too over-crowded. Not going to comment on others.
Given your political lineage, did you use any connections to firm up your aviation foray?
This is a question that I’ve been asked from the day I started my business. Out of 15 years of existence, half the time I have been in Opposition. Either I have been fighting with somebody or the Opposition is in power. In fact, political connections put me in trouble also. Whatever I’ve done, it’s open. If that is the case, then every politicians’ son should have made it big. I am proud of my heritage, my family is in politics, I am not going to say no to that. But that and this is different. I have never been part of the political system.
Currently, you’re running a company with perhaps one of the best profit margins in the media and entertainment space and now you’re getting into a sector where profitability is hard to come by. Why aviation? ( Watch )
I look at the opportunity, at what’s going to happen in the future. Currently, the industry carries four million passengers per month, growing at the rate of 15%. We are seeing the purchasing power percolating to smaller cities. I strongly believe that if you have affordable pricing, you can do mass transportation in India, with infrastructure and new airports also coming up.
But people are sceptical of your entry into this space without past experience or core competency.
I am the chairman of the company, not the CEO. It is the CEO who requires core competency. The chairman requires foresight. I don’t believe in industry’s perception, I believe in creating trends.
When I started satellite television, people laughed at me saying Tamil cannot be in satellite television, it’s too costly. When I started radio, they said television has come, radio is a dead business. When I started DTH, they said there are too many big players. We are now 5.5 million subscribers strong. If I’m going to follow the herd, I’ll be one among the crowd. Let me be clear. All my steps are calculated, I am not going blindly with intuition. I never wanted to do it when oil prices were at $140 per barrel.
What kind of moves can we see on the pricing front? Also, aviation is a loss-making industry. How will you ensure that SpiceJet keeps its head above water?
Right now, SpiceJet and IndiGo are the only two profitable airlines. We picked up one company that is making profits. So it disproves your theory that it’s a loss-making industry. EBITDA for SpiceJet is 19% for FY10. The aviation sector hit rock bottom two years back. Now, it can only go up. That’s how we see it. We have been studying SpiceJet only for three months. Next couple of months, we will consolidate this acquisition.
Do you see your latest venture as a financial investment? How much time will you spend on aviation from now on? Currently, all your time goes to Sun TV. How will you divide you time between aviation and entertainment?
I am not an FII. Whatever business I do, I am an active player. If I wanted to be a financial investor, I would have stayed at 10%. I am not like that. If you see what we’ve done, over a period of three years, we have brought in professionals. We have got one of the best teams for Sun, it is all professionally managed. It is a board-run company.
Do you think your timing is right?
Rather than a full-fledged carrier, we went to Spice at the right time when the promoter (Kansagra family and investor WL Ross) wanted to exit. So, the timing was right. We got 25% less than the market price, so it has to be right. The pricing that I did was the correct price. Lesser than the market price, even if you take a six months’ average. Deal was struck at Rs 47.25 per share.
But did you prefer the acquisition strategy rather than starting a new airline?
Starting from scratch is painful. Spice is a very strong brand up north. And its one of two airlines making profits. Spice has 20 aircraft and now they’ve also applied for international routes — Dhaka and Colombo.
What about your growth targets?
Spice’s current EBITDA margin is 19% and my target would be to take it to 25-30%.
How will you do that?
It will happen through better volumes. Not disruptive, it will be something constructive for my passengers. I am not competing with full-fledged carriers. At least for the next five years, I am not looking at changing the low-cost model. Worldwide, if you see, low-cost carriers are the ones doing well — RyanAir or EasyJet or SouthWest in the US. They are the ones who escaped the recession. So I am going to stick with that.
You already have Raja Vaidyanathan who helped you firm up your aviation plans. Will Spice CEO Sanjay Agarwal continue? Any management changes in the offing?
I am happy with what Spice has got. From what I have learnt, the Spice management has done a great job during the recession. They are doing well. What do you mean my own men? Anybody who is working for me is mine. Sanjay was not the promoter’s man because the ownership was fragmented. And he has done a good job. So, honestly I don’t see any changes I’m going to do with the management. Maybe, a new team will come. Maybe at the marketing level. All this will happen once I consolidate. This year itself, they have plans to take 5-6 aircraft. We may look at more (routes) in the south. Spice actually is less represented in the south.
Any immediate plans to rename the brand?
As of now, that is not going to change. Spice has a very strong name in the north.
Would you consider enhancing your current stake of 57%?
It all depends on the company’s requirements. From what I’ve seen, they don’t need funds. Internal accruals are enough. One of the reasons I picked them is that it is literally a zero-debt company.
What support mechanism do you anticipate from the government?
The industry’s main concern is the removal of the 30% tax that states levy on fuel. Worldwide, airlines are not treated as a luxury the way it is in India. Even in a continent like Europe, the major mode of transportation is aircraft. In third world countries too, in countries in Latin America, the population of aircraft and number of carriers is going up. If you start saying it’s luxury, you’re in trouble. The airline business should be thought of as a mode of transport. If I’m able to convert first-class passengers travelling in train into fliers, you’re looking at a huge potential.
Which other sectors are you looking to invest in?
I’m not going to comment on that. Right now, my focus is only on consolidation of this acquisition. Maybe towards the end of the quarter. We have some plans. Not telecom, its too over-crowded. Not going to comment on others.
Given your political lineage, did you use any connections to firm up your aviation foray?
This is a question that I’ve been asked from the day I started my business. Out of 15 years of existence, half the time I have been in Opposition. Either I have been fighting with somebody or the Opposition is in power. In fact, political connections put me in trouble also. Whatever I’ve done, it’s open. If that is the case, then every politicians’ son should have made it big. I am proud of my heritage, my family is in politics, I am not going to say no to that. But that and this is different. I have never been part of the political system.
Friday, June 18, 2010
Home loan interest gets benefit
The discussion paper about the DTC (Direct Tax Code) is now being revised. It was issued in the month of August 2009 and by this it has been declared to proceed with the present system of interest deducting payment up to Rs 1.5 lakh before the calculation of tax liability from whole income against the home loan.
When the paper was released in the year 2009, it had proposed not to go with the exemptions of the interest payment against the home loans but it was not implemented.
However the revised discussion paper has also raised the exemption against the investments in some savings like life insurance schemes, pension funds, PPF etc. up to Rs 3 lakh from the present limit of Rs 1.5 lakh. Earlier, the government had an argument for increasing the exemption limit against the investment.
It was also said that if the benefit of the interest payment against home loan is withdrawn then it will not affect the taxpayers.
But this argument of the withdrawal created a lot of unfavorable comments, and lastly the government has now decided to turn back to the existing system.
When the paper was released in the year 2009, it had proposed not to go with the exemptions of the interest payment against the home loans but it was not implemented.
However the revised discussion paper has also raised the exemption against the investments in some savings like life insurance schemes, pension funds, PPF etc. up to Rs 3 lakh from the present limit of Rs 1.5 lakh. Earlier, the government had an argument for increasing the exemption limit against the investment.
It was also said that if the benefit of the interest payment against home loan is withdrawn then it will not affect the taxpayers.
But this argument of the withdrawal created a lot of unfavorable comments, and lastly the government has now decided to turn back to the existing system.
RBI to up inflation forecast in July review
"Earlier, we expected the inflation rate to come down to 5.5 per cent by March 2011. We projected this number in our earlier meeting. We will revisit that number in the July policy meeting," Governor D Subbarao told reporters here.
Continuing the upward march, inflation crossed 11 per cent in March in the final data, while this was only 9.9 in provisionally. As per the provisional figures, headline inflation stood at 10.16 per cent in May and may be revised upwards in the final estimate. The food inflation too is hovering above 16 per cent.
The apex bank is slated to announce the first quarterly review of the monetary policy on July 27 during which it is widely expected to jack up key policy rates. The central bank has to draw a balance between the demand to contain inflation and promote growth.
Finance Minister Pranab Mukherjee had earlier said the RBI would take appropriate steps to contain the rising inflation. "So far as the monetary part is concerned, the Reserve Bank will look into it. Even in the last policy, 25 basis points were increased. So, as and when the Reserve Bank feels appropriate steps are required to be taken to control the inflation, it will do so," Mukherjee had said.
On liquidity crunch, the Goveror said it is a temporary phenomenon and the situation is easing. "The liquidity situation has become more comfortable now. We have done detailed calculations for the next four weeks and have taken measures which we believe that the temporary liquidity problem is taken care of," Subbarao said.
The liquidity in the system came under pressure following payment of over Rs 1.06 lakh crore towards 3G and broadband spectrum fee and advance taxes which became due on June 15.
To overcome the shortage, the RBI has decided to buyback government bonds from banks, a decision that would release about Rs 20,000 crore into the system.
The central bank, the Governor said, would go ahead with its plan to raise Rs 60,000 crore in the first half of the current financial year.
"That is the plan as of now. The borrowing programme will continue. But to manage the temporary liquidity problem, we have decided to buy back some securities due for redemption (later this year, from Friday)," Subbarao informed. The central bank had announced the Gilt buyback on Wednesday last.
To a question on whether the unexpected huge spectrum haul will reduce the government's borrowing programme, the Governor further said, "it is the prerogative of the government on what they plan to do with the additional money they generated through the 3G and broadband auctions. As of now we have no information of any change in the government's borrowing programme."
Reliance unveils big push into power sector
The elder Ambani has unveiled deals since the long-estranged brothers called a truce last month in their feud, and said the end of the non-competition agreement opens up possibilities in a power sector that he said provides "unbounded opportunity."
Investors were disappointed, however, that Ambani, the world's fourth-richest man, did not unveil more specific plans, and that his younger brother Anil was not in attendance.
"People had built unrealistic expectations that there would be big-bang announcements at the meeting," said Tejas Doshi, head of research at Sushil Finance in Mumbai.
"The disappointment is showing in the stock price of the companies led by both Ambani brothers," he said.
Reliance shares, which had gained as much as 1.7 per cent early on Friday, were down by 0.41 per cent after the meeting, while Anil Ambani's Reliance Communications and Reliance Natural Resources Ltd also skidded.
Ambani said the company had entered a new era of growth.
Reliance recently made a dramatic return to the telecoms business with a deal to pay $1 billion for Infotel Broadband, the only company to win a nationwide licence of broadband wireless spectrum in a government auction. Reliance is also keen to enter the financial and health sectors, according to newspaper reports.
Ambani unveiled plans to build its presence in the shale gas business in the United States and build a coke gasification facility in India, and an expansion of its retail business.
"It took three decades for Reliance to create an enterprise value of over $80 billion. However, I feel hopeful and confident that Reliance can accomplish value creation of a similar magnitude in less than a decade," he said.
Exactly five years ago, the two brothers split the business empire founded by their father Dhirubhai Ambani in a deal brokered by their mother after disagreements over ownership. The non-compete pact had been a source of acrimony between the two.
The two were not on speaking terms, even though they live with their mother in the same building. Mukesh Ambani, however, is building a $1 billion, 27-floor home in Mumbai.
BROTHERLY HARMONY, BUT NO INVESTMENT
Ambani said he looked forward to a constructive relationship with his brother's Reliance ADAG group, and was ready to provide it natural gas after prevailing in May in a Supreme Court dispute over the terms of a gas supply agreement.
Shares in Anil Ambani's Reliance Natural Resources lost more than 7 per cent after Mukesh Ambani did not provide details on a renegotiated gas supply deal, which is due this week.
Anil Ambani's debt-strapped Reliance Communications, which is trying to sell a 26 per cent stake in itself as well as spin-off its tower business, were down about 2 per cent after the meeting.
On Friday, a newspaper reported that Reliance was in advanced talks to buy the fibre optic cables and telecoms tower business from Reliance Communications.
Jagannadham Thunuguntla, head of equity at SMC Capitals, said Reliance was entering a period of heavy investment.
Reliance has nearly Rs 21,900 crore ($4.7 billion) in cash.
"I expect them to do a series of treasury share sales in the next six to eight months. So easily you are talking about $7 billion to $7.5 billion in ammunition," Thunuguntla said.
India is chronically short of power, and scrapping the non-compete pact means Reliance is now free to build electricity generation except for merchant power based on natural gas.
"We are drawing up specific plans for mega investments in the sector with clean coal-based power generation projects, hydel projects and also in nuclear power as and when it is opened up," Ambani said.
The Indian power sector, beset by a peak power deficit of 12 per cent, has struggled to attract foreign investment.
"We are also focused on alternative energy domains with priority on solar power," Ambani told shareholders after arriving at the meeting with his wife Nita and mother Kokilaben.
Source - Business Standard
Future takes QIP, PE routes to fund Big Bazaar expansion
Speaking to reporters after launching Big Bazaar, which will be largest retail shop in Chennai, spread over in 70,000 sq.ft Rakesh Biyani, director, Future Group, said that the group has 132 Big Bazaar shops across the country and in the next 18 months another 60 plus will be added, with an outlay of around Rs 600 crore.
“We will fund expansion through QIP and issuing of warrants,” he added. When asked whether the company is planning for private equity or planning to go public, he said, “we are open for all the options,” said Biyani.
“Funding is not main constrain for us, we always open for all the options to fund our expansion” he added.
The company is working hard not increase the price, but due to increase in commodity price their could be some price change in some products, said Biyani.
Commenting on the Bazaar which was inaugurated today, he said, this will be single largest , in a single floor, at Chennai. Of the total 70,000 sq.ft, 25 per cent was reserved for Food Bazaar.
Markets break seven-day winning streak
The Sensex broke the seven-day winning streak and ended in the red as the much-talked about Reliance AGM did not lived up to its expectations. The index opened flat owing to lacklustre global cues. The BSE benchmark touched a high of 17,721 on buying in capital goods and consumer durables stocks.
Post announcement of the RIL AGM meet, the markets turned volatile and moved in a narrow band. The shares of Anil Dhirubhai Ambani group (ADAG) firms fell sharply as Mukesh Ambani gave no detail of reconciliation between the two brothers.
All the ADAG stocks bore the heavy brunt of selling. Reliance Communications dropped 3.5% to Rs 184 and RNRL declined 7.5% to Rs 63.Reliance Power was down 3.5% at Rs 170. Meanwhile, Mukesh Ambani's Reliance Industries ended at Rs 1,055, down 1.5%. Reliance Infrastructure shed 3% to Rs 1,161.
The Sensex slipped to a low of 17,525 and finally ended at 17,571, down 46 points. The NSE Nifty settled at 5,257, down 17 points.The market breadth was negative, out of 2,982 shares traded, 1,796 declined and 1,051 advanced on the BSE.
The BSE midcap and the smallcap indices were down 0.5% each at 6,975 and 8,846, respectively..
Among the sectoral indices, metal and the oil & gas indices ended in the red, down 1% each. Hindustan Zinc and National Aluminium were down 3% each at Rs 975 and Rs 425, respectively on the metal index.
RNRL, BPCL, Essar oil and Reliance Industries were the major draggers on the oil & gas index, down 1-7%.
INDEX GAINERS...
Hero Honda and HUL were the major gainers on the BSE, up 2% each at Rs 2,020 and Rs 257, respectively. BHEL, Larsen & Toubro and SBI were up 1% each on the BSE.
...AND THE LOSERS
Reliance Communications and Reliance Infrastructure were down 3.5% each on the BSE at Rs 185 and Rs 1,161, respectively. The other prominent losers were Sterlite Industries, Maruti, Mahindra & Mahindra, ICICI Bank, Tata Steel and Reliance Industries, down over 1.5% each.
Source-Business Standard
Post announcement of the RIL AGM meet, the markets turned volatile and moved in a narrow band. The shares of Anil Dhirubhai Ambani group (ADAG) firms fell sharply as Mukesh Ambani gave no detail of reconciliation between the two brothers.
All the ADAG stocks bore the heavy brunt of selling. Reliance Communications dropped 3.5% to Rs 184 and RNRL declined 7.5% to Rs 63.Reliance Power was down 3.5% at Rs 170. Meanwhile, Mukesh Ambani's Reliance Industries ended at Rs 1,055, down 1.5%. Reliance Infrastructure shed 3% to Rs 1,161.
The Sensex slipped to a low of 17,525 and finally ended at 17,571, down 46 points. The NSE Nifty settled at 5,257, down 17 points.The market breadth was negative, out of 2,982 shares traded, 1,796 declined and 1,051 advanced on the BSE.
The BSE midcap and the smallcap indices were down 0.5% each at 6,975 and 8,846, respectively..
Among the sectoral indices, metal and the oil & gas indices ended in the red, down 1% each. Hindustan Zinc and National Aluminium were down 3% each at Rs 975 and Rs 425, respectively on the metal index.
RNRL, BPCL, Essar oil and Reliance Industries were the major draggers on the oil & gas index, down 1-7%.
INDEX GAINERS...
Hero Honda and HUL were the major gainers on the BSE, up 2% each at Rs 2,020 and Rs 257, respectively. BHEL, Larsen & Toubro and SBI were up 1% each on the BSE.
...AND THE LOSERS
Reliance Communications and Reliance Infrastructure were down 3.5% each on the BSE at Rs 185 and Rs 1,161, respectively. The other prominent losers were Sterlite Industries, Maruti, Mahindra & Mahindra, ICICI Bank, Tata Steel and Reliance Industries, down over 1.5% each.
Source-Business Standard
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