Save Rs 2-6k tax with IDFC infra bonds

Infrastructure Development Finance Company (IDFC), an integrated infrastructure finance company, has launched infrastructure bonds, giving a tax deduction of up to Rs 20,000 under Section 80CCF. The tax deduction will be above Rs 1,00,000 under Sections 80C, 80CC and 80CCD.

The bond has four investment options with five-year lock-in periods and maturity of 10 years. Each bond comes with a face value of Rs 5,000 and and one can apply for a minimum of two bonds and in multiples of one bond thereafter. Series 1 carries 8% coupon, pay-able annually. The second series is a cumulative one with 8% coupon and compounded annually. The 3rd series carries 7.5% coupon and is payable annually with a buyback option. Series 4 is a cumulative option with 7.5% coupon compounded annually and with a buyback option. The issue opened on September 30 and will close on October 18, 2010.

An investor needs a PAN number and a demat account number to invest and the bonds cannot be pledged for loans during the lock-in period. The bonds are proposed to be listed on the NSE and the BSE and are subject to statutory lock-in for five years from the date of allotment and no trading will be permitted during the lock-in period.

An investor in the highest tax bracket of 30% can save an extra Rs 6,000 by investing in infrastructure bonds. Those in the lower tax bracket can save Rs 2,000 and these bonds offer investors the stability of fixed returns and the safety of capital. According to the government’s norms, infrastructure bonds are to be issued by LIC, IDFC and IFCI and non-banking infrastructure finance companies recognised by RBI.

OBC, BoI raise base rate by 50 basis points to 8.5 pc

State-owned Oriental Bank of Commerce(OBC) and Bank of India (BoI) today their hiked base rate, below which banks can't offer loans, by 50 basis points to 8.5 per cent. 

The base rate has been increased to 8.5 per cent with effect from October 1, said a senior OBC official. 

With the increase in base rate all kinds of loans, including housing, auto and education become dearer by at least 50 basis points (0.5 per cent). 

At the same time, Kolkata-based financing firm Srei Infrastructure Finance also raised benchmark lending rate by 100 basis points to 16 per cent. 

Since last week, 11 banks, including ICICI, HDFC, PNB,IDBI Bank and Allahabad Bank have hiked their base rates by up to 50 basis points. 

Deposit rates and consequently cost of funds have increased, necessitating an increase in the base rate, the official said. 

As per RBI guideline, banks have to review their base rates every quarter. This is the first review of the rates since it was introduced in July this year. 

In order to bring in more transparency, the base rate was introduced as replacement for the Benchmark Prime Lending Rate (BPLR) from July 1 this year. 

Yesterday, several banks announced increase in base rate, including Bank of Baroda , HDFC Bank and ICICI Bank . 

The revision in base rates follows the RBI's move to raise short-term lending (repo) and borrowing (reverse repo) rates in its September monetary review.

Indian operations of Citi & Barclays get fresh capital

The Indian operations of foreign lenders Citibank and Barclays have been infused with fresh capital from their parents so as to nullify the effect of any kind of incremental losses which might arise from their lending portfolios.

Citibank has infused Rs 1,140 crore this fiscal in the Indian operations which is sufficient to absorb any kind of hit arising from losses in its Indian operations. This capital infusion has also aided in improving the tier I capital of the bank to 17.3%.

The small sized non banking finance arm of Citi has however reported losses.

With recovery signs being shown by the economy, chances of losses and delinquencies is expected to reduce.

Current Mortgage Rates – PNC Citibank Wells Fargo Chase and Bank of America Loans

(Best Syndication News) Mortgage loan rates were lower today with major changes at Chase and National City Banks (see rate charts below).

30-Year Fixed Mortgage Rates

The average 30-year fixed rate mortgage (FRM) dropped 9 basis points today to 4.329 percent.

Wells Fargo kept their rate the same but Citibank lowered their rate four points to 4.55 percent. PNC (National City Bank) lowered their rate 26 basis points from 4.39 percent to 4.13 percent.

Chase lowered their rate 14 points to 4.44 percent and Bank of America lowered their rate nine points to 4.05 percent. Over the past 30 days the rate has dropped 97 points.

15-Year FRM and 5-Year ARM Rates

The average 15-year fixed mortgage rate dropped seven points to 3.886 percent. Wells Fargo lowered their rate 13 points to 3.94 percent.
Citibank lowered their rate 11 points to 4.09 percent.
PNC lowered their rate 15 points to 3.86 percent and Chase lowered theirs 11 points to 3.99 percent. Bank of America raised their rate two points to 3.64 percent.
The average 5-year adjustable rate was near even at 3.186 percent.

Jumbo Loan Rates

The average 30-year fixed jumbo loan rate rose three basis points to 4.967 percent today. The average 15-year jumbo rate dropped five points to 4.130 percent.

Citibank launches credit card for frequent flyers

Citibank today launched a new credit card that will give frequent flyers the chance to earn mileage points when they fly on more than 50 domestic and international airlines. 

Till now, air travellers could only accumulate mileage points by flying on a single airline. 

"The Citibank PremierMiles Credit Card differentiates itself by offering frequent flyers a 'universal' mileage platform that enables them the unique freedom and flexibility to earn miles on their travel on over 50 domestic and international airlines," Citibank said in a statement. 

The key benefit of the credit card is that it frees customers from having to choose one airline loyalty programme over another. "The feature-rich card offers a superior earn rate of 10 PremierMiles per Rs 100 on all airline spends and a preferential interest rate," it added.

With an annual fee of Rs 5,000, card members will receive a first-year activation bonus of 5,000 PremierMiles. 

"An annual spending of Rs 4 lakh in a year earns cardholders a bonus 2,500 PremierMiles. All non-airline purchases on the card earn customers 2.5 PremierMiles for every Rs 100 spent," Citi said. 

Announcing the launch, N Rajashekaran, Citi India Country Business Manager, Global Consumer Group, said, "Citibank PremierMiles is a powerful addition to our bouquet of cards and will build on the success and popularity of this platform across multiple markets in Asia."

Nikko in talks to buy DBS Asset Management

Japan's Nikko Asset Management is in "serious" talks to buy DBS Asset Management in a deal that would also involve DBS Group buying a small stake in Nikko, three sources said yesterday.

The combined entity could be managing about US$145 billion ($190.4 billion) in assets. The deal is a sign of ongoing consolidation in the fund industry, where size has become increasingly important amid rising costs and falling fees for mutual funds.

"The bottomline is that the more assets under management, the more efficient you become," said Mr Trevor Kalcic, a banking analyst at RBS in Singapore.

"It is a really a case of scaling of the business whether in terms of fund management, marketing or negotiating reduced commissions from brokers," he said.

The size of the deal was not immediately known but industry sources and analysts said it could be a few hundred million dollars or around 2 per cent of the $26 billion managed by DBS Asset Management. 

Nikko manages about US$125.2 billion in assets.

"Nikko has already made an offer," one of the sources with direct knowledge of the deal told Reuters. Another said that Nikko is not the only group DBS is speaking with. The sources declined to be named because the talks are not public.

DBS declined to comment on the talks with Nikko but said it was exploring various options for its asset management arm.

A DBS spokesman said: "Asia is creating wealth faster than anywhere else in the world and against this backdrop, a key priority for DBS is to build a leading regional wealth management franchise."

DBS CEO Piyush Gupta has targeted wealth management as a key plank of his growth strategy and partnering Nikko could make its asset management arm a bigger proposition for wealthy clients.

"In line with this, DBS is exploring various options, including a possible strategic partnership for its asset management arm, to enable the business to have better intermediate burgeoning wealth flows in Asia," the spokesman added.

Nikko also declined to comment on the talks. Nikko, part of Sumitomo Trust and Banking, is keen to expand outside Japan and recently hired Mr Blair Pickerell as head of Asia from Morgan Stanley Investment Management. REUTERS

Tata Motors to raise $750 million in Indian Share Sale

Tata Motors Ltd., India's largest automaker by sales, Monday hiked the size of its institutional share sale to $750 million from $525 million, aided by robust demand for its shares amidst buoyant global markets.

"In view of the response received, the committee of directors today authorized that the size of the offering of the 'A' ordinary shares to be increased from $400 million to $550 million," the company said in a filing to the Bombay Stock Exchange.

The automaker Friday opened its share sale, which comprised $200 million of ordinary shares and $325 million of the A class of ordinary shares, with an option to increase the A class of ordinary shares to $400 million.

An investment banker involved in the share sale, who didn't wish to be named, said demand was robust and had topped $1.9 billion so far.

Tata Motors intends to use the proceeds primarily to cut debt and for capital expenditure, long-term working capital requirements, growth objectives and other general corporate purposes, the company said Friday.

The common stock was being sold at 1,074 rupees ($24.2), the shares with differential voting rights were being sold at 764 rupees apiece, two people familiar with the matter had told Dow Jones Newswires when the issue opened Friday. They didn't want to be named as they were not authorized to speak to the media.

This was at a 4.2% and a 46.4% discount to Friday's closing price of 1,118.85 rupees. Monday, the company's shares were up 1.4% at 1,134 rupees, outperforming the 0.8% rise in the benchmark Sensex to 20,603.34.

Shares with differential voting rights are usually issued to protect the stake of founders in a company, though they can also be used to raise capital. Such shares allow a company to dilute its equity without matching dilution in the promoters' stake. Investors who subscribe to such shares receive higher dividends, but have to surrender their voting rights in return.

The company, part of the salt-to-software Tata Group, said June 28 that its board approved seeking shareholders' approval to raise funds equivalent to about 47 billion rupees through ordinary shares, 'A' ordinary shares, convertible bonds, debentures, warrants and other equity-linked instruments in either the domestic or the overseas markets, or both, in one or more tranches.

In an Aug. 10 filing to the exchanges the company said it received the approval of shareholders to raise additional long-term resources.

Analysts expect Tata Motors to use the funds raised to mainly restructure debt. It had a consolidated debt of 199.83 billion rupees as of June 30.

Tata Motors has been raising funds to repay its debt. The Indian company in October 2009 raised $750 million by selling global depositary shares and convertible notes to repay debt taken to acquire the two luxury car brands, Jaguar and Land Rover, from Ford Motor Co. It paid $2.3 billion to acquire the brands in March 2008.

The company is also looking to expand operations.

Analysts say it is keen on conducting research and development work on new car models, besides setting up satellite plants to make its Nano minicar.

Tata Motors currently makes the Nano at its Sanand facility in the western state of Gujarat and at Pantnagar in northern Uttarakhand state. The company previously said it wants to set up smaller plants at several locations to assemble the minicar.

Citigroup Global Markets India Pvt. Ltd. and Credit Suisse Securities (India) Pvt. Ltd. are acting as the book running lead managers for the offering, Tata Motors said.

Rupee reverses gains as dollar strengthens

The Indian rupee reversed gains after strengthening to its highest level in more than five-and-half months on Monday, as the dollar gained against majors and stocks came off highs. 

At 1:50 p.m., the partially convertible rupee was at day's low of 44.53/54 per dollar, after hitting 44.2525, its highest since April 15 and 0.4 percent above Friday's close of 44.47/48. 

The dollar surged higher on Monday in a short-covering rally against the yen, which retreated against other currencies as investors unwound some long yen positions ahead of a Bank of Japan policy meeting this week. 

The index of the dollar against six majors was up 0.4 percent and would be watched for direction. 

Indian shares were up 0.4 percent after climbing over 1 percent to their highest in 33 months, boosted by surging foreign interest. 

Dealers expect the rupee to move in 44.40-44.60 band in rest of trade. 

However, most Asian currencies were trading stronger versus the dollar despite intervention. 

Dealers said there was no intervention in the Indian foreign exchange market by the central bank. 

One-month offshore non-deliverable forward contracts were quoted at 44.64, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange were all at 44.7050, with the total traded volume on the three exchanges at about $2 billion.

IPO : Oberoi Realty has set Price

Oberoi Realty has set Rs 253-260 per share price band for its proposed initial public offer (IPO). The issue, which will open on 6 October 2010 and close on 8 October 2010, will constitute 12% of the fully diluted post-issue paid-up share capital of the company.

The Mumbai-based property developer focuses on premium residential projects. The company is planning to use the issue proceeds for construction of ongoing projects and planned projects, acquisition of land, land development rights and general corporate purposes.

Larsen & Toubro sells 2.42% in Mahindra Satyam for Rs 295 crore

Larsen & Toubro (L&T), the technology, engineering, construction and manufacturing company, has scaled down its stake in Mahindra Satyam, the erstwhile Satyam Computer Services, to a little over two per cent.

The company sold 28 million shares of Mahindra Satyam in the open market for around Rs 295 crore (Rs 2.95 billion) last month.

According to the disclosures made by Mahindra Satyam to the stock exchange today, with this sale of shares, L&T's stake in it has reduced to 2.16 per cent from 4.58 per cent. These transactions took place between September 15 and September 28.

The average buying price of Satyam shares was Rs 80 per share. Taking into account the average acquisition price, L&T could have made a profit of around Rs 67 crore (Rs 670 million) from the latest tranche of share sale.

L&T started buying shares of Satyam in January 2009, as the share price plunged into the red after the company's chairman Ramalinga Raju confessed to an accounting fraud. The construction major acquired as much as 12 per cent in the company in the hope of attaining control.

However, as the company was auctioned, Tech Mahindra emerged as the winning bidder, and L&T's stake no more remained strategic. The company's management had maintained that they would sell this stake as and when they saw good returns.

Wipro delays filing annual report in US

BANGALORE: India's No. 3 software firm Wipro Ltd said it expects to delay filing its annual report for fiscal 2010 with the United States regulator due to an investigation into alleged embezzlement by one of its employees. 

Wipro, which was due to file its annual report with the U.S. Securities and Exchange Commission by Sept. 30, now expects to do it by Nov. 10 on completion of the investigation, the company said in a statement over the weekend. 

Earlier this year, Wipro had said one of its employees had allegedly embezzled cash for three years from November 2006. Wipro said it had recovered most of the money, but did not give the amount. 

Wipro has already filed its financial statements under Indian laws for the year ended March 31 and the quarter ended June 30. 


EconomicTimes

Network18 to sell The Indian Film Company to Roptonal

MUMBAI: Network18 Media & Investments today said it has accepted an offer from a subsidiary of Viacom 18 Media Private Ltd to buy the entire shareholding of London-listed The Indian Film Company (TIFC) at a price of 115.56 pence. 

The board of directors of Roptonal Limited, Cyprus, a subsidiary of Viacom 18 Media Private Ltd, has made an offer for the issued share capital of TIFC , Network18 Media said in a filing to the Bombay Stock Exchange. 

Network18 Media & Investments Limited, which together with certain affiliates owns 80.4 per cent of the voting shares in TIFC, has considered this offer beneficial to its shareholders and has given an irrevocable undertaking to accept the offer, the filing said. 

Viacom18 is a 50:50 joint venture between IBN18 Broadcast Limited and Viacom Group . IBN18 is a subsidiary of Network18. 

This is in line with the company's planned expansion in the entertainment space and acquisition of synergistic content. 

Shares of Network 18 Media & Investments were trading at Rs 153 in early trade on the BSE today, up 1.83 per cent from the previous close.


(source - EconomicTimes)

Visa tests smartphone payments in mass transit

 is participating in a test program started by rival that will let consumers pay for some New York subway tickets by tapping a credit card or a smartphone at the turnstile. 

MasterCard said in June that it was working with New York and New Jersey mass transit agencies on a six-month pilot program to test "contactless" payments on certain commuter routes. 

The program allows consumers to buy a subway, bus or train ticket by tapping or waving their credit or debit card, or a sticker attached to the back of their phone, over a turnstile electronic reader, instead of buying a separate ticket. 

The program was initially exclusive only to MasterCard users, but is now open to Visa. The world's largest credit and debit card processing network plans to say on Tuesday that consumers can now use their Visa cards, or in certain cases their smartphones, to buy some subway, train or bus tickets in New York and New Jersey. 

Visa told Reuters in August that it was working with to test smartphone payments in New York. Bank of America's New York pilot-enabled phones "can be used for contactless payments on mass transit," spokeswoman Tara Burke said on Monday. 

Visa also started a separate test of contactless transit payments in Los Angeles this month, the company plans to say on Tuesday. Consumers in that program will have to buy special prepaid debit cards, which they can tap to ride a subway or bus, and which can also be used to buy goods or services from other retailers.

Bharti AXA Life to infuse Rs 450 cr; unveils new brand position

a joint venture between Bharti Enterprises and AXA Asia-Pacific Holdings, today said it will infuse Rs 450 crore capital this fiscal and is open to off-loading a small portion of its stake to a bank as a part of a distribution tie-up. 

"We are planning to infuse Rs 450-crore more by end-this fiscal," Bharti AXA CEO, Glenn Williams, told reporters while unveiling the insurance company's new brand positioning here. 

The company is also in talks with several banks for bancassurance which would be either through an equity dilution or a pure distribution tie-up. 

"We are in talks with several banks and are open to both options," he added. 

Bharti AXA, which gets 80-90 per cent of its revenue from unit-linked products, is planning to focus more on traditional products. 

"We plan to focus more on traditional products going forward," he said. The share of unit-linked products could therefore reduce to around 60 per cent, he said. 

The insurance company has lined-up six traditional and about four products by March 2011, he said. 

Bharti AXA's premium collection till August was Rs 320-crore, which is expected to rise to Rs 800-900-crore this year, Williams said. 

The company, which is eyeing break-even by 2015, aims to break into the top 10 insurers club in India in five-years, he said.

India gold traders stock up; rupee helps

India's traders continued to stock up on Friday afternoon, as the rupee, which hit its highest level in five months, made the dollar-quoted yellow metal cheaper despite near-record levels in the overseas market, dealers said. "A lot of domestic buyers are there, I covered for about 100 kg from morning at $1,310-1,312 (an ounce)," said a dealer with a state-run bullion dealing bank in Mumbai. 

Gold on Multi Commodity Exchange (MCX) was trading 0.01 percent lower at 19,033 rupees per 10 grams at 2:59 p.m., down 1.2 percent lower than the all-time high of 19,257 rupees struck on Sept. 15. The Indian extended gains in afternoon session on Friday, reaching fresh 5-month highs, boosted by robust foreign portfolio investments and tracking broad losses in the dollar versus majors overseas. 

Demand has been edging up for the past two weeks in India, the world's biggest consumer of bullion, mainly helped by a strong rupee. India, the world's biggest consumer of the yellow metal, is in the middle of a festival season, with Dussera in October and Dhanteras in November, when jewellers register the highest sales every year. 

Weddings also take place during the festive season. International gold rose but remained short of record highs after Chinese manufacturing data suggested the global economy was returning to strength and the dollar firmed, while focus turned to U.S. data due later.

MasterCard buys 12.5pc stake in ECS of Pune

The world's second biggest electronic payments network today picked up 12.5 per cent stake in the Pune-based services provider (ECS). 

"This investment will extend our processing footprint and create more value for our customers in the Asia-Pacific region, the Middle East and Africa," MasterCard Worldwide president and Chief Executive Ajay Banga told a press conference here today. 

The investment on the heels of MasterCard striking a deal to buy the England-based payment services provider DataCash Group Plc for Rs 520 million. 

Banga further said MasterCard is open to acquire more stake in the company, which is the largest player in the country when it comes to processing services and providing software for credit and debit cards payments, but not interested in controlling the company as he is happy with the way ECS is being run now. 

However, Banga refused to say when he would doing it or was ready to disclose the financial details of today's purchase.

Over 22 companies apply for IPOs

More than 22 companies filed draft papers for initial share offers in September, the highest in any single month of 2010 so far, according to data from regulator Securities and Exchange Board of India (Sebi). 

As per details available with Sebi, over 22 companies filed draft red herring prospectus (DHRP) for their proposed initial public offers in September. 

The DRHP of at least 22 firms has already been uploaded on the Sebi website, while some are still to be uploaded. The maximum number of DHRPs filed in a single month this year so far was 18 in March. 

The companies that jumped on the bandwagon during September include state-run and Hindustan Copper . Some other big names include L&T Finance Holdings (Rs 1,500 crore), Kalpataru Ltd (Rs 1,000 crore) infra major HCC- promoted Lavasa Corporation (Rs 2,000 crore), Emaar MGF (Rs 1600 crore) and Kishore Biyani-promoted Future Ventures India (Rs 750 crore). 

The rally in the secondary market and some good listings in recent weeks have also encouraged India Inc to tap the capital markets, analysts said. The Bombay Stock Exchange benchmark sensex regained the magical 20,000-level in September after a gap of 32 months. 

Equity analysts said the rally was driven by huge inflows from , which have invested over Rs 80,000 crore in local stocks so far this year

NALCO to embark on Rs 6,000 cr expansion project

Undeterred by a decline in profit during 2009-10 due to low prices, aluminium major NALCO is all set to embark upon a Rs 6,000 crore capacity expansion project and also aims to establish new mega-power plants.

Third phase expansion would further enhance the Navaratna PSU's alumina capacity to 29 lakh tonnes, aluminium capacity to 5.7 lakh tonnes and power generation to 1,700 MW, NALCO Chairman A K Srivastava told reporters here.

The company has so far completed two major expansion programmes at an investment of Rs 7,800 crore, raising its bauxite mining capacity to 63 lakh tonnes, alumina capacity to 21 lakh tonnes, aluminium capacity to 4.6 lakh tonnes and power generation potential to 1,200 MW, he said.
     
Actively pushing several ambitious projects in India and abroad, NALCO is gearing up to set up a 14-lakh tonne alumina refinery in Andhra Pradesh, for which the Centre has accorded prior approval for awarding a mining lease to the aluminium giant, Srivastava said.
     
Stating that the company plans to set up a 5-lakh tonne smelter plant and a 1,250-MW power unit in India, he said the company has sought coal blocks in Orissa and is ready to establish a power plant with a capacity of up to 4,000 MW if granted proper linkages.
     
On the financial front, the company achieved a turnover of Rs 5,548 crore in 2009-10 against Rs 5,631 crore in the previous year, the NALCO chairman said.
     
Net profit, however, dropped to Rs 814 crore from Rs 1,272 crore in the previous year, mainly due to a fall in sales realisation on account of lower prices of aluminium and higher fuel costs, he said. 

Amid signs of a recovery in prices of aluminium, NALCO has targeted a Rs 1,100 crore
 
Profit in 2010-11, Srivastava said, adding that the company's net profit surpassed Rs 284 crore in the first quarter.
     
Besides proposing to set up two independent thermal power projects (IPP) in Orissa, NALCO is ready to establish a nuclear power plant in Gujarat as part of its plan to enter the energy sector in a big way.
     
The company has already signed a Memorandum of Understanding (MoU) with Nuclear Power Corporation of India Ltd (NPCIL) for setting up a nuclear power plant as a joint venture, Srivastava said. The central government has accorded approval for a 1400-MW project comprising two 700-MW units.
     
In addition, the Navaratna PSU plans to set up a super critical thermal power plant of 1,980-MW capacity (3X660-MW) in Dhenkanal district, along with another IPP.
     
The company is also keen to enter into a strategic partnership with Orissa Mining Corporation (OMC) and Orissa Hydro Power Corporation (OHPC) for developing coal blocks to set up power plants.
     
Regarding overseas proposals, Srivastava said NALCO will set up an aluminium smelter in Indonesia, which has been accorded foreign investment approval by the Indonesian government. NALCO has already opened a project office at Jakarta.
     
Srivastava also said that NALCO, in association with BEML, has developed a prototype aluminium rail wagon.
     
Furthermore, plans are afoot to set up a joint venture cement plant for effective utilisation of fly ash generated from the company's captive power plant (CPP) at Angul, he said.
     
In order to harness renewable energy, Nalco also intends to set up 50-MW wind farm, Srivastava said.

Oberoi Realty IPO to hit market on Oct 6

Real estate developer Oberoi Realty on Friday said it will hit the capital market with its initial public offer on October 6.

The issue will close on October 8, the Mumbai-based real estate developer said in a public announcement.

The company is offering 39,562,000 equity shares of the face value of Rs 10 each.

The price band of the issue will be announced later. The firm may consider participation of anchor investors.

They can bid a day prior to the opening of the issue. Kotak Mahindra, Enam Securities, Morgan Stanley India and JP Morgan India are book-running lead managers to the issue.

With a sharp rise in the stock markets, many companies are now hitting the Dalal Street to cash in on the increased investor appetite for these issue.

Good response to the recent IPOs has also encouraged firms to launch their planned issue