RBI hikes CRR by 50bps, repo by 25bps

The Reserve Bank of India (RBI) today abandoned its monetary policy stance of equal emphasis on price stability and growth, and decided to remain solely focussed on inflation containment. As part of its further monetary tightening, the central bank raised the cash reserve ratio (CRR) for third time since December 2006 by 50 basis points to 6.50% with effect from April 28 and also raised the repo rate by 25 basis points to 7.75%, the rate at which it lends to banks against securities. “The stance of monetary policy has progressively shifted from an equal emphasis on price stability along with growth, to one of reinforcing price stability with immediate monetary measures, and to take recourse to all possible measures promptly in response to evolving circumstances,” RBI said. RBI MOVES AGAINST INFLATION Date Action March 30, 2007 CRR hiked by 50 bps to 6.5%; Repo rate hiked by 25 bps to 7.75% Feb 14, 2007 CRR hiked by 50 bps to 6% Jan 31, 2007 Repo rate hiked by 25 bps to 7.5% Jan 31, 2007 General provisioning on standard commercial real estate loans, personal loans & capital market loans doubled to 2% Dec 11, 2006 CRR hiked by 50 bps to 5.5% Oct 31, 2006 Repo rate raised by 25 bps to 7.25% July 25, 2006 Reverse repo and repo rates hikes 25 bps each to 6% and 7% respectively June 8, 2006 RBI raises reverse repo and repo rates by 25 bps to 5.75% and 6.75%, respectively The central bank’s monetary tightening measures came even as the banking system was reeling under severe liquidity strain, with call rates having in recent days shot up to ridiculously high rates of 70-80% and year-on-year inflation at around 6.5% for the third week in succession up to March 17, 2007. Since the February 13 measures, when CRR was raised by 50 basis points, RBI said data has shown that industrial production increased by 11% during April 2006-January 2007 as against 8% a year earlier and the year-on-year money supply (M3) growth up to March 16, 2007 was 22% as against 16.9% a year ago. At a disaggregated level, prices of primary articles, fuel group and manufactured products registered a year-on-year increase of 12%, 1% and 6.6% as on March 17, 2007 as against 3.7%, 8.9% and 1.7% a year ago. The year-on-year growth in non-food bank credit of scheduled commercial banks (SCBs) was 29.5% as on March 16, 2007 as against 32.7% a year ago. The third increase in CRR in five months will drain Rs 43,000 crore from the banking system. The RBI has also reduced the interest it will pay on CRR balances to 0.50% from 1%. The RBI release issued this evening:

In the recent period, monetary policy has been engaged in managing the transition to a higher growth path while ensuring that pressures on actual inflation and inflation expectations are contained. At this juncture, it is important to reinforce the measures already taken for maintaining price stability and anchoring inflation expectations in order to sustain the growth momentum. The role of monetary policy is to maintain stability and so contribute to growth on an enduring basis.

As indicated in the Third Quarter Review of the Annual Statement on Monetary Policy for the year 2006-07, "the outlook for inflation assumes criticality in terms of policy monitoring and action" (paragraph 76). Furthermore, "a judicious balancing of weights assigned to monetary policy objectives would accord priority to stability in order to support growth on a sustained basis" (paragraph 82). Accordingly, it is necessary to reinforce the emphasis on price stability and well-anchored inflation expectations, as set out in the stance of the Third Quarter Review, with a demonstrated commitment in terms of credible policy monitoring and actions. The conduct of monetary policy should continue to demonstrate that inflation beyond the tolerance threshold of the Reserve Bank is unacceptable and that the resolve to ensure price stability is always backed by timely and appropriate policy responses.

In recognition of the cumulative and lagged effects of monetary policy, the Reserve Bank began a graduated withdrawal of accommodation in mid-2004. Since September, 2004 repo/reverse repo rates have been increased by 150 basis points each, the CRR has been raised by 100 basis points, risk weights have been raised in the case of housing loans (from 50 per cent to 75 per cent), commercial real estate (from 100 per cent to 150 per cent) and consumer credit (from 100 per cent to 125 per cent) and general provisioning requirement for standard advances in specific sectors has been raised to 1.0 per cent of standard advances. On February 13, 2007 a further two-stage increase of 25 basis points each in the CRR was announced, effective from the fortnights beginning February 17 and March 3, 2007. Liquidity management was modified on March 2, 2007 to put in place an augmented programme of issuance under the market stabilisation scheme (MSS) with a mix of treasury bills and dated securities in a more flexible manner. In view of the enhanced MSS programme and the need to conduct LAF as a facility for equilibrating very short-term mismatches, daily reverse repo absorptions were limited to a maximum of Rs.3,000 crore, effective March 5, 2007. The stance of monetary policy has progressively shifted from an equal emphasis on price stability along with growth to one of reinforcing price stability with immediate monetary measures and to take recourse to all possible measures promptly in response to evolving circumstances

Since the monetary measures that were announced on February 13, 2007 there have been some notable developments, namely,

(a) The general index of industrial production increased by 11.0 per cent during April 2006 to January 2007 as against 8.0 per cent a year ago, as per the release of the Central Statistical Organisation (CSO) of March 12, 2007.

(b) Year-on-year inflation based on the wholesale price index (WPI), has ruled around 6.5 per cent for the third week in succession up to March 17, 2007 as per the data released today. At a disaggregated level, prices of primary articles, fuel group and manufactured products registered a year-on-year increase of 12.0 per cent, 1.0 per cent and 6.6 per cent as on March 17, 2007 as against 3.7 per cent, 8.9 per cent and 1.7 per cent a year ago.

(c) inflation based on the consumer price index for industrial workers (CPI-IW), urban non-manual employees (CPI-UNME), agricultural labourers (CPI-AL) and rural labourers (CPI-RL) showed year-on-year increase to 7.6 per cent, 7.8 per cent, 9.8 per cent and 9.5 per cent in February 2007, respectively, from 5.0 per cent, 4.8 per cent and 5.0 per cent and 4.7 per cent, a year ago.

(d) The year-on-year growth in non-food bank credit of scheduled commercial banks (SCBs) was 29.5 per cent as on March 16, 2007 as against 32.7 per cent a year ago.

(e) The year-on-year growth in aggregate deposits of SCBs was 24.8 per cent as on March 16, 2007, over and above 18.0 per cent a year ago.

(f) The year-on-year money supply (M3) growth up to March 16, 2007 was 22.0 per cent as against 16.9 per cent a year ago.

(g) Continuation of accelerated external inflows has resulted in accretion of US $ 18.6 billion to the foreign exchange reserves, taking their level from US $ 179.1 billion at the end of January, 2007 to US $ 197.7 billion on March 23, 2007.

(h) Additional liquidity amounting to Rs.23,894 crore was absorbed under the market stabilisation scheme (MSS) during February 1 - March 30, 2007.

(i) Globally, the process of withdrawal of accommodation in monetary policy is being vigorously pursued. Since mid-February, 2007 among the leading central banks, the European Central Bank and the Bank of Japan have raised key policy rates by 25 basis points each, while the People’s Bank of China raised one year lending rates by 27 basis points and the reserve requirements by 50 basis points. There has been no change in the policy rates of the US Federal Reserve, the Bank of England, the Bank of Canada, the Reserve Bank of Australia and the Reserve Bank of New Zealand all of which had undertaken prior policy action.

In the light of the current macroeconomic, monetary and anticipated liquidity conditions, and with a view to containing inflation expectations, it is critical to take demonstrable and determined action on an urgent basis. Accordingly, the following monetary measures are being taken consistent with the stance of the monetary policy:

i) It has been decided to increase the fixed repo rate under the LAF by 25 basis points from 7.50 per cent to 7.75 per cent with immediate effect.

ii) The other arrangements regarding the operations of LAF announced on March 2, 2007 will continue until further notice.

iii) The policy of withdrawal of semi-durable and durable elements of liquidity through treasury bills and dated securities under MSS will continue. Accordingly, the Reserve Bank would, subject to variations in liquidity conditions, announce auctions of MSS covering issuances of treasury bills and dated securities on a weekly basis. The auction for Treasury bills under MSS would continue to take place by notifying the amounts under MSS every week along with the regular auction calendar as has been the existing practice. The Reserve Bank would retain the flexibility of reviewing the schedule of auctions under the MSS from time to time, in response to evolving circumstances.

iv) The cash reserve ratio (CRR) of scheduled commercial banks (SCBs), regional rural banks (RRBs), scheduled co-operative banks and scheduled primary (urban) co-operative banks is being increased by one-half of one percentage point of their net demand and time liabilities (NDTL) in two stages, effective from the fortnights indicated below:

Effective Date (i.e., the fortnight beginning from) CRR on net demand and time liabilities (per cent)

April 14, 2007 6.25%

April 28, 2007 6.50%

As a result of the above increase in the CRR, an amount of Rs.15,500 crore of resources of banks would be absorbed.

v) The interest rate applicable on eligible CRR balances (i.e., the amount of reserves between the statutory minimum CRR and the CRR prescribed by the RBI) shall be reduced to 0.5 per cent per annum from the present 1.0 per cent per annum with effect from the fortnight beginning April 14, 2007.

Active monitoring of macroeconomic, overall monetary and liquidity conditions will continue and all monetary policy actions would be considered in response to the evolving situation.

India 4th largest market for Oracle in APAC

India is the fourth largest market for Oracle in the APAC (excluding Japan) region, according to its third-quarter results for the region, while China is the first followed by South Korea and Australia.

Oracle equates the market size in tandem with the nation's economy. So while Oracle has been in China for just about 17 years and in India for 19 years, China has been growing at approximately 9% per year. However, within two years, India has jumped to fourth position from fifth, while 5-6 years back it was in the 10th position.

Though the company denied giving any exact numbers, it registered 89% growth from its new license revenues in Asia Pacific & Japan whereas the database and middleware new license revenues went up 26% in Q3FY07.

In the past few years, Oracle has made 30 acquisitions in view with its focus on vertical markets. "Acquisitions in APAC region in the financial services, retail, telecom and utilities is not off-limits for Oracle," said Brian Mitchell, senior vice president, Asia Pacific while announcing Oracle’s third quarter results for APAC (Q3FY07).

On the Indian operations side, the company has 19,000 employees, a majority of which are in its development centre. This quarter also saw Oracle completing its first phase of expansion into 17 cities of India, which brought the total number to 23. Apart from the focus on education, healthcare, construction and real estate verticals the company increased its focus on small and medium enterprises (SME).

With 4,500 customers already in the SME segment, it increased its momentum by launching Oracle Accelerate Programme. To tap into the growing SME segment Oracle recently rolled out its CRM (customer relationship management) on-demand platform. According to Krishan Dhawan, managing director, Oracle India, though the software-as-a-services concept is yet to catch up with the Indian organisation CRM is one application that is easy to deploy and manage.

While speaking on its Q3FY07 performance Dhawan pointed out that the company has continued its momentum in acquiring customers and entered some new industry areas including cement, paints, construction, real estate, retail, education and healthcare. Some of the wins of the company are-- Godfrey Philips, LG Electronics, Gujarat Electricity Board, ICICI Prudential life Insurance Company, Shree Cement, and Tube Investments of India among the others.

Apart from this, Oracle is also planning to tap into the growing utilities segment and the media sector. "The Indian media sector has not been technology intensive and hence is a virgin territory for Oracle. Similarly with the SPL acquisition we are now in a better position to offer solution to the utilities segment," remarked Dhawan. Other than Malyalam Manorama and Amar Bazaar Patrika Oracle recently had a win in the media segment with Amar Ujala Publications.

With the Indian retail segment hotting up, Dhawan felt that the coming years will see an increase uptake of IT in this segment. Oracle plans to focus on the retail segment through its recently acquired company Retek. It has already set up a centre of excellence (COE) at Bangalore. The centre with 300 people will help retailers who want to increase their profitability through IT deployment.

Carriers` equity capital bar raised

The move is set to discourage new entrants.

In a move to keep small players at bay and discourage new entrants to an overcrowded market, the civil aviation ministry has raised the minimum equity capital requirement for carriers to start or continue operations.

A notification from the ministry has raised the minimum equity capital requirement for a five-fleet carrier that wants to fly Airbuses and Boeings (or aircraft above 40,000 kg weight) from Rs 30 crore to Rs 50 crore. There is also an equity requirement of Rs 20 crore for addition of every five aircraft to the fleet.

For carriers operating smaller aircraft like the Dornier (less than 40,000 kg), the government has doubled the minimum equity capital requirement from Rs 10 crore to Rs 20 crore (for a fleet of five aircraft). For addition of every five aircraft, these airlines will have to infuse equity capital of Rs 10 crore. Existing carriers have been given a year to abide by the new rules.

Carriers could earlier expand their fleet without any limit once they put in Rs 30 crore (Rs 10 crore for smaller aircaft) as equity capital.

At the same time, the ministry has put an overall limit of Rs 100 crore as total equity capital. Beyond this, the expansion of fleet by carriers will not be linked to a commensurate increase in its equity capital.

The move will affect over half a dozen carriers which have applied for fresh licences to operate scheduled airlines -- like Easy Air, Air One, Yamuna Airways, amongst others. Most of these carriers have proposals in which their equity capital is much lower than the stipulated Rs 50 crore.

Says Ajay Singh, director of Spicejet: “We have an equity capital of Rs 200 crore and feel that this move will bring in some sanity to this sector, which has many fly-by-night operators seeking entry.”

Adds Koutav M Dhar, president (commercial & special projects) of MDLR Airlines, a regional airline that will start operations from next week, “We are a serious player and we welcome the new requirements that will throw out non-serious players.”

Welcoming the new conditions, GoAir Managing Director Jeh Wadia says, “This will ensure the financial strength of the existing airlines in the market. It may affect new entrants.”

At the same time, The new regulations, however, also give some leeway it will allow a scheduled airline operator to start airline operations with one aircraft against three required currently. However, the requirement for augmenting the fleet size to five aircraft within one year of issuing the scheduled operator permit would continue.

The government has also withdrawn the concession available to scheduled airline operators to have only 10 per cent of the paid-up capital when the initial Non Objection Certificate (NOC) is issued - another step to get small operators keep away from the business.

Rupee sees biggest fall in 11 years

The rupee had its biggest single-day fall in 11 years against the dollar on Thursday, amid buying of dollars by importers following the greenback’s sharp falls over the last few days and also on suspected intervention by the Reserve Bank of India (RBI).

The rupee fell 1.7 per cent to Rs 43.76 a dollar at close. The decline was the biggest since March 1996.

Dealers said it made sense for importers, particularly oil companies, to buy dollars after the recent sharp fall versus the rupee. The rupee has gained about 7.5 per cent since July 2006. The Indian currency touched an 8-year high of 43.05 yesterday.

The rupee had strengthened against the dollar because of the liquidity squeeze. Banks were selling dollars to replenish rupee liquidity excessively drained after tax outflows around March 15.

A dealer said the RBI was buying dollars at around Rs 43.50 and this, combined with importer demand, led to the rupee dropping the sharpest in 11 years.

The buying of dollars by the RBI and to some extent government spending infused rupee liquidity into the banking system, causing the call rates to close at 10 per cent on Thursday. The call rate closed at 10 per cent on Thursday.

The average weighted call rate yesterday was over 25 per cent.

Flag Tele listing on LSE soon

ADAG is expecting to recover ten times the value paid for buying the company in 2002.

Flag Telecom, a 100 per cent subsidiary of Reliance Communication (RComm), has mandated Goldman Sachs and Deutsche Bank as lead managers for the maiden initial public offering (IPO) on the London Stock Exchange.

Top sources say the bankers have valued the company at $2 billion. The IPO will be completed in the next three months. The company will divest 10-15 per cent of its equity through the IPO.

Through the IPO, the Anil Dhirubhai Ambani Group (ADAG), will be able to recover virtually ten times the value it paid for the company in 2002. It had paid $211 million to buy Flag.

Flag, which runs an international fibre bandwidth all across the globe, has announced an investment of Rs 7,000 crore to set up a new generation network which will provide high speed transmission. The cash from the IPO will be used to partly finance the ambitious project which is expected to be up and running by 2009. The new network will link to the Mediterranean to Greece, Cyprus, Turkey, Malta, Libya and Lebanon, Trans-Pacific to the US and Japan, Far East and Africa.

The 65,000 km cable network connects 40 countries across four continents and has over 200 international telcos and Internet service providers (ISPs) as its clients.

Flag has also recently completed Falcon, a $400 million fibre project which links West Asia to the rest of the world.

Flag Telecom is the second company of the Anil Dhirubhai Ambani Group after Reliance Energy which is being listed on the London Stock Exchange. Over 25 Indian companies are already listed on LSE which include ACC, Amtek Auto, Crompton Greaves, GAIL just to name a few.

A Reliance Communications spokesperson, however, declined to comment on the issue.

49% FDI cap for credit bureaus likely

The government is likely to cap foreign direct investment (FDI) in credit information bureaus at 49 per cent, as it prepares guidelines for entry of foreign companies in this sector.The sector has become attractive due to the booming retail financial services market.

The government has been considering either 49 per cent or 74 per cent cap, but is more inclined to go ahead with a lower cap to begin with, banking sources said.Credit information bureaus collect borrower data from banks and financial institutions, both positive and negative, for use by financial institutions subscribing to it.

Experian, which claims to be the only global credit information solutions company, is seeking to launch its subsidiary in India, with several banks including ICICI Bank having subscribed to its analytics and other services.

India already has credit bureau called Credit Information Bureau India Ltd (CIBIL), in which 62.5 per cent is owned by Indian lenders including State Bank of India, ICICI Bank, Housing Development Finance Corporation (HDFC) with 10 per cent stake each. The foreign shareholders in CIBIL include Citicorp Finance, Dun & Bradstreet and GE Strategic Investments.

CIBIL is a pure credit information bureau, whereas Experian is a provider of a range of services based on the core credit data. Experian earns only 10 per cent of its revenues globally from credit information with the balance coming from its various value-added services.

Retail credit has been growing at over 40 per cent since 2004-05 increasing its share in total advances to 25.5 per cent at the end of March 2006 from 22 per cent in March 2004. The phenomenal growth in the last three years has thrown up opportunities for companies that provide credit information and related services.

“We are waiting for the FDI rules to be framed so that we can apply for the launch of our joint venture,” said Richard Fiddis, Managing Director-Emerging Markets Development at Experian.

Experian has been waiting for the last two years to enter India as their customer in various markets wanting them to set up shop in India. “We will want more number of partners with lower shareholdings in the Indian joint venture. We will have about six to 10 banks and may be a telecom company as our partners,” Fiddis said.

Apart from borrower date from banks, Experian plans to use public sources like electoral rolls and court data for building its core database.

Corp bonds to trade on bourses from July 1

The much-awaited trading in corporate bonds will start on the National and the Bombay Stock Exchanges from July 1. This is expected to energise the moribund debt market.

The Securities and Exchange Board of India (Sebi) will ask the two stock exchanges to start trading in corporate bonds shortly, sources close to the developments said.

To begin with, trading would be through order matching as recommended by the R H Patil Committee. The committee had suggested various measures to activate the corporate bond market. The anonymous order matching would come into place only at a later stage, when the exchanges were ready, the sources added.

Banks and institutions will be allowed to trade through either the stock exchanges or via the OTC (over-the -counter). If they wanted to go through the stock exchanges, they could conduct the trading through the stock broking members, the sources added.

In order-matching system, the best buy order is matched with the best sell order. Experts said an efficient corporate debt market required a proper order-matching and guaranteed settlement systems.

Earlier this month, the capital market regulator extended the corporate bond reporting platform to the National Stock Exchange (NSE). From January 2, Sebi had asked the players to report the deals in the corporate bond market on the BSE’s reporting platform.

All transactions in corporate bonds of the value of Rs 1 lakh or above are required to be reported to the corporate bond platform. As the platform is purely for reporting purposes, the stock exchanges had no role or liability for settlement of these trades. The intermediaries and contracting parties were asked to settle the trades bilaterally.

The move to allow both the NSE and the BSE to start a trading platform is, however, at variance with the Patil Committee’s recommendation of a unified exchange for the corporate bond market.

The exchanges have also been asked by Sebi to provide details such as the issuer name, maturity date, current coupon, last price and amount traded, yield and weighted average yield.

The number of trades in the corporate bonds that took place today were 12 and the average traded value was Rs 100 crore. Presently, no trading takes place in the bonds’ segment of the BSE.

The Sebi move comes after Prime Minister Manmohan Singh’s call, during the inauguration of the Sebi headquarters last year, to activate the debt market.

The Prime Minister had said that the debt markets in India have failed to rise to the expectations. There was a need to make efforts to understand why the debt market has not taken off and to take appropriate policy measures to make it deeper, broader and more liquid, he had said.

A deeper and active debt market would help generate the necessary long-term funds required for the infrastructure sector.

Allianz takes new route for banking foray

The Allianz group, the German financial services major, is leaving no stone unturned to secure a banking license from the Reserve Bank of India (RBI) through its subsidiary, Dresdner Bank.

The move follows the RBI’s rejection of the group’s proposal to let Dresdner Bank predominantly use the Allianz brand in India.

The RBI had declined to issue a banking licence to Dresdner Bank, which was seeking to operate under a joint brand called Allianz Group Dresdner Bank.

The group’s intention was to focus on the name Allianz and not Dresdner, and capitalise on the Allianz brand awareness in India because of its insurance ventures – Bajaj Allianz General Insurance and Bajaj Allianz Life Insurance Company.

The RBI had objected to such cobranding and asked Allianz to focus on the name Dresdner Bank. Allianz had earlier proposed to have Allianz group in bigger and bolder fonts and the latter part, Dresdner Bank, in smaller fonts. Allianz has now drafted an alternative proposal.

Sam Ghosh, country manager of Allianz and CEO of Bajaj Allianz Life Insurance, said, “RBI has asked us to come back with several (alternative) options. We are changing the wordings around and redesigning the logo and using different fonts. We will be suggesting to be allowed to use “part of Allianz group” in brackets along with the name Dresdner Bank. We will be forwarding various logos and RBI will then decide on which one to approve.”

Allianz is upbeat on starting retail banking business in India after signing its third joint venture with Bajaj group earlier this month, a distribution company to sell financial products such as mutual funds, credit cards and home loans.

Dresdner Bank, which the group acquired in 2001, was operating through the branch banking route in the country earlier. Dresdner Bank surrendered its branch licence after withdrawing from the Indian market and now has only a representative office. In its new avatar, it is planning to enter retail banking.

This is not the first time a foreign group is planning to enter the Indian banking space through its banking subsidiary. Prior to Allianz, GE Money, earlier known as GE Countrywide, did the same.

Indians on top at Leeds MBA programme

Leeds University Business School, one of the top B-schools in the world, enjoys a unique record - possibly unmatched by any other educational institutions abroad.

Its MBA programme for practising managers from across the world has the highest number of Indian students in one class.

“That's a huge achievement for Indian students considering that the admission is extraordinarily tough as the university draws response from students from as many as 40 countries,” says professor Andew Lock, Dean of the University.

There are 12 Indians in a class of 43, for which entrants must have three years work experience and have the "equivalent of a First Class First degree," he says. MBA STUDENTS AT LEEDS India 12 UK 11 China 1 East Asia 6 Africa 8 West Asia 3 Others 2

Lock was speaking to a visiting group of Indian mediapersons at the Leeds campus. The rewards are also fast in coming. The average annual salary for MBA passouts is $100,000 and over half of the students join the financial sector.

Leeds was also among the first universities abroad to set up a business center to conduct quality research on Indian business. Called the James E Lynch India & South Asia Business Centre, it recently launched `Watching India', a series of market research briefings on the country.

Focusing on the economy as a whole and key industries such as manufacturing, pharma, telecom, retail, IT, BPO/KPO, the series is aimed at helping UK firms keep informed with a fast changing environment in one of the world's fastest growing economies.

Apart from its ongoing collaborations with the IIMs and the Indian Institute of Foreign Trade, Leeds has forged alliances with NIFT Amity and the BITS in areas like biotechnology and engineering.

34 Indian firms in Forbes' list

Oil and Natural Gas Corporation leads the pack of 34 Indian companies, a chunk of them from the banking sector, which have found place on the elite Forbes' list of 2000 corporate giants across the world.

In the ranking based on sales, profits, assets and stock market value, there are five oil and gas companies, four software giants, three each dealing in materials and capital goods, two utilities, and one each food, consumer durable, and telecommunications majors.

At the top of the Indian list is ONGC that finds 239 spot in the overall rankings and is followed by Reliance Industries (258), State Bank of India (326) and Indian Oil (399).

Tata Consultancy finds 1047 spot in the overall list but tops Indian companies ranking of software and service outfits. Following it in the category are Infosys Technologies (1130), Wipro (1233) and Satyam Computer Services (1874).

Bharti Airtel is the only Indian telecommunications company to find spot among 2000 giants with a rank of 1149.

State Bank of India Group finds top spot among the Indian banks and is ranked at 326 in the overall list. It is followed by ICICI bank (536), HDFC-Housing Development (1197), Punjab National Bank (1308), Canara Bank (1360), HDFC Bank (1376), Bank of Baroda (1585), Bank of India (1691), Indl Dev Bank of India (1767), Union Bank of India (1772). UCO Bank (1931), Syndicate Bank (1943), Indian Overseas Bank (1946) and

Oriental Bank of Commerce (1974).

In the materials category, Steel Authority of India, Tata Steel and Hindustan Zinc find slots in the coveted list. ITC is the only Indian company to make the list in food, drink and tobacco category. NPTC, TATA Motors, Gail India, Bharat Heavy Electricals, Bharat Petroleum, Larsen and Toubro, Hindustan Petroleum and Bajaj Auto are among other Indian companies that find spot among 2000 top companies.

The first seven top spots go the American companies. Two firms from Netherland and one from Switzerland are among the first ten companies.

The top spot goes to Citigroup and following it are Bank of America, HSBC Holdings, General Electric, JP Morgan Chase, American Intl Group, ExxonMobil (all American), Royal Dutch Shell (Netherlands), UBS (Switzerland) and ING Group (Netherlands).

Forbes says this year's comprehensive list of global super stars values the world's largest public companies, including the hottest companies and best performers across 27 industries.

The 2007 rankings indicate that globalization is the essential element for business to prosper, the magazine says.

China brings 16 new companies to the Global 2000 and the United States has 34 fewer in the list. Among the giants, 116 are oil and gas which pulled down more revenue than any other industry but banks lead in profits.

A highlight of the analysis is that total revenues of the companies headquartered in Switzerland exceed that nation's gross domestic product.

The US companies included on this year's list have a combined market capitalization of 13.9 trillion dollars.

Argentina is represented on the Global 2000 for the first time ever.

Inflation continues at 6.46%

India's wholesale price index rose 6.46 per cent in the 12 months to March 17, matching the previous week's increase, data showed on Friday.

The figure was slightly below a forecast of 6.50 per cent in a Reuters poll of analysts.

The annual inflation rate was 3.69 per cent during the corresponding week of the previous year.

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is published weekly.

France warns India against 'tricks'

France warned India the proposal to replace additional customs duty on wines and spirits with countervailing excise duty at the state level will weaken New Delhi's position in the dispute with European Union at the World Trade Organisation.

"Any trick to replace the national duties with state levies that would not result in overall duty reduction would complicate matters (at WTO)," French Trade Minister Christine Lagarde said.

The EU has dragged India before the dispute settlement panel of the WTO, alleging that high import duty on wines and spirits violates multilateral agreements.

The Indian proposal to bring a legislation to cut additional customs duty and allow states to levy equivalent of excise has not pleased the members of EU. The country imposes a duty ranging from 250-550 per cent on wines and spirits.

Lagarde also took up this issue with Commerce Minister Kamal Nath.

She also wanted India to increase FDI limit in single brand retail from 51 per cent, contending that the move would encourage premium French brands to set up shop in India.

While leading French brands like Chanel and Louis Vuitton have set up retail operations in India, their overall presence still remains small.

Dolce & Gabbana to open shops in India

Italian designer Dolce & Gabbana, known for its big cat prints and gold glitz, plans to open two shops in New Delhi--its first directly-operated outlets in India.

The deal with real estate developer DLF Group is for two shops in the Emporio mall with opening planned at the end of this year, Dolce & Gabbana said in a statement.

There will be a Dolce & Gabbana shop and one for its more informal line, D&G Dolce & Gabbana.

"We see this project as the first step of a long-term investment plan," Cristiana Ruella, the group's managing director, said in the statement.

"There is no doubt that India is a promising market with great potential," she added.

Dolce & Gabbana has a total of 90 directly-operated stores worldwide.

Italian catwalk competitor Versace opened a shop in Mumbai last year and got a publicity boost in the country earlier this month when British actress Elizabeth Hurley wore a dress by the designer for her wedding in India to businessman Arun Nayar.

Italian designers Gucci and Giorgio Armani are also moving into the country, where non-Italian brands Hugo Boss, Burberry, Cartier, Chanel, Louis Vuitton and Tommy Hilfiger already have outlets.

India opened up single-brand retail ventures in February 2006 by allowing 51 per cent foreign direct investment in them.

Dolce & Gabbana said in the statement it expected operating profit (earnings before interest and tax) to be 229.1 million euros in the year ending March 31, 2007 on revenues up 30 percent to 1.05 billion euros.

The designers' latest advertising campaign triggered criticism in Europe from Spain's government and human rights group Amnesty International by featuring a picture of a man holding down a woman by her wrists while other men looked casually on.

Reliance plans two new gas pipelines: Govt

Reliance Industries Ltd, plans to build two gas pipelines in southern India, the government said on Friday, that could help the energy explorer supply gas from its deep-sea fields to retail consumers.

The petrochemicals to oil refiner aims to produce 80 million cubic metres of gas a day (mmscmd) by mid-2008 from its two fields in the prolific Krishna Godavari basin, off the southern state of Andhra Pradesh.

The Oil Ministry said in an advertisement on Friday that Reliance Gas Transportation Infrastructure Ltd., a group firm, had submitted a proposal to lay a 670 km pipeline from Chennai to Tuticorin in Tamil Nadu.

It also wants to build another 660 km pipeline from Chennai to Mangalore in the neighbouring state of Karnataka, via Bangalore, the ministry said.

The advertisements in local newspapers did not disclose the cost of the two projects, and a Reliance spokesman could not give details immediately.

Reliance is already constructing a 1,400 km (870 mile) pipeline to transport natural gas from the deep-sea fields off India's east coast to the western regions of the country.

Earlier this month, P.M.S. Prasad, head of Reliance's oil and gas business, said the company planned to build city gas distribution networks in Tamil Nadu and Karnataka and also in Maharashtra and Gujarat in the west and West Bengal in the east.

The Oil Ministry said the two new projects were to be developed on a common carrier basis, making it mandatory for Reliance to offer 33 percent of each pipeline's total capacity to other firms.

"The interested party would have to enter into a take or pay contract or any other mutually agreeable contract with the owner for usage of the proposed pipeline," the ministry said.

India produces 95 mmscmd of gas and the government expects this to rise to more than 190 mmscmd by 2009 after a series of gas finds off the east coast, including by Reliance, come on stream.

Govt cuts minimum export price for onion

India on Friday cut by $40 a tonne the minimum price at which onion can be exported from the country, aligning it with the fall in local prices and giving a thrust to exports.

The National Agricultural Cooperative Marketing Federation of India (NAFED), a government agency, had in February raised the minimum export price (MEP) by about 30 percent across regions, to discourage exports amid surging local prices.

"Now, arrivals have improved and prices have fallen across the country. So, we decided to reduce the minimum export price," a senior NAFED official said from New Delhi.

The new export prices, to come into effect on Sunday, differ from region to region. For instance, the MEP to the Middle East, a major buyer, would be $305, compared with $345 until March and $265 in early January.

Onion prices had shot up in India in early 2007 on lower arrivals and booming export demand from neighbouring countries. However, the government's export control and improving arrivals had brought down the prices again.

Wholesale prices in India's largest onion trading hub, Lasalgaon in Maharashtra state, have eased to Rs 500 a quintal, from 1,500 rupees in February. Retail prices have fallen from a peak of Rs 25 a kg to about Rs 9 in Mumbai.

"There is no shortfall of onion and it was necessary to cut the MEP," said, C B Holkar, Vice-Chairman of NAFED.

India, the world's second largest producer of onion, is expected to have exported an all-time record of 1.1 million tonnes in the year to March 2007, cashing in on output shortfall in neighboring countries, especially Pakistan.

However, the output is expected to fall to 5.5 millon tonnes in the current fiscal year, from 6.2 million last year, as heavy rains washed out part of the crop in western and southern India.

Aditya Birla Group to invest $260 mn on fibre

Aditya Birla Group, controlled by billionaire Kumar Mangalam Birla, is investing $260 million to expand a textile fibre capacity and meet rising global demand for casual fabrics, a group official said on Friday.

The expansion includes diversified Grasim Industries Ltd, which will spend about Rs 3 billion ($69 billion), and unlisted group companies in Thailand, Indonesia and China.

The group aims to raise the capacity of viscose staple fibre, a raw material for fabrics, to 727,000 tonnes a year by the December quarter from 566,000 tonnes now, group director for pulp business Shailendra Jain said.

There has been a change in consumer preference for cellulosic fabric in the last few years after demand remained stagnant in the 1990s, he said.

"There is a strong indication that consumers want more casual look," Jain said. "It's changing because of the lifestyle products."

Most of Grasim's investment will be funded from internal accruals, he said.

The fibre unit was a drag on Grasim's earnings for many years in the 1990s and many analysts had urged the cement-to-textiles firm to spin off the unit to improve financial ratios.

The fortunes of the unit improved in the last few years and has contributed positively to earnings.

Jain said the expanded capacity would start production after the July-September quarter, and immediately add to earnings of Grasim.

India tea exports rise annual 23.3% in January

Tea exports from India, the world's largest producer, rose 23.3 per cent in January from a year earlier to 13.77 million kg, the state-run Tea Board said on Friday.

Officials said rising overseas demand should keep sales high over the next few months, even as leading competitor Kenya overcomes a drought that hit their output and exports last year.

"We are tapping a lot in the emerging markets in Asia and Africa which should help us sustain this growth," Tea Association of India (TAI) spokeswoman Mridula Bhattacharya said.

Indian tea production in January fell 12.3 percent from a year earlier to 21 million kg, Tea Board officials said.

"Unfavourable weather conditions, especially with a drought-like situation prevailing in northern India, brought about this fall in production," Kalyan Basu, the secretary general of the TAI, said.

"There is no doubt with some rains production will catch up."

Exports reached 203.8 million kg in 2006, topping 200 million kg for the first time since 2002 mainly due to Kenya's drought and India's tapping of emerging markets, officials said.

In 2006, India exported 8.52 million kg of tea to Kenya, up from 1.54 million kg a year earlier.

"That will however change this year as Kenya seems to have overcome its problems," Basu said.

The bulk of India's exports in 2006 went to Iraq, Russia and the United Arab Emirates, officials said.

Tea production rose by 3 per cent to 955.9 million kg in 2006 from 2005 as good weather lifted production in the north, officials said.

"The outlook for both production and exports for the year remains good, despite increasing competition," Basu added.

GAIL to invest $4.1 bn in pipelines

Gas transporter GAIL (India) Ltd plans to invest Rs 180 billion ($4.1 billion) over the next five years in new pipeline projects across India, Chairman U D Choubey said on Friday.

The investment would boost revenues to Rs 58 billion by 2011/12 from 20 billion in the current year, he said.

The state-run company will build new pipelines totalling 5,000 km (3,100 miles) to enhance GAIL's gas transportation capacity to 280 million standard cubic metres per day (mmscmd) from the current 145 mmscmd, he said.

"With increase in usage of natural gas, we need to build an infrastructure to meet the demand," he said at a news conference.

India produces 95 mmscmd of gas and the government expects this to rise to more than 190 mmscmd by 2009.

Choubey said the company would go to the market to fund the expansion. "Details are being worked out," he said. It was not immediately clear whether it would be equity, debt or a combination of both.

GAIL, India's largest gas distribution firm, currently has a 6,000 km pipeline network that transports up to 80 mmscmd of gas to power plants and industries.

Shares in GAIL were up 2.2 per cent at Rs 269.70 in a firm Mumbai market.

Vodafone confident of closing Indian deal

British mobile giant Vodafone Group Plc is confident it can close its recent deal to buy a controlling stake in India's Hutchison Essar in the coming weeks, Chief Executive Arun Sarin said on Friday.

Sarin told an investors presentation that the approval for Vodafone's $11.1 billion acquisition from India's Foreign Investment promotion Board (FIPB) remained a few weeks away.

ABN Amro India folio reaps profits

ABN Amro, currently in merger talks with British banking major Barclays, has doubled its micro finance clientele globally with its India portfolio in the segment growing to 26.2 million Euro in 2006.

The growth in the bank's Indian micro finance portfolio came through partnerships with 26 intermediaries across six states and the business achieved break-even within one year of start-up and continues to operate profitably, ABN Amro said in a statement.

The bank said in its sustainability report that the number of its micro finance clients has almost doubled to 351,500 last year from 186,300 clients in 2005.

"In India, we apply a different model as we provide specialised financial intermediaries with credit who then lend the money to economically disadvantaged borrowers. This approach combines the bank's financial strength with the vast rural network of the intermediaries, " it said.

Micro finance are small loans that enable many people (entrepreneurs) to work their way out of poverty. However, a significant challenge remains extending the reach and distribution capacity of micro finance activities.

In addition to India, the bank also provides micro finance in USA and Brazil.

"In Brazil, we have expanded our loan portfolio from 0.2 million Euro in 2005 to some 5.8 million Euro in 2006. This means it has evolved from a pilot to a sizable operation in nine cities across Brazil," it said.

In the USA, ABN Amro also works with intermediaries to support start-up and micro businesses. Because of the nature of the US economy, developing a small business to move someone out of poverty requires larger provisions.

India Inc all set to lose Rs 163-crore

NEW DELHI: The Indian team’s loss to Sri Lanka at Trinidad Friday night, virtually throwing men-in-blue out of the reckoning for the second-stage in the ongoing ICC World Cup, has upset many a marketer’s neatly laid out business plans, big time. India’s dismal showing in the Caribbeans, a source of much heartburn and anxiety amongst advertisers has clearly turned into panic now. Marketing and media plans are being furiously reworked to salvage big spends around the World Cup, and long faces abound across some of corporate India’s marquee names - Pepsi, LG, Reebok, Visa, Nokia, Videocon, Hero Honda, Hutch, Samsung et al.
According to Mindshare, a media buying agency, India Inc’s losses would tot upto over Rs 163-crore. And this just on the Rs 350-400-crore advertising monies that they had committed with the official broadcaster, Sony Entertainment Television (SET). Mindshare’s estimates are based on the premise that viewership for the rest of the World Cup matches, sans India, will drop as much as 50%. “Advertisers are now talking about the loss in profits. We are looking to strike an amicable resolution with Sony on this issue,” says Manish Porwal, managing director, Starcom India (West & South), another big media buying firm.

Read more at Economic Times

UBI to open first overseas branch in Shanghai

Keeping an eye on the foreign markets, Union Bank of India is set to open its first overseas branch at Shanghai in China next month.

The bank is also contemplating to open another branch in Doha and two representative offices in Hong Kong and Dubai.

"We will open our first overseas branch in Shanghai next month," Union Bank of India, General Manager, V K Dhingra said.

The bank has been given licenses by RBI for opening offices in Hong Kong, Doha and Dubai, he said. "These will also be opened soon but the bank is just awaiting the approval from their respective governments."

Expansion on the domestic front is also in the offing with the bank planning to open 125 branches during the next fiscal. "We will open 125 branches in next financial year across the country with a view to strengthen our position here," he said.

Mittal violating pact with ONGC: official

Steel tycoon Lakshmi N Mittal's acquisition of 49% stake in Hindustan Petroleum's $3 billion Bhatinda refinery has violated his pact with Oil and Natural Gas Corp (ONGC) to pursue hydrocarbon opportunities exclusively with the flagship Indian firm, an ONGC official has said.

Though Mittal inked a joint venture agreement in July 2005 with the state-run firm to form ONGC-Mittal Energy for acquisition of oil and gas fields, refinery business and LNG projects, the steel czar recently decided to go it alone in investing Rs 3,300 crore in the Bhatinda refinery.

Besides, Mittal has on his own bought 50% stake in a Kazakhstan oil firm from Russia's Lukoil for $980 million and acquired 3% stake in the $6 billion Chevron-operated Olokola LNG (OK-LNG) project in Nigeria.

Read more at Business Standard

Mahanagar Gas to invest Rs 1200cr in 5 years

Mahanagar Gas (MGL), a joint venture between GAIL India, British Gas of United Kingdom and the Maharashtra government, has rolled out piped natural Gas (PNG) in south Mumbai.

PNG pipelines will soon be reaching homes in Thane, Meera Road - Bhayandar and places Navi Mumbai where PNG is not already being supplied.

In three years, MGL expects to double its subscriber base from 2.88 lakhs to six lakhs in Mumbai and treble in five years, increasing supply of PNG from 1.4 million metric standard cubic metre per day (MMSCMD) of gas to 4.5 MMSCMD in five years. For this, MGL will have to partly depend on the increase of natural gas production, expected towards the middle of 2008, P K Gupta, managing director, MGL, said.

The investment in this project would be Rs 12,000 crore, which would be through internal accruals, he said.

Read more at Business Standard

Bajaj Auto may make cars, says Rahul Bajaj

Facing the heat over the prospect of Tatas' Rs 1 lakh car affecting the two-wheeler market, Bajaj Auto today said it may build cars to ward off the threat.

"The JD power study says that it (Tata's one lakh car) will affect the two-wheeler market. If that happens then we would also manufacture cars for the market," Rahul Bajaj, chairman, Bajaj Auto said.

International consultancy firm JD Power said early this week the "people's car" from Tatas that will come out on the roads in 2008 could create a major dent in top-end motorcycle sales with its lucrative price tag, provided the corporate house gets the product right in the first shot.

Bajaj's statement is the first confirmation that the country's top three-wheeler and second-largest motorcycle maker was interested in developing a low-cost car.

The company had earlier announced it was developing a four-wheeler goods carrier scheduled for launch in 2009.

Read more at Business Standard

Rating agencies gear up for IPO grading

Credit rating agencies are gearing up for increased activity following market regulator Sebi's decision to make grading of initial public offerings (IPOs) mandatory.

Crisil, the biggest of the four rating agencies in the country, plans to expand its team shortly. R Ravimohan, managing director, Crisil said around 20 companies were currently in talks with the company for IPO grading.

According to him, contrary to market perception, IPO gradings would not cost much to the issuers.

Ravimohan said Crisil would be charging 10 basis points of the amount to be raised with a ceiling of about Rs 10-15 lakh. Thus, even in the case of a mega-IPO, there would be a cap on fees, he noted.

Read more at Business Standard

Bharti overtakes Hutch in ARPU in Q4

NEW DELHI: India’s largest cellular operator, Bharti Airtel has overtaken Hutchison Essar (now Vodafone-Essar) with regard to its average revenue per user (ARPU). As per the latest data by the Cellular Operators Association of India, Bharti had an ARPU of Rs 343.17 per month for the quarter ended December 2006, ahead of Hutchison Essar’s Rs 340.15 per month.

HEL, India’s fourth largest telecom company, had the largest ARPUs amongst private operators until Q3 of the current fiscal. However, the company’s ARPU fell by over 9% in the quarter ended December 2006, from Rs 373.99 in September 2006 while Bharti witnessed only a 1.5% fall in its average revenues during the same period. Bharti had an ARPU of Rs 348.56 in September 2006.

More importantly, COAI’s data also reveals that ARPUs of Indian mobile companies, which are already the lowest in the world, is continuing to head further south, even as companies are registering a significant increase in their overall revenues.

Read more at Economic Times

Indiabulls Real Estate lists at Rs 380 on BSE

MUMBAI: Indiabulls Real Estate Limited (IBREL), the real estate arm of Indiabulls Group, today got listed at Rs 380.05 on the Bombay Stock Exchange.

IBREL, which recently demerged from Indiabulls Financial Services Limited (IBFSL), hit highs of Rs 414.80 per share in early trade and over 12.97 lakh shares were traded on the BSE.

The face value of the stock is Rs 2 each.

Pursuant to the scheme of arrangement, between Indiabulls Financial Services Limited (IBFSL), Indiabulls Real Estate Limited (IBREL) and their respective shareholders and creditors, the real estate undertakings of IBFSL got demerged and vested in IBREL on a going concern basis.

As per the scheme of arrangement, IBREL on February 4, issued over 16.86 crore equity shares of Rs 2 each in the exchange ratio of 1:1, that is one equity share of Rs 2 each was issued for one equity share of the same value held in IBFSL.

Read more at Economic Times

BT may offer low-powered GSM in India

British Telecom (BT) of the UK is considering a low-powered global system for mobile communications (GSM) service in India, which can bring down the costs significantly on calls made by mobile phones inside offices.

Speaking to Business Standard, BT Global Services Chief Executive Officer Andy Green said, “Low-powered GSM is part of our 21st century network solution and we are ready to explore, if it is allowed, in India.”

India does not issue separate licences for such services. Existing GSM licence holders can go ahead and offer the service, but given their outdoor orientation, the viability may be an issue.

The Telecom Regulatory Authority of India had some time ago suggested the possibility of such networks in the country. Read more at Business Standard

Over 38% IPCL staff opt for VRS

IPCL’s voluntary retirement scheme has evoked tremendous response. By Thursday morning, over 2,500 employees had already applied for the scheme.

To attract more employees, the RIL management late last evening announced ex-gratia payment of Rs 1.5 lakh to all those who have applied for the scheme.

The phenomenal success of the scheme has made it the largest-ever VRS implemented by the company. In the past, the IPCL management had come out with a similar scheme in 2003 and in 2005.

In 2003, VRS was announced immediately after the RIL takeover and around 1,800 employees had opted for the scheme. In 2005, the scheme had received poor response and there were only 600 takers. Read more at Business Standard

RIL, Rohm to set up chemical unit

Sign an MoU for 200,000 tonne facility at Jamnagar.

Reliance Industries today announced that it will set up a chemical plant at Jamnagar in Gujarat in partnership with US-based Rohm and Haas Co, the world’s biggest producer of acrylic-paint ingredients.

The companies have signed a memorandum of understanding for a plant with a capacity to produce 200,000 tonnes of acrylic acid annually.

Products from the new plant would be used to make paints, packaging adhesives, detergents, and textile and construction materials, Reliance said in a statement to the exchanges.

Industry sources said the decision to collaborate with Rohm and Haas meant Reliance would not acquire the commodities business of Dow Chemicals. Read more at Business Standard

FM talks tough, asks cement cos to cut prices

Finance Minister P Chidambaram today asked cement manufacturers to cut prices claiming that a section of them was keen to co-operate with the government in this regard.

"We have information how much your (cement makers) sales have increased. How much your PBT has increased. How much your PAT has increased. So, you should come forward with some proposals (on moderating cement prices)," Chidambaram told reporters after meeting a delegation of cement companies.

The Finance Minister had called cement manufacturers for the second time after the Budget, which imposed dual excise duty structure on cement to rein in prices. The budget hiked excise duty to Rs 600 a tonne from Rs 400 if cement is sold higher than Rs 190 per bag of 50 kg and reduced it to Rs 350 per tonne if sold up to Rs 190. The move, however, failed as cement makers hiked prices by up to Rs 12 per 50 kg bag.

Chidambaram asked the industry to co-operate with the government to fight inflation, which has touched 6.46% for the week ended March 3 with cement prices increasing at the rate of 4.4%.

Read more at Business Standard

Sebi okays short selling by institutions

The Securities & Exchange Board of India (Sebi) today tightened the norms for initial public offerings (IPOs) by real estate companies, while allowing short selling of equities by institutional investors, including FIIs.
It also made grading mandatory for all IPOs and waived the requirement of minimum public holding post-IPO for public sector companies and institutions.

The stock market regulator said real estate companies looking to tap the market must show the current value of their landholding, which should only include land actually owned by them.

A large number of real estate companies have lined up IPOs. Many have computed the value of their land on basis of what they expect the price to be when the projects are completed.

When approached for comments on Securities & Exchange Board of India’s directive, a senior executive with Delhi-based DLF said, “This will work to our advantage. The cost of land has been escalating and we will now be able to do the valuation at today’s prices.”

DLF has been awaiting Sebi’s permission to float an IPO that is estimated to garner Rs 13,600 crore, more than any issue so far.

Read more at Business Standard

SEBI makes IPO grading mandatory

Market regulator Securities and Exchange Board of India (SEBI) on Thursday made it mandatory for companies planning initial public offers to get rated by agencies and tightened disclosures for real estate IPOs.

The two decisions could affect some high-profile IPOs being planned by big developers, bankers said.

"The grading of IPOs will come into effect immediatly," SEBI Chairman M Damodaran said. "The fees to be paid for grading of IPO would be paid by companies," he said.

Read more at The Financial Express

France's Thomson mulling R&D centre in India

French technology group Thomson, which has eight research and development centres worldwide, wants to locate a ninth centre in India in coming years, its chairman said on Thursday.

This would be done by expanding its existing capacity in India and not through acquisitions, Frank Dangeard told the Association of French Economic and Financial Journalists (AJEF).

"We have eight research centres worldwide and we need a ninth centre. We need to have one in India," he said.

Read more at The Financial Express

Rahul Kirloskar appointed Maharashtra CII Chief

Kirloskar Oil Engines Ltd (KOEL) Director Rahul Kirloskar was elected as Chairman of CII Maharashtra State Council 2007-08.

Newage Electrical India Ltd Managing Director Pradeep Bhargava was elected Vice-Chairman, a release said.

Rahul Kirloskar has been associated with the Kirloskar Group of Companies for more than 19 years at senior levels in different capacities, it said.

Bhargava has worked with the Central government and Public Sector in Indian Space Research Organisation and Atomic Energy Commission, Bharat Heavy Electrical India as corporate planner, implementing diversification into Power Electronics.

Mastek to hire 5,000 IT professionals

IT company Mastek will hire 5,000 professionals for a new campus at Mahindra Industrial Park in Chennai.

In the first phase, which is expected to be completed in the next one year, the company will recruit 1,100 professionals, it said in a release on Thursday.

The company also said it is building a centre of excellence at the recently launched Chennai facility to acquire competencies in mainframe technology, mainly in the insurance vertical.

The recruitments for this unit are under process, Mastek added.

Mainframe technology provides massive storage capacity and improves data security and flexibility in the client/sever design.

ABN Amro raises stake in India Cements

India Cements Ltd said on Thursday ABN Amro Bank has acquired 2 million shares or a 0.91 per cent stake in the company to raise its stake to 5.09 per cent.

Bank unions call off proposed 3-day strike

Customers of state-run banks can heave a sigh of relief with bank unions on Wednesday calling off their three-day proposed strike from March 28.

The proposed strike could have paralysed the entire banking services and put customers to severe inconvenience as it would have affected financial work for most of next week, since March 27 (Tuesday) is already a holiday on account of Ram Navami.

The three-day strike from Wednesday would have rendered the whole week futile for carrying out any emergency bank work. In fact, the income-tax department had already asked people to pay their taxes by March 23 to avoid inconvenience on account of disruption in services due to the proposed strike. Even the government would have faced problems as tax refunds etc for 2006-07 have to be made by March 31.

Read more at The Economic Times

Govt to scout wheat import markets despite good crop

Despite prospects of a bumper crop and sizeable stocks, India will likely be tapping world markets for wheat in a big way again this year and could once again pay dearly for its needs.

Firms might start scouting the market by mid-May, when purchases by state agencies from farmers taper off and output estimates become clear.

Agriculture Minister Sharad Pawar has given strong indications that the government will be proactive on imports this year, after scrambling for costly purchases last year as output and stocks fell.

Read more at The Economic Times

Indian inks deal with Jupiter Aviation for Airbus MRO

State-owned carrier Indian on Thursday signed an agreement with Rajeev Chandrasekhar-owned firm Jupiter Aviation and Logistics to set up a maintenance, repair and overhaul (MRO) facility at an estimated investment of Rs 300 crore. This facility -- for which aircraft maker Airbus is the advisor -- will be used for maintenance of airframes, the mechanical structure of an aircraft excluding engines.

Airbus’s parent EADS, which last month signed an MoU with Jupiter Aviation and Logistics to collaborate in aviation ventures, has authorised the Bangalore-based Jupiter to enter into the joint venture with Indian to set up an MRO. This facility is being set up under the offset agreement signed between Airbus and Indian.

The MRO facility will initially cover Airbus A 320 aircraft but later it will also cater to other Airbus family planes. The facility, to be set up in the next 24 months, would not only deal with the Airbus fleet of Indian, but would attract business from several airlines in the South Asian region using Airbus aircraft, Indian CMD V Trivedi told reporters here.

Read more at The Economic Times

Tatas eyeing Deutsche Telekom's German IT unit

In line with its strategy of global expansion through acquisitions, corporate giant Tatas are reported to be in advanced stages of talks for buying the IT business unit of German telecom giant Deutsche Telekom.

According to a report by German business weekly Focus Online, the Tata Group is currently studying the books of Deutsche Telekom's T-Systems unit. The Tatas are planning this deal through the European unit of Tata Consultancy Services.

T-Systems is one of the smallest units of Deutsche Telekom. It had reported a revenue of 12.5 billion euro (about Rs 73,000 crore) last year and has a total workforce of over 55,000 people.

When contacted, a TCS spokesperson in Mumbai said the report was completely speculative and the company did not comment on speculations.

Govt expects Rs 24,000cr inflow in chip making

The government expects to attract an investment of around $6-10 billion (approx. Rs 24,000-44,000 crore) by luring two-three fabrication units with at an investment of $2-3 billion each by 2010 now that it has notified (given formal consent) to the semiconductor policy it had announced on February 22 this year.

Union Minister for IT and Communications Dayanidhi Maran told reporters here: "An appraisal committee to be headed by Additional Secretary in the Department of IT will be formed very soon. The committee will receive expression of interest from interested parties and will submit its recommendations to the government." He said he would reopen negotiations with Intel and other companies to explore possibilities of them setting up units in the country.

An Intel spokesperson had then said: "Once the comprehensive policy document is circulated, we will evaluate and respond."

Read more at Business Standard

Rs 1 lakh car a global case study: J D Power

The much-touted people's car from Tata Motors could create a major dent in the top-end motorcycle sales with its lucrative price tag, which has become a global case study, global consultancy firm J D Power said today.

"If Tatas are able to get quality and customer satisfaction parameters right, People's Car could shift buyers from a top-end two-wheeler on account of its safety and convenience factors," it said.

"The two-wheeler market in India could see a dent at the top-end because of the Rs 1 lakh car, but how far reaching will it be will depend on the product's performance, after-sales service and overall customer satisfaction," Mohit Arora, director (India), JD Power, said.

Read more at Business Standard

FIIs net buyers of Rs 713cr in cash mkt today

Foreign institutional investors (FIIs) were net buyers of Rs 712.70 crore (provisional) today, according to data released by BSE.

While FIIs made gross purchases of Rs 2,439.25 crore, gross sales totalled Rs 1,726.55 crore.

FIIs were net buyers of Rs 164.50 crore on Wednesday, March 21, according to data released by Sebi today. While FIIs made gross purchases of Rs 1,395.40 crore, gross sales totalled Rs 1,230.90 crore.

ITC's Rs 300cr WB cigarette unit may be delayed

The Left Front has one more reason to be upset with the shipping ministry, which has already irked Left MPs by shifting the apex marine training college to Chennai at the expense of the existing college in Kolkata.

This time round, the ministry was reportedly sitting on the proposal forwarded by Kolkata Port Trust (KoPT) to hand over to the company a plot of surplus land contiguous to the existing ITC cigarette factory in the port area in west Kolkata.

In consequence, the investment plan of ITC to expand the Kidderpore cigarette factory at a cost of Rs 300 crore may be delayed.

Read more at Business Standard

RIL, Rohm and Haas sign MoU for acrylic unit

Reliance Industries (RIL) and Rohm and Haas Company have signed a memorandum of understanding (MOU) to explore the joint construction of a world-scale acrylic-monomer complex in Jamnagar, India.

According to a release issued by Reliance to the BSE today, the proposed facility would have the capacity to make approximately 2,00,000 tonne of acrylic acid and its esters annually. "Materials from the facility are intended to serve as building blocks for environmentally-advanced products for paints and coatings, packaging adhesives, detergents, textile and construction materials. The new facility is expected to spur development of super absorbent polymers used primarily in the manufacture of baby diapers," the release added.

FM talks tough, asks cement cos to cut prices

Finance Minister P Chidambaram today asked cement manufacturers to cut prices claiming that a section of them was keen to co-operate with the government in this regard.

"We have information how much your (cement makers) sales have increased. How much your PBT has increased. How much your PAT has increased. So, you should come forward with some proposals (on moderating cement prices)," Chidambaram told reporters after meeting a delegation of cement companies.

The Finance Minister had called cement manufacturers for the second time after the Budget, which imposed dual excise duty structure on cement to rein in prices. The budget hiked excise duty to Rs 600 a tonne from Rs 400 if cement is sold higher than Rs 190 per bag of 50 kg and reduced it to Rs 350 per tonne if sold up to Rs 190. The move, however, failed as cement makers hiked prices by up to Rs 12 per 50 kg bag.

Read more at Business Standard

Cabinet clears 74% FDI in telecom

The Cabinet today approved amendments to Press Note 5 of 2005 that impose stiff monitoring needs for telecom service providers, increasing foreign direct investment from 49% to 74%.

Accordingly, remote access to networks in India will be permitted from approved locations, information and broadcasting minister P R Dasmunsi told reporters after a meeting of the Cabinet. Such access will only be allowed to equipment suppliers, manufacturers and affiliates and will not allow access for monitoring calls and content.

It will also be mandatory for operators to keep an audit trail of all remote access activities for six months, send a compliance report twice a year to the government and maintain a 'mirror image' of all remote access information for online monitoring.

Read more at Business Standard

Sebi to allow short-selling by institutions

Sebi chairman M Damodaran said in Mumbai this evening that the board, which met today, has approved a proposal to allow short-selling by institutions.

The board also approved a proposal for mandatory grading of IPOs, which will be reviewed periodically.

On real estate IPOs, Damodaran said land bank details should be accompanied by ownership status, and valuations should be based on current prices.

On delisting via the book-building process, Damodaran said a final decision on the issue would be taken at the next board meeting scheduled in May.

Sensex soars 362pts, gains 878pts in four days

The Sensex opened with a significant positive gap of 126 points at 13,072, and did not bother to look back. The markets, which were on the recovery path, got another booster dose as the US Federal Reserve kept the benchmark interest rates unchanged yesterday.

Unabated buying saw the index rally to a high of 13,326. The index thus gained 1,010 points from the low of 12,316 hit last Friday.

The Sensex finally closed today with a hefty gain of 362 points (2.8%) at 13,308. In the process, the index is now up 878 points (7%) in the last four trading days.

Read more at Business Standard

DLF, Nakheel in $10 bn townships venture

To develop 40,000 acres in Gurgaon, Maharashtra.

DLF Ltd is forging a 50:50 joint venture with Nakheel, a large property developer of the UAE, for two integrated townships in India at a whopping investment of $10 billion.

Set up under the auspices of the Dubai government, Nakheel functions as a private commercial enterprise and is currently developing 17 major projects worth more than $30 billion, and also has projects like The Palms, Dubai Waterfront and The World to its credit. This will be its maiden foray into India.

Interestingly, Nakheel’s main competitor in residential development in Dubai is Emaar Properties. Emaar operates in India as a 50:50 joint venture partner in Emaar-MGF. This joint venture competes with DLF at Gurgaon, the latter’s main market in India.

Even as DLF awaits the green signal from the Securities & Exchange Board of India for its Rs 13,600 crore initial public offering, it has announced a slew of joint ventures in the last one year. Read more at Business Standard

Intra-day call rate touches 9-year high

Hits 60% before closing at 17% as banks see outflows of Rs 40K cr towards tax payments.

Money market rates today touched nine-year highs as the liquidity squeeze in the banking system worsened. The overnight call money rate touched 60 per cent intra-day and some banks, particularly foreign and private banks, used dollars to raise rupee resources for a day at a record rate of 105 per cent, dealers said.

Banks chased rupee resources as they saw outflows of around Rs 40,000 crore towards tax payments. Government bond auctions further squeezed liquidity. A liquidity crunch in 1998 had seen the call rate touch 100 per cent.

The swapping of dollars for a day, by banks which had exhausted their borrowing limits in the call money market, helped the rupee to appreciate 0.7 per cent and close at a 19-month high of Rs 43.74 per dollar. Dollar swapping involves exchanging dollars for rupees. Read more at Business Standard

Liquidity crunch to end in few days: FM

Finance Minister P Chidambaram today said the current liquidity tightening is mainly due to advance tax payments and it will ease in few days as departments spend money.

"Liquidity (tightness) is mainly due to advance tax payments, it will be alright in few days as the ministries, departments start spending money," Chidambaram said on the sidelines of the release of a report by UNEFCAP. The government has collected around Rs 40,000 crore in advance tax payments in the last quarter ended March 15.

Poverty rate drops to 22%

Poverty in the country declined to 21.8% of the population in 2004-05 from 26.1% in 1999-2000, according to data released by the Planning Commission today.

Narayana Murthy opposes SEZ policy

BANGALORE: Software icon N R Narayana Murthy on Wednesday opposed the practice of acquiring farm lands for special economic zones (SEZs), saying that the earlier practice of companies building their own campuses was good enough.

"I agree that we cannot take land from farmers", the non-executive chairman and chief mentor of Infosys Technologies Limited told reporters, who sought his views on the raging debate over SEZs.

"The earlier policy, where individual companies were building their own campuses, was a good one," he said, adding that bringing real estate players in between was probably not the best thing to do.

Read more at Economic Times

Make calls abroad, it's getting cheaper

NEW DELHI: Consumers have all the reason to smile. Their telephone calls abroad would become cheaper beginning April 1. Following a steep cut in Access Deficit Charges (ADC) announced by the Telecom Regulatory and Development Authority (Trai), the telecom operators are bound to bring down the tariff outgoing and incoming international calls across the spectrum.

The ADC on outgoing ILD calls has been abolished completely. The access deficit charge rate on incoming international calls has been slashed to Re one from the prevailing Rs 1.60 per minute.

This will lead to lower telecom tariffs on services provided by the operators. Trai has directed the telecom operators to pass on the reduction in ADC charges to the consumers.

Read more at Economic Times

IBM deal valued up to $800 mn: Idea

MUMBAI: Idea Cellular Ltd, India's fifth-largest mobile phone firm, said on Wednesday its 10-year contract for IBM's Indian unit to develop its business processes and technology infrastructure was valued at up to $800 million.

Earlier ET had reported, Idea was set to close the deal at $600-700 mn.

The value of the 10-year contract could still go up depending on the scope of services to be offered by the Big Blue during the duration of the deal. Sources said the contract would be somewhat different from the one that IBM inked with Bharti in 2004. “This deal is also expected to cover billing, call centre operations, customer care management and data management for Idea,” said sources. A formal announcement is expected shortly.

Read more at Economic Times

ICRA IPO opens for subscription

ICRA, a leading provider of investment information and credit rating services in India, is open for subscription with a public issue of 2,581,100 equity shares of Rs 10 each, for cash, at a price to be decided through a 100% book building process through an offer for sale by IFCI (18.6 lakh shares), administrator of the Specified Undertaking of the Unit Trust of India (7 lakh shares) and State Bank of India (20,500 shares).
The price band for the issue has been fixed between Rs 275 to Rs 330 per equity share. The issue closes for subscription on March 23, 2007. The issue size at the higher price band is at Rs 85.17 crore.
It is also an associate of Moody’s Investors Services. Moody has 29% stake in ICRA. Remaining stake is held by leading financial institutions and banks like SBI, LIC, IFCI etc.

Read more at MoneyControl

Trai willing, ISD calls may cost less from April 1

International long distance calls (ISD) may become cheaper as telecom regulator Trai is considering reducing levy on both outgoing and incoming ISD calls from April 1.According to sources, Trai will be meeting this week to finalise the annual review of access deficit charge (ADC), a levy being paid by private operators to BSNL for rolling out services in remote and rural areas, which may be reduced on ISD traffic.The ADC on both outgoing and incoming ISD calls may be reduced by up to 50% and the current total ADC of 1.5% of gross revenue is also likely to come down to 1%.As per the road map, the total ADC, currently at Rs 3,335 crore, should be lowered to Rs 1,600-1,800 crore for FY08 before being phased out by next fiscal to 0.

Read more at Business Standard

RIL has $12 bn for gas find, transport

$5.2bn will be spent on gas production, while a larger chunk of $7bn on building gas pipes.

Reliance Industries is lining up investments of over $12 billion for production of gas from its fields in the Krishna-Godavari basin and its transport to consumers across the country.

While $5.2 billion will be spent on bringing the gas to production, a larger chunk of $7 billion will be invested in building gas pipes to transport it to consuming locations.

Production of gas from the K-G basin will begin by June 2008, the company’s president (oil and gas), PMS Prasad, told reporters.

There are three key pipelines that are being planned by the Mukesh Ambani-controlled company from Kakinada in Andhra Pradesh — a 1,386-km pipeline to Bharuch in Gujarat at an investment of $4 billion, and two coastal pipelines to West Bengal and Chennai at an investment of $3-3.5 billion.

Read more at Business Standard

Ranbaxy in Lipitor patent suit with Pfizer in 17 countries

NEW DELHI: India’s largest drug-maker Ranbaxy has locked horns with the US-based world’s largest drug-maker Pfizer in 17 countries over infringement of patent of the latter’s blockbuster cholesterol lowering drug Lipitor. The company’s launch of the atorvastatin (the generic drug of Lipitor) is crucial in its plan to generate nearly $2 billion in sales over the next five-six years.The countries where Ranbaxy is into litigations with Pfizer for atorvastatin include the US, the UK, Norway, Austria, Denmark, Finland, Australia. Lipitor is the world’s largest selling drug with sales worth about $13 billion last year. The patent for Lipitor expires in 2010. During 2004-05, Ranbaxy had to reportedly shell out around Rs 160 crore to fight against Pfizer’s Lipitor drug. Ranbaxy has about 20 first-to-file (FTF) applications pending in the US, of which about 10 are in litigations — with atorvastatin being the big bet. FTF gives 180-day exclusive marketing period along with the patent holder.

Read more at Economic Times

India Inc carts money to pvt banks to duck strike

MUMBAI: India Inc, small businesses and cautious individuals have started transferring money to private sector and foreign banks in the wake of a strike call given by public sector bank unions for next week. Private banks have already sent letters to corporate customers having payroll accounts with them, to transfer money to these accounts to avoid a cash crunch during the last week of the financial year. Customers would face major problems as the next clearing operation after March 23 would, in all likelihood, only be on April 2. If talks do not fructify, bank trade unions have threatened an indefinite strike from May 3.

Read more at Economic Times

GoM on insurance likely to meet in few days

The Group of Ministers on insurance is likely to meet in a couple of days to take up the long-pending issue of raising FDI cap in the sector to 49 per cent from the current 26 per cent, opposed vehemently by the UPA's Left allies.

"They are trying to fix time. I am told it (the meeting) will happen tomorrow or day after tomorrow," Finance Minister P Chidambaram told reporters on the sidelines of the launch of joint venture asset management business between Canara Bank and the Netherlands-based Robeco.

Since only three days are left for Parliament to go for recess, the proposed comprehensive bill on insurance sector, in case approved by the Cabinet, could come only in the second leg of the Budget session.

Read more at The Financial Express

Land rows worry POSCO

A tense stand-off with farmers unwilling to give up their land threatens India's largest-ever foreign investment project, a USD 12 billion steel plant planned by South Korea's POSCO.

Opponents of the project have taken heart from events in neighbouring West Bengal, where plans to seize farmland for a chemicals complex were shelved after police killed 14 protesters.

"This has had a very good effect on the people struggling against the POSCO project," said protest leader Abhay Sahu. "This is an opportune time for us to move forward."

Read more at The Financial Express

Murthy is now chairman of Asia Biz Council

In yet another recognition to India Inc's growing prowess, Infosys Technologies Ltd Founder N R Narayana Murthy takes over as Chairman of the prestigious Asia Business Council (ABC).

The Asia Business Council announced key leadership changes at its Spring Forum held in Hong Kong on March 15-17, a press release said.

Murthy, who takes over as the chairman of the organisation with immediate effect, promised to take the Council to the ‘next level’.

Read more The Financial Express

Media, Showbiz set for a big show

The size of the Indian media and entertainment industry is expected to more than double to Rs 100,000 crore in the next four years on rising demand, technological improvements and greater investments, according to a report by industry body FICCI and consulting firm PWC.

The sector is projected to post a growth rate of 18 per cent annually to Rs one trillion (Rs 100,000 crore) by 2011 from about Rs 437 billion (43,700 crore) at present, according to a FICCI-PriceWaterhouseCoopers (PWC) report.

Technological advancements, policy initiatives taken by the government to encourage investments and initiative by private companies will be the key drivers, it said.

Read more at The Financial Express