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