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Chidambaram announces package to double credit for SMEs
It takes 89 days to begin business in India
Mittal Steel’s net drops by 15 pc
Lufthansa to hike weekly services
RCL acquires 30.55 pc stake in Adlabs
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Yahoo to buy Alibaba stake for $1 billion
RBI to issue new bank notes
Vijaya Bank to open branch in Hong Kong
United Spirits to list by March, 2006
Middle class will constitute 13 pc Indians by 2010
China names reference currencies
M&M launches Champion Alfa
Sun Pharma to acquire Hungary-based company
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Chidambaram announces package to
New Delhi, August 10 In addition, a one-time settlement scheme to apply to small- scale non-performing assets (NPAs) accounts in the books of the banks as on March 31, 2004, will be introduced. The scheme will be in force up to March 31, 2006. “Public Sector Banks will be advised to fix their own targets for funding SMEs in order to achieve a minimum 20 per cent year-on-year growth in credit to the SME sector. The objective is to double the flow of credit from Rs. 67,600 crore in 2004-05 to Rs.1,35,000 crore to the SME sector by 2009-10,” Finance Minister P Chidambaram said in a statement tabled in the Rajya Sabha today. The current definition of small- scale and tiny industries definition may continue. Units with investment in plant and machinery in excess of the SSI limit and up to Rs.10 crore may be treated as medium enterprises (ME). “The definition may be reviewed after enactment of the Small and Medium Enterprises Development Bill. Only SSI financing will be included in priority sector,” he said. At present, member lending institutions (MLIs) like banks are provided guarantee cover of 75 per cent of the amount of default by the Credit Guarantee Fund Trust for Small Industries (CGTSI), in respect of term loan and/or working capital facilities up to Rs 25 lakh. A one-time guarantee fee of 2.5 per cent and annual service fee of 0.75 per cent of the credit facility sanctioned are currently charged by CGTSI from the MLIs. In order to reduce the cost of guarantee to the weaker borrowers, particularly tiny units, the CGTSI will be advised to reduce the one- time guarantee fee from 2.5 per cent to 1.5 per cent for all (i) loans up to Rs.2 lakh, (ii) eligible women entrepreneurs, and (iii) eligible borrowers located in the North- Eastern region, including Sikkim, and Jammu and Kashmir. Further, public sector banks will be encouraged to absorb the annual service fee in excess of 0.25 per cent in respect of guarantee for all (i) loans up to Rs.2 lakh, (ii) eligible women entrepreneurs, and (iii) eligible borrowers located in the North- Eastern region, including Sikkim, and Jammu and Kashmir, he said. Cluster- based financing would now be treated as a thrust area, the Finance Minister said. Banks would be increasingly adopt the cluster- based approach for SME financing and about 388 clusters had already been identified. “To broaden the financing options for infrastructure development in clusters through public private partnership, SIDBI will formulate a scheme in consultation with the stakeholders”, he said. The RBI would issue detailed guidelines relating to the debt- restructuring mechanism so as to ensure restructuring of debt of all eligible small and medium enterprises at terms that are not less favourable than the corporate debt restructuring (CDR) mechanism in the banking sector.
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It takes 89 days to begin business in India
New Delhi, August 10 The findings, which were presented in the Rajya Sabha by Minister of State for Commerce and Industry E V K S Elangovan through a written reply, said that starting a business in India took nearly 89 days. While India fared better than Brazil, where opening a business was said to take as many as 152 days, the country was behind Pakistan, where it takes only 24 days to set up a business. In France it takes eight the days, the Netherlands (11), Italy (13) England (18), Austria (29), and Belgium (34). With a procedure of 152 days, Spain is only the second country where it takes longer than India to open a new business. Closing a business in India takes 10 days as against less than a day in Belgium and Japan, one day each in Austria, England and Spain, 1.2 days each in Germany and Italy, 2.2 days in Sri Lanka, 2.4 days in China and 3 days in the USA.
— PTI
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Mittal Steel’s net drops by 15 pc
Rotterdam (The Netherlands), August 10 But for first six months of the year, Mittal reported a 23 per cent rise in net earnings to $ 2.237 billion from $ 1.815 billion in the second quarter of 2004. Mittal shipments came to 12.2 million tonnes of steel in the April-June period compared to 10.4 million tonnes in the first quarter and 10.8 million tonnes in second quarter of 2004. Mittal Steel, based in the Netherlands, concluded the take-over of US-based International Steel Group (ISG) in April, becoming the largest steel maker in the world with an annual production of 70 million tonnes. Today’s figures were the first to consolidate results of the ISG acquisition. Mittal chairman Lakshmi Mittal warned that conditions in the third quarter would remain difficult because demand and prices have been softened by “inventory destocking in Europe and the US.” — AFP
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Lufthansa to hike weekly services
New Delhi, August 10 While the Delhi-Munich flights would operate daily from November 1 against the current four flights a week, the Bangalore-Frankfurt service would be enhanced from five to seven flights a week, airline’s General Manager Werner Heesen told reporters here. Promising to “more than double” its frequencies by 2007, he said Lufthansa would operate 38 flights from October 1 and the number of services could go up to 46 by next year as per the rights granted in the recently concluded bilateral air traffic agreement between Germany and India. He said the agreement, which reflected “a clear trend” towards an open-sky accord, would be reviewed at another meeting slated next year. Lufthansa, which operates from five Indian cities of Delhi, Mumbai, Chennai, Bangalore and Hyderabad, is looking at more cities. Stating that its buy-off of Swiss Air would be completely concluded by 2006, Heesen said Lufthansa would then start offering another destination of Zurich in Europe, besides Frankfurt and Munich, to fly passengers onwards to North America. — PTI
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RCL acquires 30.55 pc stake in Adlabs
New Delhi, August 10 The company has acquired 1.10 crore equity shares of Rs 5 each fully paid up at an issue price of Rs 175.20 per equity share aggregating to 30.55 per cent of the total paid up capital of Adlbas Films on August 8, Reliance Capital informed the National Stock Exchange. The mode of acquisition is preferential allotment and the shareholding of Reliance Land Pvt Ltd along with Reliance Capital Ltd after the acquisition is 1,22,55,000 shares aggregating to 34.04 per cent of the total paid up capital of the Adlabs, it said. RCL and its controlled firm Reliance Land have also entered into an agreement for the acquisition of 58,00,000 equity shares representing 23.20 per cent of the pre-issue capital of the target company and has made an open offer to the shareholders of the target company in compliance with the SEBI (SAST) Regulations, 1997. These shares are held in Escrow and shall be released in favour of the acquirer upon completion of the open offer. The acquirer has also been allotted 38,00,000 warrants, with an option to get allotted one equity share for each warrant at a price of Rs 175.20 on or before the expiry of 18 months from the date of allotment.
— PTI, UNI
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Yahoo to buy Alibaba stake for $1 billion
Shanghai, August 10 The deal is in the final hours of discussions, the source told Reuters, speaking on condition of anonymity. Members of the Chinese media have been invited by Alibaba to a news briefing set for Thursday in Beijing, according to one reporter. The combination would create an e-commerce giant by bringing together Alibaba’s business-to-business and consumer online auction sites with Yahoo’s search operations, China’s second largest after leader Baidu.com. A spokesman from Alibaba and a spokeswoman from Yahoo both had no comment.
— Reuters
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RBI to issue new bank notes
Mumbai, August 10 Meanwhile, RBI Governor Y.V. Reddy suggested in Hyderabad that the Indian Banks Association set up a separate corporation for payment clearance.
— UNI
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Vijaya Bank to open branch in Hong Kong
Kolkata, August 10 “We have, for the first time, applied to the RBI for opening representative offices in Beijing, Hong Kong, London and West Asia, bank Chairman M.S. Kapur said here today. The bank also plans to open a full-fledged branch in Hong Kong given the significant business prospects there.
— PTI
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United Spirits to list by March, 2006
New Delhi, August 10 During the process of restructuring, there would be no more acquisitions and takeovers, said Mr Mallya, a Rajya Sabha MP. Mr Mallya, whose UB Group emerged as the second-largest spirits producer in the world after Diageo, said all listed companies as also the acquired ones would be clubbed together and merged into the proposed United Spirits where the promoters would have 54 per cent equity. “We will merge all our spirits companies into one legally and will complete the process by March 2006,” the MP said. — PTI
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Middle class will constitute 13 pc Indians by 2010
New Delhi, August 10 Rural markets will show impressive growth in those products less dependent on electricity connection and roads, and its expected share in the demand of various consumer products goods is 55 per cent, says the survey on ‘The Great Indian Market’ released here last evening by the National Council of Applied Economic Research (NCAER) in association with Business Standard. “The overall expected growth in the demand of various consumer goods is estimated to be around 9 per cent per annum,” NCAER Director-General Suman Bery revealed during a presentation on the survey details. An interesting finding was that after salary-earners, it is cultivators who form the next important demand constituent for products, accounting for a fifth in this respect. A region-wise breakup shows that the North would continue to dominate demand for both low-cost items and vehicles like cars and motor cycles (despite state-wise classification showing Tamil Nadu having the highest demand of 17 per cent for automobiles). At the same time, eastern India, despite lower income levels, “emerges as paradise” due to the demand for life insurance policies. When it comes to medical insurance, the East is second to the West. The prominent areas that showed the potential of the rural market were bicycles and radio (75 per cent), black-and white televisions, moped ceiling fans and pressure cookers (50 to 75 per cent), motor cycles, wrist-watches, colour TV and scooters (40 to 50 per cent and refrigerators (25 to 30 per cent). — UNI
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China names reference currencies
Shanghai, August 10 The basket also included the Singapore dollar, sterling, the Malaysian ringgit, the Russian rouble, the Australian dollar, the Thai baht and the Canadian dollar, central Bank Governor Zhou Xiaochuan said. Mr Zhou, in Shanghai to open a central bank office, did not detail the proportions or say whether other currencies were included in the basket. Premiums on the future value of the yuan against the dollar eased. Dealers trading in such offshore derivatives said that, as they learned more about the basket’s other currencies, a rise in the yuan against the dollar no longer looked like such a sure bet. The market priced the yuan a year from now at 7.8300 per dollar, weaker than the 7.8050 rate seen late on Tuesday, according to broker Prebon Yamane.
— Reuters
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Mumbai, August 10 “Champion Alfa is the new variant of Mahindra Champion, the 0.75 tonne three-wheeler in the cargo and passenger range,” M&M Executive Director Alan Durante said here. The vehicle, which is priced at Rs 1.12 lakh, would be launched in phases starting from Andhra Pradesh. The company has also announced special offers including discounts and extended warranty schemes for M&M customers to mark its 60th anniversary. The company would extend special gifts, free services, extended warranties and discount on the purchase of any Mahindra Automotive product effective from today to October 7, M&M said in a press note here today. — PTI
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Corporate News
New Delhi, August 10 The pharma company has used a mix of acquisitions and organic growth for increasing turnover base. However the company, which informed the Bombay Stock Exchange about this new development, did not mention the total amount to be spent on the acquisition nor did it disclose the percentage of the stake. The company had recently posted a 54 per cent increase in net profit of Rs 136.3 crore and a growth of 40 per cent in the total income at Rs 442.6 crore in the first quarter of current fiscal. Ajanta Soya to bag stake
Ajanta Soya Ltd today said it is acquiring 50 per cent stake in Nigeria-based Phoenix Steel Mills Ltd. The Rajasthan-based company, manufacturing edible oil, vanaspati and alloy steel castings, informed the Bombay Stock Exchange that the Phoenix Steel Mills Ltd was setting up a steel plant in Nigeria. The company belongs to an existing profit-making group, which includes Guru Proteins Ltd. and G D Ferro Alloys (P) Ltd. The company, owning refined oil brands Dhruv and Anchal, seems to be interested in diversifying into steel sector.
Exide puts joint venture on hold
Exide Industries Limited has put on hold its proposed smelter plant for recycling lead from battery scrap through a joint venture with the Malaysian Relcamation Industry. “The smelter plant project has been put on the backburner for the time being,” company sources said here. The decision, the sources said, was taken in view of the downward fluctuations of lead price in the international market and reduction of duty on the metal, posing viability risk for the project.— Agencies
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