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Idea acquires Spice
RBI hints at more tightening measures
Fertiliser industry in logjam over subsidy
Sea Link Project |
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‘Economic uncertainty to slow down FDI inflow’
Cairn unveils $2 bn investment plan
Interest Rates
‘Global upheaval not to hit India’
ONGC profit at Rs 2,627 cr
Abhishek Industries’ project
GMR buyout
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Idea acquires Spice
New Delhi, June 25 Idea would acquire the stake at Rs 77.30 a share. In the late afternoon trade, idea shares were trading at Rs 101.70, up 2.57 per cent while Spice Communication shares were up 32.75 per cent at Rs 72.15. The deal would catapult Idea Cellular's market share to 11.1 per cent and more importantly would get the crucial spectrum on 900 Mhz band. Spice currently operates in two circles of Karnataka and Punjab and has been allotted a licence for operations in four more circles , including Andhra Pradesh, Tamil Nadu, Delhi. The Birla group company today said it would merge Spice with itself through a share swap where Spice shareholders would get 49 Idea shares for every 100 Spice shares held. It will also pay an additional Rs 544-crore as non-compete fee. The long-drawn acquisition give Idea straightaway two existing circles of Punjab and Karnataka with a subscriber base of 4.4 million. Idea is present in 11 circles and has a customer base of over 26 million. India, the world's fastest-growing mobile services market and the second-largest market after China, has lured foreign firms like Vodafone and Maxis. The partner of Spice Communications, Telekom Malaysia (TMI) would now be a significant shareholder in the company, Idea cellular chairman Kumar Mangalam Birla said. Idea along with TMI would now make an open offer for additional 20 per cent stake in Spice at the same price in which Idea has bought B.K. Modi's Spice group's share. Idea would also make a preferential allotment to TMI for 15 per cent stake in the merged entity. "Idea will make a preferential allotment to TMI of 464.73 million equity shares at a price of Rs 156.96 a share representing 14.99 per cent of Idea's equity capital post allotment," an Idea statement said. In Spice Communications, TMI held 49 per cent which translated into a five per cent corresponding stake in the merged entity. When preferential offer would be complete, the stake of TMI in the merged entity would be 20 per cent. "Idea will benefit operationally by leveraging synergies with TMI which will be a significant shareholder of our company," Birla said. "The strategic move travels beyond Punjab and Karnataka. By the end of the year, the Idea yellow would increasingly colour the Indian landscape," Idea Cellular Ltd managing director Sanjeev Aga
said. — PTI |
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RBI hints at more tightening measures
New Delhi, June 25 Yesterday’s hike intends to suck up an estimated Rs 20,000 crore — a move that could make loans dearer for housing, car and personal expenses, as also to the industry. A continuous heightened vigil over ensuing monetary and macro-economic developments is warranted to enable swift responses with appropriate measures as necessary, consistent with the monetary policy stance, RBI said in a statement. The government expressed confidence that RBI’s decision to raise the short-term lending rate for banks and statutory deposits with the central bank by 50 basis points each would help contain inflation without hurting the economic growth. The objective of the RBI is to moderate and manage aggregate demand. The intention is to achieve the objective while ensuring that the prospects for overall economic growth remain positive, said a finance ministry statement. The swift action on the monetary front would be taken by the RBI to anchor expectations of price rise and also contain inflation which soared to a 13-year high of 11.05 per cent for the week ended June 7. The critical element of the public policy, RBI said, should be to moderate and manage aggregate demand so that pressures on prices are not intensified. Commenting on the impact of RBI’s steps, PNB chairman K.C. Chakrabarty said prime lending rate could go up by 50 basis points. All loans like consumer loans, home loans, personal loans are bound to go up and at the same time, deposit rates would also be increased. The finance ministry has said that the policy needs to deal with the impact of rising international crude prices, which rose from $ 134.63 per barrel on NYMEX on June 20, the trading day preceding Jeddah meeting, to $136.80 per barrel this morning. Pointing out that besides oil prices there are some underlying inflationary pressures impacting inflation in India, RBI said: Excluding the fuel sub-group, inflation rose to 9.61 per cent (for the week ended June 7) from 5.9 per cent a year ago. The finance ministry noted that these steps were necessary in the face of rising inflation, which has crossed 11 per cent mark, due to relentless increase in crude oil prices. It said the policy stance adopted by the RBI should boost the confidence of investors, both domestic and foreign, and augur well for economic growth. Meanwhile, industry chambers fear that RBI's steps may also harm India's economic growth, particularly manufacturing sector. Ficci said the move would affect the manufacturing sector, which was already facing slackening due to high interest rates. This would also affect the overall rate of growth. |
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Fertiliser industry in logjam over subsidy
New Delhi, June 25 The liquidity position of the companies has reached a stage, beyond which it will not be possible for them to continue with import and production of fertilisers in the country. Outstanding subsidy bill up to March 31, 2008, for the fertiliser supplied by the industry is estimated at about Rs 8,000 - Rs 10,000 crore, including escalation in costs yet to be notified by the government. In addition to this, the payment of subsidy and concession for the first quarter is estimated at Rs 20,000 crore. Thus, the total outstanding payment up to June 30, 2008, due from government is about Rs 28,000-30,000 crore. The industry says that a delay in approving the policy on P&K fertilisers in the present year will lead to crisis in deciding the cost of raw materials and the cost of finished fertilisers. Another issue that could snowball into a crisis is the realisation by the industry through MRP from the farmers, which is only 15 to 18 per cent of the total delivered cost of P&K fertilisers and the balance of about 82 to 85 per cent is to be recovered from the government. The international prices of raw materials and finished fertilisers are rising, but the MRP, i.e. the prices at which fertilisers are sold to farmers, have remained unchanged, except in the case of NPK complex fertilisers, where it has been reduced. However, the industry feels that the budget allocation for 2008-09 for fertiliser subsidy and concession of Rs 30,986 crore is grossly inadequate. The country is heavily dependent on import of phosphoric acid and sulphur, sulphuric acid for production of phosphatic fertilisers. The industry seeks that export of these products accentuates their non-availability and should be immediately banned. The industry also took up the issue of bonds, which are given to them in lieu of part payment of subsidy and concession. At present, they are being discounted at 11 per cent and the industry is not in a position to absorb this loss. |
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Sea Link Project
Mumbai, June 25 The 27.75 km-long link between Sewri in Mumbai and Nhava near the mainland of Navi Mumbai has been delayed for several months as companies run by both brothers tussled with each other. Today, at a cabinet meeting chaired by Chief Minister Vilasrao Deshmukh it was decided that the state government would develop the facility on its own. As per the proposal mooted by the Public Works Department of the Maharashtra government, the state plans to commercially exploit vacant land on either side of the sea link to raise finances for the project. “We may also levy a cess on private land in the vicinity, since real estate prices stand to increase substantially when the sea link comes up," a senior bureaucrat told this newspaper. Sources say, the government may also set up a Special Purpose Vehicle for the purpose. Under the fresh plan prepared by the government, the Maharashtra State Road Development Corporation will undertake this project. However a detailed financial model would be unveiled in the coming weeks, officials said. Bidding for this project was announced earlier this year. However, at the end of the process there were only two players-consortia headed by the two Ambani brothers. Of the two, the bid by Reliance Infrastructure was the lowest, with the company quoting a concession period of nine years and 11 months. On the other hand, Mukesh Ambani's Reliance Industries quoted a concession period of 75 years. However, doubts were raised as to the viability of the bid by Anil Ambani's company. An expert committee set up by the state government found merit in bids by both companies, thereby vexing the problem further. Finally, earlier this month, Anil Ambani's Reliance Infrastructure bowed out of the deal. State government sources say, Mukesh Ambani's companies should naturally have been given the contract, but the younger Ambani camp threatened to stall the project. Hours before today's cabinet meeting, the Anil Ambani camp released letters written by his company which stated that Mukesh Ambani's companies should not be awarded the contract. The letter written to various agencies, including the MSRDC and the state PWD ministry called for fresh tenders to be invited. State government sources say, similar decisions would be taken in future as well if competition between companies headed by both brothers threaten the completion of public projects. |
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‘Economic uncertainty to slow down FDI inflow’
New Delhi, June 25 Of the 400 chief executive officers (CEOs) surveyed by Assocham, 350 said India could optimally receive $28 billion in FDI. The reasons cited for lower FDI include adverse stock market sentiments, infrastructure bottlenecks, continuation of Press Note 1, the uncertainty over the nuclear deal, little initiatives in disinvestments, rising interest rates, and volatility on economic and political front because of inflation and forthcoming elections. The commerce ministry had targeted $30 billion in FDIs in the last fiscal, and managed to attract $25 billion. "Sentiments are extremely negative, as industrial production has been falling," said Assocham president Sajjan Jindal. "Agriculture is expected to do better because of anticipated good monsoon, but it alone will not enhance the country's GDP." Nearly 300 CEOs said the services sector, followed by information technology, telecom, construction and real estate, will attract the most FDI, as had happened in the last fiscal. About 230 CEOs said critical sectors such as mining, refineries, petrochemicals, petroleum, cement and steel have not been doing well despite high demand. This again does not augur well as their contributions to GDP are not going to be significant. According to 280 CEOs, the stock market will continue to remain sluggish with many investors now shifting to traditional savings channels. A vast majority of CEOs also said inflationary pressures would continue, and the expected rise in interest rates will lead to further credit and liquidity crunch that will discourage foreign investors. About 320 CEOs were of the view that foreign investors were tracking political developments here, and would take investment decisions only after there's some kind of stability following next year's parliamentary polls. |
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Cairn unveils $2 bn investment plan
Mumbai, June 25 Cairn India chairman Bill Gammell, who was in the city to address the company's annual general meeting, said the bulk of the investment will be made in the Rajasthan pipeline. The ground-breaking ceremony for the 600-km long heated pipeline was observed earlier this week. Cairn is spending nearly $1.8 billion on the pipeline which will allow crude oil to be transported from the middle of next year. Cairn India is developing one of the biggest oil finds in the country since the discovery of the Bombay High Oilfields in the 1970s. The peak production of the company's three oil fields in the Rajasthan — Mangala, Bhagyam and Aishwariya — would amount to nearly 1,75,000 barrels of oil per day. Gammell said the company would continue with exploration activities in different parts of the country. Exploratory drilling in Bihar's Ganga Basin will begin later this year, he said. Gammell added that the company was working on implementing Enhanced Oil Recovery techniques which when successful would allow oil output to be increased from 1,50,000 barrels per day to 1,75,000 barrels per day. The company, he said, would account for 25 per cent of India's oil output when the Rajathan oilfields begin production. According to the company's chairman, rising crude oil prices would substantially improve its cash flow. At $100 per barrel, Cairn's cash flow would be $3 billion. "It is very sensitive for every $20 rise the cash flow increases by about $500 million," he
said. |
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Interest Rates
New Delhi, June 25 "We have not taken any decision...we would continue to look at it on daily basis. Our liquidity situation is comfortable. Therefore, we would not take steps in panic," ICICI Bank joint managing director Chanda Kochhar told PTI. The statement assumes significance as Reserve Bank yesterday increased short-term lending rate (repo rate) and the mandatory cash deposits that banks have to keep with the Central Bank (CRR) by 50 basis points each. The RBI's move is a signal that liquidity would tighten further and therefore interest rates would go up. Interest rate in general would rise, she said. However, she said, "I think we would not see steep and continuous rise in interest rates, despite the fact that there is clearly northward
bias". — PTI |
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‘Global upheaval not to hit India’
New York, June 25 In his keynote address to a conference on investment in India, organised by CII in collaboration with the Asia Society here yesterday, he said the credit turmoil that has affected the world markets has not slowed enthusiasm in the American investments in India or vice-versa. Allaying the fears of a slowdown in the Indian economy, Kamath said India has been witnessing high growth rate only for a few years and all evidence point to the country continuing on that path for several more years. At the meeting, former USIBC chairman Charles "Chip" Kaye said keeping in view the economic downturn and projections that India may not mobilise the expected foreign direct investment in infrastructure where it is needed most, USIBC's role in the coming year must be to make investors aware of opportunities in India for investment in its soft and hard infrastructure. "To that end, we are planning a 'Green India' Summit on October 15 in Washington with CII to showcase the numerous opportunities for investment in India, matching these with America's best environmental technologies," Kaye added.
— PTI |
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ONGC profit at Rs 2,627 cr
Mumbai, June 25 |
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Abhishek Industries’ project
Mumbai, June 25 The project includes various facilities ranging from paper, pulp, energy and chemical recovery and effluent treatment and the expected incremental revenues from these units would be about Rs 450 crore per annum, the company said in a filing to the Bombay Stock Exchange.
— PTI |
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GMR buyout
Mumbai, June 25 "This is the largest-ever acquisition of a global energy utility by an Indian company. After this acquisition, we are the largest power sector player in the country," GMR executive vice-president Madhu Terdal told reporters. The company has raised $1.1 billion through a bridge loan from a consortium of Indian banks, he said.
— PTI |
Nod to Ranbaxy for AIDS drug Islamic investment index RIL in pact with UAE Co Emco bags 55.4-cr order TCS bags $11.5-m contract Rs 219.05 cr disbursed in loans Big FM enters Singapore Big B, Anil Ambani in pact
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