Mumbai, June 11
Mukesh Ambani-led RIL today entered the telecom arena, hitherto forbidden to it, with a bang, announcing a Rs 4,800 crore acquisition of Infotel which emerged as a successful bidder in all 22 circles of the auction for Broadband Wireless Access (BWA) spectrum conducted by DoT.

The acquisition of 95 per cent stake, through fresh equity infusion, values Mahendra Nahata group's Infotel at over Rs 5,000 crore, follows a truce arrived at between Mukesh and his younger brother Anil on May 23 wherein the warring brothers scrapped a non-compete agreement to allow each other's business flexibility.

As a result of the acquisition, it would be imperative on part of cash-rich RIL to pay the government Rs 12,872 crore within this month for pan-India spectrum won by Infotel, but no official comment was made on this aspect.

RIL is the largest profit making private company in the country clocking a net of Rs 16,236 crore in 2009-10 and has a networth of Rs 1,37,171 crore, with its chairman Mukesh known for creating large capacities as his business model. The company has cash and cash equivalent of Rs 21,874 crore as on March 31, 2010.

RIL said it saw the broadband opportunity as a new frontier of knowledge economy in which it could take a leadership position and provide India with an opportunity to be in the forefront among the countries providing world-class 4G network and services.

A single 20 MHz TDD spectrum when used with LTE (Long-Term Evolution) has the potential of providing greater capacity when compared to existing communication infrastructure in the country, the company said.

RIL said its entry into wireless broadband segment would usher in a wireless broadband revolution in both urban and the rural areas all across the country by providing end-to-end data solutions for business enterprises, social organisations, educational and healthcare institutions and Indian consumers.

"This will give a fillip to rural upliftment by seamlessly connecting information and markets to the rural population on a real-time basis and will help bridge the rural-urban divide in terms of access to knowledge and information," the statement said.

RIL said it had planned to create the worldclass state-of-the-art technology using an asset light strategy. RIL would forge several strategic relations with a host of leading global technology players, service providers, infrastructure providers, application developers, device manufacturers and others to leapfrog India to the 4G revolution, the company said.

The Mukesh Ambani company further said RIL would comply with the non-compete and trademark agreements entered into with brother Anil Ambani's group of companies at the time of corporate demerger and subsequent modifications made last month.

Commenting on the initiative, Mukesh Ambani, chairman and managing director of Reliance Industries, said “We see this as the next wave of value creation opportunity in the wireless broadband space.”

New Delhi, June 11
The government today got a major bonanza at the hands of the telecom and internet service providers netting in a total of Rs 1,06,262 crore from the sale of both 3G spectrum and Broadband Wireless Access (BWA) as the auction for the latter ended this morning.

After 16 days and 117 rounds of bidding, the successful bidders committed over Rs 38,543 crore for the BWA giving the government over three times the original estimate of Rs 35,000 crore from the two auctions. Internet service provider Infotel emerged as the only pan-India winner for BWA spectrum by committing Rs 12,847.77 crore.

With three pan-India licence to be given, the government will get a total of Rs 38,543 crore from the BWA auction. While two licences have been kept for auctioning to the private players, the third one has been reserved for the BSNL and the MTNL. The BSNL and the MTNL, which have been given BWA spectrum ahead of the private players, will have to pay the equivalent of the winning bid in each service area.

Along with the BWA proceeds that the exchequer will get later this month, the Rs 67,719 crore received from 3G spectrum winners will help the government go a long way in managing its deficit and reduce borrowings.

It is expected that the fiscal deficit may go even below 4.5 per cent from the earlier projected 5.5 per cent as a result of the earnings from the two auctions.

In the Budget this year, Finance Minister Pranab Mukherjee had taken into account an estimated Rs 35,000 crore from the sale of spectrum.

In BWA, the government auctioned two slots of 20 MHz each. Besides Infotel, US-based Qualcom bagged four circles of Delhi , Mumbai, Kerala and Haryana.

Qualcom will have to pay Rs 4,912.54 crore. Bharti also bagged four circles--Maharashtra, Karnataka, Kolkata and Punjab --for Rs 3,314.36 crore.

Aircel bagged eight circles, mostly in category B and C areas for Rs 3,438.01 crore. On the lines of 3G, Mumbai and Delhi received the highest bid amounts of Rs 2,292.95 crore and Rs 2,241.02 crore, respectively. As many as 11 companies, including Bharti Airtel, Reliance, Idea Cellular, Aircel, Vodafone and Tata Communications Internet Services, participated in the auction for Broadband Wireless Access spectrum.

New Delhi, June 11
The government today raised the income tax exemption limit on gratuity from Rs 3.5 lakh to Rs 10 lakh with effect from May 24. "Employees, who retire, become incapacitated, terminated, or die on or after May 24 will get I-T exemption for gratuity up to Rs 10 lakh," a Finance Ministry official said here.

The Finance Ministry today notified a rule in this regard, the official added.

Earlier, Parliament had approved raising the limit of gratuity to be exempted from income tax.

The Payment of Gratuity (Amendment) Bill, 2010, was passed by the Parliament in this regard in the Budget session.

While the Sixth Pay Commission had raised the limit for Central Government employees, the Cabinet later enhanced the ceiling for the private sector workforce as well. — PTI 

New Delhi, June 11
After last fiscal's double-digit expansion, industrial production picked up more steam to grow by 17.6 per cent in April, boosting the prospects of achieving 8.5 per cent economic growth in 2010-11.

The increase in output was due to a robust showing by the manufacturing sector and a low-base effect caused by the global economic slowdown.

Manufacturing, which accounts for around 80 per cent of the Index of Industrial Production (IIP), expanded by 19.4 per cent in April, with capital goods growing by 72.8 per cent and consumer durables by 37 per cent.

The April figure is almost equal to the 20-year-high output of 17.7 per cent achieved in December, 2009.

Analysts say that the strong uptick in April, coupled with a normal monsoon, will help the economy grow by an estimated 8.5 per cent in 2010-11.

However, Finance Minister Pranab Mukherjee said he had expected the industry to do even better in April.

"Of course, my appetite is infinite. I would have been happier if it was 20 per cent," he told reporters.

While the double-digit growth has strengthened the case for stimulus rollback, Planning Commission Deputy Chairman Montek Singh Ahluwalia cautioned that withdrawal should not be quickened.

"I don't think it (stimulus withdrawal) needs to be quickened," he said.

India Inc also cautioned that the trend may moderate from June onwards since part of the industrial expansion could be attributed to a low base in April last year.

"This trend of very high growth might moderate from June onwards because of the base effect," Ficci secretary general Amit Mitra said.

In fact, the low base is quite evident as capital goods had contracted by 5.9 per cent in April 2009, even as consumer durables had risen by 17.6 per cent.

Crisil chief economist D K Joshi said a one-off rise in IIP numbers would not prompt the RBI to further tighten money supply, especially when the fear of contagion of debt crisis in eurozone is growing.

Production of consumer non-durables grew by 6.6 per cent, a 10.5 per cent fall from April 2009.

"In April figures, one missing piece of puzzle is why consumer non-durables are so weak," Joshi said.

Besides manufacturing, mining expanded by 11.4 per cent in April against 3.4 per cent a year ago. On broad sectoral story, electricity was a weak link as generation rose by six per cent in April, lower than 6.7 per cent a year ago.

Of the 17 industries, only two--beverages, tobacco and related products and wood and wood products--posted negative growth in April.

The processed food sector, which has been on a decline for quite some time, rose by 22.9 per cent in the month. The rise could fuel prices of food items like flour even further.

The output of machinery and equipment other than transport expanded by 55.6 per cent, while metal products and parts grew by 51.9 per cent. — PTI 

New Delhi, June 11
Media magnate Kalanithi Maran is close to buying about 37 per cent equity in low-cost carrier Spicejet at an estimated Rs 45 a share that will cost him about Rs 700 crore.

"They are in dialogue and may strike a deal in a day or two," a source close to the development told PTI.

"If they (Maran) want to have a majority stake in the company, they may have to spend a lot more than an estimated about Rs 700 crore for the stake of Bhupendra Kansagara and Wilbur Ross," the source said, adding that a majority stake would necessitate an open offer.

This could entail an outgo of over Rs 1,000 crore in case an open offer for 20 per cent stake is made pursuant to acquisition of 37 per cent stake of promoters, the source said.

The carrier claims a market share of 13 per cent and operates 129 flights daily to 18 cities, with a fleet of 19 Boeing aircraft.

It plans to launch international flights, starting with services to neighbouring Bangladesh and Nepal from this month.

While Spicejet officials remained tight-lipped about the reports, some of which said the deal had been clinched, its promoters, including Bhupendra Kansagara, could not be contacted despite several attempts.

On the other hand, top officials of Maran's Sun TV denied any knowledge of the development. Kalanithi or other promoters could not be contacted for comments.

The deal could involve Maran buying 31 million shares of Bhupendra Kansagara and 125 million shares of American investor Ross.

The airline has seen interest from domestic and international investors for nearly four years now. The Tatas picked up over 6 per cent stake in the airline in 2006. Investor Wilbur Ross pumped in Rs 345 crore in 2008 and the same year Goldman Sachs injected over Rs 90 crore. — PTI

BRIEFLY

StanChart debuts at Rs 105
Mumbai: British banking major Standard Chartered made its debut in the Indian stock market today at Rs 105 a share against its issue price of Rs 104 per unit. The premium garnered by the country's first IDR listing was about 1 per cent in a strong broader market. Soon after listing, the scrip touched a high of 108, but the momentum did not sustain for longer and it fell to Rs 103.70 at 1300 hrs on the BSE. — PTI

Forex reserves fall
Mumbai: The country's foreign exchange reserves fell for the second consecutive week to $ 271.093 billion on account of a decline in the foreign currency assets. During the week, gold reserves rose to $ 19.423-billion from $ 18.537 billion last week while the country's special drawing rights declined slightly to $4.820-billion as against $ 4.861 billion a week-ago, the RBI said. — PTI

Srei BNP to raise $50 m
Kolkata: Srei BNP Paribas today signed a loan agreement with Singapore's DBS Bank for raising $50 million as external commercial borrowings (ECBs). Srei BNP Paribas's joint MD Sunil Kanoria said the loan amount would be used to finance purchase of infrastructure equipment. Kanoria said during the current financial year, Srei BNP had targeted a disbursement amount of Rs 9,000 crore. — PTI

National Insurance
Chandigarh: National Insurance Company Ltd adopted its annual accounts at a board meeting held here recently. The board has recommended a dividend of 43.98 per cent on the paid-up capital of the company. The company has registered an inpressive performance on all important functional areas viz marketing, customer service, underwritting results and overall profitability.— TNS

C S Verma is SAIL chief
New Delhi: Chandra Shekhar Verma today took over as the chairman of the SAIL. Verma, who held the post of director (Finance) with the BHEL, succeeds outgoing SAIL chairman SK Roongta who retired last month. — PTI