The Tribune, Chandigarh, India

Vedanta open offer for Cairn held up

Delay may hurt fund flows to India: Cairn

UK's Cairn Energy today said delay in government approvals for its $8.48 billion deal to sell majority stake in its
Indian unit to Vedanta Resources may hurt future foreign investments into India.
"We understand that the process will go its natural course, but it has to have a timeline," Cairn Energy Chief Executive Officer Bill Gammell said.
The government is closely vetting the transaction as an non-oil company is buying controlling stake in Cairn India, the owner of the nation's largest onland oil discovery. "If it (the deal) is delayed, it won't help India's cause," Gammell said.

Mumbai, October 11
UK-based Vedanta Group today ruled out raising the open offer price for Cairn India, even as it deferred the offer for want of clearance from market regulator SEBI. A group firm of Vedanta, which is paying up to $8.48 billion for 40-51 per cent stake in Cairn India that operates the country's largest oilfields, was to make an open offer today for an additional 20 per cent stake at Rs 355 a share to minority shareholders of the target firm.

The open offer price is Rs 50 less than what Vedanta is offering to Cairn India's parent Cairn Energy Plc.

"We have given a very lucrative offer and that offer we stand by," Vedanta Chairman Anil Agarwal told reporters.

"The price is final." He clarified that Rs 405 a share offer to Cairn Energy included a non-compete fee, under which Cairn would not compete with Vedanta in India, Sri Lanka and Bhutan for the next three years.

The Rs 50 per share premium was ‘very important’ to Vedanta as "we wanted Cairn India to have exclusivity (in operations) in India and neighbouring countries," he said. "Non-compete fee is very important for us because we do not want Cairn Energy Plc to work in our area," he said.

Vedanta group firm Sesa Goa could not go ahead with the open offer, slated for today, for want of approval from regulator SEBI. — PTI

‘Imprudent to deregulate diesel prices now’

New Delhi, October 11
Providing reprieve to transporters and the public in general, the government has said it was not the right time to deregulate diesel prices, as inflation continued to be high. "I don't think it will be a wise or prudent thing to do (deregulate price of diesel) at a time when inflation is running so high," finance secretary Ashok Chawla has said.

In June, the government had deregulated the prices of petrol but did not take a decision on diesel, which is used by various industries and the transport sector.

Following deregulation, the price of petrol went up by Rs 3.50 a litre. It raised the prices of diesel by Rs 2 a litre but did not link it to market price. LPG became dearer by Rs 35 a cylinder and kerosene by Rs 3 a litre.

On inflation, Chawla said it is likely to fall to around 6 per cent within the next few months from the current 8.5 per cent. He added, "It's not the case that because you have high growth rate you must have high inflation." For calculating inflation, from August, the government has come out with a new index, which revealed that the rate of price rise declined by 1.3 percentage points to a 7-month low of 8.5 per cent during that month.

However, data on the old inflation series, which was released along with the new series, showed that the rate of price rise dipped marginally from 10 per cent in July to 9.5 per cent in August.

Chawla said the Indian economy is likely to grow 8.5 per cent this fiscal
and it could be little higher next fiscal.

"...with the kind of growth that we are running, the kind of growth that we are seeing in the economy this year, its going to be 8.5 per cent, probably little bit more next year," he said. — PTI

India auto boom to boost tyre output 25%

New Delhi, October 11
India's 2010-11 tyre production is likely to rise to a record 121.4 million units as tyre companies boost capacity to meet booming demand from the local auto industry, a senior industry official said.

"Every (tyre) company is expanding capacity. Demand is good from both OE (original equipment) and replacement segments," Rajiv Budhraja, director-general of the New-Delhi based Automotive Tyre Manufacturers' Association told Reuters in an interview on Monday.

He said tyre production this fiscal is likely to rise by a quarter from last year's 97.13 million units, primarily driven by passenger car and two-wheeler segments at the crest of India's current auto boom.

"Passenger car tyres production is growing by 25-30 per cent. Demand is very strong in this category. Off the road is also rising by 20-25 per cent," Budhraja said.

Leading tyre makers like MRF, Apollo Tyres, JK Tyre & Industries, Ceat have all been furiously working to ramp up capacity. Budhraja estimates an investment of Rs 10,000 crore to Rs 12,000 crore on expansion in three years to 2011-12.

Price of rubber has been rising on demand-supply mismatch and it may force tyre-makers to raise prices again this year, he said. Indian tyre makers have raised prices by 11-14 per cent in the CV radial segment and by 18-20 per cent in the passenger car tyre segment in 2010 so far. — Reuters

ONGC to bid in Iraq’s Oct 20 gas auction

Baghdad, October 11
Thirteen companies have qualified to bid in Iraq's October 20 auction for three gas fields and no others will be allowed to take part, a senior oil official said on Monday. One of these is ONGC.

Iraq will tender gas fields at Akkas in the western desert, Iraq's Sunni heartland and once an al Qaeda stronghold, Mansuriyah near the Iranian border in volatile Diyala province, and Siba in the relatively peaceful southern oil hub of Basra.

The three fields together have estimated reserves of around 11.23 trillion cubic feet of gas.

The bidding round has been delayed twice to give companies more time to study contract terms.

These are the 13 companies that were qualified to take part: Italy's Edison and ENI, France's Total, South Korea's KOGAS, Japan's Mitsubishi, state-run Turkish Petroleum Corporation, Japan's Itochu, Kazakhstan state oil and gas company KazMunaiGas, Russia's TNK-BP, Norway's StatoilHydro, India's Oil & Natural Gas Corp, Japan Oil, Gas and Metals National Corp and Kuwait Energy. — Reuters

Luxury car makers enter finance biz to boost sales
Girja Shankar Kaura
Tribune News Service

New Delhi, October 11
To carve a niche and boost sales, luxury car makers are targeting the finance part of the business. Home-grown Tata Motors, Mahindra & Mahindra and multinationals like Volkswagen AG, already have their respective Indian financing arms. The latest to enter the field is luxury car market leader BWM.

Last week, BMW announced the launch of a wholly-owned subsidiary, BMW Financial Services. The company also announced an investment of $50 million (approximately Rs 220 crore) in the new business.

The Daimler AG board has given its nod to Daimler Financial Services (DFS), the company’s captive financial services provider.

Analysts say that the arrival of luxury car financing could well change the contours of the luxury car market in India.

BMW has a tie-up with HDFC bank in India. However, now that BMW Financial Services has acquired an NBFC licence, this company will take care of all BMW financing needs.

BMW Financial Services will operate in retail finance, commercial finance (catering to fleet owners and dealers) besides offering insurance solutions. DFS product portfolio would comprise financing for vehicle inventories, demonstration cars and service vehicles. It could start the service by early next year.

It would also include financing for real estate (property and dealership) granting of loans for operating materials and the provision of business loans.

With luxury car makers coming into the car financing business, there is also a possibility of the car financing rates going south.

Panasonic to double headcount to 20,000

Tokyo, October 11
Japan's consumer electronics major Panasonic plans to double its headcount in India to 20,000 in two years with the commissioning of its new manufacturing facility at Jhajjar in Haryana. The company's Indian arm, Panasonic India is investing Rs 1,000 crore to set up the new plant, spread over in 37,000 square meters.

It will be operational by 2012. "We have around 10,000 employees in India at the moment. We will be almost doubling this in two years," Panasonic India CEO Daizo Ito said.

"When we start manufacturing at Jhajjar, we will have nearly 20,000 employees," he added.

The new plant will be mainly for home appliances like air conditioners and washing machines. It will also be used for welding for third party customers like automobiles industry (welding of car, motorbike) and for construction industry, Ito added. The company has also set up a research and development (R&D) centre at Gurgaon.

"The R&D research centre has already been set up and activities have started there. The facility is doing market research for products specifically for Indian market," he said.

Panasonic India had a turnover of Rs 4,500 crore for the year ended March 31, 2010, including the sales generated by its recently acquired entities, Sanyo Electric and Anchor. — PTI

Tata Motors drives in cross-over car Aria

The Aria will compete with Honda CRV, Chevrolet Captiva, Audi etc.

Mumbai, October 11
Auto major Tata Motors today rolled out the Tata Aria, which the company claims is the country's first ever cross-over car that straddles a sport utility and multi-utility vehicle. The company said the car would shortly be exported to Europe followed by Latin America and Asia.

"The car has been designed to be in line with European standards and meets the Euro V emission norms," said Tata Motors MD for India operations P M Telang.

"By next year, we will come up with a left-hand drive version of the vehicle (for exports) ," he added at the launch of the six-seater car. Telang added the company would be launching the Aria in Italy, Spain and Poland, where the company has a presence. CMD Carl-Peter Forster informed newsmen that the company, the largest auto company in the country and the fifth one globally, would export the vehicle to Latin America and Asia as well.

Forster said, the company is not looking at entering the US market, which he said is the toughest market in the world, and hence would need hefty investment. He added, by next year, the company would roll out one model of the premium Land Rover from a local assembly unit in the country.

Tata Motors said the 2.2-L Aria, which will be available in three trims - Pride at the top end, and the Prestige and the Pleasure, each in eight colour options. The company claims the Aria is the country's first four-wheel drive crossover, that offers the luxury and the finesse of a sedan and the muscle of an SUV.

The Aria, which will be rolled out from the Pune plant of the company, offers three-rows of flexible theatre-style seating, with leather upholstery. It is the first in its segment with an in-dash GPS-based navigation system that maps 400 cities. The car will be sold through 69 dealers in 25 cities. — PTI

Crisil sees deposit rates rising

Mumbai, October 11
Banks are likely to hike their deposit rates further in the second half of the financial year, as credit growth starts to get stronger, Crisil Ratings has said. “Credit demand in India is by nature back-ended, given the festive and agricultural harvest seasons in the second half of each year,” Crisil Ratings head Suman Chowdhury said.

"Moreover, banks have sanctioned loans to a slew of large infrastructure projects, which have obtained the necessary approvals and mobilised equity, and may now begin to draw down loans," he added.

Deposit rates will need to be more attractive for inflows to revive, Crisil said. — Reuters

Fortis buys healthcare biz of HK’s QHA
Sunit Dhawan
Tribune News Service

Gurgaon, October 11
Fortis Global Healthcare, a company owned by Malvinder Mohan Singh and Shivinder Mohan Singh, will acquire all the healthcare businesses (other than elderly healthcare) of Hong Kong-listed Quality Healthcare Asia Ltd (QHA).

QHA is the largest private integrated healthcare service platform in Hong Kong, providing medical services and allied health services. The acquired businesses comprise a network of more than 60 wholly-owned medical centres, 500 affiliated clinics, 40 dental and physiotherapy centres, and a private nursing agency with a database of over 3,000 nurses.

For the financial year ended 2009, QHA recorded consolidated revenues of $131 million and EBIDTA of circa $13.1 million.

FM seeks more reforms

Washington, October 11
Finance Minister Pranab Mukherjee has indicated that the government wanted to implement more reforms in the financial sector, but has not gone ahead with the process as the Congress led United Progressive Alliance (UPA) government does not have the required majority in the Indian Parliament to pass the bills. He was talking to reporters after the conclusion of the IMF-World Bank annual meetings.

Speaking on inflation that is hovering around at 8 per cent, and rising food commodity prices, Mukherjee expressed confidence that steps are being taken to contain inflation. "This is an area where constant watch and evaluation of the situation (is being made) and thereafter appropriate steps will have to be done. My own assessment is that the annualised rate of inflation would be around six per cent," he said. — PTI