New Delhi, July 6
Rising mortgage rates and a widely anticipated price correction has seen demand curl up in India's once hot property market, burning realty stocks and blocking a $4 billion pipeline of initial public offerings.

About a dozen realty firms have been seeking to raise funds through IPOs to repay debt and finance land purchases.

The pipeline includes a much delayed $360 million offering by India JV of Dubai's Emaar Properties, Lodha Developers' $600 million offer, Sahara Prime City's $600 million and Embassy Property's $515 million issue.

“There is absolutely no investor appetite for real estate IPOs. The sector is surrounded by so many negative factors,” said COO Ambareesh Baliga of Way2Wealth Brokers.

"Very unlikely that any property IPO would happen or succeed this year unless someone is really desperate and seeks much lower valuation," said Ambar Maheshwari, MD-Corporate Finance at property consultant Jones Lang LaSalle (JLL) India.

“It was a mistake on the part of developer as well as merchant bankers to go for that kind of valuation," said Maheshwari, referring to several property IPOs in 2006-07.

Home sales have dived 50-70 per cent in Mumbai, said Aashiesh Agarwaal, an analyst with Edelweiss Securities, who expects prices to correct by about 15 per cent.

"The correction may not be as deep as we saw in 2008-09 when property prices fell by as much as 25% in some areas in Mumbai since firms are financially better placed and we have lower supplies," said Deepak Purswami, analyst at brokerage ICICI Direct.

Analysts say demand can pick up once developers bring down prices but the latter are demurring. — Reuters

New Delhi, July 6
The CBI today indicated involvement of Essar group in the 2G Spectrum scam when it said in the Supreme Court that Loop, which got licence during the tenure of A Raja, was its front company.

The agency also questioned the role of Ministry of Corporate Affairs in giving a clean chit to Essar Group.

Without naming the corporate house, the agency said that it had promoted the telecom company in order to get licence and 2G Spectrum during the tenure of former Telecom Minister Raja.

Giving details of financial transactions which was routed through Mauritius, Senior Advocate K K Venugopal, appearing for the CBI, submitted that the money trail clearly established the involvement of the corporate house.

“Attempts were made to project that they are not connected but slowly we are finding that they are closely involved,” he said, adding "Corporate guarantee was granted by the group company".

"The lady mentioned in the list is the sister of Director of the group company and is holding the telecom company along with her husband and brother. They are partners and the telecom company is owned by the three," he said without taking their names.

The investigating agency also questioned the propriety of ministry of corporate affairs as well as others to comment on the status of relationship between Loop Telecom and Essar.

“This is unwarranted when the Supreme Court is monitoring the investigations,” it said.

The ministry had communicated to the Telecom Ministry that the Ruias-led group held only 2.15 per cent stake in Loop Telecom at the time of obtaining 2G licence.

Venugopal said the legal opinion rendered by former judges to the company was forwarded to the CBI. According to this, Essar Group and Loop Telecom had no link.— PTI

New Delhi, July 6
The first ultra long-haul Boeing 787 - Dreamliner - would be delivered to Air India in the fourth quarter of this year after a delay of over three years.But before that, the aircraft would land at the IGI Airport here on a test flight next week and Air India pilots would start getting trained to fly this latest plane created out of composite material from August.

This was announced by Boeing India President Dinesh Keskar here today.

Asked about the compensation to be paid by the premier US aircraft manufacturer to Air India for the delay in deliveries, Keskar said, "We continue to work with Air India on this. Several rounds of discussions have taken place and talks are continuing. We are really sorry for the delay. We know it affected many airlines around the world, including Air India." While Air India has ordered 27 B 787-8s, private carrier Jet Airways has placed orders for 10 of these planes.

The national carrier expects at least four aircraft this calendar year - one in October, two in November and one in December.

Keskar did not disclose dates of deliveries of the Dreamliners to Air India.

Meanwhile, Boeing has forecast that the Indian aviation market would require up to 1,320 commercial planes, worth $150 billion, over the next 20 years to cater to the ever increasing passenger demand. 

New Delhi, July 6
In a bid to boost its sales, Italian automobile major Fiat has come out with a major incentive where it is offering its diesel-powered cars Punto and Linea at the same price as petrol-powered vehicles.

Known for its cutting-edge diesel technology, Fiat is hoping to take a major advantage over the other car manufacturers in the country with this offer, especially with the petrol prices skyrocketing.

"With the rise in petrol prices, diesel cars make for an even more attractive proposition. Fiat has been leading the diesel revolution across the world and even in India ," said Rajeev Kapoor, president and chief executive, Fiat India.

The company said the offer would be attractive for the customers who would have preferred to buy a diesel car due to the low running costs.

New Delhi, July 6
More than four months after UK's BP Plc agreed to buy a 30 per cent stake in Reliance Industries' oil and gas blocks, the Oil Ministry has referred the $7.2 billion deal to the Cabinet Committee on Economic Affairs (CCEA) for approval.

Although the Oil Ministry has the authority to decide on Reliance selling 30 per cent interest to BP in 23 exploration blocks, including the prized eastern offshore KG-D6 gas fields, the ministry yesterday decided to refer the deal to the CCEA, sources privy to the development said.

The $7.2 billion deal is the single largest foreign direct investment in the country and Reliance had on February 25 made a formal application to the Oil Ministry for approval of the transfer of stake to Europe's second biggest oil company. — PTI

New Delhi, July 6
The government today extended duty-free import of sugar for two months till August-end amid inflationary pressure.The zero-duty sugar import deadline, which expired on June 30, has been extended till August 31, this year, a notification issued by the Finance Ministry said.

The government had abolished import duty on sugar in February 2009 to boost domestic supply. Prior to that the import duty was 60 per cent. Currently, food inflation is ruling at 7.78 per cent.

Recently, Indian Sugar Mills Association (ISMA) had demanded that the duty-free regime on sugar import should end as "this is hurting market sentiments and sending wrong signals to the market about clarity of government policies and intentions".— PTI

With surplus availability of sugar in India and exports taking place, it neither makes much economic sense to have a duty-free regime for imports nor any commercial sense to import now, ISMA had noted.- PTI

Mumbai, July 6
The RBI today asked banks to conform to equity investments ceiling of up to 20 per cent in companies and subsidiaries within a period of 3 months in order to prevent lenders from having significant influence over them.

Banks should strictly observe prudential guidelines while investing in companies undertaking non-financial services activities, RBI said in draft guidelines on equity investments by scheduled commercial banks in subsidiaries and other companies.

"Banks should also carry out a review of their subsidiaries, associates, joint ventures (i.e. entities in which they have control or significant influence) by applying the test of ownership and control parameters as stated above, within 
a period of three months,” it said.

As per the draft guideline, banks cannot invest more than 10 per cent of their paid-up capital in a subsidiary or financial services company, while total investments made in all subsidiaries and non-subsidiary financial services companies shall not exceed 20 per cent.

"Wherever investments do not conform to the above mentioned policy parameters, banks may ensure that their investments are brought down to 10 per cent of the paid-up share capital of the investee company or give up control or exercising significant influence as the case may be," it said.

A bank's equity investments in subsidiaries and other entities that are engaged in financial services together with equity investments in entities engaged in non-financial services activities should not exceed 20 percent of the bank's paid-up share capital and reserves, it said.— PTI

BRIEFLY

PHD Chamber representation
Chandigarh: The PHD Chamber on Wednesday gave a representation to Punjab chief secreatry pointing out the areas hampering industrial development in Punjab. “Coordination between Town and Country Planning department, Punjab Pollution Control Board, Power Corporation and Department of Industries is needed for industrial growth in Punjab” said R S Sachdeva, Co- Chairman Punjab Committee, PHD Chamber. He added single window clearance was the need of the hour. — TNS

MoU renewal with Posco-India by July
Bhubaneswar: With several deadlines missed for the renewal of the MoU with Posco-India Ltd for setting up a mega steel plant in Paradip due to the controversial iron ore export clause, the Orissa government on Wednesday expressed confidence the revised version would be inked by July-end. — PTI

Capgemini buys Italian firm Aive
Mumbai: Capgemini on Wednesday said it has acquired Italian IT service provider Aive from three private equity firms (Emerald, Fidia and Athena Private Equity). The deal was inked at an enterprise value of 42.9 million euros and will be financed by the Capgemini Group's net cash.— PTI

Alcatel-Lucent India gets new chairman
Mumbai: Paris-based telecom provider Alcatel-Lucent on Wednesday said it has appointed BT India’s Arun Seth as Chairman of India operations. — PTI

PNB set to foray into Canada
Chennai: PNB is set to foray into the Canadian market by setting up a subsidiary with an estimated capital of Rs 100 crore, a top bank official said on Wednesday. The bank currently has operations in countries such as England, China and Dubai. Canada would be the latest foray of the bank in the overseas market. — PTI

SC rejects Pepsi, Coca-Cola’s plea
New Delhi: The SC has dismissed the petition of soft drink majors CocaCola and Pepsico challenging imposition of a separate levy on glass bottles and bottle crates by the municipal corporation SMKMC.The corporation had directed the two companies to pay octroi on glass bottles and crates separately on the ground that they were being reused after cleaning up and re-filling.— PTI

Stanchart PE takes 9.9% in Redington
Mumbai: Standard Chartered Private Equity on Wednesday said it has taken 9.9 per cent stake for about Rs 352 crore through open market transaction in Chennai-based IT and non-IT products distributor Redington India. — PTI

SC rejects JSW Steel plea against K’taka
New Delhi: JSW Steel on Wednesday withdrew its petition seeking direction to the Karnataka government for allotting captive iron ore mines for its steel plant in the state after the Supreme Court refused to entertain its plea.— PTI